10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

For Annual and Transition Reports Pursuant to

Sections 13 or 15(d) of the Securities Exchange Act of 1934

(Mark One)
þ	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For The Fiscal Year Ended December 31, 2003
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the Transition Period from           to

Commission File Number 001-12755

Dean Foods Company

(Exact name of Registrant as specified in its charter)

Delaware	75-2559681
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

2515 McKinney Avenue

Suite 1200

Dallas, Texas 75201

(214) 303-3400

(Address, including zip code, and telephone number, including

area code, of Registrant’s principal executive offices)

Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Each Exchange on Which Registered
Common Stock, $.01 par value	New York Stock Exchange

Securities Registered Pursuant to Section 12(g) of the Act:     None

      Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes þ          No o

      Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K     þ

      Indicate by check mark whether the Registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).     Yes þ          No o

      The aggregate market value of the Registrant’s voting and non-voting common stock held by non-affiliates of the Registrant at June 30, 2003, based on the $31.50 per share closing price for the Registrant’s common stock on the New York Stock Exchange on June 30, 2003, was approximately $4.75 billion.

      The number of shares of the registrant’s common stock outstanding as of March 10, 2004 was 156,998,652.

DOCUMENTS INCORPORATED BY REFERENCE

      Portions of the registrant’s definitive Proxy Statement for its Annual Meeting of Stockholders to be held on or about May 18, 2004 (to be filed) are incorporated by reference into Part III of this Form 10-K.

TABLE OF CONTENTS

Item		Page
PART I
1	Business		1
	Segments and Operating Divisions		1
	Current Business Strategy		9
	Developments Since January 1, 2003		9
	Employees		12
	Government Regulation		12
	Brief History		13
	Minority Holdings		14
	Where You Can Get More Information		15
2	Properties		17
3	Legal Proceedings		20
4	Submission of Matters to a Vote of Security Holders		20
PART II
5	Market for Our Common Stock and Related Matters		21
6	Selected Financial Data		22
7	Management’s Discussion and Analysis of Financial Condition and Results of Operations		24
	Business Overview		24
	Results of Operations		27
	Liquidity and Capital Resources		38
	Known Trends and Uncertainties		43
	Critical Accounting Policies		45
	Recently Adopted Accounting Pronouncements		46
	Risk Factors		48
7A	Quantitative and Qualitative Disclosures About Market Risk		49
8	Consolidated Financial Statements		51
9	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure		52
9A	Controls and Procedures		52
PART III
10	Directors and Executive Officers		53
11	Executive Compensation		53
12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		53
13	Certain Relationships and Related Transactions		53
14	Principal Accountant Fees and Services		53
PART IV
15	Exhibits, Financial Statement Schedules and Reports On Form 8-K		54
Signatures			S-1
Sixth Amended/Restated 1997 Stock Option Plan
Second Amended/Restated 1989 Stock Awards Plan
Amended/Restated Exec. Deferred Compensation Plan
Amended/Restated 1997 Employee Stock Purchase Plan
Amended/Restated Credit Agreement
Amended/Restated Receivables Purchase Agreement
Amended/Restated Receivables Purchase Agreement
List of Subsidiaries
Consent of Deloitte & Touche LLP
Certification of CEO Pursuant to Section 302
Certification of CFO Pursuant to Section 302
Certification of CEO Pursuant to Section 906
Certification of CFO Pursuant to Section 906

PART I

Item 1.     Business

      We are a leading food and beverage company. Our Dairy Group is the largest processor and distributor of milk and various other dairy products in the United States. Our Branded Products Group markets and sells a variety of well known dairy and dairy-related branded products including, for example: Silk® soymilk; Horizon Organic® dairy products and juices; International Delight® coffee creamers; Marie’s® refrigerated dips and dressings; and Hershey’s® milks and milkshakes. Our Specialty Foods Group is one of the leading pickle processors in the United States and a maker of a variety of other specialty food products. We also own the fourth largest dairy processor in Spain.

      Our principal executive offices are located at 2515 McKinney Avenue, Suite 1200, Dallas, Texas 75201. Our telephone number is (214) 303-3400. We maintain a worldwide web site at www.deanfoods.com. We were incorporated in Delaware in 1994.

Segments and Operating Divisions

      In 2003, we had three reportable segments, including the Dairy Group, Morningstar/ White Wave and the Specialty Foods Group. Effective January 1, 2004, we reorganized our former Morningstar Foods division, which has resulted in a new segment reporting structure. See “— Developments Since January 1, 2003.” We now have the following reportable segments: the Dairy Group, the Branded Products Group and the Specialty Foods Group. Our reportable segments and other operating divisions are described below.

     Dairy Group

      Our Dairy Group manufactures, markets and distributes a wide variety of branded and private label “dairy case” products to retailers, distributors, foodservice outlets, schools and governmental entities across the United States. The Dairy Group also manufactures most of the products marketed and sold by our Branded Products Group. See “— Branded Products Group.”

      The Dairy Group’s sales totaled approximately $7.15 billion in 2003, or approximately 78% of our consolidated 2003 sales. The following charts graphically depict the Dairy Group’s 2003 sales by product and by channel, and indicate the percentage of private label versus branded sales.

(1)	Includes, among other things, regular milk, flavored milks, buttermilk, half-and-half, whipping cream, dairy coffee creamers and ice cream mix.
(2)	Includes ice cream and ice cream novelties.
(3)	Includes yogurt, cottage cheese, sour cream and dairy-based dips.
(4)	Includes fruit juice, fruit-flavored drinks and water.
(5)	Includes, among other things, non-dairy coffee creamers, condensed milk and non-dairy dips.
(6)	The Dairy Group’s largest customer is Wal-Mart (including its subsidiaries, such as Sam’s Club), which accounted for 13.4% of the Dairy Group’s 2003 sales.

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(7)  Such as restaurants and hotels.

      Products not sold under customer brands are sold under the Dairy Group’s local and regional proprietary or licensed brands, including the following:

Northeast Region(1)	Southeast Region(1)	Midwest Region(1)	Southwest Region(1)
Chug® Dean’s® fitmilk® Garelick Farms® Lehigh Valley® Meadowbrook® Nature’s PrideTM Reiter® Sealtest® (licensed brand) Shenandoah’s Pride® Swiss® Tuscan®	Barbers® Broughton® Chug® Country Delite® Dairy Fresh® Dean’s® Frostbite® Louis Trauth® Mayfield® McArthur® Pet® (licensed brand) PurityTM TG Lee®	Borden® (licensed brand) Chug® Country Charm® Country Fresh® Dean’s® Land O’Lakes® (licensed brand) Melody Farms® Reiter® Schenkel’s All*Star® Verifine®	Adohr Farms® Alta Dena® Barbe’s® Berkeley FarmsTM Borden® (licensed brand) Brown’sTM Chug® Country Charm® CreamlandTM Dairy GoldTM Dean’s® ForemostTM (licensed brand) Gandy’s® Hygeia® Meadow Gold® Model® Mountain High® Oak Farms® Poudre Valley® Price’sTM Robinson® Schepps® SwissTM Viva®

(1)  Our Dairy Group operates in a generally decentralized manner organized by geographic region.

      The Dairy Group sells its products primarily on a local or regional basis through its local and regional sales forces, although some national customer relationships are coordinated by the Dairy Group’s corporate sales department. Most of the Dairy Group’s customers purchase products from the Dairy Group either by purchase order or pursuant to contracts that are generally terminable at will by the customer. The Dairy Group’s sales are slightly seasonal, with sales tending to be higher in the third and fourth quarters.

      Our Dairy Group currently operates 110 manufacturing plants in 35 states. For more information about plants in the Dairy Group, see “— Item 2. Properties.”

      Due to the perishable nature of the Dairy Group’s products, our Dairy Group delivers the majority of its products from its plants or distribution branches directly to its customers’ stores in refrigerated trucks that we own or lease. This form of delivery is called a “direct store delivery” or “DSD” system. Our Dairy Group has one of the most extensive refrigerated DSD systems in the United States.

      The primary raw material used in our Dairy Group is raw milk. We purchase our raw milk primarily from farmers’ cooperatives, typically pursuant to requirements contracts (with no minimum purchase obligation). Raw milk is generally readily available. The minimum price of raw milk is regulated in most parts of the country by the federal government. Several states also regulate raw milk pricing through their own programs.

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For more information about raw milk pricing in the United States, please see “— Government Regulation — Milk Industry Regulation” and “Part II — Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Known Trends and Uncertainties — Prices of Raw Milk and Cream.” Other raw materials used by the Dairy Group, such as juice concentrates and sweeteners, in addition to packaging supplies, are generally available from numerous suppliers and we are not dependent on any single supplier for these materials. Certain of our Dairy Group’s raw materials and packaging supplies are purchased under long-term contracts in order to obtain lower costs. The prices of our raw materials increase and decrease based on supply and demand.

      The Dairy Group generally increases or decreases the prices of its fluid dairy products on a monthly basis in correlation to fluctuations in the costs of raw materials and packaging supplies.

      The dairy industry is a mature industry which has traditionally been characterized by slow to flat growth, low profit margins, fragmentation and excess capacity. Excess capacity resulted from the development of more efficient manufacturing techniques, the establishment of captive dairy manufacturing operations by some grocery retailers and declining demand for fluid milk products. Since 1990, the dairy industry has experienced significant consolidation led in part by us. Consolidation has tended to lower costs and raise efficiency. However, consumption of traditional fluid dairy products has continued to decline. According to the United States Department of Agriculture, per capita consumption of fluid milk and cream decreased by over 10% from 1990 to the end of 2002, although total consumption has remained relatively flat over the same period due to population increases. Therefore, sales growth across the industry generally remains modest, profit margins generally remain low and excess manufacturing capacity continues to exist. Many processors, including us, are now placing an increased emphasis on product differentiation and branding, as well as reducing costs, in an effort to increase consumption, sales and margins.

      The dairy industry is highly competitive. Our Dairy Group has several competitors in each of our major product and geographic markets. Competition between dairy processors for shelf-space with retailers is based primarily on price, service and quality, while competition for consumer sales is based on a variety of factors such as brand recognition, price, taste preference and quality. Dairy products also compete with many other beverages and nutritional products for consumer sales.

      For more financial information about our Dairy Group’s recent operations, see “Part II — Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 20 to our Consolidated Financial Statements.

Branded Products Group

      Our Branded Products Group consists of three distinct operating divisions: White Wave, Horizon Organic and the National Brand Group. Our Branded Products Group develops, markets and sells our portfolio of strategic brands, including Silk® soymilk, Horizon Organic® dairy products, juices and infant formula, International Delight® coffee creamers, Hershey’s® milks and milkshakes, Land O’Lakes® Dairy Ease® and Land O’Lakes® creamers, Marie’s® dips and dressings, The Organic Cow of Vermont® organic milk, Rachel’s Organic^TM organic dairy products (sold in the U.K.), Folgers® Jakada® milk and coffee beverages and Dean’s® dips. The Branded Products Group also sells certain branded products that we do not include in our portfolio of strategic brands.

      Prior to 2004, we had a Morningstar Foods division that manufactured, marketed and sold all of our strategic brands except for our soy products, and also manufactured and sold private label dairy products. Approximately half of Morningstar Foods’ 2003 sales consisted of private label dairy products. In mid-2003, we began the process of reorganizing the operations of our Morningstar Foods division, as part of a company-wide effort to sharpen our focus on our strategic brands and to maximize our manufacturing efficiency. Effective January 1, 2004, we completed the shift of all of Morningstar Foods’ private label sales and all of its manufacturing operations to the Dairy Group. We also created the National Brand Group and assigned it the sole responsibility of developing, marketing and selling the former Morningstar Foods’ strategic brands and certain other branded products. These changes have resulted in a new segment reporting structure, which will commence in the first quarter of 2004.

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      We acquired Horizon Organic on January 2, 2004. Its financial results will be included in our new Branded Products Group segment beginning with the first quarter of 2004.

      The former Morningstar/ White Wave segment had sales of $1.11 billion in 2003, or approximately 12% of our consolidated 2003 sales. 2003 sales to Morningstar/ White Wave’s largest customer, Wal-Mart (including its subsidiaries), represented 12.8% of Morningstar/ White Wave’s 2003 sales. The following chart graphically depicts our former Morningstar/ White Wave segment’s 2003 sales by product category.

(1)  Includes tofu, tempeh and seitan sold under the White Wave® brand; Silk cultured soy; Morningstar Foods’ frozen pre-whipped topping and frozen creamer operations sold in July 2003; Mocha Mix® non-dairy liquid coffee creamer; Second Nature® egg substitute and Naturally Yours® sour cream.

      For more information about our former Morningstar/ White Wave segment, see “Part II — Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 20 to our Consolidated Financial Statements.

      White Wave — White Wave markets and sells Silk soymilk, the leading brand of soymilk in the United States; Sun Soy soymilk; Silk cultured soy products; and White Wave branded tofu, tempeh and seitan to a variety of customers across the United States and in several foreign countries, including mass merchandisers, club stores, grocery stores, natural foods stores, convenience stores and foodservice outlets, using its internal sales force and independent brokers. Most of White Wave’s customers purchase products from White Wave either by purchase order or pursuant to contracts that are generally terminable at will by the customer.

      Soymilk and cultured soy are manufactured by blending soymilk concentrate extracted from soybeans with certain proprietary ingredients. White Wave produces soymilk concentrate at three facilities that we own or lease. Due to recent rapid growth in Silk sales, all of White Wave’s extraction facilities were operating at full capacity in 2003. Therefore, in order to meet demand, White Wave purchased approximately 48% of its 2003 soymilk concentrate requirements from third parties. In 2004, we intend to install additional extraction operations in certain of our company-owned plants. Silk products and Sun Soy are processed into finished products at four company-owned plants across the country. White Wave also contracts with various third parties to co-pack Silk products at their plants. White Wave’s tofu, tempeh and seitan products are produced at White Wave’s owned facility in Boulder, Colorado.

      Most of White Wave’s products are delivered by common carrier to customer warehouses, although some of its products are distributed through our Dairy Group’s DSD system.

      The primary raw materials used by White Wave are organic soybeans and organic soybean concentrate. We purchase organic soybeans and organic soybean concentrate from a number of suppliers. Organic soybeans and other raw materials used by White Wave, such as organic sugar, flavorings and packaging materials, are generally available from several suppliers and we are not dependent on any single supplier for these materials. Certain of White Wave’s raw materials are purchased under contracts in order to guarantee supply and to obtain lower costs. The prices of White Wave’s raw materials increase and decrease based on supply and demand.

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      White Wave has several competitors in each of its product markets. Competition to obtain shelf-space with retailers for a particular product is based primarily on the expected or historical sales performance of the product compared to its competitors. Also, in some cases, White Wave pays fees to retailers to obtain shelf-space for a particular product. Competition for consumer sales is based on many different factors, including brand recognition, price, taste preferences and quality. Consumer demand for soy foods has grown rapidly in recent years due to growing consumer confidence in the health benefits of soy. White Wave has a leading position in the soy foods category, and particularly the soymilk segment. However, soy foods and soymilk compete with many other beverages and nutritional products for consumer sales, including traditional milk products.

      Horizon — Horizon Organic markets and sells a full-line of branded and private label organic dairy products and juices to retailers across the United States and in the U.K. using its internal sales force and independent brokers. Horizon Organic’s product offerings include milk, cheese, yogurt, butter, sour cream, cottage cheese, pudding, fruit jells, half and half, whipping cream, cream cheese, fruit juice and infant formula. All of Horizon Organic’s products are “certified organic products,” as defined by the USDA’s Organic Regulations.

      Approximately 50% of Horizon Organics’ product offerings are sold under the Horizon Organic brand. Another 6% are sold under our proprietary The Organic Cow of Vermont brand, 25% are sold in the U.K. under our Rachel’s Organic brand and 19% are sold under private labels. We have licensed the Horizon Organic brand to third parties for use on eggs in the United States and on organic dairy products in Japan.

      The majority of Horizon Organic’s fluid dairy products are pasteurized at ultra-high temperatures (“UHT”) and, therefore, they have longer shelf-lives than conventional fluid dairy products.

      Horizon Organic sells most of its products either by purchase order or pursuant to contracts that are generally terminable at will by the customer. Sales of Horizon Organic’s products are slightly seasonal, with sales tending to be higher in the fourth quarter.

      In the United States, Horizon Organic outsources the processing of all of its products to third party processors, including our Dairy Group. In 2003, our Dairy Group manufactured approximately 27% of Horizon Organic’s fluid dairy products. In the U.K., we outsource all production except for organic yogurt, which is processed at our company-owned plant in Aberystwyth, Wales.

      The majority of Horizon Organic’s products are delivered by common carrier to customer warehouses, although some are distributed through third-party distributors or through our Dairy Group’s DSD system.

      The primary raw material used by Horizon Organic is organic raw milk. Organic raw milk is not readily available and the growth of our business will depend on us being able to procure sufficient quantities of organic raw milk in time to meet our needs. We currently purchase organic raw milk from a network of over 200 producers across the United States. We generally enter into supply agreements with dairy farmers, with typical terms of one to two years, that obligate us to purchase certain minimum quantities. The minimum price of raw milk is regulated in most parts of the U.S. by the federal government and some states. The prices we pay for organic raw milk, however, generally far exceed the statutory minimums. We also produce certain of our own organic raw milk needs in the U.S. at two organic farms that we own and operate. In the U.K. we source all of our organic raw milk from two farmers’ cooperatives and three independent farmers pursuant to formal supply agreements. Other raw materials used by Horizon Organic, such as organic juice concentrate and sweeteners, in addition to packaging supplies, are generally readily available from several suppliers and we are not dependent on any single supplier for these materials. Certain of these materials are purchased under long-term contracts in order to obtain lower costs. The prices of Horizon Organic’s raw materials increase and decrease based on supply and demand.

      Horizon Organic has numerous competitors in each of its product markets. Competition to obtain shelf-space with retailers for a particular product is based primarily on the expected or historical sales performance of the products compared to its competitors. Also, in some cases, Horizon Organic pays fees to retailers to obtain shelf-space for a particular product. Competition for consumer sales is based on many different factors, including brand recognition, price, taste preferences and quality. Consumer demand for organic foods has

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grown rapidly in recent years due to growing consumer confidence in the health benefits of organic foods. Horizon Organic has a leading position in the organic foods industry. However, organic foods compete with many other foods and beverages and nutritional products for consumer sales.

      National Brand Group — Our National Brand Group markets and sells the following brands included in our strategic brand portfolio: International Delight coffee creamers, Hershey’s milks and milkshakes, Land O’Lakes Dairy Ease and Land O’Lakes creamers, Marie’s dips and dressings, Folgers Jakada milk and coffee beverage and Dean’s dips. Other branded products sold by the National Brand Group include Mocha Mix® non-dairy liquid coffee creamer, Naturally Yours^TM sour cream and Second Nature® egg substitute. We license the Hershey’s, Land O’Lakes and Folgers names from third parties for use on certain of our products. All of the National Brand Group’s products are manufactured by the Dairy Group.

      The National Brand Group sells its products to a wide variety of retail outlets, foodservice customers and distributors across the United States and in a number of foreign countries through its internal sales force and independent brokers. Most of the National Brand Group’s customers purchase products from the National Brand Group either by purchase order or pursuant to contracts that are generally terminable at will by the customer. Sales of the National Brand Group’s products are seasonal, with sales tending to be higher in the fourth quarter.

      Most of the National Brand Group’s products are delivered by common carrier, although some of its products are distributed through our Dairy Group’s DSD system.

      The National Brand Group competes in a number of different product markets and competition is intense in all of its markets. For most of its products, competition to obtain shelf-space with retailers is based primarily on the expected or historical sales performance of the product compared to its competitors. Also, in some cases, the National Brand Group pays fees to retailers to obtain shelf-space for a particular product. Competition for consumer sales is based on many different factors, including brand recognition, price, taste preferences and quality. All of the National Brand Group’s products compete with other food products and beverages for consumer sales.

Specialty Foods Group

      Our Specialty Foods Group is one of the nation’s leading pickle processors, and the largest manufacturer and seller of powdered non-dairy coffee creamers in the United States. The Specialty Foods Group also manufactures and sells a variety of specialty foods, such as powdered ingredients, aseptic sauces and nutritional beverages. The Specialty Foods Group’s sales totaled $684.2 million in 2003, or approximately 7.4% of our consolidated 2003 sales. The following charts graphically depict the Specialty Foods Group’s 2003 sales by product category and channel, and indicate the percentage of private label sales versus branded sales:

(1)  Approximately 67% of the Specialty Foods Group’s pickle, relish and pepper products are sold under customer brands, with the remaining 33% sold under our proprietary brands including Atkins®, Cates®, Heifetz®, Nalley’s®, Steinfeld^TM, Farmans®, Paramount®, Peter Piper®, Roddenberry® and Schwartz®. Branded products are sold to retailers and private label products are sold to retailers, foodservice customers and in bulk to other food processors.

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(2)	In addition to powdered coffee creamers, the Specialty Foods Group also sells shortening powders and other high-fat powder formulas used in baking, beverage mixes, gravies and sauces, and premium and low-fat powdered products. In 2003, all of the Specialty Foods Group’s powdered products were sold under customer brands to retailers, distributors and in bulk to other food companies for use as ingredients in their products.
(3)	Aseptic products are sterilized using a process which allows storage for prolonged periods without refrigeration. Our Specialty Foods Group manufactures aseptic cheese sauces, puddings and nutritional beverages. Our cheese sauces and puddings are sold primarily under private labels to distributors. Aseptic nutritional beverages (which are in the meal supplement, weight loss/ gain and sports categories) are sold entirely under private labels to retailers and distributors.
(4)	Includes shrimp, seafood, tarter, horseradish, chili, sweet and sour sauces and syrups sold to retail grocers in the Eastern, Midwestern and Southern United States. These products are sold under the Bennett’s® and Hoffman House® brand names.
(5)	Includes mass merchandisers, club stores, convenience stores and grocery stores.

      The Specialty Foods Group’s products are delivered to customers’ stores and warehouses primarily by common carrier. The Specialty Foods Group sells its products through its internal sales force and through independent brokers. Most of the Specialty Foods Group’s customers purchase products from the Specialty Foods Group either by purchase order or pursuant to contracts that are generally terminable at will by the customer. Sales of the Specialty Foods Group’s pickle products are generally higher in the second and fourth quarters and sales of its powdered products are generally higher in the fourth quarter.

      Our Specialty Foods Group uses a wide variety of raw materials. The main raw material used by the Specialty Foods Group is cucumbers. The Specialty Foods Group purchases cucumbers under seasonal grower contracts with a variety of growers. We supply seeds and advise growers regarding planting techniques. We also monitor and arrange for the control of insects, direct the harvest and, for some crops, provide automated harvesting services. Other raw materials used by the Specialty Foods Group, such as corn syrup, soy bean oil and casein, in addition to packaging materials, are generally available from numerous suppliers and we are not dependent on any single supplier for these materials. Certain of the Specialty Foods Group’s raw materials and packaging supplies are purchased under long-term contracts in order to guarantee supply and to obtain lower costs. The prices of the Specialty Foods Group’s raw materials increase and decrease based on supply and demand.

      The Specialty Foods Group produces its products in 11 plants located across the United States. For more information about the Specialty Foods Group’s manufacturing plants, see “— Item 2. Properties.”

      The Specialty Foods Group has several competitors in each of its product markets. For most of Specialty Foods Group’s products, competition to obtain shelf-space with retailers is based on the expected or historical sales performance of the product compared to its competitors. In rare cases, the Specialty Foods Group pays fees to retailers to obtain shelf-space for a particular company-branded product. Competition for consumer sales is based on brand recognition, price, taste preferences, and quality. The Specialty Foods Group also competes with other food and nutritional products for consumer sales.

      For more information about our Specialty Foods Group segment, see “Part II — Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 20 to our Consolidated Financial Statements.

International Group

      Our International Group manufactures, markets and sells private label and branded milk, butter, cream and cheese through its internal sales force to retailers and distributors across Spain and Portugal. The International Group’s sales totaled $244.9 million in 2003, or approximately 2.6% of our consolidated sales.

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      The following charts graphically depict the International Group’s 2003 sales by product category and channel, and indicate the percentage of private label sales versus company branded sales.

(1)	All of our International Group’s milk and cream are pasteurized at ultra-high temperatures, which is referred to in the industry as “UHT.”
(2)	Our International Group’s largest customers are Distribución Internacional de Alimentación S.A., Lidl Supermercados S.A. and Eroski Sociedad Cooperativa, which accounted for approximately 14%, 12% and 12%, respectively, of the International Group’s 2003 sales.
(3)	Including our proprietary Celta® and Campobueno® brands.

      Our International Group manufactures its products in four plants located in the Galicia and Cantabria regions of Spain. For more information about our International Group plants, see “— Item 2. Properties.” We are currently building a fifth plant, located in Alpiarca, Portugal, which we expect to commence operations in the third quarter of 2004. Our International Group operates its business primarily from its headquarters located in Pontedeume, Galicia.

      The long shelf-life of our International Group’s UHT fluid milk products allows delivery by common carrier. Most of the International Group’s customers purchase its products either by purchase order or by contracts that are generally terminable at will by the customer. Our International Group’s sales are slightly seasonal, with sales tending to be lower in the third quarter.

      The primary raw material used by our International Group is raw milk. We purchase our raw milk from farmers’ cooperatives and other intermediaries pursuant to formal and informal contractual arrangements. Raw milk production volume is regulated by European Union quotas which sometimes limit the availability of raw milk to processors. The price of raw milk is defined solely by supply and demand and can fluctuate widely. Our International Group purchases its packaging materials from two leading suppliers. Packaging materials represent a significant portion of our International Group’s raw material costs and are purchased under long-term contracts in order to obtain lower costs.

      The Iberian fluid dairy market, which includes Spain and Portugal, is characterized by relatively high per capita consumption and the UHT “brick pack” format dominates the industry. The combination of these factors makes the Iberian region one of the largest UHT markets in the world. The Iberian fluid dairy market has been characterized over the past 20 years by slow growth in the core products and faster growth for value-added products such as nutritionally enriched milks. The Iberian fluid dairy industry is highly competitive, with leading companies investing heavily in innovation and branding. The industry has undergone significant consolidation in the past 5 to 10 years leading to the emergence of several national brands, including our Celta® brand. Our International Group competes with all the leading fluid dairy processors operating in the Iberian region. Competition between dairy processors for private label business has intensified recently as a result of retailer consolidation, and is based primarily on price, service and quality. Competition for branded sales to consumers is based on a number of factors, including brand recognition, price and quality.

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Current Business Strategy

      We are focused on consistently creating and maximizing shareholder value primarily through the following strategies:

Investing in Our Brands

      We believe that investing in our brands is key to growing our sales and our profitability. In 2004, we intend to spend approximately $210 million marketing the strategic brands of our Branded Products Group, with an emphasis on our largest and most successful brands: Silk, Horizon Organic, International Delight and Hershey’s. In addition, during 2004 we expect to spend approximately $50 million marketing our regional Dairy Group brands.

Rationalizing Our Operations

      An important part of our strategy is reducing costs and ensuring that our resources are properly aligned with our strategic direction. Therefore, in 2004 we intend to continue (i) rationalizing production between manufacturing facilities and realigning Dairy Group delivery routes, (ii) closing facilities with overlapping markets or excess capacity, and (iii) eliminating duplicative administrative functions.

Investing Our Cash

      Our company generates a significant amount of cash flow from operating activities. In addition to investing in our brands, we intend to invest our capital where we believe returns are greatest, which could include acquisitions in our core lines of business, repurchases of our stock and/or reductions of indebtedness.

Developments Since January 1, 2003

Acquisitions and Divestitures

      On January 26, 2004, our Dairy Group acquired Ross Swiss Dairies, a dairy distributor based in Los Angeles, California, which had net sales of approximately $120 million in 2003. As a result of this acquisition, we have increased the distribution capability of our Dairy Group in southern California, allowing us to better serve our customers. Ross Swiss Dairies has historically purchased a significant portion of its products from other processors. We intend to shift the manufacturing of substantially all of Ross Swiss Dairies’ product needs into our southern California plants in 2004. We paid approximately $20 million for the purchase of Ross Swiss Dairies and funded the purchase price with borrowings under our receivables-backed facility.

      On January 2, 2004, we completed the acquisition of the 87% of Horizon Organic Holding Corporation that we did not already own. Horizon Organic Holding Corporation had sales of approximately $214 million during 2003. We already owned approximately 13% of the outstanding common stock of Horizon Organic Holding Corporation as a result of investments made in 1998. All of Horizon Organic’s manufacturing has historically been done by third-party co-packers, including us. During 2003, we produced approximately 27% of Horizon Organic’s dairy products. We also distributed Horizon Organic’s products in several parts of the country. Over time, we intend to increase the percentage of Horizon Organic’s manufacturing that is done in our plants, which we believe will lower its manufacturing costs. We also believe that we can achieve greater distribution for Horizon Organic’s products by leveraging our Dairy Group’s DSD system. Horizon Organic is the leading branded organic foods company in the United States. Because organic foods are gaining popularity with consumers and because Horizon Organic’s products offer consumers an alternative to our Dairy Group’s traditional dairy products, we believe Horizon Organic is an important addition to our portfolio of strategic brands. The purchase price for the 87% of Horizon Organic that we did not already own was approximately $216 million, all of which was funded using borrowings under our senior credit facility and our receivables-backed facility. We also repaid approximately $40 million of borrowings under Horizon Organic’s former credit facilities. Beginning with the first quarter of 2004, Horizon Organic’s financial results will be reported in our Branded Products Group segment.

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      On December 24, 2003, our Specialty Foods Group acquired the “Cremora®” branded non-dairy powdered coffee creamer business from Eagle Family Foods. Prior to the acquisition, we had been producing Cremora creamers for Eagle Family Foods pursuant to a co-packing arrangement, which generated approximately $8.9 million of net sales for us in 2003. Cremora is the first branded powdered coffee creamer offering for Specialty Foods. The Cremora brand had sales of approximately $15.8 million for the 12 months ended June 30, 2003. We purchased the Cremora business from Eagle Family Foods for a purchase price of approximately $12.6 million, all of which was funded using borrowings under our senior credit facility.

      On October 15, 2003, we acquired Kohler Mix Specialties, Inc., the dairy products division of Michael Foods, Inc. Kohler’s product line consists primarily of private label ultra-pasteurized ice cream mixes, creamers and creams, sold primarily in the foodservice channel. From the time of the acquisition through the end of 2003, Kohler was part of our former Morningstar/White Wave segment. Effective January 1, 2004, Kohler became part of our Dairy Group, along with all of Morningstar Foods’ other private label and manufacturing operations. The acquisition of Kohler increased the Dairy Group’s UHT processing capacity, which we need to meet the expanding needs of our Branded Products Group. Kohler had net sales of approximately $187.5 million for the 12 months ended August 31, 2003 and has three plants located in White Bear Lake, Minnesota, Sulphur Springs, Texas and Newington, Connecticut. We paid approximately $158.6 million for the purchase of Kohler, all of which was funded using borrowings under our receivables-backed facility.

      On July 31, 2003, our Morningstar/White Wave segment sold its frozen pre-whipped topping and frozen coffee creamer operations for cash proceeds of approximately $90 million, all of which was used to reduce indebtedness. The divested operations were our only operations with frozen warehouse distribution, and we sold it in order to more closely align our financial and management resources with our strategic direction and expertise.

      On June 9, 2003, our Dairy Group acquired Melody Farms, LLC. Melody Farms, which is now a part of the Midwest region of our Dairy Group, is a regional dairy processor based in Livonia, Michigan, that produces fluid dairy and ice cream products from two plants in Michigan. Our acquisition of Melody Farms expands our distribution reach and allows us to better serve our customers in the Michigan area. Melody Farms had net sales of approximately $116 million during the 12 months ended March 31, 2003. We paid approximately $52.7 million for Melody Farms, all of which was funded using borrowings under our receivables-backed facility.

Organizational Changes

      In mid-2003, we began the process of reorganizing the operations of our Morningstar Foods division as part of a company-wide effort to sharpen our focus on our strategic brands and to maximize our manufacturing efficiency. We shifted all of Morningstar Foods’ private label sales and all of its manufacturing operations to our Dairy Group. We then created the National Brand Group and assigned it the sole responsibility of developing, marketing and selling Morningstar Foods’ nationally branded products. The reorganization was completed effective January 1, 2004. The National Brand Group is part of our Branded Products Group segment.

Rationalization Activities

      As part of our overall integration and cost reduction strategy, we closed or announced the closure of five Dairy Group facilities in 2003 and reduced (or intend to reduce) our workforce accordingly. We also restructured certain administrative functions in the Northeast and Midwest regions of our Dairy Group, in addition to Morningstar Foods.

      We incurred expenses of approximately $11.8 million during 2003 related to these plant closings and reorganizations. These charges included the following costs:

•  Workforce reduction costs, which were charged against our earnings in the period that the plan was established in detail and employee severance and benefits had been appropriately communicated;

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•  Shutdown costs, including those costs necessary to prepare facilities for re-sale or closure;

•  Costs incurred after shutdown such as lease obligations or termination costs, utilities and property taxes; and

•  Write-downs of property, plant and equipment and other assets, primarily for asset impairments as a result of facilities no longer used in operations. The impairments related primarily to owned building, land and equipment at the facilities that were written down to their estimated fair value and sold or marketed for sale.

      See Note 15 to our Consolidated Financial Statements.

Branded Product Initiatives

      Our nationally branded products were a significant focus for us in 2003. We spent approximately $188 million marketing and gaining additional distribution for our strategic brands during 2003. Unit sales of our strategic brands increased by more than 27% in 2003, on a pro forma basis as if White Wave had been owned for all of 2002. Some highlights of our 2003 branded product initiatives included the following:

      International Delight Coffee Creamers — In the first half of 2003, we launched the national rollout of International Delight in its newly designed plastic pint bottle, and in the second half of the year we introduced International Delight in a quart-sized plastic bottle. In the first quarter of 2004, we introduced two flavors of International Delight with a low-carb formulation.

      Silk Soymilk — In the first quarter of 2003, we announced that White Wave had entered into a three-year agreement with Starbucks pursuant to which, beginning in the summer of 2003, Silk became the exclusive soymilk used in handcrafted beverages in all Starbucks locations throughout the United States. Single-serve bottles of Silk are also sold separately in certain Starbucks locations. In the fourth quarter of 2003, White Wave launched five new Silk product offerings, including 128-ounce plain, vanilla, very vanilla, unsweetened and enhanced.

      Marie’s Dressings — At the end of the first quarter of 2003, Marie’s dressings were re-launched nationally in a newly redesigned oval jar. Historically, Marie’s dressings were sold in different packages and pack sizes in different parts of the country because rights to the brand had been licensed to another processor in the western United States. In 2002, we purchased all outstanding rights to the Marie’s brand and became the sole owner, marketer and distributor of the brand. In addition to the 2003 packaging change, the brand was supported with increased marketing and focus on new distribution.

      Hershey’s — A strawberry milkshake was added to the Hershey’s product line in 2003.

Stock Split

      On May 7, 2003, our Board of Directors declared a three-for-two split of our common stock, which entitled shareholders of record on May 23, 2003 to receive an additional half share of common stock for each share held on that date. The new shares were issued after the market closed on June 9, 2003. All of the share numbers in this Annual Report on Form 10-K have been adjusted for all periods to reflect the stock split.

TIPES

      In three separate transactions during the second quarter of 2003, we called for redemption all of our trust-issued preferred securities (“TIPES”). We originally issued $600 million of TIPES in a private placement in 1998. The TIPES were convertible at the option of the holders, at any time, into shares of our common stock and were redeemable, at our option, at any time at specified premiums. In response to our three announced redemption transactions, holders of more than 99% of all outstanding TIPES elected to convert their TIPES into shares of our common stock rather than receive the cash redemption price. Accordingly, during the second quarter of 2003, we issued a total of approximately 23 million shares of common stock to holders of TIPES in lieu of cash redemption payments, and we paid approximately $2.4 million in cash to holders who did not elect to convert. There are no remaining TIPES outstanding.

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Stock Buyback

      During 2003, we spent approximately $185.5 million to repurchase 6.7 million shares of our common stock for an average purchase price of $27.82 per share. At March 10, 2004, approximately $114.6 million remained available under our current authorization.

Amendment to Credit Facility

      During the third quarter of 2003, we amended our senior credit facility to (1) lower the interest rates, (2) increase the available amount of the revolver from $800 million to $1 billion, (3) increase the principal balance of the Tranche A term loan from $765 million to $1 billion, (4) lower the principal balance of the Tranche B term loan (which bears a higher interest rate than the Tranche A term loan) from $990 million to $750 million, (5) fix the leverage ratio requirement at 3.75 to 1, and (6) make certain other financial covenant changes. In December 2003, we amended our senior credit facility again to (1) provide for borrowings in euros up to $200 million under the existing $1 billion revolver, and (2) amend the leverage ratio to 4 to 1 through March 31, 2005.

Employees

      As of December 31, 2003 we had the following employees:

		No. of		% of
		Employees		Total
Dairy Group			22,624		82.4	%
Morningstar/ White Wave			2,541		9.3
Specialty Foods Group			1,880		6.8
International			255		0.9
Corporate			166		0.6
	Total		27,466		100.0	%

      9,360, or approximately 41%, of the Dairy Group’s employees and 970, or approximately 52%, of the Specialty Foods Group’s employees are members of labor unions.

Government Regulation

     Public Health

      As a manufacturer and distributor of food products, we are subject to a number of food-related regulations, including the Federal Food, Drug and Cosmetic Act and regulations promulgated thereunder by the U.S. Food and Drug Administration (“FDA”). This comprehensive regulatory framework governs the manufacture (including composition and ingredients), labeling, packaging and safety of food in the United States. The FDA:

•  regulates manufacturing practices for foods through its current good manufacturing practices regulations,

•  specifies the standards of identity for certain foods, including many of the products we sell, and

•  prescribes the format and content of certain information required to appear on food product labels.

      In addition, the FDA enforces the Public Health Service Act and regulations issued thereunder, which authorize regulatory activity necessary to prevent the introduction, transmission or spread of communicable diseases. These regulations require, for example, pasteurization of milk and milk products. We are also subject to numerous other federal, state and local regulations involving such matters as the licensing and registration of manufacturing facilities, enforcement by government health agencies of standards for our products, inspection of our facilities and regulation of our trade practices in connection with the sale of food products.

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      We use quality control laboratories in our manufacturing facilities to test raw ingredients. Product quality and freshness are essential to the successful distribution of our products. To monitor product quality at our facilities, we maintain quality control programs to test products during various processing stages. We believe that our facilities and manufacturing practices comply with all material government regulations.

     Employee Safety Regulations

      We are subject to certain safety regulations including regulations issued pursuant to the U.S. Occupational Safety and Health Act. These regulations require us to comply with certain manufacturing safety standards to protect our employees from accidents. We believe that we are in material compliance with all employee safety regulations.

     Environmental Regulations

      We are subject to various environmental regulations. Ammonia, a refrigerant used extensively in our operations, is considered an “extremely” hazardous substance pursuant to U.S. federal environmental laws due to its toxicity. Also, certain of our facilities discharge biodegradable wastewater into municipal waste treatment facilities in excess of levels permitted under local regulations. Because of this, certain of our subsidiaries are required to pay wastewater surcharges or to construct waste water pretreatment facilities. To date, such wastewater surcharges have not had a material effect on our Consolidated Financial Statements.

      We maintain above-ground or underground petroleum storage tanks at many of our facilities. These tanks are periodically inspected to determine compliance with applicable regulations. We are required to make expenditures from time to time in order to maintain compliance of these tanks. To date, such expenditures have not had a material effect on our Consolidated Financial Statements.

      We do not expect environmental compliance to have a material impact on our capital expenditures, earnings or competitive position in the foreseeable future.

     Milk Industry Regulation

      The federal government establishes minimum prices that we must pay to producers in federally regulated areas for raw milk. Raw milk contains primarily raw skim milk, in addition to a small percentage of butterfat. The federal government establishes separate minimum prices for raw skim milk and butterfat. Raw milk delivered to our facilities is tested to determine the percentage of butterfat, and we pay our suppliers separate prices for the raw skim milk and butterfat based on the results of these tests.

      The federal government’s minimum prices are calculated by economic formula based on supply and demand and vary depending on the processor’s geographic location and the type of product manufactured using the raw product. Federal minimum prices change monthly. Class I butterfat and raw skim milk prices (which are the minimum prices we are required to pay for butterfat and raw skim milk that is processed into milk) and Class II raw skim milk prices (which are the prices we are required to pay for raw skim milk that is processed into products such as cottage cheese, creams, creamers, ice cream and sour cream) for each month are announced by the federal government by the 23rd day of the immediately preceding month. Class II butterfat prices for each month are announced on or before the fifth day after the end of that month.

      Some states have established their own rules for determining minimum prices for raw milk. In addition to the federal or state minimum prices, we also pay producer premiums, procurement costs and other related charges that vary by location and vendor. A few states also have retail pricing requirements.

      In Spain, the government has established a quota system regulating the amount of milk that can be sold by individual farmers and farm cooperatives, which affects the prices we pay for raw milk.

Brief History

      We commenced operations in 1988 through a predecessor entity. Our original operations consisted solely of a packaged ice business.

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      We entered the dairy business in December 1993 when we acquired Suiza Dairy Corporation, a regional dairy processor located in Puerto Rico. We have grown our dairy business rapidly since then, primarily through a focused acquisition strategy.

      In April 1996, we completed our initial public offering (under our former name: “Suiza Foods Corporation”). Initially our common stock was traded in the Nasdaq National Market. In January 1997, we completed a second public offering. Our common stock began trading on the New York Stock Exchange in March 1997 under the symbol “SZA.” Our common stock continues to trade on the New York Stock Exchange, now under the symbol “DF.”

      In August 1997, we acquired Franklin Plastics, Inc., a company engaged in the business of manufacturing and selling plastic containers, in connection with our acquisition of a dairy company related to Franklin Plastics. We then began acquiring other companies in the plastic container business.

      In November 1997, we bought Morningstar Foods Inc., which greatly expanded our branded and value-added product lines. See “— Segments and Operating Divisions — Branded Products Group” for more information about Morningstar Foods.

      As a result of our acquisition strategy in the packaged ice industry, by 1998 we had become one of the largest manufacturers and distributors of packaged ice in the United States. In April 1998, however, we sold our packaged ice operations in order to focus our resources on our dairy and packaging operations.

      In 1999, we made a decision to further focus our resources on our core dairy business. In July 1999, therefore, we sold all of our U.S. plastic packaging operations to Consolidated Container Company in exchange for cash and a minority interest in the purchaser, and in March and May 2000, we sold our European packaging operations. Except for our minority interest in Consolidated Container Company, we no longer have any investments in the packaging industry.

      Effective January 1, 2000, we completed the acquisition of Southern Foods Group, L.P., the third largest dairy processor in the United States at the time of the acquisition. As a result of that transaction, we greatly expanded the geographic reach of our Dairy Group and became the largest fluid dairy company in the United States. See “— Segments and Operating Divisions — Dairy Group” for more information about our Dairy Group. The Southern Foods transaction was completed through a joint venture with Dairy Farmers of America (“DFA”), the nation’s largest dairy farmers’ cooperative, pursuant to which DFA obtained a 33.8% interest in our Dairy Group.

      In February 2000, we entered the European dairy industry by purchasing Leche Celta, one of the largest dairy processors in Spain. See “— Segments and Operating Divisions — International Group” for more information about our international operations.

      On December 21, 2001, we acquired Dean Foods Company (“Legacy Dean”). As a result, we are now one of the leading food and beverage companies in the United States. In connection with that transaction, we purchased the 33.8% minority interest in our Dairy Group held by DFA in exchange for cash, the operations of 11 plants that we were required to divest in connection with the Legacy Dean acquisition and certain other consideration. Also on December 21, 2001, immediately after we completed the acquisition of Legacy Dean, Legacy Dean changed its name to Dean Holding Company and we changed our name from Suiza Foods Corporation to Dean Foods Company.

      In May 2002, we bought the portion of White Wave, Inc., maker of Silk soy products, that we did not already own, and in January 2004, we bought the portion of Horizon Organic Holding Company, which markets Horizon Organic dairy and dairy-related products, that we did not already own. See Notes 2 and 22 to our Consolidated Financial Statements. Both of these acquisitions significantly expanded our portfolio of strategic brands.

Minority Holdings

      We own an approximately 40% interest in Consolidated Container Company (“CCC”), one of the nation’s largest manufacturers of rigid plastic containers and our largest supplier of plastic bottles and bottle

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components. We have owned a minority interest in CCC since July 1999 when we sold our U.S. plastic packaging operations to CCC. Vestar Capital Partners controls CCC through an approximately 55% ownership interest. The remaining approximately 5% of CCC is owned indirectly by Alan Bernon, a member of our Board of Directors, and his brother Peter Bernon. Pursuant to our agreements with Vestar, we control 2 of the 7 seats on CCC’s Management Committee. We have also entered into various supply agreements with CCC pursuant to which we have agreed to purchase certain of our requirements for plastic bottles and bottle components from CCC. In 2003, we spent approximately $167.9 million on products purchased from CCC. Because CCC has issued certain senior notes, CCC files annual, quarterly and other reports with the Securities and Exchange Commission. More information about CCC can be found on its website at www.cccllc.com or in its filings with the Securities and Exchange Commission available at www.sec.gov.

      We also own an approximately 16% interest in Momentx, Inc., the owner and operator of dairy.com, an online vertical exchange focused on bringing farmers, farm cooperatives, processors and manufacturers together in an electronic marketplace for the exchange of goods and services, supply chain efficiency tools and dairy farm optimization tools. The remaining interests in Momentx, Inc. are owned by various other dairy processing companies, dairy cooperatives and certain other individual investors who are not affiliated with us. Pursuant to existing shareholder agreements, the founding stockholders, of which we are one, are entitled collectively to elect four of the seven seats on Momentx, Inc.’s Board of Directors. Gregg Engles, our Chairman of the Board and Chief Executive Officer, is currently Chairman of the Board of Momentx, Inc. We are also a user of dairy.com’s services and in 2003 we spent approximately $0.6 million on services purchased from Momentx, Inc.

      See Note 3 to our Consolidated Financial Statements for more information about our investments in CCC and Momentx, Inc.

Where You Can Get More Information

      Our fiscal year ends on December 31. We furnish our stockholders with annual reports containing audited financial statements. In addition, we file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission. Legacy Dean, which is now known as Dean Holding Company and is a wholly-owned subsidiary of ours, also files annual, quarterly and current reports with the Securities and Exchange Commission.

      You may read and copy any reports, statements or other information that we or Dean Holding Company file with the Securities and Exchange Commission at the Securities and Exchange Commission’s Public Reference Room at 450 Fifth Street, N.W., Washington D.C. 20549. You can request copies of these documents, upon payment of a duplicating fee, by writing to the Securities and Exchange Commission. Please call the Securities and Exchange Commission at 1-800-SEC-0330 for further information on the operation of the Public Reference Room.

      We file our reports with the Securities and Exchange Commission electronically via the Securities and Exchange Commission’s Electronic Data Gathering, Analysis and Retrieval system (“EDGAR”). The Securities and Exchange Commission maintains an Internet site that contains reports, proxy and information statements, and other information regarding companies that file electronically with the Securities and Exchange Commission via EDGAR. The address of this Internet site is http://www.sec.gov.

      We also make available free of charge through our website at www.deanfoods.com our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission.

      Our Code of Ethics, which is applicable to all of our employees and directors, is available on our corporate website at www.deanfoods.com, together with the Corporate Governance Principles of our Board of Directors and the charters of all of the Committees of our Board of Directors. Any waivers that we may grant to our executive officers or directors under the Code of Ethics, and any amendments to our Code of Ethics,

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will be posted on our corporate website. If you would like hard copies of any of these documents, or of any of our filings with the Securities and Exchange Commission, write or call us at:

Dean Foods Company

2515 McKinney Avenue, Suite 1200

Dallas, Texas 75201

(214) 303-3400

Attention: Investor Relations

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Item 2.     Properties

Dairy Group

      Our Dairy Group currently conducts its manufacturing operations from the following plants, most of which are owned:

	Number
Region	of Plants		Locations of Plants
Northeast		15	• Bangor, Maine
			• Lynn, Massachusetts
			• Franklin, Massachusetts
			• Mendon, Massachusetts
			• Burlington, New Jersey
			• Union, New Jersey
			• Rensselaer, New York
			• Akron, Ohio
			• Belleville, Pennsylvania
			• Erie, Pennsylvania
			• Lansdale, Pennsylvania
			• Lebanon, Pennsylvania
			• Schuylkill Haven, Pennsylvania
			• Sharpsville, Pennsylvania
			• Springfield, Virginia
Southeast		20	• Birmingham, Alabama (2)
			• Louisville, Kentucky
			• Newport, Kentucky
			• Orange City, Florida
			• Orlando, Florida
			• Miami, Florida
			• Braselton, Georgia
			• Hickory, North Carolina
			• Winston-Salem, North Carolina
			• Wilkesboro, North Carolina
			• Marietta, Ohio
			• Toledo, Ohio
			• Florence, South Carolina
			• Spartanburg, South Carolina
			• Athens, Tennessee
			• Kingsport, Tennessee
			• Nashville, Tennessee (2)
			• Portsmouth, Virginia
Midwest		20	• Belvidere, Illinois
			• Chemung, Illinois
			• Huntley, Illinois
			• O’Fallon, Illinois
			• Rockford, Illinois
			• Huntington, Indiana

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	Number
Region	of Plants		Locations of Plants
			• Rochester, Indiana
			• Detroit, Michigan
			• Evart, Michigan
			• Flint, Michigan
			• Grand Rapids, Michigan (2)
			• Lansing, Michigan
			• Livonia, Michigan
			• Thief River Falls, Minnesota
			• Woodbury, Minnesota
			• Bismarck, North Dakota
			• Springfield, Ohio
			• Sioux Falls, South Dakota
			• Sheboygan, Wisconsin
Southwest		40	• Buena Park, California (2)
			• City of Industry, California
			• Fullerton, California
			• Hayward, California
			• Riverside, California
			• Tulare, California
			• San Leandro, California
			• Delta, Colorado
			• Denver, Colorado (3)
			• Englewood, Colorado
			• Greeley, Colorado
			• Honolulu, Hawaii
			• Hilo, Hawaii
			• Boise, Idaho
			• Pocatello, Idaho
			• New Orleans, Louisiana
			• Shreveport, Louisiana
			• Westwego, Louisiana
			• Billings, Montana
			• Great Falls, Montana
			• Kalispell, Montana
			• Lincoln, Nebraska
			• Reno, Nevada
			• Albuquerque, New Mexico (2)
			• Tulsa, Oklahoma
			• Dallas, Texas (2)
			• El Paso, Texas
			• Houston, Texas
			• Lubbock, Texas
			• McKinney, Texas
			• San Antonio, Texas

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	Number
Region	of Plants		Locations of Plants
			• Sulphur Springs, Texas
			• Waco, Texas
			• Orem, Utah
			• Salt Lake City, Utah
Morningstar Manufacturing		15	• City of Industry, California (2)
			• Gustine, California
			• Newington, Connecticut
			• Jacksonville, Florida
			• Thornton, Illinois
			• Murray, Kentucky
			• Frederick, Maryland
			• White Bear Lake, Minnesota
			• New Delhi, New York
			• Sulphur Springs, Texas (2)
			• Mt. Crawford, Virginia
			• Madison, Wisconsin
			• Richland Center, Wisconsin

      Each of the Dairy Group’s manufacturing plants also serves as a distribution facility. In addition, our Dairy Group has numerous distribution branches located across the country, some of which are owned but most of which are leased. The Dairy Group’s headquarters are located in Dallas, Texas in leased premises.

Branded Products Group

      White Wave, which is part of our Branded Products Group segment, currently owns or leases the following properties:

•  Boulder, Colorado – tofu manufacturing plant

•  Jacksonville, Florida – extraction facility

•  Bridgeton, New Jersey – extraction facility

•  Cedar City, Utah – extraction facility

      White Wave’s corporate headquarters are located in leased premises in Boulder, Colorado.

      Horizon Organic Holding Corporation, also part of our Branded Products Group segment, owns or leases the following properties:

•  (near) Paul, Idaho – organic dairy farm

•  Kennedyville, Maryland – organic dairy farm

•  Wilton, California – farm land

•  Aberystwyth, Wales – office and production space

      Horizon Organic Holding Corporation’s corporate headquarters are located in leased premises in Longmont, Colorado.

      The National Brand Group’s corporate headquarters are located in leased premises in Dallas, Texas.

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Specialty Foods Group

      Our Specialty Foods Group segment currently conducts its manufacturing operations from plants in the following locations, all but one of which are owned:

•  LaJunta, Colorado

•  New Hampton, Iowa

•  Chicago, Illinois

•  Dixon, Illinois

•  Pecatonica, Illinois

•  Plymouth, Indiana

•  Benton Harbor, Michigan

•  Wayland, Michigan

•  Faison, North Carolina

•  Portland, Oregon

•  Green Bay, Wisconsin

      The Specialty Foods Group’s headquarters are located at its plant in Green Bay, Wisconsin.

International Group

      Our International Group currently manufactures its products from plants in the following locations, all of which are owned:

•  Pontedeume, Galicia

•  Meira, Galicia

•  Meruelo, Cantabria

•  Escairón, Galicia

      The International Group’s headquarters are located in owned premises in Pontedeume, Galicia.

Corporate

      Our corporate headquarters are located in leased premises at 2515 McKinney Avenue, Suite 1200, Dallas, Texas 75201.

Item 3.     Legal Proceedings

      On November 4, 2003, we received a notice (a so-called “Wells Notice”) from the staff of the Securities and Exchange Commission (the “SEC”) informing us that the staff was planning to recommend that the SEC bring a civil injunctive action against our company. The notice cites the staff’s belief that we aided and abetted The Fleming Companies in Fleming’s acceleration of revenue recognition by providing Fleming with correspondence that allowed Fleming to characterize two payments totaling $2.7 million made by us to Fleming as current income rather than deferred revenue to be recognized over future periods. Two officers of our Dairy Group received similar notices. We expensed the two payments made to Fleming during the quarters in which they were paid, and the Wells Notice contains no allegations regarding our financial statements. We have cooperated fully in the investigation, and we are currently engaged in settlement discussions with the staff. We do not expect the investigation or a settlement thereof to have a material adverse impact on our company.

Item 4.     Submission of Matters to a Vote of Security Holders

      No matter was submitted by us during the fourth quarter of 2003 to a vote of security holders, through the solicitation of proxies or otherwise.

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PART II

Item 5.     Market for Our Common Stock and Related Matters

      Our common stock began trading on the Nasdaq National Market on April 17, 1996, and continued trading on the Nasdaq until March 5, 1997, when it began trading on the New York Stock Exchange under the symbol “SZA.” We changed our trading symbol to “DF” effective December 24, 2001. The following table sets forth the high and low sales prices of our common stock as quoted on the New York Stock Exchange for the last two fiscal years. At March 10, 2004, there were approximately 6,200 record holders of our common stock.

		High		Low
2002:
	First Quarter	$	25.28	$	20.35
	Second Quarter		25.67		23.57
	Third Quarter		26.52		18.61
	Fourth Quarter		26.81		23.60
2003:
	First Quarter		28.98		24.76
	Second Quarter		31.50		28.41
	Third Quarter		33.52		27.96
	Fourth Quarter		33.25		30.01
2004:
	First Quarter (through March 10, 2004)		36.86		31.15

      We have never declared or paid a cash dividend on our common stock. Our current intention is to retain all earnings to cover working capital fluctuations and to fund capital expenditures, scheduled debt repayments, stock buybacks and acquisitions and we do not anticipate paying cash dividends on our common stock in the foreseeable future. Moreover, our senior credit facility contains certain restrictions on our ability to pay cash dividends. See “— Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Current Debt Obligations” and Note 9 to our Consolidated Financial Statements for further information regarding the terms of our senior credit facility.

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Item 6.     Selected Financial Data

      The following selected financial data as of and for each of the five years in the period ended December 31, 2003 has been derived from our audited Consolidated Financial Statements. The selected financial data do not purport to indicate results of operations as of any future date or for any future period. The selected financial data should be read in conjunction with our Consolidated Financial Statements and related Notes.

				Year Ended December 31
				2003			2002(1)			2001(1)			2000(1)			1999(1)
				(Dollars in thousands except share data)
Operating data:
	Net sales(2)			$	9,184,616		$	8,991,464		$	5,974,555		$	5,499,712		$	4,224,620
	Cost of sales				6,808,207			6,642,773			4,574,258			4,150,170			3,304,473
	Gross profit				2,376,409			2,348,691			1,400,297			1,349,542			920,147
	Operating costs and expenses:
		Selling and distribution			1,345,065			1,321,763			794,937			756,445			468,517
		General and administrative			317,342			337,496			176,642			174,353			139,175
		Amortization of intangibles(3)			4,949			7,775			51,361			49,776			35,849
		Plant closing, merger and other costs			11,787			19,050			9,550			2,747			11,185
		Other operating (income) expense(4)			(68,719	)					(17,306	)		7,500
			Total operating costs and expenses		1,610,424			1,686,084			1,015,184			990,821			654,726
Operating income					765,985			662,607			385,113			358,721			265,421
Other (income) expense:
	Interest expense, net(5)				181,134			197,685			103,820			99,329			45,764
	Financing charges on trust issued preferred securities				14,164			33,578			33,581			33,595			38,584
	Equity in (earnings) losses of unconsolidated affiliates				(244	)		7,899			23,620			(11,453	)		(2,630	)
	Other (income) expense, net				(2,625	)		2,660			4,817			(233	)		(511	)
			Total other expense		192,429			241,822			165,838			121,238			81,207
Income from continuing operations before income taxes					573,556			420,785			219,275			237,483			184,214
Income taxes					217,853			152,988			80,160			92,489			74,254
Minority interest in earnings(6)								46			31,431			29,911			8,813
Income from continuing operations					355,703			267,751			107,684			115,083			101,147
Loss on sale of discontinued operations, net of tax								(8,231	)
Income from discontinued operations, net of tax								879			3,592			3,636			8,584
Income before cumulative effect of accounting change					355,703			260,399			111,276			118,719			109,731
Cumulative effect of accounting change, net of tax								(84,983	)		(1,446	)
			Net income	$	355,703		$	175,416		$	109,830		$	118,719		$	109,731
Basic earnings per common share:
	Income from continuing operations			$	2.45		$	1.98		$	1.28		$	1.36		$	1.02
	Income (loss) from discontinued operations							(.05	)		.04			.04			.09
	Cumulative effect of accounting change							(.63	)		(.02	)
			Net income	$	2.45		$	1.30		$	1.30		$	1.40		$	1.11
Diluted earnings per common share:
	Income from continuing operations			$	2.27		$	1.77		$	1.17		$	1.24		$	.97
	Income (loss) from discontinued operations							(.05	)		.03			.03			.07
	Cumulative effect of accounting change							(.51	)		(.01	)
			Net income	$	2.27		$	1.21		$	1.19		$	1.27		$	1.04
Average common shares:
	Basic				145,201,412			135,031,274			84,454,194			84,585,129			98,583,654
	Diluted				160,695,670			163,163,904			110,676,222			110,013,792			128,575,476
Other data:
	Ratio of earnings to combined fixed charges and preferred stock dividends(7)				3.53x			2.78x			2.86x			2.68x			3.79x
Balance sheet data (at end of period):
	Total assets			$	6,992,536		$	6,582,266		$	6,691,897		$	3,780,478		$	2,658,922
	Long-term debt(8)				2,791,514			2,727,924			3,068,497			1,353,269			712,068
	Other long-term liabilities				279,823			312,110			196,189			53,753			53,782
	Mandatorily redeemable convertible trust issued preferred securities							585,177			584,605			584,032			683,505
	Total stockholders’ equity				2,542,813			1,643,293			1,475,880			598,832			583,972

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(1)	Balances for 1999 through 2002 have been adjusted to remove our Puerto Rico operations which have been reclassified as discontinued operations.
(2)	Net sales have been restated to reflect the adoption of EITF Issue No. 01-09 “Accounting for Consideration Given by a Vendor to a Customer.” The net effect was to decrease net sales by $33.7 million, $29.9 million and $22.2 million in 2001, 2000 and 1999, respectively.
(3)	On January 1, 2002, we adopted SFAS No. 142, “Goodwill and Other Intangible Assets,” which requires, among other things, that goodwill and other intangible assets with indefinite lives no longer be amortized and that recognized intangible assets with finite lives be amortized over their respective useful lives. As required by SFAS No. 142, our results for periods prior to 2002 have not been restated.
(4)	Results for 2003 include a gain of $66.2 million on the sale of our frozen pre-whipped topping and frozen coffee creamer operations and a gain of $2.5 million related to the divestiture of 11 plants in 2001. Results for 2001 include a gain of $47.5 million on the divestiture of 11 plants offset by an expense of $28.5 million resulting from a payment to a supplier as consideration for modifications to an agreement and an impairment charge of $1.7 million on a water plant. Results in 2000 include litigation settlement costs of $7.5 million.
(5)	Results for 2001 and 2000 have been restated to reflect the adoption of SFAS No. 145 “Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13 and Technical Corrections.” Gains and losses that were previously recorded as extraordinary items related to the early extinguishment of debt, which were a $7.3 million loss in 2001 and a $7.7 million gain in 2000, have been reclassified to interest expense. There was no effect on net income.
(6)	In December 2001, in connection with our acquisition of Legacy Dean, we purchased Dairy Farmers of America’s 33.8% stake in our Dairy Group.
(7)	For purposes of calculating the ratio of earnings to combined fixed charges and preferred stock dividends, “earnings” represents income before income taxes plus fixed charges. “Fixed charges” consist of interest on all debt, amortization of deferred financing costs and the portion of rental expense that we believe is representative of the interest component of rent expense.
(8)	Includes amounts outstanding under subsidiary lines of credit and the current portion of long-term debt.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Business Overview

      We are a leading food and beverage company. Our Dairy Group is the largest processor and distributor of milk and various other dairy products in the United States. Our Branded Products Group markets and sells a variety of well known dairy and dairy-related branded products including, for example: Silk soymilk; Horizon Organic dairy products and juices; International Delight coffee creamers; Marie’s refrigerated dips and dressings; and Hershey’s milks and milkshakes. Our Specialty Foods Group is one of the leading pickle processors in the United States and a maker of a variety of other specialty food products. We also own the fourth largest dairy processor in Spain.

     Segments and Operating Divisions

      In 2003, we had three reportable segments, including the Dairy Group, Morningstar/ White Wave and the Specialty Foods Group. Effective January 1, 2004, we reorganized our former Morningstar Foods division, which has resulted in a new segment reporting structure. We now have the following reportable segments: the Dairy Group, the Branded Products Group and the Specialty Foods Group. Our reportable segments and other operating divisions are described below.

      Dairy Group — Our Dairy Group segment is our largest segment, with approximately 78% of our 2003 consolidated sales. Our Dairy Group manufactures, markets and distributes a wide variety of branded and private label “dairy case” products, such as milk, cream, ice cream, cultured dairy products and juices, to retailers, distributors, foodservice outlets, schools and governmental entities across the United States. The Dairy Group also manufactures most of the products marketed and sold by our Branded Products Group. Due to the perishable nature of the Dairy Group’s products, our Dairy Group delivers the majority of its products directly to its customers’ stores in refrigerated trucks that we own or lease. This form of delivery is called a “direct store delivery” or “DSD” system and we have one of the most extensive DSD systems in the United States.

      Branded Products Group — Our Branded Products Group develops, markets and sells our portfolio of strategic brands, including Silk soymilk, Horizon Organic dairy products, juices and infant formula, International Delight coffee creamers, Hershey’s milks and milkshakes, Land O’Lakes Dairy Ease and Land O’Lakes creamers, Marie’s dips and dressings, The Organic Cow of Vermont organic milk, Rachel’s Organic organic dairy products (sold in the U.K.), Folgers Jakada milk and coffee beverage and Dean’s dips. Our Branded Products Group consists of three distinct operating divisions: the National Brand Group, White Wave and Horizon Organic.

      Prior to 2004, we had a Morningstar Foods division that manufactured, marketed and sold all of our strategic brands except for our soy products, and also manufactured and sold private label dairy products. Approximately half of Morningstar Foods’ 2003 sales consisted of private label dairy products. In mid-2003, we began the process of reorganizing the operations of our Morningstar Foods division, as part of a company-wide effort to sharpen our focus on our strategic brands and to maximize our manufacturing efficiency. Effective January 1, 2004, we completed the shift of all of Morningstar Foods’ private label sales and all of its manufacturing operations to the Dairy Group. We also created the National Brand Group and assigned it the sole responsibility of developing, marketing and selling the former Morningstar Foods’ strategic brands, which include International Delight coffee creamers, Hershey’s milks and milkshakes, Land O’Lakes Dairy Ease and Land O’Lakes creamers, Marie’s dips and dressings, Folgers Jakada milk and coffee beverage and Dean’s dips. Other branded products sold by the National Brand Group include Mocha Mix® non-dairy liquid coffee creamer, Naturally Yours^TM sour cream and Second Nature® egg substitute. We license the Hershey’s, Land O’Lakes and Folgers names from third parties for use on certain of our products.

      White Wave markets and sells Silk soymilk, the leading brand of soymilk in the United States; Sun Soy soymilk; Silk cultured soy products; and White Wave branded tofu, tempeh and seitan to a variety of customers across the United States and in several foreign countries, including mass merchandisers, club

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stores, grocery stores, natural foods stores, convenience stores and foodservice outlets, using its internal sales force and independent brokers.

      Horizon Organic, which we acquired on January 2, 2004, markets and sells a full-line of branded and private label organic dairy products and juices to retailers across the United States and in the U.K. using its internal sales force and independent brokers, under the Horizon Organic, The Organic Cow of Vermont, and Rachel’s Organic brands. All of Horizon Organic’s products are “certified organic products,” as defined by the USDA’s Organic Regulations.

      Specialty Foods Group — Our Specialty Foods Group is one of the nation’s leading pickle processors, and the largest manufacturer and seller of powdered non-dairy coffee creamers in the United States. The Specialty Foods Group also manufactures and sells a variety of specialty foods, such as powdered ingredients, aseptic sauces and nutritional beverages.

      International Group — Our International Group, which does not qualify as a reportable segment, manufactures, markets and sells private label and branded milk, butter, cream and cheese through its internal sales force to retailers and distributors across Spain and Portugal.

     Current Business Strategy

      We are focused on consistently creating and maximizing shareholder value primarily through the following strategies:

      Investing in Our Brands — We believe that investing in our brands is key to growing our sales and our profitability. In 2004, we intend to spend approximately $210 million marketing the strategic brands of our Branded Products Group, with an emphasis on our largest and most successful brands: Silk, Horizon Organic, International Delight and Hershey’s. In addition, during 2004 we expect to spend approximately $50 million marketing our regional Dairy Group brands.

      Rationalizing Our Operations — An important part of our strategy is reducing costs and ensuring that our resources are properly aligned with our strategic direction. Therefore, in 2004 we intend to continue (i) rationalizing production between manufacturing facilities and realigning Dairy Group delivery routes, (ii) closing facilities with overlapping markets or excess capacity, and (iii) eliminating duplicative administrative functions.

      Investing Our Cash — Our company generates a significant amount of cash flow from operating activities. In addition to investing in our brands, we intend to invest our capital where we believe returns are greatest, which could include acquisitions in our core lines of business, repurchases of our stock and/or reductions of indebtedness.

     Developments Since January 1, 2003

      Acquisitions and Divestitures — On January 26, 2004, our Dairy Group acquired Ross Swiss Dairies, a dairy distributor based in Los Angeles, California, which had net sales of approximately $120 million in 2003. As a result of this acquisition, we have increased the distribution capability of our Dairy Group in southern California, allowing us to better serve our customers. Ross Swiss Dairies has historically purchased a significant portion of its products from other processors. We intend to shift the manufacturing of substantially all of Ross Swiss Dairies’ product needs into our southern California plants in 2004. We paid approximately $20 million for the purchase of Ross Swiss Dairies and funded the purchase price with borrowings under our receivables-backed facility.

      On January 2, 2004, we completed the acquisition of the 87% of Horizon Organic Holding Corporation that we did not already own. Horizon Organic Holding Corporation had sales of approximately $214 million during 2003. We already owned approximately 13% of the outstanding common stock of Horizon Organic Holding Corporation as a result of investments made in 1998. All of Horizon Organic’s manufacturing has historically been done by third-party co-packers, including us. During 2003, we produced approximately 27% of Horizon Organic’s fluid dairy products. We intend to increase that percentage over time. We also distribute

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Horizon Organic’s products in several parts of the country. Because organic foods are gaining popularity with consumers and because Horizon Organic’s products offer consumers an alternative to our Dairy Group’s traditional dairy products, we believe Horizon Organic is an important addition to our portfolio of strategic brands. The purchase price for the 87% of Horizon Organic that we did not already own was approximately $216 million, all of which was funded using borrowings under our senior credit facility and our receivables-backed facility. We also repaid approximately $40 million of borrowings under Horizon Organic’s former credit facilities. Beginning in the first quarter of 2004, Horizon Organic’s financial results will be reported in our Branded Products Group segment.

      On December 24, 2003, our Specialty Foods Group acquired the “Cremora®” branded non-dairy powdered coffee creamer business from Eagle Family Foods. Prior to the acquisition, we had been producing Cremora creamers for Eagle Family Foods pursuant to a co-packing arrangement, which generated approximately $8.9 million of net sales for us in 2003. The Cremora brand had sales of approximately $15.8 million for the 12 months ended June 30, 2003. We purchased the Cremora business for a purchase price of approximately $12.6 million, all of which was funded using borrowings under our senior credit facility.

      On October 15, 2003, we acquired Kohler Mix Specialties, Inc., whose product line consists primarily of private label ultra-pasteurized ice cream mixes, creamers and creams, sold primarily in the foodservice channel. From the time of the acquisition through the end of 2003, Kohler was part of our former Morningstar/ White Wave segment. Effective January 1, 2004, Kohler became part of our Dairy Group, along with all of Morningstar Foods’ other private label and manufacturing operations. Kohler had net sales of approximately $187.5 million for the 12 months ended August 31, 2003. We paid approximately $158.6 million for the purchase of Kohler, all of which was funded using borrowings under our receivables-backed facility.

      On July 31, 2003, our Morningstar/ White Wave segment sold its frozen pre-whipped topping and frozen coffee creamer operations for cash proceeds of approximately $90 million, all of which was used to reduce indebtedness. The divested operations were our only operations with frozen warehouse distribution, and we sold it in order to more closely align our financial and management resources with our strategic direction and expertise.

      On June 9, 2003, our Dairy Group acquired Melody Farms, LLC, a regional dairy processor based in Livonia, Michigan. Melody Farms had net sales of approximately $116 million during the 12 months ended March 31, 2003. We paid approximately $52.7 million for Melody Farms, all of which was funded using borrowings under our receivables-backed facility.

      Plant Closing and Rationalization Activities — As part of our overall integration and cost reduction strategy, we closed or announced the closure of five Dairy Group facilities in 2003 and reduced (or intend to reduce) our workforce accordingly. We also restructured certain administrative functions in the Northeast and Midwest regions of our Dairy Group, in addition to Morningstar Foods.

      Branded Product Initiatives — Our nationally branded products were a significant focus for us in 2003. We spent approximately $188 million marketing and gaining additional distribution for our strategic brands during 2003.

      TIPES — In three separate transactions during the second quarter of 2003, we called for redemption all of our trust-issued preferred securities (“TIPES”). The TIPES were convertible at the option of the holders, at any time, into shares of our common stock and were redeemable, at our option, at any time at specified premiums. In response to our three announced redemption transactions, holders of more than 99% of all outstanding TIPES elected to convert their TIPES into shares of our common stock rather than receive the cash redemption price. Accordingly, during the second quarter of 2003, we issued a total of approximately 23 million shares of common stock to holders of TIPES in lieu of cash redemption payments, and we paid approximately $2.4 million in cash to holders who did not elect to convert. There are no remaining TIPES outstanding.

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      Stock Buyback — During 2003, we spent approximately $185.5 million to repurchase 6.7 million shares of our common stock for an average purchase price of $27.82 per share. At March 10, 2004, approximately $114.6 million remained available under our current authorization.

Results of Operations

      The following table presents certain information concerning our financial results, including information presented as a percentage of net sales.

			Year Ended December 31
			2003						2002					2001
			Dollars			Percent			Dollars		Percent			Dollars			Percent
									(Dollars in thousands)
Net sales			$	9,184,616			100.0	%	$	8,991,464		100.0	%	$	5,974,555			100.0	%
Cost of sales				6,808,207			74.1			6,642,773		73.9			4,574,258			76.6
Gross profit				2,376,409			25.9			2,348,691		26.1			1,400,297			23.4
Operating costs and expenses:
	Selling and distribution			1,345,065			14.6			1,321,763		14.7			794,937			13.3
	General and administrative			317,342			3.5			337,496		3.7			176,642			2.9
	Amortization of intangibles			4,949			0.1			7,775		0.1			51,361			0.9
	Plant closing and rationalization costs			11,787			0.1			19,050		0.2			9,550			0.2
	Other operating (income) expense			(68,719	)		(0.7	)							(17,306	)		(0.3	)
		Total operating costs and expenses		1,610,424			17.6			1,686,084		18.7			1,015,184			17.0
Total operating income			$	765,985			8.3	%	$	662,607		7.4	%	$	385,113			6.4	%

Year Ended December 31, 2003 Compared to Year Ended December 31, 2002 — Consolidated Results

      Net Sales — Consolidated net sales increased approximately 2% to $9.18 billion during 2003 from $8.99 billion in 2002. Net sales by segment are shown in the table below.

		Net Sales
		2003		2002		$ Increase		% Increase
		(Dollars in thousands)
Dairy Group		$	7,146,028	$	7,061,538	$	84,490		1.2	%
Morningstar/ White Wave			1,109,499		1,056,751		52,748		5.0
Specialty Foods Group			684,207		673,604		10,603		1.6
Corporate/ Other			244,882		199,571		45,311		22.7
	Total	$	9,184,616	$	8,991,464	$	193,152		2.1	%

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      The change in net sales was due to the following:

		Change in Net Sales 2003 vs. 2002
				Divestitures and					Pricing, Volume
				Discontinued			Foreign		and Product		Total
		Acquisitions		Product Lines			Exchange		Mix Changes		Increase
		(Dollars in thousands)
Dairy Group		$	82,299						$	2,191	$	84,490
Morningstar/White Wave			96,092		(114,465	)				71,121		52,748
Specialty Foods Group					(13,668	)				24,271		10,603
Corporate/Other								40,304		5,007		45,311
	Total	$	178,391	$	(128,133	)	$	40,304	$	102,590	$	193,152

      See “— Results by Segment” for more information.

      Cost of Sales — All expenses incurred to bring a product to completion are included in cost of sales, such as raw material, ingredient and packaging costs; labor costs; plant and equipment costs, including costs to operate and maintain our coolers and freezers; costs associated with transporting our finished products from our manufacturing facilities to our own distribution facilities; and the cost of shipping products to customers through third-party carriers. Our cost of sales ratio was 74.1% in 2003 compared to 73.9% in 2002. Increased raw material costs affected all of our segments in 2003. Also, the Morningstar/ White Wave segment incurred higher costs due to certain manufacturing inefficiencies related to the introduction of new products and new technologies, and the realignment of certain manufacturing operations. See “— Results by Segment.”

      Operating Costs and Expenses — Our operating expense ratio was 17.6% in 2003 compared to 18.7% during 2002. This decrease was mostly due to (i) a gain of $66.2 million on the sale of Morningstar/ White Wave’s frozen pre-whipped topping and frozen coffee creamer operations in the third quarter of 2003, (ii) a gain of $2.5 million related to the divestiture of 11 plants in 2001, which was recorded at corporate as a result of certain contingencies being favorably resolved during 2003, and (iii) lower plant closing and other rationalization costs of $11.8 million in 2003 compared to $19.1 million in 2002, primarily due to differences in the nature of the restructuring activities and to the timing of recognition of certain charges as a result of our adoption of SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities,” in January 2003.

      Operating Income — Operating income during 2003 was $766 million, an increase of $103.4 million from 2002 operating income of $662.6 million. Our operating margin in 2003 was 8.3% compared to 7.4% in 2002. Excluding the gain of $68.7 million related to divestitures, our operating margin in 2003 would have been 7.6% compared to 7.4% in 2002.

      Other (Income) Expense — Total other expense decreased by $49.4 million in 2003 compared to 2002. Interest expense decreased to $181.1 million in 2003 from $197.7 million in 2002. This decrease was the result of lower interest rates and lower average debt balances in 2003. Financing charges on preferred securities were $14.2 million in 2003 versus $33.6 million in 2002 due to the successful retirement of these securities during the second quarter of 2003. See Note 10 to our Consolidated Financial Statements.

      Income from investments in unconsolidated affiliates was $0.2 million in 2003 compared to a loss of $7.9 million in 2002. Income in 2003 related to our approximately 13% interest in Horizon Organic Holding Corporation. In 2002, we recorded income of $2.1 million which was primarily related to our 36% interest in White Wave through May 9, 2002, when we acquired the remaining equity interest in White Wave and began consolidating White Wave’s results with our financial results. This income was offset in 2002 by a $10 million loss on our minority interest in Consolidated Container Company. See “— Year Ended December 31, 2002 Compared to Year Ended December 31, 2001.”

      Income Taxes — Income tax expense was recorded at an effective rate of 38% in 2003 compared to 36.4% in 2002. In 2002 we recorded the favorable settlement of a contested tax issue. Our tax rate varies as the mix of earnings contributed by our various business units changes, and as tax savings initiatives are adopted.

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Year Ended December 31, 2003 Compared to Year Ended December 31, 2002 — Results by Segment

      As noted above, we had three reportable segments in 2003: the Dairy Group, Morningstar/ White and the Specialty Foods Group. Our new segment reporting structure will begin with the first quarter of 2004.

      The key performance indicators of our segments are sales, gross profit and operating income.

      Dairy Group —

	Year Ended December 31
	2003					2002
	Dollars		Percent			Dollars		Percent
	(Dollars in thousands)
Net sales	$	7,146,028		100.0	%	$	7,061,538		100.0	%
Cost of sales		5,295,482		74.1			5,249,730		74.3
Gross profit		1,850,546		25.9			1,811,808		25.7
Operating costs and expenses		1,241,930		17.4			1,290,873		18.3
Total operating income	$	608,616		8.5	%	$	520,935		7.4	%

      The Dairy Group’s net sales increased by approximately $84.5 million, or 1.2%, in 2003 versus 2002. The change in net sales from 2002 to 2003 was due to the following:

		Dollars			Percent
		(Dollars in millions)
2002 Net sales		$	7,061.5
	Acquisitions		82.3			1.2	%
	Volume		(127.1	)		(1.8	)
	Pricing and product mix		129.3			1.8
2003 Net sales		$	7,146.0			1.2	%

      The Dairy Group acquired Melody Farms, LLC in June 2003. Melody Farms had annual revenues of approximately $116 million in the 12 month period ended March 31, 2003. The Dairy Group also made a number of small acquisitions in 2003. See Note 2 to our Consolidated Financial Statements.

      Volume change for all products, net of the effect of acquisitions, was a decline of 1.8% in 2003 compared to 2002. That volume change was driven primarily by the fluid dairy category (which represented 73% of the Dairy Group’s 2003 sales) and the ice cream category (which represented 12% of the Dairy Group’s 2003 sales). Equivalent gallons of fluid dairy products sold (including milk, cream and ice cream mix) decreased by 1.1% in 2003. We believe the decrease is due primarily to continued declining consumption of traditional fluid dairy products in some parts of the country. Ice cream and ice cream novelty volumes declined by approximately 7% in 2003 compared to 2002, primarily because we sell our ice cream under private labels and local brands, and we believe we lost sales during the year to nationally branded products which were promoted more aggressively than our products.

      In general, we change the prices that we charge our customers for fluid dairy products on a monthly basis, as the costs of our raw materials fluctuate. The increase in sales due to price and product mix shown in the above table primarily results from higher raw milk costs in 2003 than in 2002. These price increases due to increases in the cost of raw milk were offset somewhat by price concessions that were granted in some markets in 2003 due to the competitive environment. The following table sets forth the average monthly Class I

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“mover” and average monthly Class II minimum prices for raw skim milk and butterfat for 2003 compared to 2002:

	Year Ended December 31*
	2003			2002			% Change
Class I raw skim milk mover(3)	$	7.47	(1)	$	7.01(1	)		7	%
Class I butterfat mover(3)		1.19	(2)		1.21(2	)		(2	)
Class II raw skim milk minimum(4)		6.74	(1)		7.62(1	)		(12	)
Class II butterfat minimum(4)		1.22	(2)		1.20(2	)		2

* The prices noted in this table are not the prices that we actually pay. The federal order minimum prices at any given location for Class I raw skim milk or Class I butterfat are based on the Class I mover prices plus a location differential. Class II prices noted in the table are federal minimum prices, applicable at all locations. Our actual cost also includes producer premiums, procurement costs and other related charges that vary by location and vendor. Please see “Part I — Item 1. Business — Government Regulation — Milk Industry Regulation,” and “— Known Trends and Uncertainties — Prices of Raw Milk and Cream” for a more complete description of raw milk pricing.

(1)	Prices are per hundredweight.
(2)	Prices are per pound.
(3)	We process Class I raw skim milk and butterfat into fluid milk products.
(4)	We process Class II raw skim milk and butterfat into products such as cottage cheese, creams and creamers, ice cream and sour cream.

      The Dairy Group’s cost of sales ratio improved slightly in 2003 compared to 2002. Prices of raw milk were significantly lower in the first 8 months of 2003 than in 2002. Increased raw milk prices in the last 4 months of the year did not fully offset the effects of lower raw milk prices in the first 8 months of the year.

      The Dairy Group’s operating expense ratio decreased from 18.3% in 2002 to 17.4% in 2003. Part of the improvement in the Dairy Group’s operating expense ratio in 2003 was due to the effects of increased raw milk costs. Higher raw milk costs generally increase sales dollars because we increase the prices that we charge for fluid dairy products on a monthly basis in accordance with fluctuations in the price of raw milk. Therefore, increased raw milk costs will generally decrease the Dairy Group’s operating expense ratio and decreased raw milk costs will generally increase the Dairy Group’s operating expense ratio. The decrease in the Dairy Group’s operating expense ratio was also affected by lower insurance, advertising, bad debt and bonus expenses in 2003. Insurance costs (including the costs of self-insurance) declined approximately $13.1 million in 2003 as a result of better claims experience. Advertising expenses decreased approximately $12.8 million in 2003 partially because we reduced planned advertising spending in 2003 in anticipation of the difficult raw milk environment and also because advertising expense in 2002 was higher than normal because we incurred unusual advertising costs in order to (1) promote our brands in certain parts of the country following our acquisition of Legacy Dean, and (2) promote two local Dairy Group brands affected by product recalls in 2002. Bad debt expense declined approximately $11.2 million compared to 2002. In 2002, some of our customers experienced economic difficulty and a few large customers sought bankruptcy protection. Bonus expenses were $6.4 million lower in 2003 than in 2002 as a result of our actual performance compared to bonus targets. Finally, the ratio was helped in 2003 by $4.3 million in lower plant closing and rationalization costs.

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Morningstar/ White Wave —

	Year Ended December 31
	2003					2002
	Dollars		Percent			Dollars		Percent
			(Dollars in thousands)
Net sales	$	1,109,499		100.0	%	$	1,056,751		100.0	%
Cost of sales		794,095		71.6			720,075		68.1
Gross profit		315,404		28.4			336,676		31.9
Operating costs and expenses		196,807		17.7			225,008		21.3
Total operating income	$	118,597		10.7	%	$	111,668		10.6	%

      Morningstar/White Wave’s net sales increased by $52.7 million, or 5%, in 2003 versus 2002. The change in net sales in 2002 compared to 2003 was due to the following:

		Dollars			Percent
		(Dollars in millions)
2002 Net sales		$	1,056.8
	Acquisitions		96.1			9.1	%
	Divestitures/discontinued product lines		(114.5	)		(10.8	)
	Volume		87.7			8.3
	Pricing and product mix		(16.6	)		(1.6	)
2003 Net sales		$	1,109.5			5.0	%

      On October 15, 2003 our Morningstar/White Wave segment acquired Kohler Mix Specialties, Inc., which had sales of approximately $187.5 million during the 12 month period ended August 31, 2003. We acquired the 64% of White Wave that we did not already own in May 2002. Therefore, 2003 includes 12 months of White Wave sales compared to only 8 months in 2002.

      In an effort to better align our resources with our strategic direction, Morningstar/White Wave sold its frozen pre-whipped topping and frozen coffee creamer operations in July 2003. Also, as a result of our acquisition of Legacy Dean in December 2001, we decided to discontinue certain of Morningstar/White Wave’s product lines that were competitive with other products sold by Morningstar/White Wave. Accordingly, beginning in January 2002, we began an orderly exit from the Lactaid®, Nestle® Nesquik® and Nestle® Coffeemate® co-packing businesses so that we could focus our management and financial resources on our Land O’Lakes Dairy Ease and International Delight brands. Our transition out of the Lactaid co-packing business was completed in February 2002 and our transition out of the Nestle co-packing business was completed in February 2003.

      Unit volumes for Morningstar/White Wave increased 8.3% overall in 2003 (net of the effects of acquisitions, divestitures and discontinued product lines) due to the success of our strategic brands, particularly Silk. Strategic brand volumes increased 45% in 2003 versus 2002. On a pro forma basis as if White Wave had been acquired on January 1, 2002 (instead of May 9, 2002), strategic brand volumes increased 27% in 2003. Partly offsetting this increase was a 5% volume decline in Morningstar’s private label business due primarily to cannibalization of Morningstar/White Wave’s private label creamer sales by sales of Land O’Lakes creamers (which are included in our strategic brands), and a 9.6% volume decline in Morningstar/White Wave’s non-strategic brand sales due primarily to the fact that our sales and marketing resources were focused on our strategic brands.

      Morningstar/White Wave invested approximately $188 million marketing our strategic brands in 2003, and successfully penetrated new channels such as club stores and foodservice. Approximately $91 million of that amount was spent on slotting fees, couponing and certain other promotional costs, which were recorded as reductions of revenue.

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      The dollar change in sales of our strategic brands did not increase as much as volume sales primarily because in the first half of 2003, Morningstar Foods/White Wave introduced new plastic packaging for International Delight and in order to clear shelf space for International Delight in the new plastic packaging, Morningstar/White Wave substantially reduced the price of International Delight in paper cartons. Also, promotional spending that was recorded as a reduction of revenue increased by $10 million in 2003 versus 2002.

      The cost of sales ratio for Morningstar/White Wave increased in 2003 compared to 2002 primarily due to the impact of (1) short-term manufacturing inefficiencies related to the introduction of new products and new technologies, (2) short-term manufacturing inefficiencies due to certain manufacturing realignments related to the shifting of Morningstar’s manufacturing operations to the Dairy Group, (3) an additional $15 million of packaging costs due to the introduction of International Delight in plastic packaging, and (4) increased depreciation on our new long shelf-life manufacturing equipment. These increases were partly offset by decreased Class II raw milk prices.

      The operating expense ratio at Morningstar/White Wave decreased due to a gain of $66.2 million on the sale of our frozen pre-whipped topping and frozen coffee creamer operations in the third quarter of 2003. Excluding the impact of the $66.2 million gain, Morningstar/White Wave’s operating expense ratio was 23.7% during 2003 compared to 21.3% during 2002. This increase was primarily due to $36 million of higher marketing expenses in 2003 related to the introduction of new products and higher promotional spending on strategic brands. The ratio was also significantly impacted by the addition of White Wave in May 2002, which accrued almost $10 million more in 2003 than in 2002 for bonuses to be paid in March 2004 under the White Wave Performance Bonus Plan that was established when we acquired White Wave in May 2002. See Note 18 to our Consolidated Financial Statements. Partly offsetting these items was a $3 million decrease in plant closing and rationalization costs.

Specialty Foods Group —

	Year Ended December 31
	2003					2002
	Dollars		Percent			Dollars		Percent
	(Dollars in thousands)
Net sales	$	684,207		100.0	%	$	673,604		100.0	%
Cost of sales		513,188		75.0			498,085		73.9
Gross profit		171,019		25.0			175,519		26.1
Operating costs and expenses		67,963		9.9			76,645		11.4
Total operating income	$	103,056		15.1	%	$	98,874		14.7	%

      The Specialty Foods Group’s net sales increased by $10.6 million, or 1.6%, in 2003 versus 2002. The change in net sales from 2002 to 2003 was due to the following:

		Dollars			Percentage
		(Dollars in millions)
2002 Net sales		$	673.6
	Divestitures		(13.7	)		(2.0	)
	Volume		15.9			2.4
	Pricing and product mix		8.4			1.2
2003 Net sales		$	684.2			1.6	%

      The Specialty Foods Group sold EBI Foods, Ltd. in October 2002. See Note 2 to our Consolidated Financial Statements. Net of the effects of this divestiture, the Specialty Foods Group’s pickle volumes declined 1.6% in 2003 compared to 2002 due to the bankruptcy of a large customer, and to the overall effects of economic difficulties in the foodservice sector as a whole. Approximately 28% of the Specialty Foods Group’s sales were to foodservice customers in 2003. This decrease was more than offset by a 12.8% increase

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in unit volumes of powdered coffee creamers as a result of new business and a 15.2% increase in unit volumes of nutritional beverages due to increased demand.

      Pricing was up in all categories primarily due to increased raw material costs that were passed on to customers in the form of higher selling prices. Also, promotional spending that is recorded as a reduction of revenue was down by $15.3 million in 2003 compared to 2002.

      The Specialty Foods Group’s cost of sales ratio increased in 2003 as a result of higher raw material prices, especially glass, and increases in natural gas prices. The Specialty Foods Group uses a significant amount of natural gas in its operations.

      The operating expense ratio for the Specialty Foods Group declined in 2003 compared to 2002 primarily due to the sale of EBI Foods, Ltd. in October 2002, which had higher operating expenses, and to lower bonus expense. Bonus expenses were $1.3 million less in 2003 as a result of our actual performance compared to bonus targets.

Year Ended December 31, 2002 Compared to Year Ended December 31, 2001 — Consolidated Results

      Important Note: We completed our acquisition of the former Dean Foods Company (“Legacy Dean”) on December 21, 2001. As a result, full year comparisons between 2002 and 2001 are less meaningful than they would be otherwise. We obtained our Specialty Foods Group segment as part of our acquisition of Legacy Dean. Therefore, except for sales, no prior year comparisons are provided because the Specialty Foods Group segment was only owned for a few days in 2001. More complete segment data can be found in Note 20 to our Consolidated Financial Statements. Also, effective January 1, 2002, we adopted SFAS No. 142, “Goodwill and Other Intangible Assets,” which eliminates the amortization of goodwill and certain other intangible assets. As a result of the adoption of SFAS No. 142, comparisons between 2002 and 2001 are less meaningful than they would be otherwise. Where appropriate, we have provided comparisons eliminating the amortization of goodwill and intangible assets with indefinite useful lives in 2001. See Notes 1 and 6 to our Consolidated Financial Statements for more information regarding SFAS No. 142.

      Net Sales — Consolidated net sales increased 50.5% to $8.99 billion during 2002 from $5.97 billion in 2001. Net sales by segment are shown in the table below.

		Net Sales
		2002		2001		$ Increase		% Increase
		(Dollars in thousands)
Dairy Group		$	7,061,538	$	5,042,836	$	2,018,702		40.0	%
Morningstar/ White Wave			1,056,751		741,992		314,759		42.4
Specialty Foods Group			673,604		18,709		654,895		3,500.4
Corporate/ Other			199,571		171,018		28,553		16.7
	Total	$	8,991,464	$	5,974,555	$	3,016,909		50.5	%

      The change in net sales was due to the following:

		Change in Net Sales 2002 vs. 2001
									Pricing,
				Divestitures and					Volume and
				Discontinued			Foreign		Product Mix			Total
		Acquisitions		Product Lines			Exchange		Changes			Increase
		(Dollars in thousands)
Dairy Group		$	2,894,166	$	(507,903	)			$	(367,561	)	$	2,018,702
Morningstar/ White Wave			399,754		(144,884	)				59,889			314,759
Specialty Foods Group			654,895										654,895
Corporate/ Other								9,469		19,084			28,553
	Total	$	3,948,815	$	(652,787	)	$	9,469	$	(288,588	)	$	3,016,909

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      Cost of Sales — Our cost of sales ratio was 73.9% in 2002 compared to 76.6% in 2001. This decrease was due primarily to lower raw material costs. See “— Results by Segment.”

      Operating Costs and Expenses — Our operating expense ratio was 18.7% in 2002 compared to 17% during 2001. Comparability of these ratios is significantly affected by our adoption of SFAS No. 142 on January 1, 2002. Excluding $48.4 million of amortization in 2001, our operating expense ratio would have been 16.2% in 2001, compared to 18.8% in 2002. This increase is primarily due to the effects of lower raw material prices in 2002, increased promotional spending on our strategic brands in 2002 and accrued bonuses under White Wave’s Performance Bonus Plan established in May 2002. See “— Results by Segment.”

      Operating Income — Operating income during 2002 was $662.6 million, an increase of $277.5 million from 2001 operating income of $385.1 million. Our operating margin in 2002 was 7.4% compared to 6.4% in 2001. Excluding 2001 amortization that would have been eliminated had SFAS No. 142 been in effect last year, our operating income would have increased by $229.1 million in 2002 as compared to 2001 and our operating margin would have been 7.4% in 2002 as compared to 7.3% in 2001. See “— Results by Segment.”

      Other (Income) Expense — Total other expense increased by $76 million in 2002 compared to 2001. Interest expense increased to $197.7 million in 2002 from $103.8 million in 2001 as a result of higher debt used to finance the acquisitions of Legacy Dean and White Wave. 2001 interest expense included a $7.3 million loss related to the early extinguishment of debt. Financing charges on preferred securities were $33.6 million in both years.

      Income from investments in unconsolidated affiliates was a net loss of $7.9 million in 2002 compared to a net loss of $23.6 million in 2001. We recorded income of $2.1 million in 2002, which was primarily related to our 36% interest in White Wave through May 9, 2002, when we acquired the remaining equity interest in White Wave and began consolidating White Wave’s results with our financial results. This income was offset by a $10 million loss on our minority interest in Consolidated Container Company (“CCC”). During the fourth quarter of 2002, we agreed to make a $10 million loan to CCC in exchange for the cancellation of our pre-existing $10 million guaranty of CCC’s indebtedness and additional equity interests in CCC. The additional infusion of cash to CCC required us to record our share of CCC’s 2002 losses, up to $10 million. This transaction also resulted in our ownership percentage declining to approximately 40% from 43%. See Note 3 to our Consolidated Financial Statements for more information about this transaction. Our loss from unconsolidated affiliates in 2001 related primarily to our investment in CCC. In the fourth quarter of 2001, we concluded that our investment in CCC was impaired and that the impairment was not temporary, and as a result we wrote off our remaining investment in CCC.

      Income Taxes — Income tax expense was recorded at an effective rate of 36.4% in 2002 compared to 36.7% in 2001. In 2002 and 2001, contested income tax issues were resolved in our favor. Our tax rate varies as the mix of earnings contributed by our various business units changes, and as tax savings initiatives are adopted.

      Minority Interest — Minority interest in earnings decreased significantly to $46 thousand in 2002 from $31.4 million in 2001. For most of 2002, management of EBI Foods Ltd., a subsidiary of our Specialty Foods segment, owned a small minority interest in that subsidiary. We sold our interest in EBI Foods Ltd. in October 2002. In 2001, Dairy Farmers of America owned a 33.8% minority interest in our Dairy Group. On December 21, 2001, in connection with our acquisition of Legacy Dean, we purchased the 33.8% stake that was owned by Dairy Farmers of America. See Note 2 to our Consolidated Financial Statements.

      Discontinued Operations — On December 30, 2002, we sold our operations in Puerto Rico resulting in a loss on sale from discontinued operations of $8.2 million, including income tax expense. We also recorded income from discontinued operations of $0.9 million during 2002 versus $3.6 million in 2001. All amounts attributable to our former Puerto Rico operations, for all periods, have been reclassified to “Income from discontinued operations.”

      Cumulative Effect of Accounting Change — As part of our adoption of SFAS No. 142 on January 1, 2002 we wrote down the value of certain trademarks and the goodwill related to our Puerto Rico operations which our analysis indicated were impaired. Our adoption of this accounting standard resulted in the recognition of

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$85 million, net of an income tax benefit of $29 million, as a charge to earnings. During 2001, we recorded a charge of $1.4 million, net of an income tax benefit of $1.5 million and a minority interest benefit of $0.7 million related to our adoption of SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities.”

Year Ended December 31, 2002 Compared to Year Ended December 31, 2001 — Results by Segment

     Dairy Group —

	Year Ended December 31
	2002					2001
	Dollars		Percent			Dollars		Percent
			(Dollars in thousands)
Net sales	$	7,061,538		100.0	%	$	5,042,836		100.0	%
Cost of sales		5,249,730		74.3			3,896,136		77.3
Gross profit		1,811,808		25.7			1,146,700		22.7
Operating costs and expenses		1,290,873		18.3			822,945		16.3
Total operating income	$	520,935		7.4	%	$	323,755		6.4	%

      The Dairy Group’s net sales increased by approximately $2 billion, or 40%, in 2002 versus 2001. The change in net sales from 2001 to 2002 was due to the following:

		Dollars			Percent
		(Dollars in millions)
2001 Net sales		$	5,042.8
	Acquisitions		2,894.2			57.4	%
	Divestitures		(507.9	)		(10.1	)
	Pricing, volume and product mix		(367.6	)		(7.3	)
2002 Net sales		$	7,061.5			40.0	%

      We completed the acquisition of Legacy Dean on December 21, 2001, and Legacy Dean’s dairy operations were merged into our Dairy Group. The acquisition of Legacy Dean’s dairy operations (net of the plants divested as part of the transaction) contributed a net increase in sales of approximately $2.4 billion.

      The Dairy Group’s 2002 sales were negatively affected by certain volume decreases. On a pro forma basis as if Legacy Dean had been acquired on January 1, 2001 (net of the plants divested as part of the transaction), the Dairy Group’s fluid milk volumes during 2002 would have been relatively flat compared to 2001, while ice cream and ice cream novelty volumes were down 4.5%. Our ice cream is sold under private labels and local brands, and we lost sales during the year to nationally branded products, which are usually promoted more aggressively than our products.

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      Prices were down in 2002 versus 2001 because the price of raw milk was down considerably. In general, we change the prices that we charge our customers for our fluid dairy products on a monthly basis, as the costs of our raw materials fluctuate. The following table sets forth the average monthly Class I “mover” and average monthly Class II minimum prices for raw skim milk and butterfat for 2002 compared to 2001:

	Year Ended December 31*
	2002			2001			% Change
Class I raw skim milk mover(3)	$	7.01	(1)	$	7.93	(1)		(12	)%
Class I butterfat mover(3)		1.21	(2)		1.89	(2)		(36	)
Class II raw skim milk minimum(4)		7.62	(1)		8.33	(1)		(9	)
Class II butterfat minimum(4)		1.20	(2)		1.86	(2)		(35	)

*	The prices noted in this table are not the prices that we actually pay. The federal order minimum prices at any given location for Class I raw skim milk or Class I butterfat are based on the Class I mover prices plus a location differential. Class II prices noted in the table are federal minimum prices, applicable at all locations. Our actual cost also includes producer premiums, procurement costs and related charges that vary by location and vendor. Please see “Part I — Item 1. Business — Government Regulation — Milk Industry Regulation,” and “— Known Trends and Uncertainties — Prices of Raw Milk and Cream” for a more complete description of raw milk pricing.
(1)	Prices are per hundredweight.
(2)	Prices are per pound.
(3)	We process Class I raw skim milk and butterfat into fluid milk products.
(4)	We process Class II raw skim milk and butterfat into products such as cottage cheese, creams, ice cream and sour cream.

      The Dairy Group’s cost of sales ratio improved in 2002 compared to 2001 primarily due to lower raw milk costs.

      The operating expense ratio at the Dairy Group was 18.3% in 2002 compared to 16.3% in 2001. Excluding approximately $39.4 million of amortization in 2001, the Dairy Group’s operating expense ratio would have been 15.5% in 2001, compared to 18.3% in 2002. The increase in the 2002 operating expense ratio was primarily due to the effect of lower raw milk prices in 2002 and to the impact of a gain of $47.5 million in 2001 related to the divestiture of 11 plants in connection with the acquisition of Legacy Dean. Lower raw milk prices generally result in lower sales dollars because we decrease the prices of our fluid dairy products on a monthly basis in accordance with fluctuations in the price of raw milk. Therefore, falling raw milk prices will generally increase the Dairy Group’s operating expense ratio and rising raw milk prices will generally reduce the Dairy Group’s operating expense ratio. In addition to the effects of lower raw milk costs and the $47.5 million gain, the ratio was also affected by increased advertising, bad debt and bonus expenses in 2002 compared to 2001. We incurred unusual advertising costs in 2002 in an effort to promote our brands in certain parts of the country following our acquisition of Legacy Dean. Bad debt expense was affected in 2002 by the financial difficulties of several of our customers, and bonus expense was affected in 2002 because our performance was better than bonus targets for the year causing increased bonus expense.

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          Morningstar/ White Wave —

	Year Ended December 31
	2002					2001
	Dollars		Percent			Dollars		Percent
	(Dollars in thousands)
Net sales	$	1,056,751		100.0	%	$	741,992		100.0	%
Cost of sales		720,075		68.1			518,367		69.9
Gross profit		336,676		31.9			223,625		30.1
Operating costs and expenses		225,008		21.3			119,331		16.1
Total operating income	$	111,668		10.6	%	$	104,294		14.0	%

      Morningstar/ White Wave’s sales increased by $315 million, or approximately 42.4%, in 2002 versus 2001. The change in Morningstar/ White Wave’s net sales from 2001 to 2002 was due to the following:

		Dollars			Percent
		(Dollars in millions)
2001 Net sales		$	742.0
	Acquisitions		399.8			53.9	%
	Divestitures and discontinued product lines		(144.9	)		(19.5	)
	Pricing, volume and product mix		59.9			8.0
2002 Net sales		$	1,056.8			42.4	%

      We completed the acquisition of Legacy Dean on December 21, 2001, and Legacy Dean’s National Refrigerated Products operations were merged into our Morningstar/ White Wave segment. The National Refrigerated Products Group had net sales of approximately $371.7 million in the 12 months ended May 27, 2001. On May 9, 2002 we acquired the 64% equity interest in White Wave, Inc. that we did not already own. White Wave had net sales of $125 million in the 12 months ended March 31, 2002. On May 17, 2002, we bought the assets of Marie’s Quality Foods, Marie’s Dressings, Inc. and Marie’s Associates, makers of Marie’s brand dips and dressings in the western United States, with net sales of $15.7 million in the 12 months ended March 31, 2002.

      We estimate that the acquisition of Legacy Dean added approximately $275 million of sales at our Morningstar/ White Wave segment during 2002. Precise measurement of the impact of the acquisition of Legacy Dean on Morningstar/ White Wave’s sales is not possible because Legacy Dean’s National Refrigerated Products segment was quickly integrated into Morningstar Foods and is not accounted for separately. The acquisition of White Wave contributed approximately $113 million during 2002, while the Marie’s business contributed approximately $10 million.

      In January 2002, Morningstar/ White Wave began an orderly exit from certain product lines including the Lactaid, Nestle Nesquik and Nestle Coffeemate co-packing businesses. See “— Year Ended December 31, 2003 Compared to Year Ended December 31, 2002 — Results by Segment — Morningstar/ White Wave.”

      Total unit volume comparisons from 2001 to 2002 are not meaningful because it is not possible to isolate the volume impact of acquisitions since we did not account for the volume acquired from Legacy Dean separately in 2002. However, we do believe that the $59.9 million increase in sales due to pricing, revenue and product mix changes shown in the table above was due primarily to increased sales of our strategic brands.

      These increases were partially offset by (i) the effects of significantly lower raw milk and bulk cream costs in 2002 that were passed along to customers in the form of lower selling prices, and (ii) approximately $81 million of promotional spending in 2002 that was recorded as a reduction of revenue, compared to approximately $33.7 million in 2001.

      The cost of sales ratio for Morningstar/ White Wave improved in 2002 compared to 2001 due primarily to lower Class II raw milk and butterfat costs.

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      The operating expense ratio at Morningstar/ White Wave was 21.3% during 2002 compared to 16.1% in 2001. Excluding approximately $7.2 million of amortization in 2001, the operating expense ratio would have been 15.1% in 2001, compared to 21.3% in 2002. This increase was caused primarily by higher promotional expenses related to the introduction of new products, and the acquisition of White Wave. Morningstar/ White Wave spent approximately $127 million promoting our strategic brands in 2002, of which $46 million was included in 2002 operating expenses. Only $11.5 million of promotional expenses were included in operating expenses in 2001. The ratio was also affected by $11.7 million in management bonus accruals in 2002 for White Wave management under the Performance Bonus Plan that was established when we bought White Wave in May 2002. Also, plant closing costs were $4.9 million higher in 2002. See Note 15 to our Consolidated Financial Statements.

Liquidity and Capital Resources

Historical Cash Flow

      During 2003, we met our working capital needs with cash flow from operations. Net cash provided by operating activities from continuing operations was $522.3 million for 2003 as contrasted to $642.6 million for 2002, a decrease of $120.3 million. Net cash provided by operating activities was impacted by:

•  An increase of $91.5 million in net income from continuing operations plus non-cash items in 2003 as compared to 2002 primarily due to the increase in deferred income taxes; and

•  Changes in assets and liabilities which declined by $211.9 million in 2003 compared to the previous year, primarily due to an increase in accounts receivable and inventory as a result of higher raw material prices in the fourth quarter of 2003.

      Net cash used in investing activities for continuing operations was $436.2 million in 2003 compared to $309.1 million in 2002, an increase of $127.1 million. We used approximately $291.7 million for capital expenditures and approximately $246.6 million for acquisitions. We had cash proceeds from the sale of the frozen pre-whipped topping and frozen creamer operations and one other small business of $90 million in 2003. In 2002, we had cash proceeds from the divestiture of Puerto Rico and three other small businesses of $148.3 million.

      We used approximately $199.5 million to repurchase our stock during 2003, including $14 million paid in 2003 for prior year repurchases. Set forth in the chart below is a summary of the stock we repurchased in 2003:

	No. of Shares of				Average
	Common Stock		Aggregate		Purchase
Period	Repurchased		Purchase Price		Price Per Share
			(Dollars in millions)
January 2003		4,854,900	$	128.5	$	26.48
August 2003		360,000		9.9		27.52
November 2003		992,400		31.9		32.08
December 2003		461,000		15.2		33.01

      We received approximately $95.3 million in 2003 as a result of stock option exercises and employee stock purchases through our employee stock purchase plan.

      We received a net amount of $27 million in 2003 from borrowings in 2003.

     Current Debt Obligations

      Our senior credit facility provides us with a revolving line of credit of up to $1 billion, a Tranche A term loan in the amount of $1 billion and a Tranche B term loan in the amount of $750 million.

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      Amounts outstanding under the revolver and the Tranche A term loan bear interest at a rate per annum equal to one of the following rates, at our option:

•  a base rate equal to the higher of the Federal Funds rate plus 50 basis points or the prime rate, plus a margin that varies from 0 to 75 basis points, depending on our leverage ratio (which is computed as the ratio of indebtedness to EBITDA, as such terms are defined in the credit agreement), or

•  the London Interbank Offering Rate (“LIBOR”) divided by the product of one minus the Eurodollar Reserve Percentage, plus a margin that varies from 125 to 200 basis points, depending on our leverage ratio (as defined in the credit agreement).

      EBITDA is defined in the credit agreement for any period as, the sum of (i) net income (excluding extraordinary items) after taxes for such period as determined in accordance with GAAP, plus (ii) an amount which, in the determination of such net income, has been deducted for (a) all interest expense, including the interest component under capital leases and the implied interest component under our receivables-backed facilities, plus net amounts payable (or minus net amounts receivable) under hedging agreements, minus interest income for such period, in each case as determined in accordance with generally accepted accounting principles (“GAAP”), (b) total federal, state, local and foreign income, value added and similar taxes, (c) depreciation, amortization expense and other noncash charges, (d) pro forma cost savings add-backs resulting from non-recurring charges related to acquisitions to the extent permitted under the credit agreement and under Regulation S-X of the Securities Exchange Act of 1934 or as approved by the representative of the lenders and (e) other adjustments reasonably acceptable to the representative of the lenders.

      Borrowings under the Tranche B term loan bear interest at a rate per annum equal to one of the following rates, at our option:

•  a base rate equal to the higher of the Federal Funds rate plus 50 basis points or the prime rate, plus a margin of 75 basis points, or

•  LIBOR divided by the product of one minus the Eurodollar Reserve Percentage, plus a margin of 200 basis points.

      The blended interest rate in effect on borrowings under the senior credit facility, including the applicable interest rate margin, was 3.05% at December 31, 2003. However, we had interest rate swap agreements in place that hedged $1.13 billion of our borrowings under this facility at an average rate of 4.32%, plus the applicable interest rate margin. Interest is payable quarterly or at the end of the applicable interest period.

      Principal payments are required on the Tranche A term loan as follows:

•  $37.5 million quarterly beginning on September 30, 2003 through December 31, 2004;

•  $43.75 million quarterly on March 31, 2005 through December 31, 2005;

•  $50 million quarterly on March 31, 2006 through December 31, 2006;

•  $62.5 million quarterly on March 31, 2007 and June 30, 2007; and

•  A final payment of $275 million on July 15, 2007.

      Principal payments are required on the Tranche B term loan as follows:

•  $1.875 million quarterly beginning on September 30, 2003 through December 31, 2007; and

•  $358.1 million on each of March 31, 2008 and July 15, 2008.

      No principal payments are due on the $1 billion line of credit until maturity on July 15, 2007.

      Our credit agreement also requires mandatory principal prepayments upon the occurrence of certain asset dispositions not in the ordinary course of business.

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      In consideration of the revolving commitment, we pay a quarterly commitment fee on unused amounts of the $1 billion revolving credit facility that ranges from 25 to 37.5 basis points, depending on our leverage ratio (as defined in the credit agreement).

      The senior credit facility contains various financial and other restrictive covenants and requires that we maintain certain financial ratios, including a leverage ratio (computed as the ratio of the aggregate outstanding principal amount of indebtedness to EBITDA, as such terms are defined in the credit agreement) and an interest coverage ratio (computed as the ratio of EBITDA to interest expense, as such terms are defined in the credit agreement). In addition, this facility requires that we maintain a minimum level of net worth (as defined in the credit agreement).

      For the period from December 31, 2003 through March 31, 2005, our leverage ratio must be less than or equal to 4 to 1. Beginning April 1, 2005, our leverage ratio, calculated according to the definitions contained in the credit agreement, must be less than or equal to 3.75 to 1. As of December 31, 2003, our leverage ratio, calculated according to the definitions contained in the credit agreement, was 3.16 to 1.

      EBITDA, as used in our credit agreement, is not intended to represent cash flow from operations as defined by GAAP and principles and should not be used as an alternative to net income as an indicator of our operating performance or to cash flow as a measure of our liquidity. Moreover, EBITDA is a term used by many companies to mean many different things. Therefore, neither our EBITDA nor our leverage ratio, calculated under our credit agreement, should be compared to any other company’s EBITDA or leverage ratio. We present our leverage ratio in this discussion not as a measure of our liquidity or performance but only to demonstrate our level of compliance with our credit agreement.

      Our interest coverage ratio must be greater than or equal to 3 to 1. As of December 31, 2003, our interest coverage ratio, calculated according to the definitions contained in the credit agreement, was 5.24 to 1.

      Our consolidated net worth must be greater than or equal to $1.75 billion, as increased each quarter (beginning with the quarter ended December 31, 2003) by an amount equal to 50% of our consolidated net income for the quarter, plus 50% of the amount by which stockholders’ equity is increased by certain equity issuances. As of December 31, 2003, the minimum net worth requirement was $1.85 billion, and our actual net worth (as defined in the credit agreement) was $2.54 billion.

      Our credit agreement permits us to complete acquisitions that meet the following conditions without obtaining prior approval: (1) the acquired company is involved in the manufacture, processing and distribution of food or packaging products or any other line of business in which we are currently engaged, (2) the net cash consideration is not greater than $300 million, (3) we acquire at least 51% of the acquired entity, and (4) the transaction is approved by the Board of Directors or shareholders, as appropriate, of the target. All other acquisitions must be approved in advance by the required percentage of lenders.

      The facility also contains limitations on liens, investments and the incurrence of additional indebtedness, and prohibits certain dispositions of property and restricts certain payments, including dividends. The credit facility is secured by liens on substantially all of our domestic assets (including the assets of our subsidiaries, but excluding the capital stock of Legacy Dean’s subsidiaries, and the real property owned by Legacy Dean and its subsidiaries).

      The agreement contains standard default triggers, including without limitation: failure to maintain compliance with the financial and other covenants contained in the agreement, default on certain of our other debt, a change in control and certain other material adverse changes in our business. The agreement does not contain any default triggers based on our debt rating.

      At December 31, 2003, we had outstanding borrowings of $1.78 billion under our senior credit facility (compared to $1.83 billion at December 31, 2002), including $1.67 billion in term loan borrowings, and $112.8 million outstanding under the revolving credit facility. In addition, at December 31, 2003, there were $108.9 million of letters of credit under the revolver that were issued but undrawn. On January 2, 2004, we acquired the equity interests in Horizon Organic Holding Corporation that we did not already own and used approximately $80 million of borrowings under our senior credit facility to pay a portion of the purchase price.

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As of March 1, 2004, approximately $665.4 million was available for future borrowings under our credit facility. We are currently, and have always been, in compliance with all covenants contained in our credit agreement.

      In addition to our senior credit facility, we also have a $500 million receivables-backed credit facility, which had $302.5 million outstanding at December 31, 2003. We used approximately $180 million of borrowings under this facility to pay a portion of the purchase price for Horizon Organic Holding Corporation. Therefore, approximately $451.8 million was outstanding under this facility at March 1, 2004. See Note 9 to our Consolidated Financial Statements for more information about our receivables-backed facility.

      Other indebtedness outstanding at December 31, 2003 included $700 million face value of outstanding indebtedness under Legacy Dean’s senior notes, a $6.4 million line of credit at our Spanish subsidiary, $11.7 million of industrial development revenue bonds and approximately $26.2 million of capital lease and other obligations. See Note 9 to our Consolidated Financial Statements.

      The table below summarizes our obligations for indebtedness and lease obligations at December 31, 2003. Please see Note 18 to our Consolidated Financial Statements for more detail about our lease obligations.

				Payments Due by Period
Indebtedness & Lease Obligations		Total		2004		2005		2006		2007		2008		Thereafter
				(Dollars in thousands)
Senior credit facility		$	1,784,053	$	157,500	$	182,500	$	207,500	$	520,303	$	716,250
Senior notes(1)			700,000				100,000				250,000			$	350,000
Receivables-backed facility			302,500						302,500
Foreign line of credit			6,401		6,401
Industrial development revenue bonds			11,700		3,500										8,200
Capital lease obligations and other(1)			26,523		12,757		4,688		6,567		2,258		172		81
Purchasing obligations			229,748		144,797		43,527		12,267		10,360		8,522		10,275
Operating leases			452,273		90,662		76,356		61,556		51,483		42,950		129,266
	Total	$	3,513,198	$	415,617	$	407,071	$	590,390	$	834,404	$	767,894	$	497,822

(1)  Represents face value.

      In addition to the letters of credit secured by our senior credit facility, at December 31, 2003 we had approximately $16.2 million of letters of credit with three other banks that were issued but undrawn. The majority of these were required by various utilities and government entities for performance and insurance guarantees.

Other Long-Term Liabilities

      We offer pension benefits through various defined benefit pension plans and also offer certain health care and life insurance benefits to eligible employees and their eligible dependents upon the retirement of such employees. Reported costs of providing non-contributory defined pension benefits and other postretirement benefits are dependent upon numerous factors, assumptions and estimates.

      For example, these costs are impacted by actual employee demographics (including age, compensation levels and employment periods), the level of contributions made to the plan and earnings on plan assets. Our pension plan assets are primarily made up of equity and fixed income investments. Changes made to the provisions of the plan may also impact current and future pension costs. Fluctuations in actual equity market returns as well as changes in general interest rates may result in increased or decreased pension costs in future periods. Pension costs may also be significantly affected by changes in key actuarial assumptions, including anticipated rates of return on plan assets and the discount rates used in determining the projected benefit obligation and pension costs.

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      In accordance with SFAS No. 87, “Employers’ Accounting for Pensions,” changes in pension obligations associated with these factors may not be immediately recognized as pension costs on the income statement, but generally are recognized in future years over the remaining average service period of plan participants. As such, significant portions of pension costs recorded in any period may not reflect the actual level of cash benefits provided to plan participants. In 2003, we recorded non-cash expense of $15.3 million, of which $12.8 million was attributable to periodic expense and $2.5 million was attributable to settlements compared to a total of $9.1 million in 2002, of which $3 million was attributable to settlements. These amounts were determined in accordance with the provisions of SFAS No. 87 and SFAS No. 88, “Employer’s Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits.”

      As of December 31, 2003, we decreased the assumed discount rate in 2002 from 6.75% to a range of 6% to 6.5%. In selecting assumed rate of return on plan assets, we considered past performance and economic forecasts for the types of investments held by the plan as well as the interim target allocation policy. Plan asset returns were $25 million in 2003 after decreasing by $19.7 million in 2002. Net periodic pension expense for our plans is expected to decrease in 2004 by approximately $3.3 million due primarily to the increase in assets from $124.8 million as of December 31, 2002 to $151.6 million as of December 31, 2003. Based on current projections, 2004 funding requirements will be approximately $37.8 million as compared to $31.1 million for 2003. Additionally, based on current projections, 2004 funding requirements for our other postretirement benefit obligations will be approximately $2.8 million as compared to $2.4 million in 2003.

      As a result of lower discount rates at December 31, 2003, we were required to recognize an additional minimum liability as prescribed by SFAS No. 87 and SFAS No. 132, “Employers’ Disclosures about Pensions and Postretirement Benefits.” The accumulated other comprehensive income component of the additional minimum liability, which totaled $37.9 million ($23.6 million after-tax), was recorded as a reduction to shareholder’s equity through a charge to Other Comprehensive Income, and did not affect net income for 2003. The charge to Other Comprehensive Income will be reversed in future periods to the extent the fair value of plan assets exceeds the accumulated benefit obligation. See Notes 13 and 14 to our Consolidated Financial Statements for information regarding retirement plans and other postretirement benefits.

     Other Commitments and Contingencies

      On December 21, 2001, in connection with our acquisition of Legacy Dean, we issued a contingent, subordinated promissory note to Dairy Farmers of America (“DFA”) in the original principal amount of $40 million. DFA is our primary supplier of raw milk, and the promissory note is designed to ensure that DFA has the opportunity to continue to supply raw milk to certain of our plants until 2021, or be paid for the loss of that business. The promissory note has a 20-year term and bears interest based on the consumer price index. Interest will not be paid in cash, but will be added to the principal amount of the note annually, up to a maximum principal amount of $96 million. We may prepay the note in whole or in part at any time, without penalty. The note will only become payable if we ever materially breach or terminate one of our milk supply agreements with DFA without renewal or replacement. Otherwise, the note will expire at the end of 20 years, without any obligation to pay any portion of the principal or interest. Payments we make under this note, if any, will be expensed as incurred.

      We also have the following commitments and contingent liabilities, in addition to contingent liabilities related to ordinary course litigation and audits:

•  the obligation to pay performance bonuses to White Wave’s management team in the event that established performance hurdles are met by the end of March 2004, which we currently expect to be approximately $39 million; and

•  certain indemnification obligations related to businesses that we have divested; and

•  potential liability related to a Wells Notice we received from the staff of the Securities and Exchange Commission related to our relationship with one of our customers.

      See Note 18 to our Consolidated Financial Statements for more information about our commitments and contingent obligations.

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     Future Capital Requirements

      During 2004, we intend to invest a total of approximately $350 million in capital expenditures primarily for our existing manufacturing facilities and distribution capabilities. We intend to fund these expenditures using cash flow from operations. We intend to spend this amount as follows:

Operating Division		Amount
		(Dollars in millions)
Dairy Group		$	275
Branded Products Group			25
Specialty Foods Group			20
Other			30
	Total	$	350

      In 2004, we expect cash interest to be approximately $170 million based on current debt levels and cash taxes to be approximately $90 million.

      We expect that cash flow from operations will be sufficient to meet our requirements for our existing businesses for the foreseeable future.

      In 2004, we intend to pursue additional acquisitions that are compatible with our core business strategy. We may also repurchase our stock pursuant to open market or privately negotiated transactions. Approximately $114.6 million was available for spending under our stock repurchase program as of March 10, 2004. We base our decisions regarding when to repurchase stock on a variety of factors, including primarily an analysis of the optimal use of available capital, taking into account the market value of our stock, the relative expected return on alternative investments and the financial covenants in our credit facility. Any acquisitions or stock repurchases will be funded through cash flows from operations or borrowings under our senior credit facility. If necessary, we believe that we have the ability to secure additional debt or equity financing for our future capital requirements and we will explore those alternatives as appropriate.

Known Trends and Uncertainties

     Economic Environment

      As a result of the recent economic environment in this country, and due to the highly competitive environment currently existing in the food retailing and foodservice industries, many of our retail and foodservice customers have experienced economic difficulty over the past 18 months to 2 years. A number of our customers have been forced to close stores and certain others have sought bankruptcy protection. This trend could have a material adverse effect on us if a material number of our customers, or any one large customer, were to be forced to close a significant number of stores or file for bankruptcy protection.

      Many of our retail customers have become increasingly price sensitive in the current economic environment. We have recently been subject to a number of intensely competitive bidding situations, which has resulted in margin erosion on sales to several customers. We expect this trend to continue. In bidding situations we are subject to the risk of losing certain customers altogether. Loss of any of our largest customers could have a material adverse impact on our financial results. We do not have contracts with many of our largest customers, and most of the contracts that we do have are generally terminable at will by the customer.

     Prices of Raw Milk and Cream

      Our raw milk cost changes are based on the federal and certain state governments’ minimum prices, regional and national milk supply conditions and arrangements with our suppliers. Generally, we pay the federal minimum prices for raw milk, plus certain producer premiums (or “over-order” premiums) and location differentials. We also incur other raw milk procurement costs in some locations (such as hauling, field personnel, etc.). A change in the federal minimum price does not necessarily mean an identical change in our total raw material cost, as over-order premiums may increase or decrease. This relationship is different in

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every region of the country, and sometimes within a region based on supplier arrangements. However, in general, the overall change in our raw milk costs can be linked to the change in federal minimum prices. Bulk cream is also a significant raw material cost to us. Bulk cream is typically purchased based on a multiple of the AA butter price on the Chicago Mercantile Exchange. Bulk cream is used in our Class II products such as ice cream, ice cream mix, creams and creamers, sour cream and cottage cheese.

      In 2002 and in the first eight months of 2003, prices for raw milk and butter were unusually low. Beginning in September 2003 and continuing through the end of the year, prices for raw milk and butter increased significantly. Although Class I prices in early 2004 have declined from the levels experienced in late 2003, they have remained at levels higher than the 2003 average. We expect Class I prices to continue to rise throughout the remainder of the year. Class II prices have increased significantly over the levels experienced late last year, and are expected to continue to increase over the next several months. Although we currently expect Class II prices to decrease somewhat in the latter part of 2004, we anticipate that they will still be at levels higher than experienced in 2003. Of course, raw milk and butter prices are difficult to predict and we change our forecasts frequently based on current market activity.

      In general, we change the prices that we charge our customers for our fluid dairy products on a monthly basis, as the costs of our raw materials fluctuate. However, there can be a lag between the time of a raw material cost increase or decrease and the effectiveness of a corresponding price change to our customers, especially in the case of Class II butterfat because Class II butterfat prices for each month are not announced by the government until after the end of that month. (We use Class II butterfat to make creams, cultured dairy products and ice cream). Also, in some cases we are contractually restrained with respect to the means and timing of implementing price changes, and at some point price increases could erode our volumes. These factors can cause volatility in our earnings. Our sales and operating profit margin (expressed as a percentage of sales) fluctuate with the price of our raw materials. We expect our profit margins to be lower in 2004 as a result of the expected increase in the price of raw milk.

     Grocery Strikes

      From October 11, 2003 until February 29, 2004, the workers of the United Food and Commercial Workers Union were on strike in southern California. This strike affected many of our retail grocery customers in southern California whose employees are members of the United Food and Commercial Workers Union. Our business in southern California was adversely affected in the fourth quarter of 2003 and in most of the first quarter of 2004 as a result of the strike. We estimate that the strike adversely impacted our fourth quarter consolidated diluted earnings per share by approximately $.015. We cannot yet estimate the impact on our results for the first quarter of 2004; however, we expect it to be a proportionately similar amount to the fourth quarter of 2003.

     Plant Closings

      As part of our ongoing efforts to reduce our costs and improve our manufacturing efficiency, we expect to close approximately six to eight plants in 2004. We will incur costs in connection with these plant closings, which will be recorded as operating expenses in the quarter in which they are incurred. Expenses associated with plant closings generally include severance costs, property and equipment write-down costs and in some cases, lease termination expenses. These costs vary from plant to plant and cannot be estimated with certainty. We expect the majority of the plants closed in 2004 to be closed in the second half of 2004. Also, we expect to incur $4.3 million of additional costs primarily in 2004 related to facilities closed prior to 2004.

     Tax Rate

      Our 2003 tax rate was approximately 38%. We believe that our effective tax rate will be approximately 38% for 2004.

      See “— Risk Factors” for a description of various other risks and uncertainties concerning our business.

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Critical Accounting Policies

      “Critical accounting policies” are defined as those that are both most important to the portrayal of a company’s financial condition and results, and that require our most difficult, subjective or complex judgments. In many cases the accounting treatment of a particular transaction is specifically dictated by generally accepted accounting principles with no need for the application of our judgment. In certain circumstances, however, the preparation of our Consolidated Financial Statements in conformity with generally accepted accounting principles requires us to use our judgment to make certain estimates and assumptions. These estimates affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. We have identified the policies described below as our critical accounting policies. See Note 1 to our Consolidated Financial Statements for a detailed discussion of these and other accounting policies.

      Accounts Receivable — We provide credit terms to customers generally ranging up to 30 days, perform ongoing credit evaluations of our customers and maintain allowances for estimated credit losses. As these factors change, our estimates change and we could accrue different amounts for doubtful accounts in different accounting periods. At December 31, 2003, our allowance for doubtful accounts was approximately $32.7 million, or 0.4% of sales. The allowance for doubtful accounts, expressed as a percent of sales, was also 0.4% in 2002. Each 0.1% change in that ratio of allowance for doubtful accounts to sales would impact net income by approximately $5.7 million.

      Insurance Accruals — We retain selected levels of property and casualty risks, primarily related to employee health care, workers’ compensation claims and other casualty losses. Many of these potential losses are covered under conventional insurance programs with third party carriers with high deductible limits. In other areas, we are self-insured with stop-loss coverages. Accrued liabilities for incurred but not reported losses related to these retained risks are calculated based upon loss development factors which contemplate a number of variables including claims history and expected trends. These loss development factors are developed by us in consultation with external insurance brokers and actuaries. At December 31, 2003 and 2002, we recorded accrued liabilities related to these retained risks of $136.3 million and $128.5 million, respectively, including both current and long-term liabilities.

      Income Taxes — Deferred taxes are recognized for future tax effects of temporary differences between financial and income tax reporting using tax rates in effect for the years in which the differences are expected to reverse. We periodically estimate our probable tax obligations using historical experience in tax jurisdictions and informed judgments. There are inherent uncertainties related to the interpretations of tax regulations in the jurisdictions in which we operate. These judgments and estimates made at a point in time may change based on the outcome of tax audits and changes to or further interpretations of regulations. If such changes take place, there is a risk that our tax rate may increase or decrease in any period which could have an impact on our earnings. Future business results may affect deferred tax liabilities or the valuation of deferred tax assets over time. The change in our valuation allowance increased $7.5 million in 2003 due to increased likelihood that state net operating losses will expire before they are used.

      Valuation of Long-Lived Intangible Assets and Goodwill — In January 2002, we adopted Statement of Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and Other Intangible Assets” and as a result, we no longer amortize goodwill and other intangibles with indefinite lives. In lieu of amortization, we now conduct impairment tests on our goodwill, trademarks and other intangible assets with indefinite lives annually and when circumstances indicate that the carrying value may not be recoverable. We evaluate the value of our intangibles using cash flow analyses, which require the use of significant judgments and estimates, including projections of enterprise values and expected cash flows from specific product sales in the future.

      Purchase Price Allocation — We allocate the cost of acquisitions to the assets acquired and liabilities assumed. All identifiable assets acquired, including identifiable intangibles, and liabilities assumed are assigned a portion of the cost of the acquired company, normally equal to their fair values at the date of acquisition. The excess of the cost of the acquired company over the sum of the amounts assigned to identifiable assets acquired less liabilities assumed is recorded as goodwill. We record the initial purchase price

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allocation based on evaluation of information and estimates available at the date of the financial statements. As final information regarding fair value of assets acquired and liabilities assumed is received and estimates are refined, appropriate adjustments are made to the purchase price allocation. To the extent that such adjustments indicate that the fair value of assets and liabilities differ from their preliminary purchase price allocations, such difference would adjust the amounts allocated to those assets and liabilities and would change the amounts allocated to goodwill. The final purchase price allocation includes the consideration of a number of factors to determine the fair value of individual assets acquired and liabilities assumed including quoted market prices, forecast of expected cash flows, net realizable values, estimates of the present value of required payments and determination of remaining useful lives.

      Employee Benefit Plan Costs — We provide a range of benefits to our employees including pension and postretirement benefits to our eligible employees and retirees. We record annual amounts relating to these plans based on calculations specified by generally accepted accounting principles, which include various actuarial assumptions, such as discount rates, assumed rates of return, compensation increases, employee turnover rates and health care cost trend rates. We review our actuarial assumptions on an annual basis and make modifications to the assumptions based on current rates and trends when it is deemed appropriate. As required by generally accepted accounting principles, the effect of the modifications is generally recorded and amortized over future periods. Different assumptions that we make could result in the recognition of different amounts of expense over different periods of time.

      In 2003, we decided to consolidate the assets of our ten qualified pension plans into one master trust. This consolidation is expected to be completed in the first quarter of 2004. Also in 2003, we retained investment consultants to assist our Investment Committee with the transition of the plans’ assets to the master trust and to help our Investment Committee formulate a long-term investment policy for the newly established master trust. We have developed an interim investment policy to ensure a smooth transition to the master trust. Our current asset mix guidelines under the interim investment policy target equities at 65-75% of the portfolio and fixed income at 25-35%. We expect to develop and adopt a long-term investment policy in early 2004.

      We determine our expected long-term rate of return based on our expectations of future returns for the pension plan’s investments based on interim target allocations of the pension plan’s investments. Additionally, we consider the weighted-average return of a capital markets model that was developed by the plans’ investment consultants and historical returns on comparable equity, debt and other investments. The resulting weighted average expected long-term rate of return on plan assets is 8.5%.

      A 1% reduction in the assumed rate of return on plan assets would increase our annual pension expense by approximately $1.52 million. In addition, a 1% increase in assumed healthcare costs trends would increase the aggregate annual post retirement medical expense by approximately $0.2 million.

Recently Adopted Accounting Pronouncements

      In June 2001, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standard (“SFAS”) No. 143, “Accounting for Asset Retirement Obligations.” This statement requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which the associated legal obligation for the liability is incurred if a reasonable estimate of fair value can be made. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset and amortized over the useful life of the asset. SFAS No. 143 became effective for us in 2003. The adoption of this pronouncement did not have a material impact on our Consolidated Financial Statements.

      SFAS No. 145, “Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections,” was issued in April 2002 and is applicable to fiscal years beginning after May 15, 2002. One of the provisions of this technical statement is the rescission of SFAS No. 4, “Reporting Gains and Losses from Extinguishment of Debt,” whereby any gain or loss on the early extinguishment of debt that was classified as an extraordinary item in prior periods in accordance with SFAS No. 4, which does not meet the criteria of an extraordinary item as defined by APB Opinion 30, must be reclassified. Adoption of this standard required us to reclassify gains and losses related to early extinguishment of debt that were previously

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reported as extraordinary as a component of “interest expense.” The adoption of this pronouncement did not have a material effect on our Consolidated Financial Statements.

      In June 2002, FASB issued SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities.” This statement addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies EITF Issue No. 94-3, “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring).” The statement requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred, and is effective for exit or disposal activities that are initiated after December 31, 2002. Our adoption of this standard changed the timing of the recognition of certain charges associated with exit and disposal activities.

      In November 2002, FASB issued FASB Interpretation (“FIN”) No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others.” FIN No. 45 clarifies the requirements of SFAS No. 5 “Accounting for Contingencies,” relating to the accounting for and disclosure of certain guarantees issued and indemnification obligations incurred. FIN No. 45 requires disclosure of certain guarantees and indemnification obligations. It also requires liability recognition for the fair value of certain guarantees and indemnification obligations made or incurred after December 31, 2002. We adopted FIN No. 45 effective January 1, 2003. See Note 18 to our Consolidated Financial Statements for the disclosures required by FIN No. 45.

      In December 2003, FASB issued FIN No. 46(R), “Consolidation of Variable Interest Entities — an interpretation of ARB No. 51 (revised December 2003).” FIN 46(R) provides guidance for identifying a controlling interest in a variable interest entity (“VIE”) established by means other than voting interests. FIN 46(R) also requires consolidation of a VIE by an enterprise that holds such a controlling interest. The effective date for interest qualification is December 31, 2003. We currently utilize special purpose limited liability entities to facilitate our receivable-backed facility. Since their formations, these entities have been consolidated in our financial statements for financial reporting purposes. Therefore, the adoption of FIN No. 46(R) had no material impact on our Consolidated Financial Statements.

      In April 2003, FASB issued SFAS No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities.” This statement amends and clarifies financial accounting and reporting for derivative instruments, including derivative instruments embedded in other contracts and hedging activities under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities.” This statement required that contracts with comparable characteristics be accounted for similarly and is effective for contracts entered into or modified after June 30, 2003. Our reporting for our hedging activities is within the requirements of this statement, therefore SFAS No. 149 did not have an impact on our Consolidated Financial Statements.

      In May 2003, FASB issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity.” This statement, which became effective for us on July 1, 2003, requires that certain financial instruments which had previously been classified as equity be classified as liabilities. We have no outstanding securities that meet the criteria of SFAS No. 150. Therefore, SFAS No. 150 had no impact on our Consolidated Financial Statements.

      In December 2003, the FASB issued SFAS No. 132 (revised 2003), “Employers’ Disclosures about Pensions and Other Postretirement Benefits,” to improve financial statement disclosures for defined benefit plans. This standard requires that companies provide more details about their plan assets, benefit obligations, cash flows, benefit costs and other relevant information. In addition to expanded annual disclosures, we are required to report the various elements of pension and other postretirement benefit costs on a quarterly basis. SFAS No. 132 (revised 2003) is effective for fiscal years ending after December 15, 2003, and for quarters beginning after December 15, 2003. The expanded disclosure requirements are included in this report.

      In January 2004, the FASB issued FASB Staff Position (“FSP”) 106-1, “Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003” in response to a new law regarding prescription drug benefits under Medicare as well as a federal subsidy to sponsors of retiree health care benefit plans. Currently, SFAS No. 106, “Employers’ Accounting for

47

Postretirement Benefits Other Than Pensions”, requires that changes in relevant law be considered in current measurement of postretirement benefit costs. We are currently evaluating the impact of the new law and will defer recognition, as permitted by FSP 106-1, until authoritative guidance is issued.

Risk Factors

      This report contains forward looking statements within the meaning of the Private Securities Litigation Reform Act. Statements that are not historical in nature are forward-looking statements about our future that are not statements of historical fact. Most of these statements are found in this report under the following subheadings: “Part I — Item 1. Business,” “Part II — Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Part II — Item 7A. Quantitative and Qualitative Disclosures About Market Risk.” In some cases, you can identify these statements by terminology such as “may,” “will,” “should,” “could,” “expects,” “seek to,” “anticipates,” “plans,” “believes,” “estimates,” “intends,” “predicts,” “projects,” “potential” or “continue” or the negative of such terms and other comparable terminology. These statements are only predictions, and in evaluating those statements, you should carefully consider the information above, including in “— Known Trends and Uncertainties,” as well as the risks outlined below. Actual performance or results may differ materially and adversely.

     Further Consolidation of the Grocery and Foodservice Industries Could Cost Us Customers and Sales

      Over the past several years, the retail grocery and foodservice industries have experienced significant consolidation. As our customer base continues to consolidate, we expect competition to intensify as we compete for the business of fewer customers. There can be no assurance that we will be able to keep our existing customers, or gain new customers. Winning new customers is especially important to the growth of our Dairy Group, as demand tends to be relatively flat in the dairy industry.

      There are several large regional grocery chains that have captive dairy operations. As the consolidation of the grocery industry continues, we could lose sales if any one or more of our existing customers were to be sold to a chain with captive dairy operations.

Our Recent Successes in the Refrigerated Soymilk and Organic Foods Industries Could Attract New and Stronger Competitors, Which Could Impede Our Growth Rate and Cost Us Sales

      We have experienced a great deal of success in the past in the refrigerated soymilk and organic foods industries. Our Silk soymilk and our Horizon Organic organic food and beverage products have leading market shares in their categories and have benefited in many cases from being the first to introduce products in their categories. As soy and organic products continue to gain in popularity with consumers, we expect our products in these categories to continue to attract competitors. Many large food and beverage companies have substantially more resources than we do and they may be able to market their soy and organic products more successfully than us, which could cause our growth rate in these categories to slow and could cause us to lose sales.

Loss of Rights to Any of Our Licensed Brands Could Adversely Affect Our Sales and Profits

      We sell certain of our products under licensed brand names such as Hershey’s, Borden®, Pet®, Folgers, Land O’Lakes and others. In some cases, we have invested, and intend to continue to invest, significant capital in product development and marketing and advertising related to these licensed brands. Should our rights to manufacture and sell products under any of these names be terminated for any reason, our financial performance and results of operations could be materially and adversely affected.

We Have Substantial Debt and Other Financial Obligations and We May Incur Even More Debt

      We have substantial debt and other financial obligations and significant unused borrowing capacity. See “— Liquidity and Capital Resources.”

48

      We have pledged substantially all of our assets (including the assets of our subsidiaries) to secure our indebtedness. Our high debt level and related debt service obligations:

•  require us to dedicate significant cash flow to the payment of principal and interest on our debt which reduces the funds we have available for other purposes,

•  may limit our flexibility in planning for or reacting to changes in our business and market conditions,

•  impose on us additional financial and operational restrictions, and

•  expose us to interest rate risk since a portion of our debt obligations are at variable rates.

      Our ability to make scheduled payments on our debt and other financial obligations depends on our financial and operating performance. Our financial and operating performance is subject to prevailing economic conditions and to financial, business and other factors, some of which are beyond our control. A significant increase in interest rates could adversely impact our net income. If we do not comply with the financial and other restrictive covenants under our credit facilities, we may default under them. Upon default, our lenders could accelerate the indebtedness under the facilities, foreclose against their collateral or seek other remedies, which would jeopardize our ability to continue our current operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Fluctuations

      In order to reduce the volatility of earnings that arises from changes in interest rates, we manage interest rate risk through the use of interest rate swap agreements. These swap agreements provide hedges for loans under our senior credit facility by limiting or fixing the LIBOR interest rates specified in the senior credit facility at the interest rates noted below until the indicated expiration dates.

      These swaps have been designated as cash flow hedges against variable interest rate exposure. The following table summarizes our various interest rate swap agreements in effect as of December 31, 2003:

Fixed Interest Rates	Expiration Date		Notional Amounts
			(in millions)
1.48% to 6.69%		December 2004	$	650
5.20% to 6.74%		December 2005		400
6.78%		December 2006		75

      The following table summarizes our various interest rate swap agreements as of December 31, 2002:

Fixed Interest Rates	Expiration Date		Notional Amounts
			(in millions)
6.23%		June 2003	$	50
4.29% to 4.69%		December 2003		275
4.01% to 6.69%		December 2004		275
5.20% to 6.74%		December 2005		400
6.78%		December 2006		75

      In 2001, we entered into an interest rate swap agreement that provided hedges for euro-denominated loans, which were repaid and replaced with euro-denominated borrowings under our senior credit facility. The following table describes this swap agreement as of December 31, 2003 and 2002:

Fixed
Interest
Rates		Expiration Date		Notional Amounts
	5.60%		November 2004	12 million euros (approximately $15.1 million as of December 31, 2003 and $12.6 million as of December 31, 2002)

      We are exposed to market risk under these arrangements due to the possibility of interest rates on our credit facilities falling below the rates on our interest rate derivative agreements. We incurred $25.6 million of

49

additional interest expense, net of taxes, during 2003 as a result of interest rates on our variable rate debt falling below the agreed-upon interest rate on our existing swap agreements. Credit risk under these arrangements is remote since the counterparties to our interest rate derivative agreements are major financial institutions.

      A majority of our debt obligations are currently at variable rates. We have performed a sensitivity analysis assuming a hypothetical 10% adverse movement in interest rates. As of December 31, 2003 and 2002, the analysis indicated that such interest rate movement would not have a material effect on our financial position, results of operations or cash flows. However, actual gains and losses in the future may differ materially from that analysis based on changes in the timing and amount of interest rate movement and our actual exposure and hedges.

Foreign Currency

      We are exposed to foreign currency risk due to operating cash flows and various financial instruments that are denominated in foreign currencies. Our most significant foreign currency exposures relate to the euro and the British pound. We have performed a sensitivity analysis assuming a hypothetical 10% adverse movement in foreign currency exchange rates. As of December 31, 2003 and 2002, the analysis indicated that such foreign currency exchange rate change would not have a material effect on our financial position, results of operations or cash flows.

50

Item 8.      Consolidated Financial Statements

      Our Consolidated Financial Statements for 2003 are included in this report on the following pages.

			Page
Independent Auditors’ Report				F-1
Consolidated Balance Sheets as of December 31, 2003 and 2002				F-2
Consolidated Statements of Income for the years ended December 31, 2003, 2002 and 2001				F-3
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2003, 2002 and 2001				F-4
Consolidated Statements of Cash Flows for the years ended December 31, 2003, 2002 and 2001				F-5
Notes to Consolidated Financial Statements
	1.	Summary of Significant Accounting Policies		F-6
	2.	Acquisitions, Divestitures and Discontinued Operations		F-11
	3.	Investments in Unconsolidated Affiliates		F-17
	4.	Inventories		F-18
	5.	Property, Plant and Equipment		F-18
	6.	Intangible Assets		F-19
	7.	Accounts Payable and Accrued Expenses		F-21
	8.	Income Taxes		F-21
	9.	Long-Term Debt		F-23
	10.	Mandatorily Redeemable Trust Issued Preferred Securities		F-28
	11.	Stockholders’ Equity		F-28
	12.	Other Comprehensive Income		F-33
	13.	Employee Retirement and Profit Sharing Plans		F-33
	14.	Postretirement Benefits Other Than Pensions		F-36
	15.	Plant Closing and Rationalization Costs		F-38
	16.	Other Operating (Income) Expense		F-42
	17.	Supplemental Cash Flow Information		F-42
	18.	Commitments and Contingencies		F-42
	19.	Fair Value of Financial Instruments		F-45
	20.	Segment and Geographic Information and Major Customers		F-45
	21.	Quarterly Results of Operations (Unaudited)		F-48
	22.	Subsequent Events		F-49
	23.	Related Party Transactions		F-49

51

INDEPENDENT AUDITORS’ REPORT

To the Board of Directors

Dean Foods Company

Dallas, Texas

      We have audited the accompanying consolidated balance sheets of Dean Foods Company and subsidiaries (the “Company”) as of December 31, 2003 and 2002, and the related consolidated statements of income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2003. These consolidated financial statements are the responsibility of the Company’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 that 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 consolidated financial position of Dean Foods Company and subsidiaries as of December 31, 2003 and 2002, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2003, in conformity with accounting principles generally accepted in the United States of America.

      As discussed in Note 1 to the consolidated financial statements, in 2002 the Company changed its method of accounting for goodwill and other intangible assets to conform to Statement of Financial Accounting Standards No. 142.

DELOITTE & TOUCHE LLP

Dallas, Texas

March 11, 2004

F-1

DEAN FOODS COMPANY

CONSOLIDATED BALANCE SHEETS

			December 31
			2003			2002
			(Dollars in thousands, except
			share data)
ASSETS
Current assets:
	Cash and cash equivalents		$	47,143		$	45,896
	Receivables, net of allowance for doubtful accounts of $32,684 and $34,317			742,934			656,938
	Inventories			426,478			400,347
	Deferred income taxes			137,055			158,337
	Prepaid expenses and other current assets			47,271			49,628
		Total current assets		1,400,881			1,311,146
Property, plant and equipment				1,773,555			1,628,424
Goodwill				3,197,548			3,035,417
Identifiable intangible and other assets				620,552			607,279
		Total	$	6,992,536		$	6,582,266
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
	Accounts payable and accrued expenses		$	924,707		$	981,018
	Income taxes payable			65,528			38,488
	Current portion of long-term debt			180,158			173,442
		Total current liabilities		1,170,393			1,192,948
Long-term debt				2,611,356			2,554,482
Other long-term liabilities				279,823			312,110
Deferred income taxes				388,151			294,256
Mandatorily redeemable convertible trust issued preferred securities (redemption value of $599,910 plus accrued dividends)							585,177
Commitments and contingencies (Note 18)
Stockholders’ equity:
	Preferred stock, none issued
	Common stock, 154,993,214 and 132,961,440 shares issued and outstanding, with a par value of $0.01 per share			1,550			1,330
	Additional paid-in capital			1,498,025			979,113
	Retained earnings			1,074,258			718,555
	Accumulated other comprehensive loss			(31,020	)		(55,705	)
		Total stockholders’ equity		2,542,813			1,643,293
		Total	$	6,992,536		$	6,582,266

See Notes to Consolidated Financial Statements.

F-2

DEAN FOODS COMPANY

CONSOLIDATED STATEMENTS OF INCOME

			Years Ended December 31
			2003			2002			2001
			(Dollars in thousands, except share data)
Net sales			$	9,184,616		$	8,991,464		$	5,974,555
Cost of sales				6,808,207			6,642,773			4,574,258
Gross profit				2,376,409			2,348,691			1,400,297
Operating costs and expenses:
	Selling and distribution			1,345,065			1,321,763			794,937
	General and administrative			317,342			337,496			176,642
	Amortization of intangibles			4,949			7,775			51,361
	Plant closing and rationalization costs			11,787			19,050			9,550
	Other operating income			(68,719	)					(17,306	)
		Total operating costs and expenses		1,610,424			1,686,084			1,015,184
Operating income				765,985			662,607			385,113
Other (income) expense:
	Interest expense, net			181,134			197,685			103,820
	Financing charges on trust issued preferred securities			14,164			33,578			33,581
	Equity in (earnings) losses of unconsolidated affiliates			(244	)		7,899			23,620
	Other (income) expense, net			(2,625	)		2,660			4,817
		Total other expense		192,429			241,822			165,838
Income from continuing operations before income taxes				573,556			420,785			219,275
Income taxes				217,853			152,988			80,160
Minority interest in earnings							46			31,431
Income from continuing operations				355,703			267,751			107,684
Loss on sale of discontinued operations, net of tax							(8,231	)
Income from discontinued operations, net of tax							879			3,592
Income before cumulative effect of accounting change				355,703			260,399			111,276
Cumulative effect of accounting change, net of tax							(84,983	)		(1,446	)
Net income			$	355,703		$	175,416		$	109,830
Basic earnings per common share:
	Income from continuing operations		$	2.45		$	1.98		$	1.28
	Income (loss) from discontinued operations						(.05	)		.04
	Cumulative effect of accounting change						(.63	)		(.02	)
	Net income		$	2.45		$	1.30		$	1.30
Diluted earnings per common share:
	Income from continuing operations		$	2.27		$	1.77		$	1.17
	Income (loss) from discontinued operations						(.05	)		.03
	Cumulative effect of accounting change						(.51	)		(.01	)
	Net income		$	2.27		$	1.21		$	1.19
Average common shares — Basic				145,201,412			135,031,274			84,454,194
Average common shares — Diluted				160,695,670			163,163,904			110,676,222

See Notes to Consolidated Financial Statements.

F-3

DEAN FOODS COMPANY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

														Accumulated
			Common Stock											Other			Total
									Additional			Retained		Comprehensive			Stockholders’			Comprehensive
			Shares			Amount			Paid-In Capital			Earnings		Income (loss)			Equity			Income
			(Dollars in thousands)
Balance, January 1, 2001				81,856,947		$	819		$	165,815		$	433,309	$	(1,111	)	$	598,832
	Issuance of common stock			3,943,941			39			62,603								62,642
	Purchase and retirement of treasury stock			(370,002	)		(4	)		(6,054	)							(6,058	)
	Net income												109,830					109,830		$	109,830
	Acquisition of Dean Foods Company			46,378,584			464			738,902								739,366
	Other comprehensive income (Note 12):
		Cumulative effect of accounting change													(6,403	)		(6,403	)		(6,403	)
		Change in fair value of derivative instruments													(9,438	)		(9,438	)		(9,438	)
		Reclassification of minority interest portion of derivative fair values													(10,033	)		(10,033	)		(10,033	)
		Cumulative translation adjustment													(2,232	)		(2,232	)		(2,232	)
		Minimum pension liability adjustment													(626	)		(626	)		(626	)
Comprehensive income																				$	81,098
Balance, December 31, 2001				131,809,470			1,318			961,266			543,139		(29,843	)		1,475,880
	Issuance of common stock			5,278,170			53			88,578								88,631
	Reclassification of Legacy Dean stock option liability									30,461								30,461
	Purchase and retirement of treasury stock			(4,126,200	)		(41	)		(101,192	)							(101,233	)
	Net income												175,416					175,416		$	175,416
	Other comprehensive income (Note 12):
		Change in fair value of derivative instruments													(46,803	)		(46,803	)		(46,803	)
		Amounts reclassified to income statement related to derivatives													24,014			24,014			24,014
		Cumulative translation adjustment													8,408			8,408			8,408
		Minimum pension liability adjustment													(11,481	)		(11,481	)		(11,481	)
Comprehensive income																				$	149,554
Balance, December 31, 2002.				132,961,440			1,330			979,113			718,555		(55,705	)		1,643,293
	Issuance of common stock			5,798,235			58			121,592								121,650
	Exchange of trust issued preferred securities			22,901,839			229			582,757								582,986
	Purchase and retirement of treasury stock			(6,668,300	)		(67	)		(185,437	)							(185,504	)
	Net income												355,703					355,703		$	355,703
	Other comprehensive income (Note 12):
		Change in fair value of derivative instruments													(7,650	)		(7,650	)		(7,650	)
		Amounts reclassified to income statement related to derivatives													25,610			25,610			25,610
		Cumulative translation adjustment													18,247			18,247			18,247
		Minimum pension liability adjustment													(11,522	)		(11,522	)		(11,522	)
	Comprehensive income																			$	380,388
Balance, December 31, 2003				154,993,214		$	1,550		$	1,498,025		$	1,074,258	$	(31,020	)	$	2,542,813

See Notes to Consolidated Financial Statements.

F-4

DEAN FOODS COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

					Years Ended December 31
					2003			2002			2001
					(In thousands)
Cash flows from operating activities:
	Net income				$	355,703		$	175,416		$	109,830
	Income from discontinued operations								(879	)		(3,592	)
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation and amortization				191,885			173,994			145,898
		(Gain) loss on disposition of assets				(67,362	)		4,586			(46,270	)
		Minority interest							120			51,402
		Equity in (earnings) loss of unconsolidated affiliates				(244	)		7,899			23,620
		Loss on sale of discontinued operations							8,231
		Loss on early extinguishment of debt										7,271
		Cumulative effect of accounting change							84,983			1,446
		Write-down of impaired assets				8,757			11,253			6,812
		Deferred income taxes				143,267			75,605			41,500
		Tax savings on stock option exercises				26,380			13,923			9,319
		Other				(8,990	)		2,719			2,402
		Changes in operating assets and liabilities, net of acquisitions:
			Receivables			(67,565	)		99,775			(3,199	)
			Inventories			(18,718	)		18,167			(4,703	)
			Prepaid expenses and other assets			20,663			(943	)		(17,137	)
			Accounts payable and accrued expenses			(89,367	)		(51,193	)		(16,929	)
			Income taxes payable			27,893			18,961			(2,444	)
				Net cash provided by continuing operations		522,302			642,617			305,226
				Net cash provided by discontinued operations					13,147			2,701
				Net cash provided by operating activities		522,302			655,764			307,927
Cash flows from investing activities:
	Additions to property, plant, and equipment					(291,662	)		(241,982	)		(131,210	)
	Cash outflows for acquisitions and investments					(246,573	)		(222,149	)		(1,146,077	)
	Net proceeds from divestitures					89,950			148,313
	Proceeds from sale of fixed assets					12,112			6,765			2,683
				Net cash used in continuing operations		(436,173	)		(309,053	)		(1,274,604	)
				Net cash used in discontinued operations					(5,138	)		(5,896	)
				Net cash used in investing activities		(436,173	)		(314,191	)		(1,280,500	)
Cash flows from financing activities:
	Proceeds from issuance of debt					349,680			637,500			2,203,725
	Repayment of debt					(322,691	)		(992,797	)		(1,173,335	)
	Payments of deferred financing, debt restructuring and merger costs					(5,200	)		(2,887	)		(47,125	)
	Distributions to minority interest holders											(10,363	)
	Issuance of common stock, net of expenses					95,270			74,988			50,599
	Redemption of common stock					(199,521	)		(87,211	)		(6,058	)
	Redemption of trust issued preferred securities					(2,420	)
				Net cash provided by (used in) financing activities		(84,882	)		(370,407	)		1,017,443
Increase (decrease) in cash and cash equivalents						1,247			(28,834	)		44,870
Cash and cash equivalents, beginning of period						45,896			74,730			29,860
Cash and cash equivalents, end of period					$	47,143		$	45,896		$	74,730

See Notes to Consolidated Financial Statements.

F-5

DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2003, 2002 and 2001

1.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      Nature of Our Business — We are a leading food and beverage company. Our Dairy Group is the largest processor and distributor of milk and various other dairy products in the United States. Our Branded Products Group markets and sells a variety of well known dairy and dairy-related branded products. Our Specialty Foods Group is one of the leading pickle processors in the United States and a maker of a variety of other specialty food products. We also own the fourth largest dairy processor in Spain.

      Basis of Presentation — Our Consolidated Financial Statements include the accounts of our wholly-owned subsidiaries. All significant intercompany balances and transactions are eliminated in consolidation.

      Use of Estimates — The preparation of our Consolidated Financial Statements in conformity with generally accepted accounting principles (“GAAP”) requires us to use our judgment to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates under different assumptions or conditions.

      Cash Equivalents — We consider temporary cash investments with a remaining maturity of three months or less to be cash equivalents.

      Inventories — Inventories are stated at the lower of cost or market. Dairy and certain specialty products are valued on the first-in, first-out (“FIFO”) method while our pickle inventories are valued using the last-in, first-out (“LIFO”) method. The costs of finished goods inventories include raw materials, direct labor and indirect production and overhead costs.

      Property, Plant and Equipment — Property, plant and equipment are stated at acquisition cost, plus capitalized interest on borrowings during the actual construction period of major capital projects. Also included in property, plant and equipment are certain direct costs related to the implementation of computer software for internal use. Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the assets, as follows:

Asset	Useful Life
Buildings and improvements	7 to 40 years
Machinery and equipment	3 to 20 years

      Impairment tests are performed when circumstances indicate that the carrying value may not be recoverable. Capitalized leases are amortized over the shorter of their lease term or their estimated useful lives. Expenditures for repairs and maintenance which do not improve or extend the life of the assets are expensed as incurred.

      Intangible and Other Assets — Prior to January 1, 2002, intangibles were amortized over their related estimated useful lives as follows:

Asset		Useful Life
Goodwill		Straight-line method over 25 to 40 years
Identifiable intangible assets:
	Customer lists	Straight-line method over 7 to 10 years
	Customer supply contracts	Straight-line method over the terms of the agreements
	Trademarks/trade names	Straight-line method over 10 to 40 years
	Noncompetition agreements	Straight-line method over the terms of the agreements
	Patents	Straight-line method over 15 years
Deferred financing costs		Interest method over the terms of the related debt

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DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      Effective January 1, 2002, in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 142, goodwill and other intangible assets determined to have indefinite useful lives are no longer amortized. Instead, we now conduct impairment tests on our goodwill, trademarks and other intangible assets with indefinite lives annually and when circumstances indicate that the carrying value may not be recoverable. To determine whether an impairment exists, we use present value techniques. Upon adoption of SFAS No. 142, we conducted transitional impairment tests and recorded certain impairments. See Note 6.

      Foreign Currency Translation — The financial statements of our foreign subsidiaries are translated to U.S. dollars in accordance with the provisions of SFAS No. 52, “Foreign Currency Translation.” The functional currency of our foreign subsidiaries is generally the local currency of the country. Accordingly, assets and liabilities of the foreign subsidiaries are translated to U.S. dollars at year-end exchange rates. Income and expense items are translated at the average rates prevailing during the year. Changes in exchange rates, which affect cash flows and the related receivables or payables are recognized as transaction gains and losses in the determination of net income. The cumulative translation adjustment in stockholders’ equity reflects the unrealized adjustments resulting from translating the financial statements of our foreign subsidiaries.

      Minority Interest in Subsidiaries — Minority interest in results of operations of consolidated subsidiaries represents the minority shareholders’ share of the income or loss of various consolidated subsidiaries. Equity in earnings/ (losses) represents the proportional share of the earnings or losses of these subsidiaries less any cash distributions made. At December 31, 2003, there were no outstanding minority interests.

      Employee Stock-Based Compensation — We measure compensation expense for our stock-based employee compensation plans using the intrinsic value method and provide the required pro forma disclosures of the effect on net income and earnings per share as if the fair value-based method had been applied in measuring compensation expense. See Note 11.

      We have elected to follow Accounting Principles Board Opinion (“APB”) No. 25, “Accounting for Stock Issued to Employees,” and related interpretations in accounting for our stock options. All options granted to date have been to employees, officers or directors. Accordingly, no compensation expense has been recognized since stock options granted were at exercise prices which approximated or exceeded market value at the grant date. Compensation expense for deferred stock units (“DSUs”) is recorded over the vesting period. Had compensation expense been determined for all stock-based compensation using fair value

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

methods provided for in SFAS No. 123, “Accounting for Stock-Based Compensation,” our pro forma net income and net income per common share would have been the amounts indicated below:

		Year Ended December 31
		2003			2002			2001
		(In thousands, except share data)
Net income, as reported		$	355,703		$	175,416		$	109,830
Add: Stock-based compensation expense included in reported net income, net of tax			2,396
Less: Stock-based compensation expense determined under fair value-based methods for all awards, net of tax			(36,614	)		(31,249	)		(16,926	)
Pro forma net income		$	321,485		$	144,167		$	92,904
Net income per share:
Basic — as reported		$	2.45		$	1.30		$	1.30
— pro forma			2.21			1.07			1.10
Diluted — as reported			2.27			1.21			1.19
— pro forma			2.06			1.01			1.03
Stock option share data:
	Stock options granted during period		3,508,667			7,710,438			3,732,450
	Weighted average option fair value	$	11.61		$	9.99		$	7.43
DSU data:
	DSUs granted during period		806,838
	Weighted average unit fair value	$	25.06

      The fair value of each stock option grant is calculated using the Black-Scholes option pricing model, with the following assumptions:

	2003			2002			2001
Expected volatility		37 – 38	%		38	%		40	%
Expected dividend yield		0	%		0	%		0	%
Expected option term		7 years			7 years			7 years
Risk-free rate of return		3.03 – 4.00	%		4.09 – 4.87	%		4.51 – 5.19	%

      Revenue Recognition and Accounts Receivable — Revenue is recognized when persuasive evidence of an arrangement exists, the price is fixed or determinable, the product has been shipped to the customer and there is a reasonable assurance of collection of the sales proceeds. In accordance with Emerging Issues Task Force (“EITF”) 01-09, “Accounting for Consideration Given by a Vendor to a Customer,” revenue is reduced by certain sales incentives, some of which are recorded by estimating expense based on our historical experience. We provide credit terms to customers generally ranging up to 30 days, perform ongoing credit evaluation of our customers and maintain allowances for potential credit losses based on historical experience.

      Income Taxes — All of our wholly-owned U.S. operating subsidiaries are included in our consolidated tax return. In addition, our proportional share of the operations of our former majority-owned subsidiaries and certain of our equity method affiliates, which are organized as limited liability companies or limited partnerships, are also included in our consolidated tax return. Our foreign subsidiaries are required to file separate income tax returns in their local jurisdictions. Certain distributions from these subsidiaries are subject to U.S. income taxes; however, available tax credits of these subsidiaries may reduce or eliminate these U.S. income tax liabilities. Other foreign earnings are expected to be reinvested indefinitely. At December 31,

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DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

2003 no provision had been made for U.S. federal or state income tax on approximately $19.4 million of accumulated foreign earnings.

      Deferred income taxes are provided for temporary differences between amounts recorded in the Consolidated Financial Statements and tax bases of assets and liabilities using current tax rates. Deferred tax assets, including the benefit of net operating loss carry-forwards, are evaluated based on the guidelines for realization and are reduced by a valuation allowance if deemed necessary.

      Advertising Expense — Advertising expense is comprised of media, agency and production expenses. Advertising expenses are charged to income during the period incurred, except for expenses related to the development of a major commercial or media campaign which are charged to income during the period in which the advertisement or campaign is first presented by the media. Advertising expenses charged to income totaled $108.3 million in 2003, $91.1 million in 2002 and $41.1 million in 2001. Additionally, prepaid advertising costs were $0.4 million and $4.9 million at December 31, 2003 and 2002, respectively.

      Shipping and Handling Fees — Our shipping and handling costs are included in both cost of sales and selling and distribution expense, depending on the nature of such costs. Shipping and handling costs included in cost of sales reflect the cost of shipping products to customers through third party carriers, inventory warehouse costs, product loading and handling costs and costs associated with transporting finished products from our manufacturing facilities to our own distribution warehouses. Shipping and handling costs included in selling and distribution expense consist primarily of route delivery costs for both company-owned delivery routes and independent distributor routes, to the extent that such independent distributors are paid a delivery fee. Shipping and handling costs that were recorded as a component of selling and distribution expense were approximately $988.1 million, $951.9 million and $639.2 million during 2003, 2002 and 2001, respectively.

      Insurance Accruals — We retain selected levels of property and casualty risks, primarily related to employee health care, workers’ compensation claims and other casualty losses. Many of these potential losses are covered under conventional insurance programs with third party carriers with high deductible limits. In other areas, we are self-insured with stop-loss coverages. Accrued liabilities for incurred but not reported losses related to these retained risks are calculated based upon loss development factors which contemplate a number of factors including claims history and expected trends. These loss development factors are developed by us in consultation with external insurance brokers and actuaries.

      Plant Closing and Rationalization Costs — We have an on-going plant closing and rationalization strategy. We periodically record plant closing and rationalization charges when we have identified a plant for closure or other rationalization opportunity, developed a plan and notified the affected employees. Effective January 1, 2003, we record these charges in accordance with SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities.” Plant closings initiated prior to January 1, 2003 continue to be accounted for under the old guidance. See “Recently Adopted Accounting Pronouncements.”

      Comprehensive Income — We consider all changes in equity from transactions and other events and circumstances, except those resulting from investments by owners and distributions to owners, to be comprehensive income.

      Stock Split — On June 9, 2003, we effected a three-for-two split of our common stock, and on April 23, 2002, we effected a two-for-one stock split. All share numbers contained in our Consolidated Financial Statements and in these Notes have been adjusted for all periods to reflect the stock splits.

      Recently Adopted Accounting Pronouncements — In June 2001, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 143, “Accounting for Asset Retirement Obligations.” This statement requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which the associated legal obligation for the liability is incurred if a reasonable estimate of fair value can be made. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset and

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DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

amortized over the useful life of the asset. SFAS No. 143 became effective for us in 2003. The adoption of this pronouncement did not have a material impact on our Consolidated Financial Statements.

      SFAS No. 145, “Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections,” was issued in April 2002 and is applicable to fiscal years beginning after May 15, 2002. One of the provisions of this technical statement is the rescission of SFAS No. 4, “Reporting Gains and Losses from Extinguishment of Debt,” whereby any gain or loss on the early extinguishment of debt that was classified as an extraordinary item in prior periods in accordance with SFAS No. 4, which does not meet the criteria of an extraordinary item as defined by APB Opinion No. 30, must be reclassified. Adoption of this standard required us to reclassify gains and losses related to early extinguishment of debt that were previously reported as extraordinary as a component of “interest expense.” Interest expense was increased by $7.3 million in 2001 as a result of the adoption, but there was no effect on net income.

      In June 2002, FASB issued SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities.” This statement addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies EITF Issue No. 94-3, “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring).” The statement requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred, and is effective for exit or disposal activities that are initiated after December 31, 2002. Our adoption of this standard changed the timing of the recognition of certain charges associated with exit and disposal activities.

      In November 2002, FASB issued FASB Interpretation (“FIN”) No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others.” FIN No. 45 clarifies the requirements of SFAS No. 5 “Accounting for Contingencies,” relating to the accounting for and disclosure of certain guarantees issued and indemnification obligations incurred. FIN No. 45 requires disclosure of certain guarantees and indemnification obligations. It also requires liability recognition for the fair value of certain guarantees and indemnification obligations made or incurred after December 31, 2002. We adopted FIN No. 45 effective January 1, 2003. See Note 18 for the disclosures required by FIN No. 45. The adoption of this pronouncement did not have a material impact on our Consolidated Financial Statements.

      In December 2003, FASB issued FIN No. 46(R), “Consolidation of Variable Interest Entities — an interpretation of ARB No. 51 (revised December 2003).” FIN 46(R) provides guidance for identifying a controlling interest in a variable interest entity (“VIE”) established by means other than voting interests. FIN 46(R) also requires consolidation of a VIE by an enterprise that holds such a controlling interest. The effective date for interest qualification is December 31, 2003. We currently utilize special purpose limited liability entities to facilitate our receivable-backed facility. Since their formations, these entities have been consolidated in our financial statements for financial reporting purposes. Therefore, the adoption of FIN No. 46(R) had no material impact on our Consolidated Financial Statements.

      In April 2003, FASB issued SFAS No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities.” This statement amends and clarifies financial accounting and reporting for derivative instruments, including derivative instruments embedded in other contracts and hedging activities under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities.” This statement requires that contracts with comparable characteristics be accounted for similarly and is effective for contracts entered into or modified after June 30, 2003. Our reporting for our hedging activities is within the requirements of this statement, therefore SFAS No. 149 had no impact on our Consolidated Financial Statements.

      In May 2003, FASB issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity.” This statement, which became effective for us on July 1, 2003, requires that certain financial instruments which had previously been classified as equity be classified as

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DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

liabilities. We have no outstanding securities that meet the criteria of SFAS No. 150. Therefore, SFAS No. 150 had no impact on our Consolidated Financial Statements.

      In December 2003, FASB issued SFAS No. 132 (revised 2003), “Employers’ Disclosures about Pensions and Other Postretirement Benefits,” to improve financial statement disclosures for defined benefit plans. This standard requires that companies provide more details about their plan assets, benefit obligations, cash flows, benefit costs and other relevant information. In addition to expanded annual disclosures, we will be required to report the various elements of pension and other postretirement benefit costs on a quarterly basis. SFAS No. 132 (revised 2003) is effective for fiscal years ending after December 15, 2003, and for quarters beginning after December 15, 2003. The expanded disclosure requirements are included in this report.

      In January 2004, the FASB issued FASB Staff Position (“FSP”) 106-1, “Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003” in response to a new law regarding prescription drug benefits under Medicare as well as a federal subsidy to sponsors of retiree health care benefit plans. Currently, SFAS No. 106, “Employers’ Accounting for Postretirement Benefits Other Than Pensions”, requires that changes in relevant law be considered in current measurement of postretirement benefit costs. We are currently evaluating the impact of the new law and will defer recognition, as permitted by FSP 106-1, until authoritative guidance is issued.

      Reclassifications — Certain reclassifications have been made to conform the prior years’ Consolidated Financial Statements to the current year classifications

2.     ACQUISITIONS, DIVESTITURES AND DISCONTINUED OPERATIONS

General

      In total, we completed the acquisitions of 16 businesses during 2003, 2002 and 2001, which included the acquisition of the former Dean Foods Company (“Legacy Dean”) for a purchase price of approximately $1.7 billion in December 2001.

      All of these acquisitions were funded with cash flows from operations, borrowings under our credit facility and our accounts receivables-backed facilities and, in the case of the acquisition of Legacy Dean, the issuance of 46,378,584 shares of our common stock with a fair market value of $739.4 million.

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DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      All acquisitions were accounted for using the purchase method of accounting as of their respective acquisition dates, and accordingly, only the results of operations of the acquired companies subsequent to their respective acquisition dates are included in our Consolidated Financial Statements. At the acquisition date, the purchase price was allocated to assets acquired, including identifiable intangibles, and liabilities assumed based on their fair market values. The excess of the total purchase prices over the fair values of the net assets acquired represented goodwill. In connection with the acquisitions, assets were acquired and liabilities were assumed as follows:

			Year Ended December 31
			2003			2002			2001
			(In thousands)
Purchase prices:
	Cash paid, net of cash acquired		$	246,573		$	206,307	(1)	$	1,146,077
	Cash acquired in acquisitions			171			17,870			15,060
	Common stock issued									739,366
	Operations of 11 divested plants									287,989
		Total purchase prices	$	246,744		$	224,177			2,188,492
Fair values of net assets acquired:
	Assets acquired			102,709			147,650			2,283,882
	Liabilities assumed			(28,771	)		(29,172	)		(1,511,436	)
	Total fair value of net assets acquired			73,938			118,478			772,446
Goodwill			$	172,806		$	105,699		$	1,416,046

(1)  An additional $15.8 million was paid in 2002 as part of the Legacy Dean acquisition.

      We have not completed the final allocation of purchase price to the fair values of assets and liabilities acquired in 2003, or the related business integration plans. We expect that the ultimate purchase price allocation may include additional adjustments to the fair values of depreciable tangible assets, identifiable intangible assets and the carrying values of certain liabilities. Accordingly, to the extent that such assessments indicate that the fair value of the assets and liabilities differ from their preliminary purchase price allocation, such difference would adjust the amounts allocated to the assets and liabilities and would change the amounts allocated to goodwill.

2003 Acquisitions

      Cremora — On December 24, 2003, our Specialty Foods Group acquired the “Cremora®” branded non-dairy powdered coffee creamer business from Eagle Family Foods. Prior to the acquisition, we had been producing Cremora creamers for Eagle Family Foods pursuant to a co-packing arrangement, which generated approximately $8.9 million of net sales for us in 2003. Cremora is the first branded powdered coffee creamer offering for Specialty Foods. The Cremora brand had sales of approximately $15.8 million in the twelve months ended June 30, 2003. We purchased the Cremora business for a purchase price of approximately $12.6 million, all of which was funded using borrowings under our senior credit facility.

      Kohler Mix — On October 15, 2003, we acquired Kohler Mix Specialties, Inc., the dairy products division of Michael Foods, Inc. Kohler’s product line consists primarily of private label ultra-pasteurized ice cream mixes, creamers and creams, sold primarily in the foodservice channel. Since the acquisition, Kohler has been part of our former Morningstar/ White Wave segment. Effective January 1, 2004, Kohler became part of our Dairy Group, along with all of Morningstar Foods’ other private label and manufacturing operations. The acquisition of Kohler increased the Dairy Group’s ultra-high temperature processing capacity,

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DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

which we need to meet the expanding needs of our Branded Products Group segment (formerly known as the Morningstar/ White Wave segment). Kohler had net sales of approximately $187.5 million for the 12 months ended August 31, 2003 and has three plants located in White Bear Lake, Minnesota, Sulphur Springs, Texas and Newington, Connecticut. We paid approximately $158.6 million for the purchase of Kohler, all of which was funded using borrowings under our receivables-backed facility.

      Melody Farms — On June 9, 2003, our Dairy Group acquired Melody Farms, LLC. Melody Farms, which is now a part of the Midwest region of our Dairy Group, is a regional dairy processor based in Livonia, Michigan, that produces fluid dairy and ice cream products from two plants in Michigan. Our acquisition of Melody Farms expands our distribution reach and allows us to better serve our customers in the Michigan area. Melody Farms had net sales of approximately $116 million during the 12 months ended March 31, 2003. We paid approximately $52.7 million for Melody Farms, all of which was funded using borrowings under our receivables-backed facility.

      Other — During 2003, our Dairy Group completed the following acquisitions for an aggregate purchase price of $22.6 million:

•  In December, a dairy plant located in Baxley, Georgia.

•  In October, a distributor located in Dallas, Texas; and

•  In September, a distributor located in Veguita, New Mexico;

•  In August, a dairy located in Calverton, New York;

•  In July, a distributor located in Reno, Nevada;

•  In July, an ice cream plant located in Boise, Idaho;

•  In March, a distributor located in Nashville, Tennessee;

2002 Acquisitions

      Marie’s — On May 17, 2002, we bought the assets of Marie’s Quality Foods, Marie’s Dressings, Inc. and Marie’s Associates, makers of Marie’s® brand dips and dressings in the western United States, for an aggregate purchase price of approximately $23.5 million. Prior to the acquisition, we licensed the Marie’s brand to Marie’s Quality Foods and Marie’s Dressings, Inc. for use in connection with the manufacture and sale of dips and dressings in the western United States. As a result of this acquisition, our Branded Products Group segment is now the sole owner, manufacturer and marketer of Marie’s brand products nationwide.

      White Wave — On May 9, 2002, we acquired the 64% equity interest in White Wave, Inc. that we did not already own. White Wave, based in Boulder, Colorado, is the maker of Silk® soymilk and other soy-based products, and had sales of approximately $125 million during the 12 months ended March 31, 2002. Prior to May 9, 2002, we owned approximately 36% of White Wave, as a result of certain investments made by Legacy Dean beginning in 1999. We decided to purchase the remaining 64% equity interest, for a total price of approximately $192.8 million because of the success that Silk had experienced in the refrigerated soymilk category and we believed it was important that we have a successful branded soymilk offering in order to better serve our customers and consumers. Existing management of White Wave has remained in place after the acquisition. We have agreed to pay White Wave’s management team an incentive bonus based on achieving certain sales growth targets by the end of March 2004. The bonus amount will depend on the level of two-year cumulative sales White Wave achieves by the end of March 2004, and is anticipated to be approximately $39 million. Amounts expected to be payable under the bonus plan have been expensed each quarter based on White Wave’s performance during the quarter. See Note 18.

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DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      Other — In January 2002, we bought a milk plant in Fort Worth, Texas, and in December 2002, we purchased an ice cream plant in Denver, Colorado for an aggregate purchase price of $8 million.

2001 Acquisitions

      Dean Foods Company — On December 21, 2001, we completed our acquisition of Legacy Dean. Legacy Dean is now our wholly-owned subsidiary. Immediately upon completion of the transaction, Legacy Dean changed its name to Dean Holding Company and we changed our name to Dean Foods Company. As a result of the transaction, each share of common stock of Legacy Dean was converted into 1.287 shares of our common stock and the right to receive $21 in cash. The aggregate purchase price recorded was $1.7 billion, including $756.8 million of cash paid to Legacy Dean stockholders and common stock valued at $739.4 million. The value of the approximately 46.5 million common shares issued was determined based on the average market price of our common stock during the period from April 2 through April 10, 2001 (the merger was announced on April 5, 2001). In addition, each of the options to purchase Legacy Dean’s common stock outstanding on December 21, 2001 was converted into an option to purchase 2.256 shares of our stock. As discussed below, the holders of these options had the right, during the ninety day period following the acquisition, to surrender their stock options to us, in lieu of exercise, in exchange for a cash payment.

      We decided to acquire Legacy Dean for the above-described consideration after considering a number of factors, including:

•  The acquisition would result in us becoming the first truly national dairy and specialty foods company with the geographic reach, management depth and product mix necessary to meet the needs of large customers, who can especially benefit from the added services, convenience and value that a national dairy company can provide;

•  Combining our businesses would enable us to reduce our costs by pursuing economies of scale in purchasing, product development and manufacturing, and by eliminating duplicative costs; and

•  Increasing our scale would provide us with greater resources to invest in marketing and innovation.

      Also on December 21, 2001, in connection with our acquisition of Legacy Dean, we purchased Dairy Farmers of America’s (“DFA”) 33.8% stake in our Dairy Group for consideration consisting of: (1) approximately $145.4 million in cash, and (2) the operations of eleven plants (including seven of our plants and four of Legacy Dean’s plants) located in nine states where we and Legacy Dean had overlapping operations. Also in connection with the transaction, we delivered a contingent promissory note in the original principal amount of $40 million to secure our obligation to renew certain of our milk supply agreements with DFA until 2021. See Note 18 for a further discussion of this obligation. As a result of this transaction, we now own 100% of our Dairy Group.

      In connection with the merger, we entered into a new credit facility and expanded our receivables-backed loan facilities. We used the proceeds from the credit facility and receivables-backed loan facilities to fund the cash portion of the merger consideration and the acquisition of DFA’s minority interest, to refinance certain indebtedness and to pay certain transaction costs.

      Legacy Dean’s operations and the acquisition of DFA’s minority interest are reflected in our Consolidated Financial Statements after December 21, 2001.

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DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of acquisition of Legacy Dean, and includes the effects of divesting four Legacy Dean plants.

		At December 21, 2001
		(In thousands)
Current assets		$	694,453
Property, plant, and equipment			725,258
Intangible assets			236,978
Goodwill			1,515,267
Other assets			79,945
	Total assets acquired		3,251,901
Current liabilities			540,458
Other liabilities			285,209
Long-term debt			685,645
	Total liabilities assumed		1,511,312
Net assets acquired		$	1,740,589

      Of the approximately $237 million of acquired intangible assets, approximately $206.5 million was assigned to trademarks and trade names that are not subject to amortization and approximately $30.5 million was assigned to customer contracts that have a weighted-average useful life of approximately 17 years.

      The approximately $1.52 billion of goodwill was assigned to Legacy Dean’s Dairy Group, NRP and Specialty segments in the amounts of $1.01 billion, $215 million and $290 million, respectively. None of the goodwill is expected to be deductible for tax purposes.

      The final allocation of the purchase price to the fair values of assets and liabilities of Legacy Dean and the related business integration plans was completed in the fourth quarter of 2002. This final allocation process increased goodwill by approximately $55.4 million, primarily as a result of the final determination of the fair values of depreciable tangible assets and business integration plans.

      The purchase price allocation of Legacy Dean included a liability for payment obligations to Legacy Dean employees related to Legacy Dean stock options as a result of the change in control of Legacy Dean. Under Legacy Dean’s stock option agreements, upon a change in control, employees had the right to surrender their stock options to us, in lieu of exercise, in exchange for a cash payment during the ninety day period following the change in control. The required cash payment varied depending on the type of stock option and the grant date with certain stock options requiring a cash payment equal to the difference between the exercise price and the highest closing price of our stock during the sixty day period beginning thirty days before and ending 30 days after the completion of the change in control transaction, and certain of the stock option agreements required a tax gross-up payment upon surrender. Cash payments of approximately $44.2 million were made. At the conclusion of the surrender period, the remaining liability of approximately $30.5 million was transferred to stockholders’ equity as the underlying stock options remained outstanding.

      We also incurred a change in control obligation of approximately $4.9 million for payments to 18 officers under Legacy Dean’s long-term incentive plan and transition bonuses to 5 officers of Legacy Dean, both of which became earned and payable upon consummation of the merger; and severance obligations of approximately $17.5 million related to the termination of certain employees and officers of Legacy Dean as a result of the decision to eliminate certain Legacy Dean administrative functions.

      The unaudited results of operations on a pro forma basis for the year ended December 31, 2001 as if the acquisition of Legacy Dean, and the purchase of DFA’s minority interest (including the divestiture of the

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DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

11 plants transferred in partial consideration of that interest) had occurred as of the beginning of 2001 are as follows:

		Year Ended December 31, 2001
		(In thousands,
		except per share data)
Net sales		$	10,058,288
Income from continuing operations before taxes			289,058
Net income from continuing operations			178,411
Earnings per share from continuing operations:
	Basic	$	1.38
	Diluted	$	1.28

      Minority Interest in Spanish Operations — In August of 2001, we purchased the 25% minority interest in Leche Celta, our Spanish dairy processor that we did not already own, for approximately $12.6 million. We funded this purchase with cash flow from operations.

Divestitures

      In order to more closely align both our assets and our management resources with our strategic direction, part of our strategy in 2003 and 2002 was to divest certain assets. On July 31, 2003, we completed the sale of the frozen pre-whipped topping and frozen coffee creamer operations of Morningstar Foods. We recorded a pre-tax gain on the sale of approximately $66.2 million. Also in July 2003, we sold certain Dairy Group delivery trucks and customer relationships in New York. The proceeds from the sale of businesses during 2003 was approximately $90 million. During 2002, we completed the sale of the following non-core businesses acquired as part of Legacy Dean’s Specialty Foods division: on January 4, 2002, we completed the sale of the stock of DFC Transportation Company, a contract hauler; on February 7, 2002, we completed the sale of the assets related to a boiled peanut business; and on October 11, 2002, we completed the sale of EBI Foods Limited, a U.K.-based manufacturer of powdered food coatings. Net proceeds from the sale of these three businesses totaled approximately $28.9 million. No gain or loss was recorded on the divestiture of Legacy Dean’s businesses during 2002 because the sales prices equaled the carrying values.

Discontinued Operations

      On December 30, 2002, we sold our operations in Puerto Rico for a net price of approximately $119.4 million. In accordance with generally accepted accounting principles, our financial statements have been restated to reflect our former Puerto Rico business as a discontinued operation.

      Revenues and income before taxes generated by our Puerto Rico operations were as follows:

	Year Ended
	December 31(2)
	2002		2001
	(In thousands)
Net sales	$	221,908	$	220,451
Income before tax(1)		1,762		4,213

(1)	Corporate interest expense of $5.5 million and $5.1 million in 2002 and 2001, respectively, was allocated to our Puerto Rico operations based on the ratio of our investment in them to total debt and equity.
(2)	All intercompany revenues and expenses have been appropriately eliminated in the table.

      In the first quarter of 2002, we recognized an impairment charge of $37.7 million related to the goodwill of our Puerto Rico operations in accordance with our implementation of SFAS No. 142 “Goodwill and Other

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DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Intangible Assets.” This loss is reflected as a cumulative change in accounting principle in our Consolidated Financial Statements.

3.     INVESTMENTS IN UNCONSOLIDATED AFFILIATES

      Investment in Consolidated Container Company — We own a minority interest in Consolidated Container Company (“CCC”), one of the nation’s largest manufacturers of rigid plastic containers and our largest supplier of plastic bottles and bottle components. We have owned our minority interest since July 2, 1999 when we sold our U.S. plastic packaging operations to CCC.

      Since July 2, 1999, our investment in CCC has been accounted for under the equity method of accounting. During 2001, due to a variety of operational difficulties, CCC consistently reported operating results that were significantly weaker than expected, which resulted in significant losses in the third and fourth quarters of 2001. As a result, by late 2001 CCC had become unable to comply with the financial covenants contained in its credit facility. We concluded that our investment was impaired and that the impairment was not temporary, and wrote off our remaining investment during the fourth quarter of 2001. Accordingly, our investment in CCC was recorded at $0 at December 31, 2001.

      In February 2002, CCC’s lenders agreed to restructure CCC’s credit agreement to modify the financial covenants, subject to the agreement of CCC’s primary shareholders to guarantee certain of CCC’s indebtedness. Because CCC is an important and valued supplier of ours, and in order to protect our interest in CCC, we agreed to provide a limited guarantee of up to $10 million of CCC’s revolving credit indebtedness. By late 2002, CCC was again unable to comply with the terms of its credit agreement. CCC’s lenders agreed to again restructure CCC’s credit agreement, subject to the agreement of CCC’s primary shareholders to provide a total of $35 million of additional debt financing to CCC. In the fourth quarter of 2002, we agreed to loan CCC $10 million of the $35 million in additional financing, in exchange for cancellation of our pre-existing $10 million guaranty and the receipt of additional equity. Vestar Capital Partners, majority owner of CCC, loaned CCC the remaining $25 million. Our loan to CCC is due on December 31, 2007 (or upon the earlier payment in full of CCC’s senior debt) and is secured by a subordinate lien on certain of CCC’s assets. The loan is not scheduled to be repaid until after CCC’s senior debt has been paid. Therefore, our right to enforce payment of the loan is limited prior to payment in full of CCC’s senior debt. The loan bears interest at the prime rate plus 2.25%, or the eurodollar rate plus 3.25%, at CCC’s option. Upon maturity of the loan, we will be entitled to receive a $400,000 fee, plus an additional fee in respect of the unpaid principal amount of the loan from January 10, 2003 to the maturity date of the loan, computed at an annual rate of 11.3%. Because our participation in this transaction was not in proportion to our ownership interest in CCC, our ownership interest was diluted from approximately 43% to approximately 40%. On a fully-diluted basis, our interest is approximately 36%.

      Because we made the $10 million loan to CCC, generally accepted accounting principles required us to recognize a portion of CCC’s 2002 losses, up to the amount of the loan. The loan was written off in its entirety in the fourth quarter of 2002. Accordingly, our investment in CCC was recorded at $0 at December 31, 2003 and 2002. Our equity in losses included in our consolidated statement of income for 2003, 2002 and 2001 was $0, $10 million and $23.7 million, respectively.

      Approximately 5% of CCC is owned indirectly by Alan Bernon, a member of our Board of Directors, and his brother Peter Bernon. Pursuant to our agreements with Vestar, we control two of the seven seats on CCC’s Management Committee. We have long-term supply agreements with CCC to purchase certain of our requirements for plastic bottles and bottle components from CCC. In 2003, we spent approximately $167.9 million on products purchased from CCC.

      Investment in Horizon Organic — As of December 31, 2003 and 2002, we had an approximately 13% interest in Horizon Organic Holding Corporation. We accounted for this investment under the equity method

F-17

DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

of accounting, because we had the ability to influence the operating policies of Horizon Organic given the size of our investment and the fact that we controlled one seat on their Board of Directors. On January 2, 2004 we acquired the 87% of Horizon Organic that we did not already own. Prior to that, Horizon Organic’s common stock traded on the Nasdaq under the symbol “HCOW.” The quoted stock price ranged from $11.07 to $24.00 during 2003. The closing stock price on December 31, 2003 was $23.95 per share, resulting in a market value of our investment of $32.1 million. Our investment in Horizon Organic at December 31, 2003, 2002 and 2001 was recorded at $16.6 million, $16.4 million and $16.5 million, respectively, and our equity in earnings included in our consolidated statement of income for 2003, 2002 and 2001 was income of $0.2 million, a loss of $0.1 million and income of $0.1 million, respectively.

      Investment in White Wave — From December 21, 2001 to May 9, 2002, we owned a 36% interest in White Wave, Inc. This investment was made by Legacy Dean prior to our acquisition of Legacy Dean. On May 9, 2002, we acquired the remaining equity interest in White Wave and began consolidating White Wave’s results with our financial results.

      Investment in Momentx — As of December 31, 2003 and 2002, we had an approximately 16% interest in Momentx, Inc. Our investment in Momentx at both December 31, 2003 and 2002 was $1.2 million. Momentx is the owner and operator of dairy.com, an online vertical exchange dedicated to the dairy industry. We account for this investment under the cost method of accounting. During 2001, we recorded an impairment charge on this investment of $3.6 million in “Other (income) expense, net” to reflect the current value of our equity stake based on their latest financing.

4.     INVENTORIES

		December 31
		2003		2002
		(In thousands)
Raw materials and supplies		$	165,206	$	151,179
Finished goods			261,272		249,168
	Total	$	426,478	$	400,347

      Approximately $97.6 million and $97.3 million of our inventory was accounted for under the LIFO method of accounting at December 31, 2003 and 2002, respectively. There was no material excess of current cost over the stated value of LIFO inventories at either date.

5.     PROPERTY, PLANT AND EQUIPMENT

		December 31
		2003			2002
		(In thousands)
Land		$	153,257		$	145,978
Buildings and improvements			642,468			569,001
Machinery and equipment			1,616,100			1,391,114
			2,411,825			2,106,093
Less accumulated depreciation			(638,270	)		(477,669	)
	Total	$	1,773,555		$	1,628,424

      For 2003 and 2002, we capitalized $3.4 million and $1.5 million in interest, respectively, related to borrowings during the actual construction period of major capital projects, which is included as part of the cost of the related asset.

F-18

DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

6.     INTANGIBLE ASSETS

      On January 1, 2002, we adopted SFAS No. 142, which requires, among other things, that goodwill and other intangible assets with indefinite lives no longer be amortized, and that recognized intangible assets with finite lives be amortized over their respective useful lives. As required by SFAS No. 142, our results for the year ended December 31, 2001 have not been restated. The following sets forth a reconciliation of net income and earnings per share information for the year ended December 31, 2001 eliminating amortization of goodwill and intangible assets with indefinite lives.

		2003		2002		2001
		(In thousands, except per share data)
Reported income from continuing operations		$	355,703	$	267,751	$	107,684
Goodwill amortization, net of tax and minority interest							24,481
Trademark amortization, net of tax and minority interest							2,355
Adjusted income from continuing operations		$	355,703	$	267,751	$	134,520
Reported net income		$	355,703	$	175,416	$	109,830
Goodwill amortization, net of tax and minority interest							26,247
Trademark amortization, net of tax and minority interest							2,355
Adjusted net income		$	355,703	$	175,416	$	138,432
Basic earnings per share:
	Income from continuing operations	$	2.45	$	1.98	$	1.28
	Goodwill amortization						.28
	Trademark amortization						.03
	Adjusted income from continuing operations	$	2.45	$	1.98	$	1.59
	Reported net income	$	2.45	$	1.30	$	1.30
	Goodwill amortization						.31
	Trademark amortization						.03
	Adjusted net income	$	2.45	$	1.30	$	1.64
Diluted earnings per share:
	Income from continuing operations	$	2.27	$	1.77	$	1.17
	Goodwill amortization						.22
	Trademark amortization						0.2
	Adjusted income from continuing operations	$	2.27	$	1.77	$	1.41
	Reported net income	$	2.27	$	1.21	$	1.19
	Goodwill amortization					$	.23
	Trademark amortization						.02
	Adjusted net income	$	2.27	$	1.21	$	1.44

F-19

DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      The changes in the carrying amount of goodwill for the years ended December 31, 2003 and 2002 are as follows:

				Morningstar/			Specialty
	Dairy Group			White Wave			Foods Group		Other		Total
	(In thousands)
Balance at December 31, 2001	$	2,123,702		$	389,572		$	290,000	$	57,710	$	2,860,984
Purchase accounting adjustments		21,710			19,358			14,290				55,358
Acquisitions		3,977			101,722							105,699
Currency changes and other										13,376		13,376
Balance at December 31, 2002		2,149,389			510,652			304,290		71,086		3,035,417
Purchase accounting adjustments		(12,623	)		(12,091	)						(24,714	)
Acquisitions		53,305			112,001			7,500				172,806
Currency changes and other										14,039		14,039
Balance at December 31, 2003	$	2,190,071		$	610,562		$	311,790	$	85,125	$	3,197,548

      In accordance with SFAS No. 142, we completed a goodwill impairment assessment on our goodwill balances during 2002. The results of this test indicated that the goodwill related to our Puerto Rico reporting unit was impaired at January 1, 2002. In the fourth quarter of 2002, we determined that the impairment that existed as of January 1, 2002 was $37.7 million (net of tax). As required by SFAS No. 142, we recorded the impairment in our income statement as the cumulative effect of accounting change retroactive to the first quarter of 2002. See Note 2 for information related to the sale of our Puerto Rico operating unit. Our 2003 annual impairment test, which was completed in the fourth quarter of 2003, indicated no goodwill impairment.

      The gross carrying amount and accumulated amortization of our intangible assets other than goodwill as of December 31, 2003 and 2002 are as follows:

		December 31
		2003							2002
		Gross					Net		Gross					Net
		Carrying		Accumulated			Carrying		Carrying		Accumulated			Carrying
		Amount		Amortization			Amount		Amount		Amortization			Amount
		(In thousands)
Intangible assets with indefinite lives:
	Trademarks	$	485,358	$	(14,274	)	$	471,084	$	478,691	$	(14,274	)	$	464,417
Intangible assets with finite lives:
	Customer-related		50,850		(12,187	)		38,663		56,864		(13,270	)		43,594
Total other intangibles		$	536,208	$	(26,461	)	$	509,747	$	535,555	$	(27,544	)	$	508,011

      In accordance with SFAS No. 142, we completed an impairment assessment of our intangibles with indefinite useful lives, other than goodwill, during the first quarter of 2002 as of January 1, 2002. We determined that an impairment of $47.3 million, net of income tax benefit of $29 million existed at January 1, 2002. The impairment related to certain trademarks in our Dairy Group and Morningstar/ White Wave segments, and was recorded in the first quarter as the cumulative effect of an accounting change. The fair value of these trademarks was determined using a present value technique. Our annual impairment test for 2003 was completed in the fourth quarter of 2003 and an impairment of $2.3 million was recorded for a trademark that we are no longer using.

F-20

DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      Amortization expense on intangible assets for the years ended December 31, 2003, 2002 and 2001 was $5.5 million, $7.8 million and $7.8 million, respectively. Estimated aggregate intangible asset amortization expense for the next five years is as follows:

2004	$	4.9  million
2005	$	4.8  million
2006	$	4.5  million
2007	$	4.4  million
2008	$	4.3  million

7.     ACCOUNTS PAYABLE AND ACCRUED EXPENSES

		December 31
		2003		2002
		(In thousands)
Accounts payable		$	517,852	$	510,531
Payroll and benefits			161,700		150,679
Health insurance, workers’ compensation and other insurance costs			51,720		53,319
Other accrued liabilities			193,435		266,489
	Total	$	924,707	$	981,018

8.     INCOME TAXES

      The following table presents the 2003, 2002 and 2001 provisions for income taxes.

			Year Ended December 31
			2003		2002(1)		2001(2)
			(In thousands)
Current taxes payable:
	Federal		$	55,652	$	47,618	$	37,295
	State			14,533		7,829		6,107
	Foreign and other			4,401		3,238		3,319
Deferred income taxes				143,267		94,303		33,439
		Total	$	217,853	$	152,988	$	80,160

(1)	Excludes a $0.9 million income tax expense related to discontinued operations and a $29 million income benefit related to a cumulative effect of accounting change.
(2)	Excludes a $1.5 million income tax benefit related to a cumulative effect of accounting change and a $0.6 million income tax expense related to discontinued operations.

F-21

DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      The following is a reconciliation of income taxes computed at the U.S. federal statutory tax rate to the income taxes reported in the consolidated statements of income:

		Year Ended December 31
		2003			2002			2001
		(In thousands)
Tax expense at statutory rates		$	200,746		$	147,274		$	76,746
State income taxes			11,732			16,320			3,290
Change in valuation allowance			7,493			4,527			1,537
Tax effect of tax-exempt earnings									(2,387	)
Nondeductible goodwill									5,527
Favorable tax settlement						(10,076	)
Other			(2,118	)		(5,057	)		(4,553	)
	Total	$	217,853		$	152,988		$	80,160

      The tax effects of temporary differences giving rise to deferred income tax assets and liabilities were:

			December 31
			2003			2002
			(In thousands)
Deferred income tax assets:
	Net operating loss carry-forwards		$	11,402		$	11,990
	Asset valuation reserves			17,096			10,859
	Non-deductible accruals			157,268			130,753
	State and foreign tax credits			8,389			7,632
	Derivative instruments			13,593			27,433
	Other			1,404			8,860
	Valuation allowances			(13,557	)		(6,064	)
				195,595			191,463
Deferred income tax liabilities:
	Depreciation and amortization			(428,624	)		(312,165	)
	Basis differences in unconsolidated affiliates			(18,067	)		(8,777	)
				(446,691	)		(320,942	)
		Net deferred income tax liability	$	(251,096	)	$	(129,479	)

      These net deferred income tax assets (liabilities) are classified in our consolidated balance sheets as follows:

		December 31
		2003			2002
		(In thousands)
Current assets		$	137,055		$	158,337
Noncurrent assets						6,440
Noncurrent liabilities			(388,151	)		(294,256	)
	Total	$	(251,096	)	$	(129,479	)

F-22

DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      At December 31, 2003, we had approximately $3.8 million of federal net operating losses and approximately $4.3 million of federal tax credits available for carry-over to future years. The losses are subject to certain limitations and will expire beginning in 2007.

      A valuation allowance of $13.5 million has been established because we believe it is “more likely than not” that all of the deferred tax assets relating to state net operating loss and credit carryovers, foreign tax credit carryovers and capital loss carryovers will not be realized prior to the date they are scheduled to expire.

9.     LONG-TERM DEBT

			December 31
			2003						2002
			Amount			Interest			Amount			Interest
			Outstanding			Rate			Outstanding			Rate
			(Dollars in thousands)
Senior credit facility			$	1,784,053			3.05	%	$	1,827,500			3.65	%
Subsidiary debt obligations:
	Senior notes			660,663			6.625-8.15			656,951			6.625-8.15
	Receivables-backed facility			302,500			1.84			145,000			2.28
	Foreign subsidiary term loan									35,739			4.69
	Other lines of credit			6,401			2.76			11,919			3.71-4.69
	Industrial development revenue bonds			11,700			1.35-1.40			21,000			1.65-2.00
	Capital lease obligations and other			26,197						29,815
				2,791,514						2,727,924
Less current portion				(180,158	)					(173,442	)
		Total	$	2,611,356					$	2,554,482

      The scheduled maturities of long-term debt, at December 31, 2003, were as follows (in thousands):

2004		$	180,158
2005			287,189
2006			516,567
2007			772,561
2008			716,422
Thereafter			358,281
	Subtotal		2,831,178
	Less discounts		(39,664	)
	Total outstanding debt	$	2,791,514

      Senior Credit Facility — Our senior credit facility provides for a revolving line of credit and two term loans. During 2003, we amended our senior credit facility to lower our interest rates, modify certain covenants, increase the revolving line of credit from $800 million to $1 billion, increase the Tranche A term loan from $765 million to $1 billion, decrease the Tranche B term loan from $990 million to $750 million and provide for borrowings in euros up to $200 million under the $1 billion revolver. At December 31, 2003, there were outstanding term loan borrowings of $1.67 billion under this facility, and $112.8 million outstanding under the revolving line of credit. Letters of credit in the aggregate amount of $108.9 million were issued but undrawn. At December 31, 2003, approximately $778.3 million was available for future borrowings under the revolving

F-23

DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

credit facility, subject to satisfaction of certain conditions contained in the credit agreement. We are currently in compliance with all covenants contained in our credit agreement.

      Amounts outstanding under the revolver and the Tranche A term loan bear interest at a rate per annum equal to one of the following rates, at our option:

•  a base rate equal to the higher of the Federal Funds rate plus 50 basis points or the prime rate, plus a margin that varies from 0 to 75 basis points, depending on our leverage ratio (which is computed as the ratio of indebtedness to EBITDA, as such terms are defined in the credit agreement), or

•  the London Interbank Offering Rate (“LIBOR”) divided by the product of one minus the Eurodollar Reserve Percentage, plus a margin that varies from 125 to 200 basis points, depending on our leverage ratio (as defined in the credit agreement).

      EBITDA is defined in the credit agreement for any period as, the sum of (i) net income (excluding extraordinary items) after taxes for such period as determined in accordance with GAAP, plus (ii) an amount which, in the determination of such net income, has been deducted for (a) all interest expense, including the interest component under capital leases and the implied interest component under our receivables-backed facilities, plus net amounts payable (or minus net amounts receivable) under hedging agreements, minus interest income for such period, in each case as determined in accordance with GAAP, (b) total federal, state, local and foreign income, value added and similar taxes, (c) depreciation, amortization expense and other noncash charges, (d) pro forma cost savings add-backs resulting from non-recurring charges related to acquisitions to the extent permitted under the credit agreement and under Regulation S-X of the Securities Exchange Act of 1934 or as approved by the representative of the lenders and (e) other adjustments reasonably acceptable to the representative of the lenders.

      Borrowings under the Tranche B term loan bear interest at a rate per annum equal to one of the following rates, at our option:

•  a base rate equal to the higher of the Federal Funds rate plus 50 basis points or the prime rate, plus a margin of 75 basis points, or

•  LIBOR divided by the product of one minus the Eurodollar Reserve Percentage, plus a margin of 200 basis points.

      The blended interest rate in effect on borrowings under the senior credit facility, including the applicable interest rate margin, was 3.05% at December 31, 2003. However, we had interest rate swap agreements in place that hedged $1.13 billion of our borrowings under this facility at an average rate of 4.32%, plus the applicable interest rate margin. Interest is payable quarterly or at the end of the applicable interest period.

      Principal payments are required on the Tranche A term loan as follows:

•  $37.5 million quarterly beginning on September 30, 2003 through December 31, 2004;

•  $43.75 million quarterly on March 31, 2005 through December 31, 2005;

•  $50 million quarterly on March 31, 2006 through December 31, 2006;

•  $62.5 million quarterly on March 31, 2007 and June 30, 2007; and

•  A final payment of $275 million on July 15, 2007.

      Principal payments are required on the Tranche B term loan as follows:

•  $1.875 million quarterly beginning on September 30, 2003 through December 31, 2007; and

•  $358.1 million on each of March 31, 2008 and July 15, 2008.

F-24

DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      No principal payments are due on the $1 billion line of credit until maturity on July 15, 2007.

      Our credit agreement also requires mandatory principal prepayments upon the occurrence of certain asset dispositions not in the ordinary course of business.

      In consideration of the revolving commitment, we pay a quarterly commitment fee on unused amounts of the $1 billion revolving credit facility that ranges from 25 to 37.5 basis points, depending on our leverage ratio (as defined in the credit agreement).

      The senior credit facility contains various financial and other restrictive covenants and requires that we maintain certain financial ratios, including a leverage ratio (computed as the ratio of the aggregate outstanding principal amount of indebtedness to EBITDA, as such terms are defined in the credit agreement) and an interest coverage ratio (computed as the ratio of EBITDA to interest expense, as such terms are defined in the credit agreement). In addition, this facility requires that we maintain a minimum level of net worth (as defined in the credit agreement).

      For the period from December 31, 2003 through March 31, 2005, our leverage ratio must be less than or equal to 4 to 1. Beginning April 1, 2005, our leverage ratio, calculated according to the definitions contained in the credit agreement, must be less than or equal to 3.75 to 1. As of December 31, 2003, our leverage ratio, calculated according to the definitions contained in the credit agreement, was 3.16 to 1.

      EBITDA, as used in our credit agreement, is not intended to represent cash flow from operations as defined by GAAP and should not be used as an alternative to net income as an indicator of our operating performance or to cash flow as a measure of our liquidity. Moreover, EBITDA is a term used by many companies to mean many different things. Therefore, neither our EBITDA nor our leverage ratio, calculated under our credit agreement, should be compared to any other company’s EBITDA or leverage ratio. We present our leverage ratio in this discussion not as a measure of our liquidity or performance but only to demonstrate our level of compliance with our credit agreement.

      Our interest coverage ratio must be greater than or equal to 3 to 1. As of December 31, 2003, our interest coverage ratio, calculated according to the definitions contained in the credit agreement, was 5.24 to 1.

      Our consolidated net worth must be greater than or equal to $1.75 billion, as increased each quarter (beginning with the quarter ended December 31, 2003) by an amount equal to 50% of our consolidated net income for the quarter, plus 50% of the amount by which stockholders’ equity is increased by certain equity issuances. As of December 31, 2003, the minimum net worth requirement was $1.85 billion, and our actual net worth (as defined in the credit agreement) was $2.54 billion.

      Our credit agreement permits us to complete acquisitions that meet the following conditions without obtaining prior approval: (1) the acquired company is involved in the manufacture, processing and distribution of food or packaging products or any other line of business in which we are currently engaged, (2) the net cash consideration is not greater than $300 million, (3) we acquire at least 51% of the acquired entity, and (4) the transaction is approved by the Board of Directors or shareholders, as appropriate, of the target. All other acquisitions must be approved in advance by the required percentage of lenders.

      The facility also contains limitations on liens, investments and the incurrence of additional indebtedness, and prohibits certain dispositions of property and restricts certain payments, including dividends. The credit facility is secured by liens on substantially all of our domestic assets (including the assets of our subsidiaries, but excluding the capital stock of Legacy Dean’s subsidiaries, and the real property owned by Legacy Dean and its subsidiaries).

      The credit agreement contains standard default triggers, including without limitation: failure to maintain compliance with the financial and other covenants contained in the agreement, default on certain of our other

F-25

DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

debt, a change in control and certain other material adverse changes in our business. The agreement does not contain any default triggers based on our debt rating.

      Senior Notes — Legacy Dean had certain senior notes outstanding at the time of the acquisition which remain outstanding. The notes carry the following interest rates and maturities:

•  $98 million ($100 million face value), at 6.75% interest, maturing in 2005;

•  $250.4 million ($250 million face value), at 8.15% interest, maturing in 2007;

•  $186.1 million ($200 million face value), at 6.625% interest, maturing in 2009; and

•  $126.2 million ($150 million face value), at 6.9% interest, maturing in 2017.

      The related indentures do not contain financial covenants but they do contain certain restrictions including a prohibition against Legacy Dean and its subsidiaries granting liens on certain of their real property interests and a prohibition against Legacy Dean granting liens on the stock of its subsidiaries. The indentures also place certain restrictions on Legacy Dean’s ability to divest assets not in the ordinary course of business.

      Receivables-Backed Facility — In November 2003, we amended our $400 million receivables securitization facility to increase the facility to $500 million. Certain of our subsidiaries sell their accounts receivable to three wholly-owned special purpose entities intended to be bankruptcy-remote. The special purpose entities then transfer the receivables to third party asset-backed commercial paper conduits sponsored by major financial institutions. The assets and liabilities of these three special purpose entities are fully reflected on our balance sheet, and the securitization is treated as a borrowing for accounting purposes. During 2003, we made net borrowings of $157.5 million on this facility leaving an outstanding balance of $302.5 million at December 31, 2003. The receivables-backed facility bears interest at a variable rate based on the commercial paper yield as defined in the agreement. The average interest rate on this facility was 1.84% at December 31, 2003. Our ability to re-borrow under this facility is subject to a standard “borrowing base” formula. At December 31, 2003, we could have re-borrowed an additional $154.1 million under this facility.

      Foreign Subsidiary Term Loan — In connection with our acquisition of Leche Celta in February 2000, our Spanish subsidiary obtained a 42.1 million euro (as of December 30, 2003, approximately $53 million) non-recourse term loan from a syndicate of lenders, all of which was borrowed at closing and used to finance a portion of the purchase price. On December 30, 2003, we repaid the entire outstanding balance of the loan with borrowings under our senior credit facility.

      Other Lines of Credit — Leche Celta, our Spanish subsidiary, is our only subsidiary with its own lines of credit separate from the credit facilities described above. Leche Celta’s primary line of credit, which is in the principal amount of 15 million euros (as of December 31, 2003, approximately $18.9 million), was obtained on July 12, 2000, bears interest at a variable interest rate based on the ratio of Leche Celta’s debt to EBITDA (as defined in the corresponding loan agreement), is secured by our stock in Leche Celta and will expire in June 2007. Leche Celta also utilizes other local commercial lines of credit and receivables factoring facilities. At December 31, 2003, a total of $6.4 million was outstanding on these facilities at an average interest rate of 2.76%.

      Industrial Development Revenue Bonds — Certain of our subsidiaries have revenue bonds outstanding, some of which require nominal annual sinking fund redemptions. Typically, these bonds are secured by irrevocable letters of credit issued by financial institutions, along with first mortgages on the related real property and equipment. In December 2003, we made payments of $9 million, leaving an outstanding balance of $11.7 million. Interest on these bonds is due semiannually at interest rates that vary based on market conditions, which at December 31, 2003 ranged from 1.35% to 1.40%.

      Capital Lease Obligations and Other — Capital lease obligations and other subsidiary debt includes various promissory notes for the purchase of property, plant, and equipment and capital lease obligations. The

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DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

various promissory notes payable provide for interest at varying rates and are payable in monthly installments of principal and interest until maturity, when the remaining principal balances are due. Capital lease obligations represent machinery and equipment financing obligations which are payable in monthly installments of principal and interest and are collateralized by the related assets financed.

      Letters of Credit — At December 31, 2003, there were $108.9 million of issued but undrawn letters of credit secured by our senior credit facility. In addition to the letters of credit secured by our credit facility, an additional $16.2 million of letters of credit were outstanding at December 31, 2003. The majority of these letters of credit were required by various utilities and government entities for performance and insurance guarantees.

      Interest Rate Agreements — We have interest rate swap agreements in place that have been designated as cash flow hedges against variable interest rate exposure on a portion of our debt, with the objective of minimizing our interest rate risk and stabilizing cash flows. These swap agreements provide hedges for loans under our senior credit facility by limiting or fixing the LIBOR interest rates specified in the senior credit facility at the interest rates noted below until the indicated expiration dates of these interest rate swap agreements.

      The following table summarizes our various interest rate agreements in effect as of December 31, 2003:

Fixed Interest Rates	Expiration Date		Notional Amounts
			(in millions)
1.48% to 6.69		December 2004	$	650
5.20% to 6.74%		December 2005		400
6.78%		December 2006		75

      The following table summarizes our various interest rate agreements in effect as of December 31, 2002:

Fixed Interest Rates	Expiration Date		Notional Amounts
			(in millions)
6.23%		June 2003	$	50
4.29% to 4.69%		December 2003		275
4.01% to 6.69%		December 2004		275
5.20% to 6.74%		December 2005		400
6.78%		December 2006		75

      In 2001, we entered into interest rate swap agreements that provided hedges for euro-denominated loans, which were repaid and replaced with a euro-denominated borrowing under our senior credit facility. The following swap hedges the euro-denominated debt. The following table describes this agreement:

Fixed Interest Rates		Expiration Date		Notional Amounts
	5.60%		November 2004	12 million euros (approximately $15.1 million as of December 31, 2003 and $12.6 million as of December 31, 2002)

      These swaps are required to be recorded as an asset or liability on our consolidated balance sheet at fair value, with an offset to other comprehensive income to the extent the hedge is effective. Derivative gains and losses included in other comprehensive income are reclassified into earnings as the underlying transaction occurs. Any ineffectiveness in our hedges is recorded as an adjustment to interest expense.

      As of December 31, 2003 and 2002, our derivative liability totaled $48.4 million and $80.4 million on our consolidated balance sheet respectively. This balance includes approximately $33.6 million and $42.8 million recorded as a component of accounts payable and accrued expenses at December 31, 2003 and 2002, respectively and $14.8 million and $37.6 million recorded as a component of other long-term liabilities at

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DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

December 31, 2003 and 2002, respectively. There was no hedge ineffectiveness, as determined in accordance with SFAS No. 133, for the years ended December 31, 2003 and 2002, respectively. Approximately $25.6 million and $24 million of losses (net of taxes) were reclassified to interest expense from other comprehensive income during the years ended December 31, 2003 and 2002, respectively. We estimate that approximately $21.4 million of net derivative losses (net of income taxes) included in other comprehensive income will be reclassified into earnings within the next 12 months. These losses will partially offset the lower interest payments recorded on our variable rate debt.

      We are exposed to market risk under these arrangements due to the possibility of interest rates on the credit facilities falling below the rates on our interest rate swap agreements. Credit risk under these arrangements is remote since the counterparties to our interest rate swap agreements are major financial institutions.

10. MANDATORILY REDEEMABLE TRUST ISSUED PREFERRED SECURITIES

      In three separate transactions during the second quarter of 2003, we called for redemption all of our trust-issued preferred securities (“TIPES”). We originally issued $600 million of TIPES in a private placement in 1998. The TIPES were convertible at the option of the holders, at any time, into shares of our common stock and were redeemable, at our option, at any time at specified premiums. In response to our three announced redemption transactions, holders of more than 99% of all outstanding TIPES elected to convert their TIPES into shares of our common stock rather than receive the $51.035 per security cash redemption price. Accordingly, during the second quarter of 2003, we issued an aggregate total of approximately 23 million shares of common stock to holders of TIPES in lieu of cash redemption payments, and we paid approximately $2.4 million in cash to holders who did not elect to convert. There are no remaining TIPES outstanding.

11.     STOCKHOLDERS’ EQUITY

      Our authorized shares of capital stock include 1 million shares of preferred stock and 500 million shares of common stock with a par value of $.01 per share.

      Stock Award Plans — We currently have two stock award plans with shares remaining available for issuance. These plans, including our 1997 Stock Option and Restricted Stock Plan and the 1989 Legacy Dean Stock Awards Plan (which we adopted upon completion of our acquisition of Legacy Dean), provide for grants of stock options, restricted stock and other stock-based awards to employees, officers, directors and, in some cases, consultants, up to a maximum of 37.5 million and approximately 5.7 million shares, respectively. Approximately 10.7 million and 1 million shares remained available for issuance under the 1997 and 1989 plans, respectively, as of March 10, 2004. Options and other stock-based awards vest in accordance with provisions set forth in the applicable award agreements.

F-28

DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      The following table summarizes the status of our stock option compensation programs:

					Weighted Average
		Options			Exercise Price
Outstanding at January 1, 2001			13,578,813		$	12.99
	Granted		3,732,450			14.56
	Options issued to Legacy Dean option holders(1)		8,055,336			15.39
	Canceled		(872,454	)		15.47
	Exercised		(3,398,355	)		12.99
Outstanding at December 31, 2001			21,095,790			14.11
	Granted		7,711,394			20.61
	Canceled(2)		(4,297,922	)		14.94
	Exercised		(4,950,732	)		13.79
Outstanding at December 31, 2002			19,558,530			16.55
	Granted		3,508,667			25.08
	Canceled		(1,094,262	)		20.38
	Exercised		(5,373,809	)		15.17
Outstanding at December 31, 2003			16,599,126		$	18.50
Exercisable at December 31, 2001			14,553,276		$	14.38
Exercisable at December 31, 2002			8,997,098			14.42
Exercisable at December 31, 2003			8,333,658			15.62

(1)

In connection with our acquisition of Legacy Dean, all options to purchase Legacy Dean stock outstanding at the time of the acquisition were automatically converted into options to purchase our stock. Upon conversion, those options represented options to purchase a total of approximately 8.1 million shares of our common stock. Also, the acquisition triggered certain “change in control” rights contained in the option agreements, which consisted of the right to surrender the options to us, in lieu of exercise, in exchange for cash, provided the options were surrendered prior to March 21, 2002. Options to purchase approximately 2.4 million shares were surrendered. See Note 2 to our Consolidated Financial Statements.

(2)

The acquisition of Legacy Dean triggered certain “change in control” rights contained in the Legacy Dean option agreements, which consisted of the right to surrender the options to us, in lieu of exercise, in exchange for cash, provided the options were surrendered prior to March 21, 2002. Options to purchase approximately 2.4 million shares were surrendered.

F-29

DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      The following table summarizes information about options outstanding and exercisable at December 31, 2003:

		Options Outstanding
								Options Exercisable
				Weighted-Average
Range of		Number		Remaining		Weighted-Average		Number		Weighted-Average
Exercise Prices		Outstanding		Contractual Life		Exercise Price		Exercisable		Exercise Price
$	0 to $10.88		982,859		3.09	$	8.67		982,859	$	8.67
	11.42 to 14.54		4,694,793		6.29		13.41		3,699,147		13.15
	16.30 to 17.70		844,140		5.61		16.69		844,140		16.69
	18.75 to 20.35		6,307,991		7.53		20.24		2,274,028		20.05
	21.75 to 22.23		190,979		4.95		21.94		168,982		21.91
	24.41 to 25.88		3,427,864		8.95		24.78		282,002		24.73
	29.05 to 31.50		150,500		9.60		30.93		82,500		31.50

      During 2003, we issued the following shares of restricted stock, all of which were granted to independent members of our Board of Directors as compensation for services rendered as directors during the immediately preceding quarter. Directors’ shares of restricted stock vest one-third on grant, one-third on the first anniversary of grant and one-third on the second anniversary of grant.

			Grant Date
			Fair Value
Period	Number of Shares		Per Share
First quarter		13,435	$	27.58
Second quarter		9,044		31.50
Third quarter		8,216		31.03
Fourth quarter		8,128		32.87

      We also issued DSUs to certain key employees and directors during 2003. Each DSU represents the right to receive one share of common stock in the future. DSUs have no exercise price. Each employee’s DSU grant vests ratably over five years, subject to certain accelerated vesting provisions based primarily on our stock price. DSUs granted to non-employee directors vest ratably over three years. The following table summarized the status of our DSU compensation program:

	Employees			Directors		Total
Outstanding at December 31, 2002
Issued		778,750			28,088		806,838
Cancelled		(125,250	)				(125,250	)
Outstanding at December 31, 2003		653,500			28,088		681,588
Weighted average fair value	$	24.83		$	31.50	$	25.06
Compensation expense (in thousands)	$	3,376		$	147	$	3,523

      Rights Plan — On February 27, 1998, our Board of Directors declared a dividend of the right to purchase one half of one common share for each outstanding share of common stock to the stockholders of record on March 18, 1998. The rights are not exercisable until ten days subsequent to the announcement of the acquisition of or intent to acquire a beneficial ownership of 15% or more in Dean Foods Company. At such time, each right entitles the registered holder to purchase from us that number of shares of common stock at an exercise price of $70.00, with a market value of up to two times the exercise price. At any time prior to such date, a required majority may redeem the rights in whole, but not in part, at a price of $0.01 per right. The rights will expire on March 18, 2008, unless our Board of Directors extends the term of, or redeems, the rights.

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DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      Earnings Per Share — Basic earnings per share is based on the weighted average number of common shares outstanding during each period. Diluted earnings per share is based on the weighted average number of common shares outstanding and the effect of all dilutive common stock equivalents during each period. The following table reconciles the numerators and denominators used in the computations of both basic and diluted EPS:

			Year Ended December 31
			2003		2002		2001
Basic EPS computation:
	Numerator:
		Income from continuing operations	$	355,703	$	267,751	$	107,684
	Denominator:
		Average common shares		145,201,412		135,031,274		84,454,194
	Basic EPS from continuing operations		$	2.45	$	1.98	$	1.28
Diluted EPS computation:
	Numerator:
		Income from continuing operations	$	355,703	$	267,751	$	107,684
		Net effect on earnings from conversion of mandatorily redeemable convertible preferred securities		8,994		21,324		21,324
		Income applicable to common stock	$	364,697	$	289,075	$	129,008
	Denominator:
		Average common shares — basic		145,201,412		135,031,274		84,454,194
		Stock option conversion(1)		5,346,882		5,132,746		3,221,679
		Restricted stock		729,655
		Dilutive effect of conversion of mandatorily redeemable convertible preferred securities		9,417,721		22,999,884		23,000,349
Average common shares — diluted				160,695,670		163,163,904		110,676,222
Diluted EPS from continuing operations			$	2.27	$	1.77	$	1.17

(1)  Stock option conversion excludes anti-dilutive shares of 58,344; 263,655 and 1,809,819 at December 31, 2003, 2002 and 2001, respectively.

F-31

DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      Stock Repurchases — On September 15, 1998, our Board of Directors authorized a stock repurchase program of up to $100 million. On September 28, 1999, the Board increased the program by $100 million to $200 million and on November 17, 1999 authorized a further increase to $300 million. We depleted the $300 million authorization during the second quarter of 2000, and on May 19, 2000, the Board increased the program by $100 million to $400 million. On November 2, 2000, the Board authorized a further increase to $500 million. On each of January 8, 2003 and February 12, 2003, the Board authorized additional increases of $150 million each. Set forth in the chart below is a summary of the stock we repurchased pursuant to this program through December 31, 2003.

		No. of Shares of
		Common Stock
Period		Repurchased		Purchase Price
Third Quarter 1998			3,000,000	$	30.4 million
Fourth Quarter 1998			1,531,200		15.6 million
Second Quarter 1999			239,100		3.0 million
Third Quarter 1999			5,551,545		66.7 million
Fourth Quarter 1999			10,459,524		128.4 million
First Quarter 2000			2,066,400		27.2 million
Second Quarter 2000			2,898,195		42.2 million
Third Quarter 2000			4,761,000		77.0 million
Fourth Quarter 2000			120,000		2.1 million
First Quarter 2001			370,002		6.1 million
Fourth Quarter 2002			4,126,200		101.2 million
First Quarter 2003			4,854,900		128.5 million
Third Quarter 2003			360,000		9.9 million
Fourth Quarter 2003			1,453,400		47.1 million
	Total		41,791,466	$	685.4 million

      As of March 10, 2004, $114.6 million was available for spending under this program.

      Repurchased shares are treated as effectively retired in the Consolidated Financial Statements.

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DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

12.     OTHER COMPREHENSIVE INCOME

      Comprehensive income comprises net income plus all other changes in equity from non-owner sources. The amount of income tax (expense) benefit allocated to each component of other comprehensive income during the year ended December 31, 2003 and 2002 are included below.

	Pre-Tax
	Income			Tax Benefit			Net
	(Loss)			(Expense)			Amount
	(In thousands)
Accumulated other comprehensive income, January 1, 2002	$	(51,021	)	$	21,178		$	(29,843	)
Cumulative translation adjustment		13,392			(4,984	)		8,408
Net change in fair value of derivative instruments		(74,332	)		27,529			(46,803	)
Amounts reclassified to income statement related to derivatives		38,945			(14,931	)		24,014
Minimum pension liability adjustment		(18,668	)		7,187			(11,481	)
Accumulated other comprehensive income, December 31, 2002		(91,684	)		35,979			(55,705	)
Cumulative translation adjustment		16,210			2,037			18,247
Net change in fair value of derivative instruments		(12,338	)		4,688			(7,650	)
Amounts reclassified to income statement related to derivatives		43,733			(18,123	)		25,610
Minimum pension liability adjustment		(18,652	)		7,130			(11,522	)
Accumulated other comprehensive income, December 31, 2003	$	(62,731	)	$	31,711		$	(31,020	)

13.     EMPLOYEE RETIREMENT AND PROFIT SHARING PLANS

      We sponsor various defined benefit and defined contribution retirement plans, including various employee savings and profit sharing plans, and contribute to various multi-employer pension plans on behalf of our employees. Substantially all full-time union and non-union employees who have completed one or more years of service and have met other requirements pursuant to the plans are eligible to participate in these plans. During 2003, 2002 and 2001, our retirement and profit sharing plan expenses were as follows:

	Year Ended December 31
	2003		2002		2001
	(In thousands)
Defined benefit plans	$	15,312	$	9,052	$	1,343
Defined contribution plans		16,873		13,731		7,891
Multi-employer pension and certain union plans		24,358		17,868		13,247
	$	56,543	$	40,651	$	22,481

      Defined Benefit Plans — The benefits under our defined benefit plans are based on years of service and employee compensation. Our funding policy is to contribute annually the minimum amount required under ERISA regulations.

      As of December 31, 2003, the latest measurement date, the accumulated benefit obligation of the pension plan exceeded the fair value of plan assets. In accordance with SFAS No. 87, “Employer’s Accounting for Pensions”, we recorded an additional minimum pension liability of $18.7 million ($11.5 million, net of income tax benefit). The adjustment to the additional minimum pension liability was included in other accumulated

F-33

DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

comprehensive loss as a direct charge to stockholders’ equity. As of December 31, 2003, the cumulative additional minimum pension charge included in accumulated other comprehensive income was $37.9 million ($23.6 million, net of income tax benefit).

      The following table sets forth the funded status of our defined benefit plans and the amounts recognized in our consolidated balance sheets.

		December 31
		2003			2002
		(In thousands)
Change in benefit obligation:
Benefit obligation at beginning of year		$	261,367		$	280,281
	Service cost		2,799			1,581
	Interest cost		17,752			18,954
	Plan participants’ contributions		73			332
	Plan amendments		9,510
	Assumption change					525
	Actuarial (gain)/loss		18,521			1,163
	Acquisition					23,750
	Effect of settlement		(603	)
	Benefits paid		(28,225	)		(65,219	)
Benefit obligation at end of year			281,194			261,367
Change in plan assets:
Fair value of plan assets at beginning of year			124,759			178,251
	Actual return on plan assets		24,952			(19,718	)
	Acquisition					2,609
	Employer contribution		31,171			28,752
	Plan participants’ contributions		73			84
	Effect of settlement		(1,132	)
	Benefits paid		(28,225	)		(65,219	)
Fair value of plan assets at end of year			151,598			124,759
Funded status			(129,596	)		(136,608	)
	Unrecognized net transition obligation		999			1,106
	Unrecognized prior service cost		11,025			2,223
	Unrecognized net loss		43,741			43,589
Net amount recognized		$	(73,831	)	$	(89,690	)
Amounts recognized in the statement of financial position consist of:
	Prepaid benefit cost				$	1,138
	Accrued benefit liability	$	(124,307	)		(114,035	)
	Intangible asset		12,530			3,913
	Accumulated other comprehensive income		37,946			19,294
Net amount recognized		$	(73,831	)	$	(89,690	)

F-34

DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      A summary of our key actuarial assumptions used to determine benefit obligations as of December 31, 2003 and 2002 follows:

	December 31
	2003			2002
	(In thousands)
Weighted-average assumptions as of December 31:
Discount rate		6.00- 6.50	%		6.50- 6.75	%
Expected return on plan assets		8.50	%		6.75- 8.50	%
Rate of compensation increase		4.00	%		4.00	%

      A summary of our key actuarial assumptions used to determine net periodic benefit cost for 2003, 2002 and 2001 follows:

	Year Ended December 31
	2003			2002			2001
Weighted-average assumptions as of December 31:
Discount rate		6.50- 6.75	%		7.25	%		7.75	%
Expected return on plan assets		6.75- 8.50	%		6.75- 9.00	%		6.75- 9.50	%
Rate of compensation increase		4.00	%		0-5.00	%		0-5.00	%

		December 31
		2003			2002			2001
		(In thousands)
Components of net periodic pension cost:
	Service cost	$	2,799		$	1,581		$	1,594
	Interest cost		17,752			18,954			6,671
	Effect of curtailment								311
	Expected return on plan assets		(10,430	)		(15,142	)		(7,647	)
Amortizations:
	Unrecognized transition obligation		107			106			106
	Prior service cost		708			190			207
	Unrecognized net (gain)/loss		1,833			332			(47	)
	Divestiture change								148
	Effect of settlement		2,543			3,031
Net periodic benefit cost		$	15,312		$	9,052		$	1,343

      The projected benefit obligation, accumulated benefit obligation, and fair value of plan assets for the pension plan with accumulated benefit obligations in excess of plan assets were $281.2 million, $275.6 million and $151.6 million, respectively, as of December 31, 2003 and $240.9 million, $223.4 million and $120.4 million, respectively, as of December 31, 2002. Included in the above pension benefit tables is an unfunded supplemental retirement plan with a liability of $5.8 million and $7.3 million at December 31, 2003 and 2002, respectively.

      In 2003, we decided to consolidate the assets of our ten qualified pension plans into one master trust. This consolidation is expected to be completed in the first quarter of 2004. Also in 2003, we retained investment consultants to assist our Investment Committee with the transition of the plans’ assets to the master trust and to help our Investment Committee formulate a long-term investment policy for the newly established master trust. We have developed an interim investment policy to ensure a smooth transition to the master trust. Our

F-35

DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

current asset mix guidelines under the interim investment policy target equities at 65-75% of the portfolio and fixed income at 25-35%. We expect to develop and adopt a long-term investment policy in early 2004.

      We determine our expected long-term rate of return based on our expectations of future returns for the pension plan’s investments based on interim target allocations of the pension plan’s investments. Additionally, we consider the weighted-average return of a capital markets model that was developed by the plans’ investment consultants and historical returns on comparable equity, fixed income and other investments. The resulting weighted average expected long-term rate of return on plan assets is 8.5%.

      Our pension plan weighted average asset allocations at December 31, 2003 and 2002 by asset category were as follows:

Asset Category		December 31, 2003			December 31, 2002
Equity securities			65	%		66	%
Fixed income securities			18			26
Cash			14			3
Other			3			5
	Total		100	%		100	%

      Equity securities of the plan did not include any investment in our common stock at December 31, 2003 or 2002.

      We expect to contribute $37.8 million to the pension plans for 2004.

      Defined Contribution Plans — Certain of our non-union personnel may elect to participate in savings and profit sharing plans sponsored by us. These plans generally provide for salary reduction contributions to the plans on behalf of the participants of between 1% and 17% of a participant’s annual compensation and provide for employer matching and profit sharing contributions as determined by our Board of Directors. In addition, certain union hourly employees are participants in company-sponsored defined contribution plans which provide for employer contributions in various amounts ranging from $21 to $39 per pay period per participant.

      Multi-Employer Pension and Certain Union Plans — Certain of our subsidiaries contribute to various multi-employer pension and certain union plans, which are administered jointly by management and union representatives and cover substantially all full-time and certain part-time union employees who are not covered by our other plans. The Multi-Employer Pension Plan Amendments Act of 1980 amended ERISA to establish funding requirements and obligations for employers participating in multi-employer plans, principally related to employer withdrawal from or termination of such plans. We could, under certain circumstances, be liable for unfunded vested benefits or other expenses of jointly administered union/management plans. At this time, we have not established any significant liabilities because withdrawal from these plans is not probable or reasonably possible.

14.     POSTRETIREMENT BENEFITS OTHER THAN PENSIONS

      Certain of our subsidiaries provide health care benefits to certain retirees who are covered under specific group contracts. As defined by the specific group contract, qualified covered associates may be eligible to receive major medical insurance with deductible and co-insurance provisions subject to certain lifetime maximums.

F-36

DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      The following table sets forth the funded status of these plans and the amounts recognized in our consolidated balance sheets:

		December 31
		2003			2002
		(In thousands)
Change in benefit obligation:
Benefit obligation at beginning of year		$	20,813		$	20,605
	Service cost		1,169			1,039
	Interest cost		1,217			1,139
	Plan participants’ contributions					195
	Plan amendments					(337	)
	Assumption change					(4,873	)
	Actuarial loss		598			4,249
	Acquisitions					1,152
	Benefits paid		(2,536	)		(2,191	)
	Effect of curtailment					(165	)
Benefit obligation at end of year			21,261			20,813
Fair value of plan assets at end of year
Funded status			(21,261	)		(20,813	)
	Unrecognized prior service cost		(2,552	)		(2,760	)
	Unrecognized net (gain)/loss		6,424			6,056
Net amount recognized		$	(17,389	)	$	(17,517	)

      A summary of our key actuarial assumptions used to determine the benefit obligation as of December 31, 2003 and 2002 follows:

		December 31
		2003			2002
Healthcare inflation:
	Initial rate		12.00	%		8.33- 12.00	%
	Ultimate rate		5.00	%		5.00- 6.00	%
	Year of ultimate rate achievement		2009			2008-2014
Discount rate			6.50	%		6.75	%

      The weighted average discount rate used to determine net periodic benefit cost was 6.75%, 7.25% and 7.75% for 2003, 2002 and 2001, respectively.

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DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

		December 31
		2003			2002			2001
		(In thousands)
Components of net periodic benefit cost:
	Service and interest cost	$	2,386		$	2,178		$	644
Amortizations:
	Prior service cost		(207	)		(210	)		(43	)
	Unrecognized net (gain)/loss		230			133			(43	)
	Recognized net actuarial loss from curtailment								217
Net periodic benefit cost		$	2,409		$	2,101		$	775

      Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. A one percent change in assumed health care cost trend rates would have the following effects:

	1-Percentage-		1-Percentage-
	Point Increase		Point Decrease
	(In thousands)
Effect on total of service and interest cost components	$	200	$	(175	)
Effect on postretirement obligation		1,146		(1,006	)

      We expect to contribute $2.8 million to the postretirement health care plans for 2004.

15.     PLANT CLOSING AND RATIONALIZATION COSTS

      Plant Closing and Rationalization Costs — As part of our rationalization and cost reduction program, we recorded plant closing costs of $11.8 million, $19.1 million and $9.6 million during 2003, 2002 and 2001, respectively. In addition, our share of CCC’s restructuring charges was $1.7 million during 2001. This amount was recorded as an adjustment to equity in earnings of unconsolidated affiliates.

      The charges recorded during 2003 are related to the following:

•  Closing of a Dairy Group ice cream plant in Hawaii;

•  Closing of a Dairy Group distribution facility in New York;

•  Closing of a Dairy Group ice cream operation and maintenance facility in Ohio;

•  Closing of a Dairy Group manufacturing facility in California;

•  Elimination of certain administrative functions at the Midwest region of our Dairy Group;

•  Realignment of Morningstar’s private label business and manufacturing operations into the Dairy Group; and

•  Elimination of certain administrative functions at the Northeast region of our Dairy Group.

      These charges were accounted for in accordance with SFAS No. 146 which became effective for us in January 2003. Under SFAS No. 146, the timing of certain costs associated with restructurings are accrued differently than in the past. We expect to incur additional charges related to these restructuring plans of approximately $4.3 million, including an additional $1.2 million in workforce reduction costs, $2.2 million in shutdown and other costs and $0.9 million in lease obligation costs. These additional charges are expected to be completed by December 2004 with the exception of the lease obligation payments for the closed Hawaii ice cream plant. The Hawaii lease expires in October 2033.

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DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      The charges recorded during 2002 are related to the closing of Dairy Group plants in Bennington, Vermont and Toledo, Ohio, a Dairy Group distribution facility in Winchester, Virginia, and one Morningstar plant in Tempe, Arizona. The charges also reflect additional costs related to severance on the closing of our Dairy Group plant in Port Huron, Michigan in 2001, the shutdown of an ice cream production line at our Englewood, Colorado plant and the closing of a Dairy Group plant’s administrative offices in Grand Rapids, Michigan.

      During 2001, we recorded charges related to the closing of three Dairy Group plants with consolidation of production into other plants. The plants closed during 2001 were our processing facilities in Canton, Mississippi, Corpus Christi, Texas and Port Huron, Michigan.

      The principal components of our rationalization and cost reduction program include the following:

•  Workforce reductions as a result of plant closings, plant rationalizations and consolidation of administrative functions;

•  Shutdown costs, including those costs that are necessary to prepare the plant facilities for closure;

•  Costs incurred after shutdown such as lease obligations or termination costs, utilities and property taxes; and

•  Write-downs of property, plant and equipment and other assets, primarily for asset impairments as a result of facilities that are no longer used in operations. The impairments relate primarily to owned buildings, land and equipment at the facilities which were written down to their estimated fair values and are being sold. The effect of suspending depreciation on the buildings and equipment related to the closed facilities was not significant. The carrying value of closed facilities at December 31, 2003 was approximately $2.6 million. We are marketing these properties for sale. Divestitures of the closed facilities has not resulted in significant modification to the estimate of fair value.

      We consider several factors when evaluating a potential plant closure, including, among other things, the impact of such a closure on our customers, the impact on production, distribution and overhead costs, the investment required to complete any such closure, and the impact on future investment decisions. Some plant closures are pursued to improve our operating cost structure, while others enable us to avoid unnecessary capital expenditures, allowing us to more prudently invest our capital expenditure dollars in our production facilities.

      In the first quarter of 2003, we sold a Dairy Group plant in Port Huron, Michigan. In 2001, we closed this plant and recorded plant closing costs which included a write-down in the value of the plant. We sold the closed plant for more than expected, resulting in a gain of $1.6 million. This gain was recorded as a reduction of plant closing expense, resulting in a net plant closing charge of $11.8 million during 2003.

F-39

DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      Activity with respect to plant closing and rationalization costs for exit plans approved after January 1, 2003, which was accounted for under FAS No. 146, is summarized below:

							Accrued Charges at
							December 31,
		Charges		Payments			2003
		(In thousands)
Cash charges:
	Workforce reduction costs	$	8,737	$	(2,775	)	$	5,962
	Shutdown costs		203		(203	)
	Lease obligations after shutdown		491		(14	)		477
	Other		971		(918	)		53
Subtotal			10,402	$	(3,910	)	$	6,492
Noncash charges:
	Write-down of assets		3,093
Total charges		$	13,495

      Activity with respect to plant closing and rationalization costs for exit plans approved before January 1, 2003, which was accounted for under EITF 94-3, is summarized below:

		Accrued								Accrued
		Charges at								Charges at
		December 31,								December 31,
		2002		Charges/(Gain)			Payments			2003
		(In thousands)
Cash charges:
	Workforce reduction costs	$	3,882	$	234		$	(2,659	)	$	1,457
	Shutdown costs		1,657		(7	)		(945	)		705
	Obligations after shutdown		668					(621	)		47
	Other		786		(290	)		(413	)		83
Subtotal		$	6,993		(63	)	$	(4,638	)	$	2,292
	Gain on sale of facility				(1,645	)
Total gain				$	(1,708	)

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DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      Activity with respect to plant closing and rationalization costs for 2002 is summarized below:

		Accrued							Accrued
		Charges at							Charges
		December 31,							December 31,
		2001		Charges		Payments			2002
		(In thousands)
Cash charges:
	Workforce reduction costs	$	668	$	4,576	$	(1,362	)	$	3,882
	Shutdown costs		460		1,468		(271	)		1,657
	Obligations after shutdown		119		563		(14	)		668
	Other		253		1,190		(657	)		786
Subtotal		$	1,500		7,797	$	(2,304	)	$	6,993
Noncash charges:
	Write-down of assets				11,253
Total charges				$	19,050

      There have not been significant adjustments to the plans and the majority of future cash requirements to reduce the liability at December 31, 2003 are expected to be completed within a year.

      Acquired Facility Closing Costs — As part of our purchase price allocations, we accrued costs from time to time pursuant to plans to exit certain activities and operations of acquired businesses in order to rationalize production and reduce costs and inefficiencies. During 2003, we accrued costs related to the closing of an ice cream plant acquired in July 2003 by our Dairy Group. One plant was closed in connection with our acquisition of Marie’s in May 2002 and several plants were closed in connection with our acquisition of Legacy Dean.

      The principal components of the plans include the following:

•  Workforce reductions as a result of plant closings, plant rationalizations and consolidation of administrative functions;

•  Shutdown costs, including those costs that are necessary to clean and prepare the plant facilities for closure and costs incurred after shutdown such as lease obligations or termination costs, utilities and property taxes after shutdown.

      Activity with respect to these acquisition liabilities for 2003 is summarized below:

	Accrued							Accrued
	Charges at							Charges at
	December 31,							December 31,
	2002		Accruals		Payments			2003
	(In thousands)
Workforce reduction costs	$	9,002	$	100	$	(6,231	)	$	2,871
Shutdown costs		11,637		500		(5,820	)		6,317
Total	$	20,639	$	600	$	(12,051	)	$	9,188

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DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      Activity with respect to these acquisition liabilities for 2002 is summarized below:

	Accrued							Accrued
	Charges at							Charges at
	December 31,							December 31,
	2001		Accruals		Payments			2002
	(In thousands)
Workforce reduction costs	$	20,029	$	11,205	$	(22,232	)	$	9,002
Shutdown costs		12,621		7,880		(8,864	)		11,637
Total	$	32,650	$	19,085	$	(31,096	)	$	20,639

16.     OTHER OPERATING (INCOME) EXPENSE

      In the third quarter of 2003, we recognized a gain on the sale of our frozen pre-whipped topping and frozen creamer operations of $66.2 million.

      During the fourth quarter of 2003, we recognized $2.5 million of other operating income as a result of certain contingencies related to the divestiture of 11 plants in 2001 being favorably resolved.

      During the fourth quarter of 2001, we recognized a net of $17.3 million of other operating income which includes the following:

•  A gain of $47.5 million on the divestiture of the 11 plants divested in connection with the acquisition of Legacy Dean. The gain represented the difference between fair value and the carrying value of the plants;

•  An expense of $28.5 million resulting from a payment to DFA as consideration for certain modifications to our existing milk supply arrangements; and

•  An expense of $1.7 million resulting from the impairment in value of a water plant.

17.     SUPPLEMENTAL CASH FLOW INFORMATION

		Year Ended December 31
		2003		2002		2001
		(In thousands)
Cash paid for interest and financing charges, net of capitalized interest		$	182,825	$	224,561	$	139,984
Cash paid for taxes			19,788		44,738		24,983
Noncash transactions:
	Exchange of trust issued preferred securities		582,986
	Issuance of common stock in connection with business acquisitions						739,366
	Operations of 11 plants in connection with acquisition of minority interest						287,989

18.     COMMITMENTS AND CONTINGENCIES

      Leases — We lease certain property, plant and equipment used in our operations under both capital and operating lease agreements. Such leases, which are primarily for machinery, equipment and vehicles, have lease terms ranging from 1 to 20 years. Certain of the operating lease agreements require the payment of additional rentals for maintenance, along with additional rentals based on miles driven or units produced. Certain leases require us to guarantee a minimum value of the leased asset at the end of the lease. Our maximum exposure under those guarantees is not a material amount. Rent expense, including additional rent,

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DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

was $121.2 million, $124.5 million and $86.9 million for the years ended December 31, 2003, 2002 and 2001, respectively.

      The composition of capital leases which are reflected as property, plant and equipment in our consolidated balance sheets are as follows:

	December 31
	2003			2002
	(In thousands)
Buildings and improvements	$	707		$	588
Machinery and equipment		1,940			9,200
Less accumulated amortization		(779	)		(5,347	)
	$	1,868		$	4,441

      Future minimum payments at December 31, 2003, under non-cancelable capital and operating leases with terms in excess of one year are summarized below:

	Capital			Operating
	Leases			Leases
	(In thousands)
2004	$	375		$	90,662
2005		158			76,356
2006		99			61,556
2007		116			51,483
Thereafter					172,215
Total minimum lease payments	$	748		$	452,272
Less amount representing interest		(75	)
Present value of capital lease obligations	$	673

      Contingent Obligations Related to Milk Supply Arrangements — On December 21, 2001, in connection with our acquisition of Legacy Dean, we purchased DFA’s 33.8% stake in our Dairy Group. In connection with that transaction, we issued a contingent, subordinated promissory note to DFA in the original principal amount of $40 million. DFA is our primary supplier of raw milk, and the promissory note is designed to ensure that DFA has the opportunity to continue to supply raw milk to certain of our plants until 2021, or be paid for the loss of that business. The promissory note has a 20-year term and bears interest based on the consumer price index. Interest will not be paid in cash, but will be added to the principal amount of the note annually, up to a maximum principal amount of $96 million. We may prepay the note in whole or in part at any time, without penalty. The note will only become payable if we ever materially breach or terminate one of our milk supply agreements with DFA without renewal or replacement. Otherwise, the note will expire at the end of 20 years, without any obligation to pay any portion of the principal or interest. Payments we make under this note, if any, will be expensed as incurred.

      Contingent Obligations Related to White Wave Acquisition — On May 9, 2002, we acquired White Wave, Inc. In connection with the acquisition, we established a Performance Bonus Plan pursuant to which we have agreed to pay performance bonuses to certain employees of White Wave if certain performance targets are achieved. Specifically, we agreed that if the cumulative net sales (as defined in the plan) of White Wave equal or exceed $382.5 million during the period beginning April 1, 2002 and ending March 31, 2004 (the

F-43

DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

“Incentive Period”) and White Wave does not exceed the budgetary restrictions set forth in the plan by more than $1 million during the Incentive Period, we will pay employee bonuses as follows:

•  If cumulative net sales during the Incentive Period are between $382.5 million and $450 million, the bonus paid will scale ratably (meaning $129,630 for each $1 million of net sales) between $26.025 million and $35.0 million; and

•  If cumulative net sales exceed $450 million during the Incentive Period, additional amounts will be paid as follows:

•  First $50 million above $450 million net sales: 10% of amount in excess of $450 million, plus

•  Second $50 million above $450 million net sales: 15% of amount in excess of $500 million, plus

•  In excess of $550 million net sales: 20% of amount in excess of $550 million.

We currently expect the aggregate amount of bonuses payable under White Wave’s Performance Bonus Plan to be approximately $39 million, and we have recorded quarterly accruals based on the aggregate amount that we expect to pay.

      Contingent Obligations Related to Divested Operations — We have sold several businesses in recent years. In each case, we have retained certain known contingent liabilities related to those businesses and/or assumed an obligation to indemnify the purchasers of the businesses for certain unknown contingent liabilities. In the case of the sale of our Puerto Rico operations, we were required to post collateral, including one surety bond and one letter of credit, to secure our obligation to satisfy the retained liabilities and to fulfill our indemnification obligation. We believe we have established adequate reserves for any potential liability related to our divested businesses. Moreover, we do not expect any liability that we may have for these retained liabilities, or any indemnification liability, to be material.

      Enron — In 1999, we entered into an Energy Program Agreement with Enron Energy Services pursuant to which we contracted to purchase electricity for certain of our plants at a discounted rate for a ten-year period. Under the agreement, Enron (i) supplied (or arranged for the supply of) utilities to our facilities and paid the costs of such utilities directly to the utility suppliers, and (ii) made certain capital improvements at certain of our facilities in an effort to reduce our utility consumption, all in exchange for one monthly payment from us. In November 2001, Enron stopped performing under the agreement and in December 2001, Enron filed for bankruptcy protection. Shortly thereafter, Enron rejected our contract. In order to compensate us for our lost savings, the Energy Program Agreement provided for formula-based liquidated damages. We have filed a claim in Enron’s bankruptcy for our damages. We have received correspondence from Enron demanding payment of certain amounts that Enron alleges we owe under the agreement. We have disputed the validity of Enron’s claim and are in the process of attempting to negotiate an agreement with Enron for the settlement of our claims against each other. We do not expect the settlement to have a material adverse impact on our financial position, results of operations or cash flows.

      Fleming Matter — On November 4, 2003, we received a notice (a so-called “Wells Notice”) from the staff of the Securities and Exchange Commission (the “SEC”) informing us that the staff was planning to recommend that the SEC bring a civil injunctive action against our company. The notice cites the staff’s belief that we aided and abetted The Fleming Companies in Fleming’s acceleration of revenue recognition by providing Fleming with correspondence that allowed Fleming to characterize two payments totaling $2.7 million made by us to Fleming as current income rather than deferred revenue to be recognized over future periods. Two officers of our Dairy Group received similar notices. We expensed the two payments made to Fleming during the quarters in which they were paid, and the Wells Notice contains no allegations regarding our financial statements. We have cooperated fully in the investigation and we are currently engaged in settlement discussions with the staff. We do not expect the investigation or a settlement thereof to have a material adverse impact on our company.

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DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      Litigation, Investigations and Audits — We are party, in the ordinary course of business, to certain other claims, litigation, audits and investigations. We believe we have adequate reserves for any liability we may incur in connection with any such currently pending or threatened matter. In our opinion, the settlement of any such currently pending or threatened matter is not expected to have a material adverse impact on our financial position, results of operations or cash flows.

19.     FAIR VALUE OF FINANCIAL INSTRUMENTS

      Pursuant to SFAS No. 107, “Disclosure About Fair Value of Financial Instruments,” we are required to disclose an estimate of the fair value of our financial instruments as of December 31, 2003 and 2002. SFAS No. 107 defines the fair value of financial instruments as the amount at which the instrument could be exchanged in a current transaction between willing parties.

      Due to their near-term maturities, the carrying amounts of accounts receivable and accounts payable are considered equivalent to fair value. In addition, because the interest rates on our senior credit facility and most other debt are variable, their fair values approximate their carrying values.

      We have senior notes with an aggregate face value of $700 million with fixed interest rates ranging from 6.625% to 8.15% at December 31, 2003. These notes were issued by Legacy Dean prior to our acquisition of Legacy Dean, and had a fair market value of $699.2 million at December 31, 2003.

      We have entered into various interest rate agreements to reduce our sensitivity to changes in interest rates on our variable rate debt. The fair values of these instruments and our senior notes were determined based on current values for similar instruments with similar terms. The following table presents the carrying value and fair value of our senior notes and interest rate agreements at December 31:

	2003						2002
	Carrying Value			Fair Value			Carrying Value			Fair Value
	of Liability			of Liability			of Liability			of Liability
	(In thousands)
Senior notes	$	(660,663	)	$	(699,234	)	$	(656,951	)	$	(702,830	)
Interest rate agreements		(48,368	)		(48,368	)		(80,431	)		(80,431	)

20. SEGMENT AND GEOGRAPHIC INFORMATION AND MAJOR CUSTOMERS

      Segment Information — In 2003, we had the following reportable segments: Dairy Group, Morningstar/ White Wave and Specialty Foods Group. Our Dairy Group segment manufactures and distributes fluid milk, ice cream and ice cream novelties, half-and-half and whipping cream, sour cream, cottage cheese, yogurt and dips, as well as fruit juices and other flavored drinks and bottled water. In 2003, Morningstar/ White Wave manufactured dairy and non-dairy coffee creamers, whipping cream and pre-whipped toppings, dips and dressings, specialty products such as lactose-reduced milk and extended shelf-life milks, as well as certain other refrigerated and extended shelf-life products. The Specialty Foods Group processes and markets pickles, powdered products such as non-dairy coffee creamers, aseptic sauces and puddings and nutritional beverages. Our International Group does not meet the definition of a segment and is reported in “Corporate/ Other.” Prior periods have been restated to remove the results of our Puerto Rico operations, which has been reclassified as a discontinued operation.

      The accounting policies of the segments are the same as those described in the summary of significant accounting policies. We evaluate performance based on operating profit not including non-recurring gains and losses and foreign exchange gains and losses.

      We do not allocate income taxes, management fees or unusual items to segments. In addition, there are no significant non-cash items reported in segment profit or loss other than depreciation and amortization and the $47.5 million gain on the divestiture of the 11 plants divested in connection with the acquisition of Legacy

F-45

DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Dean which is reported in our Dairy Group segment in 2001. The amounts in the following tables are the amounts obtained from reports used by our executive management team for the year ended December 31:

		2003			2002			2001
		(In thousands)
Net sales to external customers:
	Dairy Group(1)	$	7,146,028		$	7,061,538		$	5,042,836
	Morningstar/ White Wave(2)		1,109,499			1,056,751			741,992
	Specialty Foods Group		684,207			673,604			18,709
	Corporate/ Other(3)		244,882			199,571			171,018
	Total	$	9,184,616		$	8,991,464		$	5,974,555
Intersegment sales:
	Dairy Group	$	35,852		$	31,340		$	14,133
	Morningstar/ White Wave		99,414			103,686			90,476
	Specialty Foods Group		10,692			16,287
	Total	$	145,958		$	151,313		$	104,609
Operating income:
	Dairy Group(4)	$	608,616		$	520,935		$	323,755
	Morningstar/ White Wave(5)		118,597			111,668			104,294
	Specialty Foods Group		103,056			98,874			2,168
	Corporate/ Other(3)(6)		(64,284	)		(68,870	)		(45,104	)
	Total		765,985			662,607			385,113
Other (income) expense:
	Interest expense and financing charges(3)(7)		195,298			231,263			137,401
	Equity in (loss) earnings of unconsolidated affiliates(8)		(244	)		7,899			23,620
	Other (income) expense, net(3)		(2,625	)		2,660			4,817
	Consolidated income from continuing operations before tax	$	573,556		$	420,785		$	219,275
Depreciation and amortization:
	Dairy Group	$	127,224		$	114,354		$	113,780
	Morningstar/ White Wave		29,381			25,216			24,574
	Specialty Foods Group		14,505			14,101			353
	Corporate/ Other(3)		20,775			20,323			7,191
	Total	$	191,885		$	173,994		$	145,898
Assets:
	Dairy Group	$	4,590,291		$	4,415,139		$	4,882,224
	Morningstar/ White Wave		1,255,759			1,071,095			858,656
	Specialty Foods Group		635,321			617,210			625,382
	Corporate/ Other		511,165			478,822			325,635
	Total	$	6,992,536		$	6,582,266		$	6,691,897

F-46

DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

		2003		2002		2001
		(In thousands)
Capital expenditures:
	Dairy Group	$	177,006	$	162,493	$	89,125
	Morningstar/ White Wave		80,786		61,765		37,401
	Specialty Foods Group		18,511		11,176
	Corporate/ Other(3)		15,359		6,548		4,684
	Total	$	291,662	$	241,982	$	131,210

(1)	Net sales for 2001 have been restated to reflect the adoption of EITF Issue No. 01-09, “Accounting for Consideration Given By a Vendor to a Customer.” The net effect was to decrease net sales by $8.8 million in 2001.
(2)	Net sales for 2001 have been restated to reflect the adoption of EITF Issue No. 01-09 “Accounting for Consideration Given By a Vendor to a Customer.” The net effect was to decrease net sales by $24.9 million in 2001.
(3)	Balances for 2002 and 2001 have been adjusted to remove our Puerto Rico operations which have been reclassified as discontinued operations.
(4)	Operating income includes plant closing charges of $9.9 million, $14.2 million and $9.6 million in 2003, 2002 and 2001, respectively. Operating income in 2001 includes a gain of $47.5 million related to the divestiture of 11 plants as part of the acquisition of Legacy Dean and an impairment charge of $1.7 million on a water plant.
(5)	Operating income includes a gain on the sale of the frozen pre-whipped topping and frozen creamer operations of $66.2 million and plant closing charges of $1.9 million in 2003 and $4.9 million in 2002.
(6)	Operating income in 2003 included income of $2.5 million from the divestiture of 11 plants in 2001. Operating income in 2001 includes an expense of $28.5 million resulting from certain changes to our milk supply agreements.
(7)	Results for 2001 have been restated to reflect the adoption of SFAS No. 145 “Rescission of FASB No. 4, 44 and 64, Amendment of FASB No. 13 and Technical Corrections.” Accordingly, a loss of $7.3 million in 2001 related to the early extinguishment of debt previously recorded as an extraordinary item has been reclassified to interest expense.
(8)	Includes $1.7 million in 2001 which is our share of CCC’s restructuring charges.

      Geographic Information

		Net Sales						Long-Lived Assets
		2003		2002(2)		2001(2)		2003		2002		2001
		(In thousands)						(In thousands)
United States(1)		$	8,939,734	$	8,791,893	$	5,803,535	$	5,429,202	$	5,137,695	$	4,947,908
Europe			244,882		199,571		171,020		162,453		126,984		118,022
Puerto Rico(2)													124,079
	Total	$	9,184,616	$	8,991,464	$	5,974,555	$	5,591,655	$	5,264,679	$	5,190,009

(1)	Net sales for 2001 have been restated to reflect the adoption of EITF Issue No. 01-09, “Accounting for Consideration Given By a Vendor to a Customer.” The net effect was to decrease net sales by $33.7 million in 2001.
(2)	Net sales for 2002 and 2001 have been restated to remove net sales related to our Puerto Rico operations, which have been reclassified as discontinued operations.

F-47

DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      Major Customers — Our Dairy Group and Morningstar/ White Wave segments each had one customer that represented greater than 10% of their 2003 sales. Approximately 12.6% of our consolidated 2003 sales were to that same customer. In addition, our International Group had three customers that represented greater than 10% of their 2003 sales. Each of these customers represented less than 1% of our consolidated sales.

21. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

      The following is a summary of our unaudited quarterly results of operations for 2003 and 2002. Financial information for 2002 has been adjusted to remove our Puerto Rico operations, which have been reclassified as discontinued operations.

		Quarter
		First			Second		Third		Fourth
		(In thousands, except per share data)
2003:
Net sales		$	2,144,878		$	2,222,572	$	2,306,848	$	2,510,318
Gross profit			571,233			601,153		593,537		610,486
Net income(1)(2)			63,209			83,789		122,162		86,543
Basic earnings per common share(3):
	Net income		.49			.60		.79		.56
Diluted earnings per common share(3)
	Net income		.43			.54		.76		.54
2002:
Net sales		$	2,226,220		$	2,295,243	$	2,229,726	$	2,240,275
Gross profit			544,832			600,457		593,420		609,982
Income from continuing operations(4)			54,662			74,031		68,007		71,051
Net income(4)(5)			(29,624	)		73,227		68,699		63,114
Basic earnings per common share(3):
	Income from continuing operations		.41			.55		.50		.52
	Net income		(.22	)		.54		.51		.47
Diluted earnings per common share(3):
	Income from continuing operations		.37			.49		.45		.46
	Net income		(.15	)		.48		.45		.43

(1)	The results for the first, second, third and fourth quarters include plant closing charges, net of taxes of $(1.0) million, $1.9 million, $1.3 million and $5.2 million, respectively.
(2)	The results for the third and fourth quarters include a gain on sale of the frozen pre-whipped topping and frozen creamer operations and income related to the divestiture of 11 plants in 2001 of $40.9 million, net of tax, and $1.8 million net of tax, respectively.
(3)	Earnings per common share calculations for each of the quarters were based on the basic and diluted weighted average number of shares outstanding for each quarter, and the sum of the quarters may not necessarily be equal to the full year earnings per common share amount.
(4)	The results for the first, second, third and fourth quarters include plant closing charges, net of taxes, of $0.8 million, $3.2 million, $3.1 million and $4.7 million, respectively. Results in the fourth quarter also include a $6.3 million loss, net of taxes, related to our investment in CCC.

F-48

DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(5)  The results of the first quarter include an $85 million loss, net of taxes, for the impairment of goodwill and other intangible assets in accordance with our adoption of SFAS No. 142 in the first quarter of 2002. The results for the first, second, third and fourth quarters include income from discontinued operations of $0.7 million, $(0.8) million, $0.7 million and $0.3 million, respectively.

22.     SUBSEQUENT EVENTS

      In 2003, we had three reportable segments, including the Dairy Group, Morningstar/ White Wave and the Specialty Foods Group. Effective January 1, 2004, we reorganized our former Morningstar Foods division, which has resulted in a new segment reporting structure. We now have the following reportable segments: the Dairy Group, the Branded Products Group and the Specialty Foods Group.

      On January 26, 2004, our Dairy Group acquired Ross Swiss Dairies, a dairy distributor based in Los Angeles, California, which had net sales of approximately $120 million in 2003. As a result of this acquisition, we have increased the distribution capability of our Dairy Group in Southern California, allowing us to better serve our customers. Ross Swiss Dairies has historically purchased a significant portion of its products from other processors. We intend to shift the manufacturing of substantially all of Ross Swiss Dairies’ product needs into our Southern California plants in 2004. We paid approximately $20 million for the purchase of Ross Swiss Dairies and funded the purchase price with borrowings under our receivables-backed facility.

      On January 2, 2004, we completed the acquisition of the 87% of Horizon Organic Holding Corporation that we did not already own. Horizon Organic Holding Corporation had sales of approximately $214 million during 2003. We already owned approximately 13% of the outstanding common stock of Horizon Organic Holding Corporation as a result of investments made in 1998. All of Horizon Organic’s manufacturing has historically been done by third-party co-packers, including us. During 2003, we produced approximately 27% of Horizon Organic’s dairy products. We also distributed Horizon Organic’s products in several parts of the country. Over time, we intend to increase the percentage of Horizon Organic’s manufacturing that is done in our plants, which we believe will lower its manufacturing costs. We also believe that we can achieve greater distribution for Horizon Organic’s products by leveraging our Dairy Group’s DSD system. Horizon Organic is the leading branded organic foods company in the United States. Because organic foods are gaining popularity with consumers and because Horizon Organic’s products offer consumers an alternative to our Dairy Group’s traditional dairy products, we believe Horizon Organic is an important addition to our portfolio of strategic brands. The purchase price for the 87% of Horizon Organic that we did not already own was approximately $216 million, all of which was funded using borrowings under our senior credit facility and our receivables-backed facility. We also repaid approximately $40 million of borrowings under Horizon Organic’s former credit facilities. Horizon Organic’s financial results will be reported in our Branded Products Group segment.

23.     RELATED PARTY TRANSACTIONS

      Real Property Lease — We lease the land for our Franklin, Massachusetts plant from a partnership in which Alan Bernon, Chief Operating Officer of the Northeast region of our Dairy Group and a member of our Board of Directors, owns a 13.45% minority interest. (The remaining interests are owned by members of Mr. Bernon’s family.) The lease payments totaled $0.7 million in 2003, $0.7 million in 2002 and $0.6 million in 2001.

      Minority Interest in Consolidated Container Holding Company — We hold our minority interest in Consolidated Container Company through our subsidiary Franklin Plastics, Inc., in which we own an 89.5% interest. Alan Bernon, Chief Operating Officer of the Northeast region of our Dairy Group and a member of our Board of Directors, and his brother, Peter Bernon, collectively own the remaining 10.5% of Franklin Plastics, Inc.

F-49

DEAN FOODS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      Aircraft Leases — On August 1, 2000, we entered into a five-year aircraft lease agreement with Neptune Colorado LLC, a limited liability company owned by Gregg Engles (our Chief Executive Officer and Chairman of our Board of Directors) and Pete Schenkel (President of our Dairy Group and also a member of our Board of Directors). Pursuant to the lease agreement, we agreed to lease an airplane from Neptune Colorado at a rate of $1,000 per hour for each hour of flight with a minimum of 40 hours of flight per month. We also agreed to pay a non-refundable equipment reserve charge equal to $83.10 per engine hour used during the term of the agreement, with reserve funds being used by the lessor for engine overhauls, removal or replacement during the term of the agreement. Under the lease, we were responsible for paying certain taxes related to and insurance for the airplane, as well as operating costs, landing and customs fees, storage charges and any fines or penalties arising from the operation or use of the airplane. We paid an aggregate of $0.5 million in 2002 and $0.6 million in 2001 to Neptune Colorado, LLC under the lease.

      In June 2001, we entered into a six-year aircraft lease agreement with Curan, LLC, a limited liability company also owned by Gregg Engles and Pete Schenkel. Pursuant to the lease agreement, we agreed to lease an airplane from Curan at a rate of $122,000 per month. We were required to set up a non-refundable equipment reserve account, the amount of which was determined periodically by a third party. Reserve funds were used by the lessor for engine overhauls, removal or replacement during the term of the agreement. We were responsible for paying certain taxes related to and insurance for the airplane, as well as operating costs, landing and customs fees, storage charges and any fines or penalties arising from our operation or use of the airplane. We paid an aggregate of $1.6 million and $0.9 million to Curan, LLC during 2002 and 2001, respectively.

      On March 24, 2003, the independent members of our Board of Directors voted to purchase Neptune Colorado LLC and Curan, LLC from Messrs. Engles and Schenkel, after determining that it would be in our best interests to own the aircraft rather than to lease the aircraft pursuant to the terms of the existing leases. As consideration for the purchase of the lessor companies from Messrs. Engles and Schenkel, we assumed the indebtedness that the lessor entities incurred to finance the purchase of the aircraft. No other consideration was paid to Mr. Engles or Mr. Schenkel, directly or indirectly. The aggregate principal balance of the indebtedness that we assumed was approximately $9.6 million, which approximated the then-current fair market value of the aircraft. The indebtedness is secured by the aircraft. The lessor entities have no assets or liabilities other than the aircraft, certain cash and the related purchase money indebtedness. As part of the transaction, we received cash in the amount of approximately $100,000, which was the balance of the equipment reserves that were established under the leases. Because the market value of the assets we acquired in the transaction was equal to the value of the liabilities that we assumed, there was no income statement impact related to the transaction. We completed the transaction in March 2003.

F-50

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

      During our two most recent fiscal years, no independent accountant who was engaged as the principal accountant to audit our financial statements, nor any independent accountant who was engaged to audit a significant subsidiary and on whom our principal accountant expressed reliance in its report, has resigned or been dismissed.

Item 9A. Controls and Procedures

Controls Evaluation and Related CEO and CFO Certifications

      We conducted an evaluation of the effectiveness of the design and operation of our “disclosure controls and procedures” (“Disclosure Controls”) as of the end of the period covered by this annual report. The controls evaluation was done under the supervision and with the participation of management, including our Chief Executive Officer (CEO) and Chief Financial Officer (CFO).

      Attached as exhibits to this annual report are certifications of the CEO and the CFO, which are required in accordance with Rule 13a-14 of the Exchange Act. This Controls and Procedures section includes the information concerning the controls evaluation referred to in the certifications and it should be read in conjunction with the certifications for a more complete understanding of the topics presented.

Definition of Disclosure Controls

      Disclosure Controls are controls and procedures designed to reasonably assure that information required to be disclosed in our reports filed with the Securities and Exchange Commission (the “SEC”) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure Controls are also designed to reasonably assure that such information is accumulated and communicated to our management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. Our Disclosure Controls include components of our internal control over financial reporting, which consists of control processes designed to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements in accordance with US generally accepted accounting principles.

Limitations on the Effectiveness of Controls

      We do not expect that our Disclosure Controls or our internal controls over financial reporting will prevent all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Scope of the Controls Evaluation

      Our evaluations of our Disclosure Controls include reviews of the controls’ objectives and design, our implementation of the controls and the effect of the controls on the information generated for use in our SEC filings. In the course of our controls evaluations, we seek to identify data errors, controls problems or acts of

52

fraud and confirm that appropriate corrective actions, including process improvements, are undertaken. Many of the components of our Disclosure Controls are evaluated on an ongoing basis by our Audit Services department. The overall goals of these various evaluation activities are to monitor our Disclosure Controls, and to modify them as necessary. Our intent is to maintain the Disclosure Controls as dynamic systems that change as conditions warrant.

Conclusions

      Based upon our most recent controls evaluation, our CEO and CFO have concluded that as of the end of the period covered by this annual report, our Disclosure Controls were effective to provide reasonable assurance that material information is made known to management, particularly during the period when our periodic reports are being prepared. In the fourth quarter of 2003, there was no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART III

Item 10. Directors and Executive Officers

      Incorporated herein by reference to our proxy statement (to be filed) for our May 18, 2004 Annual Meeting of Stockholders.

Item 11. Executive Compensation

      Incorporated herein by reference to our proxy statement (to be filed) for our May 18, 2004 Annual Meeting of Stockholders.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

      Incorporated herein by reference to our proxy statement (to be filed) for our May 18, 2004 Annual Meeting of Stockholders.

Item 13. Certain Relationships and Related Transactions

      Incorporated herein by reference to our proxy statement (to be filed) for our May 18, 2004 Annual Meeting of Stockholders.

Item 14. Principal Accountant Fees and Services

      Incorporated herein by reference to our proxy statement (to be filed) for our May 18, 2004 Annual Meeting of Stockholders.

53

PART IV

Item 15. Exhibits, Financial Statement Schedules and Reports On Form 8-K

Financial Statements

      The following Consolidated Financial Statements are filed as part of this report or are incorporated herein as indicated:

	Page
Independent Auditors’ Report		F-1
Consolidated Balance Sheets as of December 31, 2003 and 2002		F-2
Consolidated Statements of Income for the years ended December 31, 2003, 2002 and 2001		F-3
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2003, 2002 and 2001		F-4
Consolidated Statements of Cash Flows for the years ended December 31, 2003, 2002 and 2001		F-5
Notes to Consolidated Financial Statements		F-6

Financial Statement Schedules

      Independent Auditors’ Report

      Schedule II — Valuation and Qualifying Accounts

Exhibits

      See Index to Exhibits.

Reports on Form 8-K

•  Furnished a Form 8-K dated February 12, 2004

•  Furnished a Form 8-K dated January 5, 2004

•  Furnished a Form 8-K dated November 5, 2003

54

      Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

By: /s/ BARRY A. FROMBERG

Barry A. Fromberg

Executive Vice President and

Chief Financial Officer

Dated March 12, 2004

      Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Name	Title	Date
/s/ BARRY A. FROMBERG Barry A. Fromberg	Principal Accounting Officer	March 12, 2004
/s/ GREGG L. ENGLES Gregg L. Engles	Chief Executive Officer and Chairman of the Board	March 12, 2004
/s/ ALAN BERNON Alan Bernon	Director	March 12, 2004
/s/ LEWIS M. COLLENS Lewis M. Collens	Director	March 12, 2004
/s/ TOM DAVIS Tom Davis	Director	March 12, 2004
/s/ STEPHEN L. GREEN Stephen L. Green	Director	March 12, 2004
/s/ JANET HILL Janet Hill	Director	March 12, 2004
/s/ JOSEPH S. HARDIN, JR. Joseph S. Hardin, Jr.	Director	March 12, 2004
/s/ RON KIRK Ron Kirk	Director	March 12, 2004
/s/ JOHN S. LLEWELLYN, JR. John S. Llewellyn, Jr.	Director	March 12, 2004
/s/ JOHN MUSE John Muse	Director	March 12, 2004

S-1

Name	Title	Date
/s/ HECTOR M. NEVARES Hector M. Nevares	Director	March 12, 2004
/s/ P. EUGENE PENDER P. Eugene Pender	Director	March 12, 2004
/s/ PETE SCHENKEL Pete Schenkel	Director	March 12, 2004
/s/ JIM TURNER Jim Turner	Director	March 12, 2004

S-2

INDEPENDENT AUDITORS’ REPORT

To the Board of Directors

Dean Foods Company

Dallas, Texas

      We have audited the consolidated financial statements of Dean Foods Company and subsidiaries (the “Company”) (formerly known as Suiza Foods Corporation) as of December 31, 2003 and 2002 and for each of the three years in the period ended December 31, 2003, and have issued our report thereon dated March 11, 2004 (which report expresses an unqualified opinion and includes an explanatory paragraph relating to the change in 2002 in the method of accounting for goodwill and other intangible assets to conform to Statement of Financial Accounting Standard No. 142); such report is included elsewhere in this Form 10-K. Our audits also included the consolidated financial statement schedule of Dean Foods Company and subsidiaries, listed in Item 15. This consolidated financial statement schedule is the responsibility of the Company’s management. Our responsibility is to express an opinion based on our audits. In our opinion, such consolidated financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

DELOITTE & TOUCHE LLP

Dallas, Texas

March 11, 2004

SCHEDULE II

DEAN FOODS COMPANY AND SUBSIDIARIES

VALUATION AND QUALIFYING ACCOUNTS

Years Ended December 31, 2003, 2002 and 2001

      Allowance for doubtful accounts deducted from accounts receivable:

	Balance								Recoveries		Write-Off of
	Beginning		Charged to						of Accounts		Uncollectible		Balance
Year	of Year		Income		Acquisitions		Dispositions		Written Off		Accounts		End of Year
	(In thousands)
2001		22,290		5,030		9,391		469		168		8,259		28,151
2002		28,151		18,985		1,716		38		1,129		15,626		34,317
2003		34,317		8,143		881				1,733		12,390		32,684

INDEX TO EXHIBITS

Exhibit
Number			Description
	3.1	—	Amended and Restated Certificate of Incorporation (incorporated by reference from our Annual Report on Form 10-K for the year ended December 31, 2001, filed April 1, 2002 (File No. 1-12755)).
	3.2	—	Amended and Restated Bylaws (incorporated by reference from our Quarterly Report on Form 10-Q for the quarter ended June 30, 1999 (File No. 1-12755)).
	4.1	—	Specimen of Common Stock Certificate (incorporated by reference from our Annual Report on Form 10-K for the year ended December 31, 2001, filed April 1, 2002 (File No. 1-12755)).
	4.2	—	Registration Rights Agreement (incorporated by reference from our Registration Statement on Form S-1 (File No. 333-1858)).
	4.3	—	Rights Agreement dated March 6, 1998 among us and Harris Trust & Savings Bank, as rights agent, which includes as Exhibit A the Form of Rights Certificate (incorporated by reference from the Registration Statement on Form 8-A filed on March 10, 1998 (File No. 1-12755)).
	*10.1	—	Sixth Amended and Restated 1997 Stock Option and Restricted Stock Plan (filed herewith).
	*10.2	—	Second Amended and Restated 1989 Dean Foods Stock Awards Plan (filed herewith).
	*10.3	—	Amended and Restated Executive Deferred Compensation Plan (filed herewith).
	*10.4	—	Fourth Amended and Restated 1997 Employee Stock Purchase Plan (filed herewith).
	*10.5	—	Performance Bonus Plan for Steve Demos and certain other employees of White Wave, Inc. (incorporated by reference from our Quarterly Report on Form 10-Q for the quarter ended June 30, 2002 (File No. 1-12755)).
	10.6	—	Stockholders Agreement dated July 31, 1997 among us, Franklin Plastics, Peter M. Bernon and Alan J. Bernon (incorporated by reference from our Quarterly Report on Form 10-Q for the quarter ended June 30, 1997, as amended on October 24, 1997 (File No. 1-12755)).
	10.7	—	Amended and Restated Limited Liability Company Agreement of Consolidated Container Holdings, LLC (incorporated by reference from our Current Report on Form 8-K dated July 19, 1999, (File No. 1-12755)).
	10.8	—	Agreement and Plan of Merger dated April 4, 2001 among us, Legacy Dean and Blackhawk Acquisition Corp. (incorporated by reference from our Current Report on Form 8-K filed April 5, 2001, (File No. 1-12755)).
	10.9	—	Amended and Restated Securities Purchase Agreement, dated December 21, 2001 (incorporated by reference to our 8-K dated January 7, 2002, (File No. 1-12755)).
	10.10	—	Amended and Restated Credit Agreement among us and our senior lenders (filed herewith).
	10.11	—	Third Amended and Restated Receivables Purchase Agreement related to our receivables-backed loan (filed herewith).
	10.12	—	First Amendment to Third Amended and Restated Receivables Purchase Agreement (filed herewith).
	*10.13	—	Form of Change in Control Agreement for our executive officers (incorporated by reference from our Annual Report on Form 10-K for the year ended December 31, 2002, filed March 27, 2003, as amended on July 3, 2003 (File No. 1-12755)).
	*10.14	—	Form of Change in Control Agreement for certain senior officers (incorporated by reference from our Annual Report on Form 10-K for the year ended December 31, 2002, filed March 27, 2003, as amended on July 3, 2003 (File No. 1-12755)).
	*10.15	—	Form of Change in Control Agreement for certain other officers (incorporated by reference from our Annual Report on Form 10-K for the year ended December 31, 2002, filed March 27, 2003, as amended on July 3, 2003 (File No. 1-12755)).
	21	—	List of Subsidiaries (filed herewith).
	23.1	—	Consent of Deloitte & Touche LLP (filed herewith).

Exhibit
Number			Description
	31.1	—	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
	31.2	—	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
	32.1	—	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
	32.2	—	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).

*  Management or compensatory contract

EX-10.1 3 d13098exv10w1.txt SIXTH AMENDED/RESTATED 1997 STOCK OPTION PLAN EXHIBIT 10.1 (DEAN FOODS LOGO) DEAN FOODS COMPANY SIXTH AMENDED AND RESTATED 1997 STOCK OPTION AND RESTRICTED STOCK PLAN 1. Purpose of the Plan. This Plan shall be known as the Dean Foods Company Sixth Amended and Restated 1997 Stock Option and Restricted Stock Plan. The purpose of the Plan is to attract and retain the best available persons for positions of substantial responsibility and to provide incentives to such persons to promote the success of the business of Dean Foods Company and its subsidiaries. Certain options granted under this Plan are intended to qualify as "incentive stock options" pursuant to Section 422 of the Internal Revenue Code of 1986, as amended from time to time. 2. Definitions. As used herein, the following definitions shall apply: "Authorized Officers" shall have the meaning set forth in Section 19 hereof. "Board" means the Board of Directors of the Company. "Change in Control" means (1) any "person" (as such term is used in Section 13(d) of the Exchange Act) becomes the "beneficial owner" (as determined pursuant to Rule 13d-3 under the Exchange Act, but specifically excluding the Company, any Subsidiary of the Company, and/or any employee benefit plan maintained by the Company or any Subsidiary of the Company), directly or indirectly, of securities of the Company representing thirty percent (30%) or more of the combined voting power of the Company's then outstanding securities; or (2) during any period of two (2) consecutive years (not including any period prior to the effective date of this amendment and restatement), individuals who at the beginning of such period constitute the members of the Board and any new director, whose election to the Board or nomination for election to the Board by the Company's stockholders was approved by a vote of at least two-thirds (?) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority of the Board; or (3) the Company or any Subsidiary shall merge with or consolidate into any other company, other than a merger or consolidation which would result in the holders of the voting securities of the Company outstanding immediately prior thereto holding immediately thereafter securities representing more than sixty percent (60%) of the combined voting power of the voting securities of the Company or such surviving entity (or its ultimate parent, if applicable) outstanding immediately after such merger or consolidation; or (4) the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets or such a plan is commenced. "Code" means the Internal Revenue Code of 1986, as amended from time to time, and any successor statute. "Committee" means the committee described in Section 19 that administers the Plan or, if no such committee has been appointed, the full Board. "Common Stock" means the common stock, $.01 par value per share, of the Company. Except as otherwise provided herein, all Common Stock issued pursuant to this Plan shall have the same rights as all other issued and outstanding shares of Common Stock, including but not limited to voting rights, the right to dividends, if declared and paid, and the right to pro rata distributions of the Company's assets in the event of liquidation. "Company" means Dean Foods Company, a Delaware corporation, formerly known as Suiza Foods Corporation. "Consultant" means any consultant or advisor who renders bona fide services to the Company or one of its Subsidiaries, which services are not in connection with the offer or sale of securities in a capital-raising transaction. "Date of Grant" shall have the meaning set forth in Section 8 hereof. "Divested Business Unit" shall have the meaning set forth in Section 10 hereof. "Employee" means any officer or other key employee of the Company or one of its Subsidiaries (including any director who is also an officer or key employee of the Company or one of its Subsidiaries). "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Exercise Price" shall have the meaning set forth in Section 9 hereof. "Fair Market Value" means the closing sale price (or average of the quoted closing bid and asked prices if there is no closing sale price reported) of the Common Stock on the date specified as reported by the principal national exchange or trading system on which the Common Stock is then listed or traded. If there is no reported price information for the Common Stock, the Fair Market Value will be determined by the Board or the Committee, in its sole discretion. In making such determination, the Board or the Committee may, but shall not be obligated to, commission and rely upon an independent appraisal of the Common Stock. "Immediate Family Members" shall have the meaning set forth in Section 15 hereof. "Non-Employee Director" means an individual who is a "non-employee director" as defined in Rule 16b-3 under the Exchange Act, an "outside director" within the meaning of Treasury Regulation Section 1.162-27(e)(3) and an "independent director" within the meaning of the New York Stock Exchange rules. "Nonqualified Option" means any Option that is not a Qualified Option. "Option" means a stock option granted pursuant to Section 6 of this Plan. 2 "Optionee" means any Employee, Consultant or Non-Employee Director who receives an Option. "Participant" means any Employee, Consultant or Non-Employee Director who receives an Option or Restricted Stock pursuant to this Plan. "Qualified Option" means any Option that is intended to qualify as an "incentive stock option" within the meaning of Section 422 of the Code. "Qualifying Retirement" means retirement by a Participant from employment or other service to the Company or any Subsidiary after such Participant reaches the age of 65. "Restricted Stock" means Common Stock awarded to an Employee, Consultant or Non-Employee Director pursuant to Section 7 of this Plan. "Restricted Stock Cap" shall have the meaning set forth in Section 7 hereof. "Rule 16b-3" means Rule 16b-3 of the rules and regulations under the Exchange Act, as Rule 16b-3 may be amended from time to time, and any successor provisions to Rule 16b-3 under the Exchange Act. "Subsidiary" means any now existing or hereinafter organized or acquired company of which more than fifty percent (50%) of the issued and outstanding voting interests are owned or controlled directly or indirectly by the Company or through one or more Subsidiaries of the Company. "10-Percent Stockholder" shall have the meaning set forth in Section 9 hereof. 3. Term of Plan. The Plan has been adopted by the Board effective as of February 24, 1997 and approved by the stockholders of the Company. The Plan shall continue in effect until terminated pursuant to Section 19. 4. Shares Subject to the Plan. Except as otherwise provided in Section 18 hereof, the aggregate number of shares of Common Stock issuable upon the exercise of Options or upon the grant of Restricted Stock pursuant to this Plan shall be 37,500,000 shares. Such shares may either be authorized but unissued shares or treasury shares. The Company shall, during the term of this Plan, reserve and keep available a number of shares of Common Stock sufficient to satisfy the requirements of the Plan. If an Option should expire or become unexercisable for any reason without having been exercised in full, or Restricted Stock should fail to vest and be forfeited in whole or in part for any reason, then the shares that were subject thereto shall, unless the Plan has terminated, be available for the grant of additional Options or Restricted Stock under this Plan, subject to the limitations set forth above and in Section 19 hereof. 5. Eligibility. Qualified Options may be granted under Section 6 of the Plan to such Employees of the Company or its Subsidiaries as may be determined by the Board or the Committee (or the Authorized Officers, to the extent permitted by Section 19 of this Plan). Nonqualified Options may be granted under Section 6 of the Plan to such Employees, 3 Consultants and Non-Employee Directors of the Company or its Subsidiaries as may be determined by the Board or the Committee (or the Authorized Officers, to the extent permitted by Section 19 of this Plan). Restricted Stock may be granted under Section 7 of the Plan to such Employees, Consultants and Non-Employee Directors of the Company or its Subsidiaries as may be determined by the Board or the Committee (or the Authorized Officers, to the extent permitted by Section 19 of this Plan). 6. Grant of Options. (a) Except as limited by Section 4 hereof, the Board or the Committee shall determine the number of shares of Common Stock to be offered from time to time pursuant to Options granted hereunder and shall grant Options under the Plan. In connection with the granting of Qualified Options, the aggregate Fair Market Value (determined at the Date of Grant of a Qualified Option) of the shares with respect to which Qualified Options are exercisable for the first time by an Optionee during any calendar year (under all such plans of the Optionee's employer company and its parent and subsidiary corporations as defined in Section 424(e) and (f) of the Code, or a corporation or a parent or subsidiary corporation of such corporation issuing or assuming an Option in a transaction to which Section 424(a) of the Code applies) shall not exceed $100,000 or such other amount as from time to time provided in Section 422(d) of the Code or any successor provision. The grant of Options shall be evidenced by Option agreements containing such terms and provisions as are approved by the Board or the Committee and executed on behalf of the Company by an appropriate officer. (b) Unless the Board or the Committee determines otherwise with respect to a particular year, each Non-Employee Director will automatically be granted a Nonqualified Option to purchase 7,500 shares of Common Stock (subject to adjustment pursuant to Section 18 hereof), at an exercise price equal to the Fair Market Value of the Common Stock on the Date of Grant, on June 30 of each year. 7. Restricted Stock. The Board or the Committee shall from time to time determine the number of shares of Common Stock to be granted as Restricted Stock; provided that no more than an aggregate amount of 225,000 shares of Restricted Stock may be issued under the Plan (such limit being herein referred to as the "Restricted Stock Cap"). Any shares of Restricted Stock that fail to vest and are forfeited shall not count against the Restricted Stock Cap set forth in the preceding sentence. The grant of Restricted Stock shall be evidenced by Restricted Stock agreements containing such terms and provisions as are approved by the Board or the Committee and executed on behalf of the Company by an appropriate officer. 8. Date of Grant. The date of grant of an Option or Restricted Stock under the Plan (the "Date of Grant") shall be the date on which the Board or the Committee awards the Option or Restricted Stock or, if the Board or the Committee so determines, the date specified by the Board or the Committee as the date the award is to be effective. Notice of the grant shall be given to each Participant to whom an Option or Restricted Stock is granted promptly after the date of such grant. 9. Price. The exercise price for each share of Common Stock subject to an Option (the "Exercise Price") granted pursuant to Section 6 of the Plan shall be determined by the Board or the Committee at the Date of Grant; provided, however, that (a) the Exercise Price for any Option shall not be less than 100% of the Fair Market Value of the Common Stock at the Date of Grant, and (b) if the Optionee owns on the Date of Grant more than 10 percent of the total 4 combined voting power of all classes of stock of the Company or its parent or any of its subsidiaries, as more fully described in Section 422(b)(6) of the Code or any successor provision (such stockholder is referred to herein as a "10-Percent Stockholder"), the Exercise Price for any Qualified Option granted to such Optionee shall not be less than 110% of the Fair Market Value of the Common Stock at the Date of Grant. The Board or the Committee in its discretion may award shares of Restricted Stock under Section 7 of the Plan to Participants without requiring the payment of cash consideration for such shares. 10. Vesting. (a) Subject to the provisions of this Plan, each Option and Restricted Stock award under the Plan shall vest or be subject to forfeiture in accordance with the provisions set forth in the applicable Option agreement or Restricted Stock agreement. (b) In addition to the vesting provisions contained in each Option and Restricted Stock agreement, each Option and share of Restricted Stock granted under the Plan shall also be subject to the following vesting provisions: (i) If the Company shall sell or otherwise divest of all of its ownership interest in any Subsidiary or any business unit or operation (a "Divested Business Unit") owned by the Company or any Subsidiary, then the outstanding unvested Options and shares of Restricted Stock held by each Employee of such Divested Business Unit shall automatically vest in full as of the date of the consummation of such sale or divestiture; (ii) Each unvested Option and share of Restricted Stock shall immediately vest in full upon the death of the holder of such Option or Restricted Stock; (iii) Each unvested Option and share of Restricted Stock shall immediately vest in full upon any Change in Control; (iv) Each unvested Option and share of Restricted Stock shall immediately vest in full upon the permanent and total disability (as defined within the meaning of Section 22(e)(3) of the Code) of the holder of such Option or Restricted Stock; and (iv) In the event of the Qualifying Retirement of a Participant, all unvested Options and shares of Restricted Stock held by such Participant shall automatically vest in full as of the effective date of such Participant's Qualifying Retirement. 11. Exercise. (a) An Option will not be deemed to be exercised and shares will not be issued, until the applicable Exercise Price is received by the Company. A Participant may pay the Exercise Price of an Option by the delivery of cash, check or wire transfer. (b) If the shares to be purchased are covered by an effective registration statement under the Securities Act of 1933, as amended, any Option may be exercised by a broker-dealer acting on behalf of an Optionee if (i) the broker-dealer has received from the Company confirmation of the existence and validity of the Option to be exercised, together with instructions from the Optionee requesting the Company to deliver the shares of Common Stock subject to such Option to the broker-dealer on behalf of the Optionee and specifying the account into which such shares should be deposited, (ii) adequate provision has been made with respect to the payment of any withholding taxes due upon such exercise, and (iii) the broker-dealer and 5 the Optionee have otherwise complied with Section 220.3(e)(4) of Regulation T, 12 CFR Part 220, or any successor provision, and any other applicable regulations. 12. Expiration of Options. (a) No Option shall be exercisable at any time after the expiration of ten (10) years from the Date of Grant; provided, however, that if the Optionee with respect to a Qualified Option is a 10-Percent Stockholder on the Date of Grant of such Qualified Option, then such Option shall not be exercisable after the expiration of five (5) years from its Date of Grant. (b) In addition, if an Optionee ceases to be an Employee or Non-Employee Director of the Company or any Subsidiary for any reason (including because such Optionee is an Employee of a Divested Business Unit), such Optionee's vested Options shall expire on the earlier of the expiration date contained in the corresponding Option Agreement or (a) 60 days following the date such Optionee ceases to be an Employee or Non-Employee Director of the Company or any Subsidiary, if such cessation of service is not due to the death, Qualifying Retirement or permanent and total disability (within the meaning of Section 22(e)(3) of the Code) of the Optionee, or (b) 12 months following the date such Optionee ceases to be an Employee or Non-Employee Director of the Company or any Subsidiary, if such cessation of service is due to the death or permanent and total disability (as defined above) of the Optionee. Options held by an Optionee who has retired pursuant to a Qualifying Retirement will remain exercisable until the earlier of (i) the tenth anniversary of the date the Option was granted, and (ii) the first anniversary of the Optionee's death. Upon the death of an Optionee, any vested Option exercisable on the date of death may be exercised by the Optionee's estate or by a person who acquires the right to exercise such Option by bequest or inheritance or by reason of the death of the Optionee, provided that such exercise occurs within the shorter of the remaining option term of the Option and 12 months after the date of the Optionee's death. (c) Notwithstanding any provision of this Plan or any Option Agreement to the contrary, no Optionee may, under any circumstances, exercise a vested Option following termination of employment if the Optionee is discharged due to the Optionee's willful or intentional fraud, embezzlement or other conduct seriously detrimental to the Company or any Subsidiary. The determination of whether or not an Optionee has been discharged for any of the reasons specified in the preceding sentence will be made by the Committee or the Board. 13. Option Financing. Upon the exercise of any Option granted under the Plan, the Company may, but shall not be required to, make financing available to the Participant for the purchase of shares of Common Stock pursuant to such Option on such terms as the Board or the Committee may specify. 14. Withholding of Taxes. The Board or the Committee shall make such provisions and take such steps as it may deem necessary or appropriate for the withholding of any taxes that the Company is required by any law or regulation of any governmental authority to withhold in connection with any Option or Restricted Stock including, but not limited to, withholding the issuance of all or any portion of the shares of Common Stock subject to such Option or Restricted Stock until the Participant reimburses the Company for the amount it is required to withhold with respect to such taxes, canceling any portion of such issuance in an amount sufficient to reimburse the Company for the amount it is required to withhold or taking any other action reasonably required to satisfy the Company's withholding obligation. 6 15. Conditions Upon Issuance of Shares. (a) The Company shall not be obligated to sell or issue any shares upon the exercise of any Option granted under the Plan or to deliver Restricted Stock unless the issuance and delivery of shares complies with all provisions of applicable federal and state securities laws and the requirements of any national exchange or trading system on which the Common Stock is then listed or traded. (b) As a condition to the exercise of an Option or the grant of Restricted Stock, the Company may require the person exercising the Option or receiving the grant of Restricted Stock to make such representations and warranties as may be necessary to assure the availability of an exemption from the registration requirements of applicable federal and state securities laws. (c) The Company shall not be liable for refusing to sell or issue any shares covered by any Option or for refusing to issue Restricted Stock if the Company cannot obtain authority from the appropriate regulatory bodies deemed by the Company to be necessary to sell or issue such shares in compliance with all applicable federal and state securities laws and the requirements of any national exchange or trading system on which the Common Stock is then listed or traded. In addition, the Company shall have no obligation to any Participant, express or implied, to list, register or otherwise qualify the shares of Common Stock covered by any Option or Restricted Stock. (d) No Participant will be, or will be deemed to be, a holder of any Common Stock subject to an Option unless and until the Option is vested, and the Participant has exercised the Option and paid the purchase price for the subject shares of Common Stock. Options and shares of Restricted Stock that have not fully vested shall be transferable only by will or the laws of descent and distribution and Options shall be exercisable during the Participant's lifetime only by such Participant; provided, however, that the Participant may transfer his or her Options and/or unvested Restricted Stock without consideration, to (i) the spouse, children or grandchildren of the Participant ("Immediate Family Members"), (ii) a trust or trusts, or to a guardian under the Uniform Gift to Minors Act, for the exclusive benefit of such Immediate Family Members, or (iii) a partnership or other entity in which such Immediate Family Members are the only partners, provided that subsequent transfers of transferred Options or unvested shares of Restricted Stock shall be prohibited except by will or the laws of descent and distribution. Following transfer, any such Options shall continue to be subject to the same terms and conditions as were applicable immediately prior to transfer, provided that, for purposes of each award agreement and the vesting and expiration provisions hereof, the terms "Participant" and "Optionee" shall be deemed to refer to the transferee (however, the events of termination of employment, if any, set forth in the agreement and the obligation to pay withholding taxes shall continue to apply to the transferor). Qualified Options shall be nontransferable except by will or the laws of descent and distribution, and may only be exercisable during the Participant's lifetime, by the Participant. 16. Restrictions on Shares. Shares of Common Stock issued pursuant to the Plan may be subject to restrictions on transfer under applicable federal and state securities laws. The Board may impose such additional restrictions on the ownership and transfer of shares of Common Stock issued pursuant to the Plan as it deems desirable; any such restrictions shall be set forth in any award agreement entered into hereunder. 7 17. Modification of Awards. At any time and from time to time, the Board or the Committee may execute an instrument providing for modification, extension or renewal of any outstanding award, provided that no such modification, extension or renewal shall (a) impair any award without the consent of the holder of the award, or (b) decrease the exercise price of any Option without the consent of the stockholders of the Company. Notwithstanding the foregoing, in the event of a modification, extension or renewal of a Qualified Option, the Board or the Committee may increase the exercise price of such Option if necessary to retain the qualified status of such Option. Any amendment to the Plan shall apply to all Options and shares of Restricted Stock outstanding at the time of such amendment in addition to all awards granted thereafter, subject to the limitations of clause (a) of the first sentence of this Section 17. 18. Effect of Change in Stock Subject to the Plan. In the event that each of the outstanding shares of Common Stock (other than shares held by dissenting stockholders) shall be changed into or exchanged for a different number or kind of shares of stock of the Company or of another company (whether by reason of merger, consolidation, recapitalization, reclassification, split-up, combination of shares or otherwise), or in the event a stock split or stock dividend occurs, then there shall be substituted for each share of Common Stock then subject to Options or Restricted Stock awards or available for Options or Restricted Stock awards the number and kind of shares of stock into which each outstanding share of Common Stock (other than shares held by dissenting stockholders) shall be so changed or exchanged, or the number of shares of Common Stock as is equitably required in the event of a stock split or stock dividend, together with an appropriate adjustment of the Exercise Price. The Board may, but shall not be required to, provide additional anti-dilution protection to a Participant under the terms of the Participant's Option or Restricted Stock agreement. 19. Administration. (a) The Plan shall be administered by the Board or by a committee of the Board comprised solely of two or more Non-Employee Directors appointed by the Board (the "Committee"). Options and Restricted Stock may be granted under Sections 6 and 7, respectively, (i) by the Board as a whole, or (ii) by majority agreement of the members of the Committee. Subject to the limitations and qualifications set forth in this Plan, the Board or the Committee shall determine the number of Options or shares of Restricted Stock to be granted, the number of shares subject to each Option or Restricted Stock grant, the exercise price or prices of each Option, the vesting and exercise period of each Option and the vesting and/or forfeiture provisions relating to Restricted Stock, whether an Option may be exercised as to less than all of the Common Stock subject thereto, and such other terms and conditions of each Option or grant of Restricted Stock, if any, as are consistent with the provisions of this Plan. To the extent permitted by applicable law (including the Exchange Act and the Code), the Board or the Committee may at any given time authorize an aggregate number of Options or shares of Restricted Stock to be granted to eligible Employees, and then authorize one or more officers of the Company (the "Authorized Officers") to allocate such awards among eligible Employees; provided that the Authorized Officers may not allocate awards to themselves or other executive officers, and the terms of the awards, including the Exercise Price (if any) must be established by the Board or the Committee. Option agreements and Restricted Stock agreements, in the forms as approved by the Board or the Committee, and containing such terms and conditions consistent with the provisions of this Plan as are determined by the Board or the Committee, may be executed on behalf of the Company by the Chairman of the Board, the President or any Vice President of the Company. The Board or the Committee shall have complete authority to 8 construe, interpret and administer the provisions of this Plan and the provisions of the Option agreements and Restricted Stock agreements granted hereunder; to prescribe, amend and rescind rules and regulations pertaining to this Plan; to suspend or discontinue this Plan; and to make all other determinations necessary or deemed advisable in the administration of the Plan. The determinations, interpretations and constructions made by the Board or the Committee shall be final and conclusive. No member of the Board or the Committee shall be liable for any action taken, or failed to be taken, made in good faith relating to the Plan or any award thereunder, and the members of the Board or the Committee shall be entitled to indemnification and reimbursement by the Company in respect of any claim, loss, damage or expense (including attorneys' fees) arising therefrom to the fullest extent permitted by law. (b) Although the Board or the Committee may suspend or discontinue the Plan at any time, all Qualified Options must be granted before February 24, 2007. (c) Subject to any applicable requirements of Rule 16b-3 or of any national exchange or trading system on which the Common Stock is then listed or traded, and subject to the stockholder approval requirements of Sections 422 and 162(m)(4)(C) of the Code, the Board may amend any provision of this Plan in any respect in its discretion. 20. Continued Employment Not Presumed. Nothing in this Plan or any document describing it nor the grant of any Option or Restricted Stock shall give any Participant the right to continue in the employment of the Company or affect the right of the Company to terminate the employment of any such person with or without cause. 21. Liability of the Company. Neither the Company, its directors, officers or employees or the Committee, nor any Subsidiary which is in existence or hereafter comes into existence, shall be liable to any Participant or other person if it is determined for any reason by the Internal Revenue Service or any court having jurisdiction that any Qualified Option granted hereunder does not qualify for tax treatment as an incentive stock option under Section 422 of the Code. 22. GOVERNING LAW. THE PLAN SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF STATE OF DELAWARE AND THE UNITED STATES, AS APPLICABLE, WITHOUT REFERENCE TO THE CONFLICT OF LAWS PROVISIONS THEREOF. 23. Severability of Provisions. If any provision of this Plan is determined to be invalid, illegal or unenforceable, such invalidity, illegality or unenforceability shall not affect the remaining provisions of the Plan, but such invalid, illegal or unenforceable provision shall be fully severable, and the Plan shall be construed and enforced as if such provision had never been inserted herein. Last Amended and Restated July 2003 9 EX-10.2 4 d13098exv10w2.txt SECOND AMENDED/RESTATED 1989 STOCK AWARDS PLAN EXHIBIT 10.2 (DEAN FOODS LOGO) DEAN FOODS COMPANY SECOND AMENDED AND RESTATED 1989 STOCK AWARDS PLAN 1. Purpose of the Plan. This Plan shall be known as the Dean Foods Company Second Amended and Restated 1989 Stock Awards Plan. The purpose of the Plan is to attract and retain the best available persons for positions of substantial responsibility and to provide incentives to such persons to promote the success of the business of Dean Foods Company and its subsidiaries. Certain options granted under this Plan are intended to qualify as "incentive stock options" pursuant to Section 422 of the Internal Revenue Code of 1986, as amended from time to time. 2. Definitions. The following definitions are applicable to the Plan: "Authorized Officers" shall have the meaning set forth in Section 18 hereof. "Award" shall have the meaning set forth in Section 6 hereof. "Board" means the Board of Directors of the Company. "Change in Control" means (1) any "person" (as such term is used in Section 13(d) of the Exchange Act but specifically excluding the Company, any Subsidiary of the Company and/or any employee benefit plan maintained by the Company or any Subsidiary of the Company) becomes the "beneficial owner" (as determined pursuant to Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing thirty percent (30%) or more of the combined voting power of the Company's then outstanding securities; or (2) during any period of two (2) consecutive years (not including any period prior to the effective date of this amendment and restatement), individuals who at the beginning of such period constitute the members of the Board and any new director, whose election to the Board or nomination for election to the Board by the Company's stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority of the Board; or (3) the Company or any Subsidiary shall merge with or consolidate into any other company, other than a merger or consolidation which would result in the holders of the voting securities of the Company outstanding immediately prior thereto holding immediately thereafter securities representing more than sixty percent (60%) of the combined voting power of the voting securities of the Company or such surviving entity (or its ultimate parent, if applicable) outstanding immediately after such merger or consolidation; or (4) the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets or such a plan is commenced. "Code" means the Internal Revenue Code of 1986, as amended from time to time, and any successor statute. "Committee" means the committee described in Section 18 that administers the Plan or, if no such committee has been appointed, the full Board. "Common Stock" means the common stock, $0.01 par value per share, of the Company. Except as otherwise provided herein, all Common Stock issued pursuant to this Plan shall have the same rights as all other issued and outstanding shares of Common Stock, including but not limited to voting rights, the right to dividends, if declared and paid, and the right to pro rata distributions of the Company's assets in the event of liquidation. "Company" means Dean Foods Company, a Delaware corporation formerly known as Suiza Foods Corporation. "Consultant" means any consultant or advisor who renders bona fide services to the Company or one of its Subsidiaries, which services are not in connection with the offer or sale of securities in a capital-raising transaction. "Date of Grant" shall have the meaning set forth in Section 7 hereof. "Divested Business Unit" shall have the meaning set forth in Section 9 hereof. "Employee" means any officer or other key employee of the Company or one of its Subsidiaries (including any director who is also an officer or key employee of the Company or one of its Subsidiaries). "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Exercise Price" shall have the meaning set forth in Section 8 hereof. "Fair Market Value" means the closing sale price (or average of the quoted closing bid and asked prices if there is no closing sale price reported) of the Common Stock on the date specified as reported by the principal national exchange or trading system on which the Common Stock is then listed or traded. If there is no reported price information for the Common Stock, the Fair Market Value will be determined by the Board or the Committee, in its sole discretion. In making such determination, the Board 2 or the Committee may, but shall not be obligated to, commission and rely upon an independent appraisal of the Common Stock. "Immediate Family Members" shall have the meaning set forth in Section 14(d) hereof. "Non-Employee Director" means an individual who is a "non-employee director" as defined in Rule 16b-3 under the Exchange Act, an "outside director" within the meaning of Treasury Regulation Section 1.162-27(e)(3) and "independent" within the meaning of the New York Stock Exchange rules. "Nonqualified Option" means any Option that is not a Qualified Option. "Option" means a stock option granted pursuant to Section 6 of this Plan. "Optionee" means any Employee, Consultant or Non-Employee Director who receives an Option. "Original Sponsor" shall have the meaning set forth in Section 3 hereof. "Participant" means any Employee, Consultant or Non-Employee Director who receives an Award pursuant to this Plan. "Qualified Option" means any Option that is intended to qualify as an "incentive stock option" within the meaning of Section 422 of the Code. "Qualifying Retirement" means retirement by a Participant from employment or other service to the Company or any Subsidiary after such Participant reaches the age of 65. "Restricted Stock" means Common Stock awarded to an Employee, Consultant or Non-Employee Director pursuant to Section 6(c) of this Plan. "Rule 16b-3" means Rule 16b-3 of the rules and regulations under the Exchange Act, as Rule 16b-3 may be amended from time to time, and any successor provisions to Rule 16b-3 under the Exchange Act. "Subsidiary" means any now existing or hereinafter organized or acquired company of which more than fifty percent (50%) of the issued and outstanding voting interests are owned or controlled directly or indirectly by the Company or through one or more Subsidiaries of the Company. "10-Percent Stockholder" shall have the meaning set forth in Section 8 hereof. 3. Term of Plan. This Plan was adopted by the Company in December 2001 in connection with the Company's acquisition of the former Dean Foods Company 3 (which company was merged into a Subsidiary of the Company now known as Dean Holding Company) (such predecessor being herein referred to as the "Original Sponsor"). Such adoption was approved by the shareholders of the Company at a special meeting of shareholders held September 21, 2001. This Plan was first adopted by the Board of Directors of the Original Sponsor on August 2, 1989. The Plan shall continue in effect until terminated pursuant to Section 18 hereof. 4. Shares Subject to the Plan. Upon completion of the acquisition of the Original Sponsor by the Company on December 21, 2001, all outstanding Awards under this Plan were automatically converted pursuant to the terms of the Agreement and Plan of Merger dated April 4, 2001 by and among the Company (then known as Suiza Foods Corporation), a Delaware corporation, Blackhawk Acquisition Corp., a Delaware corporation and Dean Foods Company, a Delaware corporation (now known as Dean Holding Company). From and after the effective date of such acquisition, the number of shares of Common Stock which may be issued pursuant to Awards granted under the Plan shall not exceed, in the aggregate, 3,789,728 shares (subject to adjustment as provided in Section 17 hereof) PLUS the number of shares that would have been issuable under any Awards that, after December 21, 2001, expire unexercised or are cancelled, terminated, surrendered or forfeited in any manner without the issuance of shares of Common Stock thereunder, which shares shall again be available for the grant of additional Awards under the Plan. Shares of Common Stock issuable hereunder may be either authorized but unissued shares, treasury shares, or a combination thereof, as the Committee shall determine. 5. Eligibility. Qualified Options may be granted under Section 6 of this Plan to such Employees of the Company or its Subsidiaries as may be determined by the Board or the Committee; other Awards may be granted under Section 6 of the Plan to such Employees, Consultants and Non-Employee Directors of the Company or its Subsidiaries as may be determined by the Board or the Committee 6. Grant of Options, SARs, Restricted Stock, Performance Shares and Other Awards. The Board or Committee may from time to time grant to eligible Employees, in accordance with this paragraph 6 and the other provisions of this Plan, Options, stock appreciation rights ("SARs"), Restricted Stock, performance share awards and other awards (any award granted under this Plan being herein referred to as an "Award"). Subject to the limitations and qualifications set forth below or elsewhere in this Plan, the Board or the Committee (or the Authorized Officers, to the extent permitted by Section 18 of this Plan) shall determine the number of Options, shares of Restricted Stock or other Awards to be granted, the number of shares subject to each Award, the Exercise Price of each Option, the vesting and exercise period of each Award and such other terms and conditions of each Award, if any, as are consistent with the provisions of this Plan. All Awards must be evidenced by a written Award agreement, signed by an authorized officer of the Company. (a) Options. Options granted under this Plan may be Qualified Options within the meaning of Section 422A of the Code or any successor provision, or 4 Non-Qualified Options; except that Qualified Options may only be granted to eligible Employees, and no Qualified Option may be granted under this Plan after July 24, 2007. In connection with the granting of Qualified Options, the aggregate Fair Market Value (determined at the Date of Grant of a Qualified Option) of the shares with respect to which Qualified Options are exercisable for the first time by an Optionee during any calendar year (under all such plans of the Optionee's employer company and its parent and subsidiary corporations as defined in Section 424(e) and (f) of the Code, or a corporation or a parent or subsidiary corporation of such corporation issuing or assuming an Option in a transaction to which Section 424(a) of the Code applies (collectively, such companies described in this sentence are hereinafter referred to as "Related Companies")) shall not exceed $100,000 or such other amount as from time to time provided in Section 422(d) of the Code or any successor provision. (b) SARs. (i) Subject to the limitations set forth herein, an SAR shall entitle its holder to receive from the Company, at the time of exercise of such right, an amount equal to the excess of the fair market value (at the date of exercise) of a share of Common Stock over a specified price fixed by the Board or the Committee multiplied by the number of shares as to which the holder is exercising the SAR. SARs may be in tandem with any previously or contemporaneously granted Option or independent of any Option. The specified price of a tandem SAR shall be the Option price of the related Option. The amount payable may be paid by the Company in Common Stock (valued at its Fair Market Value on the date of exercise), cash or a combination thereof, as the Board or the Committee may determine, which determination may take into consideration any preference expressed by the holder. (ii) To the extent a tandem SAR is exercised, the related Option will be cancelled and, to the extent the related Option is exercised, the tandem SAR will be cancelled. (c) Restricted Stock. (i) The Board or the Committee may award to any eligible Employee, Non-Employee Director or Consultant shares of Common Stock, subject to this paragraph 6(c) and such other terms and conditions as the Board or the Committee may prescribe (such shares being called "Restricted Stock"). (ii) There shall be established for each Restricted Stock Award a restriction period (the "restriction period"), of such length as shall be determined by the Board or the Committee. Shares of Restricted Stock may not be sold, assigned, transferred, pledged or otherwise encumbered, except as hereinafter provided, during the restriction period. Except for such restrictions on transfer and such other restrictions as the Committee may impose, the Participant shall have all the rights of a holder of Common Stock as to such Restricted Stock. The Board or the Committee, in its sole discretion, may permit or require the payment of any cash dividends to be deferred and, if 5 the Board or the Committee so determines, reinvested in additional Restricted Stock or otherwise invested or accruing a yield. (d) Performance Share Awards. A performance share Award shall entitle its holder to receive from the Company, following the expiration of a period of at least one fiscal year specified by the Committee or the Board (the "performance measurement period"), cash or Common Stock or a combination thereof as determined by the Committee or the Board (either at the time of grant or thereafter) in an aggregate amount based on the level of achievement during the performance measurement period of one or more Company financial performance criteria (such criteria to be determined by the Board or the Committee in its sole discretion). The aggregate amount received by a Participant shall be determined by a formula for such Participant established by the Committee or the Board not later than the ninetieth day of the performance measurement period. The formula shall establish a range between a minimum level of achievement before any amount will be received and a level of achievement at or above which the maximum potential amount will be received. (e) Other Awards. (i) Other Awards may be granted under this Plan, including, without limitation, convertible debentures, other convertible securities and other forms of Award measured in whole or in part by the value of shares of Common Stock, the performance of the Participant, or the performance of the Company, any Subsidiary or any operating unit thereof. Such Awards may be payable in Common Stock, cash or a combination thereof, and shall be subject to such restrictions and conditions as the Board or the Committee shall determine. At the time of such an Award, the Board or Committee shall, if applicable, determine a performance period and performance goals to be achieved during the performance period, subject to such later revisions as the Board or Committee shall deem appropriate to reflect significant unforeseen events such as changes in laws, regulations or accounting practices, unusual or nonrecurring items or occurrences. Following the conclusion of each performance period, the Board or Committee shall determine the extent to which performance goals have been attained or a degree of achievement between maximum and minimum levels during the performance period in order to evaluate the level of payment to be made, if any. (ii) The purchase price per share of Common Stock under other Awards involving the right to purchase Common Stock (including for this purpose the right to purchase Common Stock upon the conversion of convertible securities) shall be fixed by the Board or Committee at not less than 85% of the Fair Market Value of a share of Common Stock on the date of Award and not less than the par value of a share of Common Stock. (iii) A Participant may elect to defer all or a portion of any such Award in accordance with procedures established by the Board or Committee. Deferred amounts will be subject to such terms and conditions and shall accrue such yield thereon (which may be measured by the Fair Market Value of the Common Stock and dividends 6 thereon) as the Board or Committee may determine. Payment of deferred amounts may be in cash, Common Stock or a combination thereof, as the Board or Committee may determine. Deferred amounts shall be considered an Award under the Plan. The Board or Committee may establish a trust or trusts to hold deferred amounts or any portion thereof for the benefit of Participants. (f) Cash Payments. SARs and Nonqualified Options may, in the Board's or Committee's discretion, provide that in connection with exercises thereof the holders will receive cash payments based on formulas designed to reimburse holders for their income tax liability resulting from such exercise and the payment made pursuant to this paragraph 6(f). (g) Surrender. If so provided by the Board or Committee at or subsequent to the time of grant, an Award may be surrendered to the Company on such terms and conditions, and for such consideration, as the Board or Committee shall determine. (h) Foreign Alternatives. Without amending and notwithstanding the other provisions of this Plan, in the case of any Award to be held by any Participant who is employed outside the United States or who is a foreign national, the Committee or the Board may specify that such Award shall be made on such terms and conditions different from those specified in the Plan as may, in the judgment of the Committee or the Board, be necessary or desirable to further the purposes of the Plan. 7. Date of Grant. The date of grant of an Award granted under this Plan (the "Date of Grant") shall be the date on which the Board or the Committee grants the Award or, if the Board or the Committee so determines, the date specified by the Board or the Committee as the date the Award is to be effective. Notice of the grant shall be given to each Participant to whom an Award is granted promptly after the date of such grant. 8. Price. The exercise price for each Option (the "Exercise Price") granted pursuant to Section 6 of this Plan shall be determined by the Board or the Committee at the Date of Grant; provided, however, that the Exercise Price (a) for any Qualified Option shall not be less than 100% of the Fair Market Value of the Common Stock at the Date of Grant, and (b) for any Nonqualified Option, not less than 85% of the Fair Market Value of the Common Stock on the Date of Grant. If the Optionee owns on the Date of Grant more than 10 percent of the total combined voting power of all classes of stock of the Company or its parent or any of its Subsidiaries, as more fully described in Section 422(b)(6) of the Code or any successor provision (such stockholder is referred to herein as a "10-Percent Stockholder"), the Exercise Price for any Qualified Option granted to such Optionee shall not be less than 110% of the Fair Market Value of the Common Stock at the Date of Grant. The Board or the Committee in its discretion may award shares of Restricted Stock, Performance Share Awards and other Awards not involving the right to purchase Common Stock under Section 6 of this Plan to Participants without requiring the payment of cash consideration for such shares. 7 9. Vesting. (a) Subject to the provisions of this Plan, each Award granted under this Plan shall vest or be subject to forfeiture in accordance with the provisions set forth in the applicable Award agreement. (b) In addition to the vesting provisions contained in each Option agreement, each Option granted under the Plan shall also be subject to the following additional vesting provisions: (i) If the Company shall sell or otherwise divest all of its ownership interest in any Subsidiary or any business unit or operation (a "Divested Business Unit") owned by the Company or any Subsidiary, then the outstanding unvested Options held by each Employee of such Divested Business Unit shall automatically vest in full as of the date of the consummation of such sale or divestiture; (ii) Each unvested Option shall immediately vest in full upon the death of the holder of such Option; (iii) Each unvested Option shall immediately vest in full upon any Change in Control; (iv) Each unvested Option shall immediately vest in full upon the permanent and total disability (as defined within the meaning of Section 22(e)(3) of the Code) of the holder of such Option; and (iv) In the event of the Qualifying Retirement of an Optionee, all unvested Options held by such Optionee shall automatically vest in full as of the effective date of such Optionee's Qualifying Retirement. 10. Exercise. (a) An Award will not be deemed to be validly exercised, and shares will not be issued, until payment of any applicable Exercise Price is received by the Company. A Participant may pay the exercise price of an Award by the delivery of cash, check or wire transfer. (b) If the shares to be issued upon the exercise of an Award are covered by an effective registration statement under the Securities Act of 1933, as amended, any Award may be exercised by a broker-dealer acting on behalf of a Participant if (i) the broker-dealer has received from the Participant or the Company a fully- and duly-endorsed agreement evidencing such Award, together with instructions signed by the Participant requesting the Company to deliver the shares of Common Stock subject to such Award to the broker-dealer on behalf of the Participant and specifying the account into which such shares should be deposited, (ii) adequate provision has been made with respect to the payment of any withholding taxes due upon such exercise, and (iii) the broker-dealer and the Participant have otherwise complied with Section 220.3(e)(4) of Regulation T, 12 CFR Part 220, or any successor provision. 8 11. Expiration of Awards. If a Participant ceases to be an Employee or Non-Employee Director of the Company or any Subsidiary for any reason (including because such Participant is an Employee of a Divested Business Unit), unless the Award agreement provides otherwise, such Participant's unexercised Awards (whether vested or not) shall expire on the earlier of the expiration date contained in the corresponding Award agreement, or (a) 60 days following the date such Participant ceases to be an Employee or Non-Employee Director of the Company or any Subsidiary, if such cessation of service is not due to the death, Qualifying Retirement or permanent and total disability (within the meaning of Section 22(e)(3) of the Code) of the Participant, or (b) 12 months following the date such Participant ceases to be an Employee or Non-Employee Director of the Company or any Subsidiary, if such cessation of service is due to the death or permanent and total disability (as defined above) of the Participant. Awards held by a Participant who has retired pursuant to a Qualifying Retirement will remain exercisable until the earlier of (i) the date indicated in the applicable Award agreement, and (ii) the first anniversary of the Participant's death. Upon the death of a Participant, any vested and unexercised Award may be exercised by the Participant's estate or by a person who acquires the right to exercise such Award by bequest or inheritance or by reason of the death of the Participant, provided that such exercise occurs within both the remaining term of the Award and 12 months after the date of the Participant's death. Notwithstanding any provision of this Plan or any Award agreement to the contrary, no Participant may, under any circumstances, exercise a vested Award following termination of employment if the Participant is discharged due to the Participant's willful or intentional fraud, embezzlement or other conduct seriously detrimental to the Company or any Subsidiary. The determination of whether or not a Participant has been discharged for any of the reasons specified in the preceding sentence will be made by the Committee or the Board. 12. Option Financing. Upon the exercise of any Option granted under this Plan, the Company may, but shall not be required to, make financing available to the Participant for the purchase of shares of Common Stock pursuant to such Option on such terms as the Board or the Committee may specify. 13. Withholding of Taxes. The Board or the Committee shall make such provisions and take such steps as it may deem necessary or appropriate for the withholding of any taxes that the Company is required by any law or regulation of any governmental authority to withhold in connection with any Award including, but not limited to, withholding the issuance of all or any portion of the shares of Common Stock subject to such Award until the Participant reimburses the Company for the amount it is required to withhold with respect to such taxes, canceling any portion of such issuance in an amount sufficient to reimburse the Company for the amount it is required to withhold or taking any other action reasonably required to satisfy the Company's withholding obligation. 9 14. Conditions Upon Issuance of Shares. (a) The Company shall not be obligated to sell or issue any shares upon the exercise or vesting of any Award granted under the Plan unless the issuance and delivery of shares complies with all provisions of applicable federal and state securities laws and the requirements of any national exchange or trading system on which the Common Stock is then listed or traded. (b) As a condition to the issuance of Common Stock pursuant to any Award, the Company may require the recipient of such Award to make such representations and warranties as may be necessary to assure the availability of an exemption from the registration requirements of applicable federal and state securities laws. (c) The Company shall not be liable for refusing to sell or issue any shares pursuant to any Award if the Company cannot obtain authority from the appropriate regulatory bodies deemed by the Company to be necessary to sell or issue such shares in compliance with all applicable federal and state securities laws and the requirements of any national exchange or trading system on which the Common Stock is then listed or traded. In addition, the Company shall have no obligation to any Participant, express or implied, to list, register or otherwise qualify the shares of Common Stock covered by any Award. (d) No Participant will be, or will be deemed to be, a holder of any Common Stock subject to an Award unless and until the Award is vested, the Participant has exercised the Award, if applicable, paid any applicable Exercise Price for the subject shares of Common Stock and received the shares. Unless an award agreement provides otherwise, each unexercised Award (whether vested or not) shall be transferable only by will or the laws of descent and distribution; provided, however, that the Participant may transfer his or her unexercised Award (other than Qualified Options) without consideration to (i) the spouse, children or grandchildren of the Participant ("Immediate Family Members"), (ii) a trust or trusts, or to a guardian under the Uniform Gift to Minors Act, for the exclusive benefit of such Immediate Family Members, or (iii) a partnership or other entity in which such Immediate Family Members are the only partners, provided that subsequent transfers of transferred Awards shall be prohibited except by will or the laws of descent and distribution. Following transfer, any such Awards shall continue to be subject to the same terms and conditions as were applicable immediately prior to transfer, provided that, for purposes of each Award agreement and Section 10 hereof, the terms "Optionee" or "Participant" shall be deemed to refer to the transferee (however, the events of termination of employment, if any, set forth in the agreement and the obligation to pay withholding taxes shall continue to apply to the transferor). Notwithstanding the foregoing, Qualified Options shall be nontransferable except by will or the laws of descent and distribution, and may only be exercisable during the Participant's lifetime, by the Participant. 15. Restrictions on Shares. Shares of Common Stock issued pursuant to this Plan may be subject to restrictions on transfer under applicable federal and state securities laws. The Board may impose such additional restrictions on the ownership and 10 transfer of shares of Common Stock issued pursuant to the Plan as it deems desirable; any such restrictions shall be set forth in any Award agreement entered into hereunder. 16. Modification of Awards. At any time and from time to time, the Board or the Committee may execute an instrument providing for modification, extension or renewal of any outstanding Award, provided that no such modification, extension or renewal shall impair any Award without the consent of the holder of the Award. Notwithstanding the foregoing, in the event of a modification, extension or renewal of a Qualified Option, the Board or the Committee may increase the exercise price of such Option if necessary to retain the qualified status of such Option. Any amendment to the Plan shall apply to all Awards outstanding at the time of such amendment in addition to all Awards granted thereafter, subject to the limitations of the first sentence in this Section 16. 17. Effect of Change in Stock Subject to the Plan. In the event that each of the outstanding shares of Common Stock (other than shares held by dissenting stockholders) shall be changed into or exchanged for a different number or kind of shares of stock of the Company or of another company (whether by reason of merger, consolidation, recapitalization, reclassification, split-up, combination of shares or otherwise), or in the event a stock split or stock dividend occurs, then there shall be substituted for each share of Common Stock then subject to Awards or available for Awards the number and kind of shares of stock into which each outstanding share of Common Stock (other than shares held by dissenting stockholders) shall be so changed or exchanged, or the number of shares of Common Stock as is equitably required in the event of a stock split or stock dividend, together with an appropriate adjustment of the Exercise Price. The Board may, but shall not be required to, provide additional anti-dilution protection to a Participant under the terms of the Participant's Award agreement. 18. Administration. (a) The Plan shall be administered by the Board or by a committee of the Board comprised solely of two or more Non-Employee Directors appointed by the Board (the "Committee"). Awards may be granted under Section 6 (i) by the Board as a whole, or (ii) by majority agreement of the members of the Committee. In addition, to the extent permitted by applicable law (including the Exchange Act and the Code), the Board or the Committee may at any given time authorize an aggregate number of Awards to be granted to eligible Employees, and then authorize one or more officers of the Company (the "Authorized Officers") to allocate such Awards among eligible Employees; provided that the Authorized Officers may not allocate Awards to themselves or other executive officers, and the terms of the Awards, including the Exercise Price (if any) must be established by the Board or the Committee. Award agreements, in the forms as approved by the Board or the Committee, and containing such terms and conditions consistent with the provisions of this Plan as are determined by the Board or the Committee, may be executed on behalf of the Company by the Chairman of the Board, the President or any Vice President of the Company. The Board or the Committee shall have complete authority to construe, interpret and administer the provisions of this Plan and the provisions of the Award agreements 11 granted hereunder; to prescribe, amend and rescind rules and regulations pertaining to this Plan; to suspend or discontinue this Plan; and to make all other determinations necessary or deemed advisable in the administration of this Plan. The determinations, interpretations and constructions made by the Board or the Committee shall be final and conclusive. No member of the Board or the Committee shall be liable for any action taken, or failed to be taken, made in good faith relating to this Plan or any Award thereunder, and the members of the Board or the Committee shall be entitled to indemnification and reimbursement by the Company in respect of any claim, loss, damage or expense (including attorneys' fees) arising therefrom to the fullest extent permitted by law. (b) Subject to any applicable requirements of Rule 16b-3 or of any national exchange or trading system on which the Common Stock is then listed or traded, and subject to the stockholder approval requirements of Sections 422 and 162(m)(4)(C) of the Code, the Board may amend any provision of this Plan in any respect in its discretion. 19. Continued Employment Not Presumed. Nothing in this Plan or any document describing it nor the grant of any Award shall give any Participant the right to continue in the employment of the Company or affect the right of the Company to terminate the employment of any such person with or without cause. No Employee shall have a right to be selected as a Participant, or, having been so selected, to be selected again as a Participant. 20. Liability of the Company. Neither the Company, its directors, officers or Employees or the Committee, nor any Subsidiary which is in existence or hereafter comes into existence, shall be liable to any Participant or other person if it is determined for any reason by the Internal Revenue Service or any court having jurisdiction that any Qualified Option granted hereunder does not qualify for tax treatment as an incentive stock option under Section 422 of the Code. 21. GOVERNING LAW. THIS PLAN SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF STATE OF DELAWARE AND THE UNITED STATES, AS APPLICABLE, WITHOUT REFERENCE TO THE CONFLICT OF LAWS PROVISIONS THEREOF. 22. Severability of Provisions. If any provision of this Plan is determined to be invalid, illegal or unenforceable, such invalidity, illegality or unenforceability shall not affect the remaining provisions of the Plan, but such invalid, illegal or unenforceable provision shall be fully severable, and the Plan shall be construed and enforced as if such provision had never been inserted herein. Last Amended and Restated July 2003 12 EX-10.3 5 d13098exv10w3.txt AMENDED/RESTATED EXEC. DEFERRED COMPENSATION PLAN EXHIBIT 10.3 DEAN FOODS COMPANY EXECUTIVE DEFERRED COMPENSATION PLAN (As Restated to Incorporate Amendments 1-6) DEAN FOODS COMPANY EXECUTIVE DEFERRED COMPENSATION PLAN Table of Contents

Page ---- ARTICLE I DEFINITIONS..............................................1 ARTICLE II ELIGIBILITY..............................................3 ARTICLE III CREDITS TO ACCOUNT.......................................3 ARTICLE IV BENEFITS.................................................5 ARTICLE V PAYMENT OF BENEFITS AT TERMINATION.......................6 ARTICLE VI IN-SERVICE WITHDRAWALS...................................7 ARTICLE VII ADMINISTRATION OF THE PLAN...............................9 ARTICLE VIII CLAIMS REVIEW PROCEDURE.................................10 ARTICLE IX LIMITATION OF RIGHTS....................................11 ARTICLE X LIMITATION OF ASSIGNMENT AND PAYMENTS TO LEGALLY INCOMPETENT DISTRIBUTEE.........................11 ARTICLE XI AMENDMENT TO OR TERMINATION OF THE PLAN.................11 ARTICLE XII GENERAL AND MISCELLANEOUS...............................12

DEAN FOODS COMPANY EXECUTIVE DEFERRED COMPENSATION PLAN PREAMBLE WHEREAS, Dean Foods Company (the "Company"), a corporation formed under the laws of the State of Delaware, established the Suiza Foods Corporation Executive Deferred Compensation Plan (the "Plan") effective July 1, 1999, for the exclusive benefit of a select group of management and highly compensated employees of the Company and its affiliates to provide an additional means by which such employees may defer funds for their retirement; WHEREAS the name of the Plan was later changed to Dean Foods Company Executive Deferred Compensation Plan to reflect the new name of the Company; WHEREAS, the Plan was subsequently amended by Amendments 1-6; WHEREAS, the Company desires to restate the plan to incorporate all such amendments; NOW, THEREFORE, the Company hereby restates the Plan to read as follows: ARTICLE I DEFINITIONS 1.1 "Account" shall mean the individual bookkeeping record established by the Committee showing the monetary value of the interest in the Plan of each Participant or Beneficiary. 1.2 "Affiliate" shall mean a member of a controlled group of corporations (as defined in Section 414(b) of the Code), a group of trades or businesses (whether or not incorporated) which are under common control (as defined in Section 414(c) of the Code), or an affiliated service group (as defined in Section 414(m) of the Code) of which the Company is a member; and any entity otherwise required to be aggregated with the Company pursuant to Section 414(o) of the Code or the regulations issued thereunder; and any other entity in which the Company has an ownership interest and to which the Company elects to make participation in the Plan available. 1.3 "Annual Compensation" shall mean the total amounts paid or accrued by the Company or an Affiliate to an employee as remuneration for personal services rendered during each Plan Year, including bonuses and commissions, as reported on the employee's federal income tax withholding statement or statements (IRS Form W-2 or its subsequent equivalent), together with any amounts not includable in such employee's gross income pursuant to Sections 125 or 402(g) of the Code, and any amounts deferred by such employee pursuant to Section 3.1 hereof. The term "Annual Compensation" shall also include any amounts paid as director's fees to members of the Board or members of the board of directors of an Affiliate. -1- 1.4 "Beneficiary" shall mean the Beneficiary designated by each Participant under the 401(k) Plan; provided, however, that a Participant may designate a different Beneficiary hereunder by delivering to the Committee a written beneficiary designation, in the form provided by the Committee, and executed specifically with respect to this Plan. 1.5 "Board" shall mean the Board of Directors of the Company. 1.6 "Code" shall mean the Internal Revenue Code of 1986, as it may be amended from time to time, and the rules and regulations promulgated thereunder. 1.7 "Committee" shall mean the Compensation Committee of the Board. 1.8 "Company" shall mean Dean Foods Company or its successor or successors. 1.9 "Company Contribution Account" shall mean the subaccount of each Participant's Account showing the monetary value of the Participant's interest in the Plan which is attributable to matching or profit sharing contributions credited pursuant to Sections 3.2 and 3.3. 1.10 "Company Stock" shall mean the common stock of the Company. 1.11 "Disability" shall mean a physical or mental condition which, in the opinion of the Committee, prevents a Participant from being able to perform the substantial duties of his employment with the Company and is expected to be of long duration or to result in death. 1.12 "Effective Date" shall mean July 1, 1999. 1.13 "401(k) Plan" shall mean the Dean Foods 401(k) Plan. 1.14 "Participant" shall mean an individual who has been designated by the Committee as being eligible to participate in the Plan. 1.15 "Plan" shall mean the Dean Foods Company Executive Deferred Compensation Plan set forth in this document, as it may be amended from time to time. 1.16 "Plan Year" shall mean the twelve month period beginning each January 1 and ending each December 31, except that the first Plan Year shall commence July 1, 1999 and end December 31, 1999. 1.17 "Profit Sharing Credit" shall mean the amount contributed to the Participant's Account as a profit sharing credit pursuant to Section 3.3 hereof. 1.18 "Trust" shall mean the Dean Foods Company Executive Deferred Compensation Plan Trust. 1.19 "Valuation Date" shall mean each business day on which the financial markets are open for trading activity or such other dates as may be established by the Committee. -2- ARTICLE II ELIGIBILITY Participation in the Plan shall be made available to a select group of individuals, as determined by the Committee, who are providing services to the Company or an Affiliate in key positions of management and responsibility. Participation in the Plan shall also be made available to members of the Board and any outside directors of subsidiaries of the Company. Such individuals may elect to participate hereunder by executing a participation agreement in such form and at such time as the Committee shall require, provided that each participation agreement shall be executed no later than the day immediately preceding the Plan Year for which an individual elects to make contributions to the Plan in accordance with the provisions of Section 3.1 hereof. Notwithstanding the foregoing, in the first year in which an individual becomes eligible to participate in the Plan, he may elect to participate in the Plan by executing a participation agreement, in such form as the Committee shall require, within thirty (30) days of the date on which he is notified by the Committee of his eligibility to participate in the Plan. In such event, his election to participate in the Plan shall become effective as of the first full payroll period beginning on or after the Committee's receipt of his participation agreement. The determination as to the eligibility of any individual to participate in the Plan shall be in the sole and absolute discretion of the Committee, whose decision in that regard shall be conclusive and binding for all purposes hereunder. ARTICLE III CREDITS TO ACCOUNT 3.1 For any Plan Year, a Participant may, in the manner prescribed by the Committee, irrevocably elect to defer a portion of the Annual Compensation otherwise payable to such Participant with respect to such Plan Year, not to exceed the maximum amount established by the Committee. Any amount deferred, pursuant to this Article III, from the Annual Compensation otherwise payable to a Participant shall be transferred to the Trust and credited to the Account of such Participant as soon as practicable after the date on which such amounts would otherwise have been paid to the Participant. 3.2 The Committee shall credit a matching contribution, calculated as provided in this Section 3.2, to the Company Contribution Account of each Participant who has deferred amounts under the Plan during any Plan Year pursuant to Section 3.1 above. The matching contribution, if any, shall be computed as follows: (i) the Committee shall first compute a maximum matching contribution for each Participant for a Plan Year, on the salary deferrals made by the Participant under the 401(k) plan in which the Participant participates, using the formula applied by such 401(k) plan with respect to percentage of salary deferrals matched and the maximum percentage of compensation which is subject to the match, but using the Participant's Annual Compensation as defined in this Plan up to the maximum compensation that may be considered on behalf of a participant under such 401(k) plan (unless otherwise approved by the Board of Directors of the Company); (ii) the Committee shall then determine the amount of matching contributions made for the Participant under such 401(k) plan; and (iii) the difference between (i) and (ii), if any, is the matching contribution to be credited to the Participant's Company Contribution Account -3- under the Plan. The Committee shall credit a matching contribution, if any, to the Participant's Company Contribution Account as soon as administratively practicable following the end of the Plan Year in which the 401(k) plan year ends, and the Company shall transfer a similar amount to the Trust as soon as administratively practicable following such date. A member of the Board or an outside director of a subsidiary who participates in the Plan is not eligible for matching contributions. 3.3 For each Plan Year, the Committee shall credit each Participant's Company Contribution Account with an amount that represents a Profit Sharing Credit. The Profit Sharing Credit shall be equal in amount to the additional contribution, if any, which would have been allocated as a non-matching contribution to the Participant's account in the 401(k) plan in which the Participant is eligible to participate, if the Participant had not elected to defer, pursuant to this Plan, Annual Compensation that otherwise would have been paid during the plan year of the 401(k) plan which ends in the Plan Year. The Committee shall credit the Profit Sharing Credit to the Company Contribution Account of each Participant entitled thereto as soon as administratively practicable following the end of the Plan Year. A member of the Board or an outside director of a subsidiary who participates in the Plan is not eligible for a Profit Sharing Credit. 3.4 At the time of making the deferrals elections described in Section 3.1 and at such other times as is allowed by the Committee, the Participant shall designate, on a form provided by the Committee, the types of investments, including life insurance policies, in which the Participant's Account will be deemed to be invested for purposes of determining the amount of earnings to be credited to that Account. On a quarterly or other basis selected by the Committee, the Committee shall credit to each Participant's Account an amount equal to the interest, earnings or losses that would have resulted to the Account if the amounts credited to the Account were invested as elected by the Participant. If the Participant designates a deemed investment in a life insurance policy, the rate of earnings to be credited to such Participant's Account shall be as set forth in a split-dollar life insurance agreement or other agreement concerning such a policy. 3.5 In addition to the other investments which the Participant may designate in which such Participant's Account shall be deemed to be invested for the purpose of determining the amount of earnings to be credited to that Account, a Participant may designate that all or a portion of such Participant's bonus be deemed to be invested in Company stock. If a Participant makes such an election, the Committee shall credit to the Participant's Account the number of shares that could have been purchased on the open market on a date and at a time selected by the Company which is not more than two business days after the bonus is determined by the Company, but applying a 15% discount to the purchase price. If the Participant makes such a designation with respect to a bonus, such designation shall remain in force throughout the Participant's participation in the Plan and the Participant shall not be entitled to change such designation. A Participant who makes such a designation with respect to bonuses paid in one year can make another investment designation for bonuses paid in other years. 3.6 At any time, the Company may, in its sole discretion, credit an amount on behalf of a particular Participant to his or her account. The crediting of such an amount shall be evidenced by providing the Participant a notice or statement specifying the amount of the credit. -4- Thereafter, the amount credited to the Participant's Account shall be subject to all of the same terms and provisions as amounts credited to the Account under Sections 3.1 through 3.4 of the Plan. ARTICLE IV BENEFITS 4.1 After the death of a Participant, the Beneficiary of such Participant shall be entitled to the entire value of all amounts credited to such Participant's Account, determined as of the Valuation Date coincident with or preceding the date of distribution, including any additional amount credited to such Participant's Account as a result of life insurance proceeds payable on the Participant's death. 4.2 After the Disability of a Participant, such Participant shall be entitled to the entire value of all amounts credited to such Participant's Account, determined as of the Valuation Date coincident with or preceding the date of Disability. Such amount shall be payable to the Participant at the time and in the manner determined by the Committee. 4.3 After a Participant's employment terminates or such Participant ceases to be a member of the Board or a board of directors of a subsidiary for any reason other than death or Disability, such Participant shall be entitled to the entire value of all amounts credited to the Account of such Participant, determined as of the Valuation Date coincident with or preceding the date of distribution, except that the Participant shall only be entitled to the vested portion, if any, of his Company Contribution Account. The vested portion of a Participant's Company Contribution Account shall be determined by applying the Participant's vesting percentage calculated pursuant to the terms of the 401(k) Plan. In addition to crediting service with Related Employers, as that term is defined in the 401(k) Plan, the Company will credit service with organizations and their predecessors in which the Company owns an interest but which do not qualify as Related Employers. 4.4 If a Participant has designated that all or a portion of a bonus that otherwise would be paid to such Participant shall be deferred pursuant to the Plan and deemed to be invested in Company Stock, then the following rules shall apply to that portion of the Participant's Account: (a) If the Participant becomes entitled to a distribution from the Plan and such distribution is as a result of the Participant's termination of employment because of death, Disability, or retirement on or after age 65, then such Participant shall be entitled to a distribution of the portion of his Account which is deemed to be invested in Company Stock either in shares of Company Stock or in a cash payment equal to the value of such Company Stock, determined as of the Valuation Date coincident with or preceding the date of distribution. (b) If a Participant is entitled to a distribution for a reason other than death, Disability, or retirement on or after age 65, or if a Participant elects to take an in-service withdrawal as authorized in Article VI, the Participant shall be entitled to -5- receive Company Stock that has been credited to the Participant's account for the number of years in the schedule below, calculated as of the date of the termination or request for withdrawal, as the case may be (or a cash payment equal to the value of such shares), in the percentage set forth below:

Vested Percentage Number of Years ----------------- --------------- 85% less than one year 92.5% at least one but less than two years 100% two or more years

In the case of an in-service withdrawal, the reductions and limitations of Article VI shall apply to the amount determined pursuant to this Section 4.4(b). ARTICLE V PAYMENT OF BENEFITS AT TERMINATION 5.1 In the case of a Participant who terminates employment with the Company or ceases to be a member of the Board or an outside director of a subsidiary of the Company, the amount credited to the Participant's Account (provided it is more than $25,000) shall be paid in cash (except as otherwise provided in Section 4.4), to the Participant, at the time the distribution of the Account is to commence, from among the following optional forms of benefit as elected by the Participant on the form provided by the Company upon his or her initial participation in the Plan: (1) a lump sum distribution; (2) substantially equal annual installments over five (5) years; (3) substantially equal annual installments over ten (10) years; or (4) substantially equal annual installments over fifteen (15) years. If a portion of the Participant's Account is invested in Company Stock, and an installment form of payment is elected, then the distribution shall be deemed to be made on a pro rata basis out of the other investment options in which amounts credited to a Participant's Account are deemed to be invested first, and then, after all such other amounts are distributed, from the portion of the Participant's Account which is deemed to be invested in Company Stock. Notwithstanding the Participant's distribution election, if the amount credited to a Participant's Account is $25,000 or less, at the time distribution of the Account is to commence, payment will be made in a lump sum, and even if installment payments have commenced under this Section 5.1, at such time as the value of such remaining amounts is $25,000 or less, all remaining amounts credited to a Participant's Account shall be distributed in a lump sum. Payment shall commence as soon as practicable following the Participant's termination of employment with the Company or termination as a member of the Board or a director of a subsidiary of the Company, or, if so elected by the Participant in the Participant's deferral election form provided by the Committee, as soon as practicable during the calendar year following the year in which such event occurs. If installment payments are made, the unpaid -6- balance of the Participant's Account shall continue to share in the income and losses attributable thereto, in accordance with the provisions of the Trust, during the period for which installment payments are made. A Participant may modify the optional form of benefit that he or she has previously elected, as long as he or she provides the Committee with written notice at least one (1) year in advance of the effective date of the change. 5.2 Payment of a Participant's benefit on account of death shall be made in a lump sum in cash or, to the extent that Section 4.4 applies, in shares of Company Stock. Payment of a Participant's death benefit shall be made to the Beneficiary of such Participant as soon as practicable following the Committee's receipt of proper notice of such Participant's death. 5.3 Notwithstanding the provisions of Sections 5.1 or 5.2, the benefits payable hereunder may be paid before they would otherwise be payable if, based on a change in the federal or applicable state tax or revenue laws, a published ruling or similar announcement issued by the Internal Revenue Service, a regulation issued by the Secretary of the Treasury, a decision by a court of competent jurisdiction involving a Participant or a Beneficiary, or a closing agreement made under Section 7121 of the Code that is approved by the Internal Revenue Service and involves a Participant, the Committee determines that a Participant has or will recognize income for federal or state income tax purposes with respect to amounts that are or will be payable under the Plan before they otherwise would be paid. The amount of any payments pursuant to this Section 5.3 shall not exceed the lesser of: (a) the amount in the Participant's Account or (b) the amount of taxable income with respect to which the tax liability is assessed or determined. 5.4 The payment of benefits under the Plan shall begin at the date specified in accordance with the provisions of Sections 5.1 and 5.2 hereof; provided that, in case of administrative necessity, the starting date of payment of benefits may be delayed up to thirty (30) days as long as such delay does not result in the Participant or Beneficiary receiving the distribution in a different taxable year than if no such delay had occurred. ARTICLE VI IN-SERVICE WITHDRAWALS 6.1 (HARDSHIP WITHDRAWALS): In the event of an unforeseeable emergency, a Participant may make a request to the Committee for a withdrawal from the Account of such Participant. For purposes of this Section, the term "unforeseeable emergency" shall mean a severe financial hardship to the Participant resulting from a sudden and unexpected illness or accident of the Participant or of a dependent (as defined in Section 152(a) of the Code) of the Participant, loss of the Participant's property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. Any determination of the existence of an unforeseeable emergency and the amount to be withdrawn on account thereof shall be made by the Committee, in its sole and absolute discretion. However, notwithstanding the foregoing, a withdrawal will not be permitted to the extent that the financial hardship is or may be relieved: (i) through reimbursement or compensation by insurance or otherwise; (ii) by liquidation of the Participant's assets, to the extent that liquidation of such assets would not itself cause severe financial hardship; or (iii) by -7- cessation of deferrals under this Plan. In no event shall the need to send a Participant's child to college or the desire to purchase a home be deemed to constitute an unforeseeable emergency. No member of the Committee shall vote or decide upon any matter relating to the determination of the existence of such member's own financial hardship or the amount to be withdrawn on account thereof. A request for a hardship withdrawal must be made in the manner prescribed by the Committee, and must be expressed as a specific dollar amount. The amount of a hardship withdrawal may not exceed the amount required to meet the severe financial hardship. All hardship withdrawals shall be paid in a lump sum in cash or, to the extent Section 4.4 applies, in shares of Company Stock. 6.2 (SCHEDULED IN-SERVICE WITHDRAWALS): On a form prescribed by the Committee, a Participant, prior to the beginning of any Plan Year, can elect to receive that Plan Year's deferrals made pursuant to Section 3.1, matching contributions credited pursuant to Section 3.2, any additional credits made that Plan Year pursuant to Sections 3.3, 3.5 or 3.6, and earnings thereon, at a date specified by the Participant. Such date shall be no earlier than two (2) years from the last day of the Plan Year for which the deferrals and matching and other credits are made. A Participant may extend the scheduled in-service withdrawal date for any Plan Year, as long as the Participant provides advance written notice to the Committee at least one year before the scheduled payment date, and such extension is for a period of not less than one year from the previous, scheduled in-service withdrawal date. Any withdrawal under this Section 6.2 shall be made in a single lump sum, in cash, or to the extent Section 4.4 applies, in shares of Company Stock. 6.3 (UNSCHEDULED IN-SERVICE WITHDRAWALS): Notwithstanding any other provision herein to the contrary, a Participant who is actively employed or has started receiving installment payments, (as provided in Section 5.1 above) may elect to accelerate the date on which payment of his benefit hereunder would otherwise be made, using a form provided by and filed with the Committee. Upon such election, the amount to which such Participant is entitled shall be any whole percentage, from ten percent (10%) to ninety percent (90%) of the benefit otherwise payable hereunder, which shall be distributed in one lump sum, in cash (or in shares of Company Stock to the extent that Section 4.4 applies), as soon as administratively practicable after the early distribution election is made. Ten percent (10%) of any amounts withdrawn from such Participant's Account shall be forfeited as of the date of such distribution. If, at the time of such election, the Participant is employed by the Company or an Affiliate, such Participant shall be prohibited from participating in the Plan for the balance of the Plan Year and no amounts shall be credited to his or her Account pursuant to Section 3.1 hereunder during this period. The Participant may again elect to participate in the Plan as of the first full payroll period after the last day of that Plan Year by executing a new participation agreement within the time prior to such date established by the Committee. 6.4 Withdrawals shall be charged pro rata to the investment options in which amounts credited to a Participant's Account are deemed to be invested pursuant to Section 3.4 hereof. If a withdrawal exceeds the amount of a Participant's Account which is deemed to be invested pursuant to Section 3.4 hereof, then such withdrawals shall be charged to the portion of the Participant's Account which is deemed to be invested in Company Stock as provided in Section 3.5 hereof. -8- ARTICLE VII ADMINISTRATION OF THE PLAN 7.1 The Plan shall be administered by the Committee. The members of the Committee shall not receive compensation with respect to their services for the Committee. The members of the Committee shall serve without bond or security for the performance of their duties hereunder unless applicable law makes the furnishing of such bond or security mandatory or unless required by the Company. Any member of the Committee may resign by delivering a written resignation to the Company and to the other members of the Committee. 7.2 The Committee shall perform any act which the Plan authorizes expressed by a vote at a meeting or in a writing signed by a majority of its members without a meeting. The Committee may, by a writing signed by a majority of its members, appoint any member of the Committee to act on behalf of the Committee. Any person who is a member of the Committee shall not vote or decide upon any matter relating solely to such member or vote in any case in which the individual right or claim of such member to any benefit under the Plan is particularly involved. If, in any matter or case in which a person is so disqualified to act, the remaining persons constituting the Committee cannot resolve such matter or case, the Board will appoint a temporary substitute to exercise all the powers of the disqualified person concerning the matter or case in which such person is disqualified. 7.3 The Committee may designate in writing other persons to carry out its responsibilities under the Plan, and may remove any person designated to carry out its responsibilities under the Plan by notice in writing to that person. The Committee may employ persons to render advice with regard to any of its responsibilities. All usual and reasonable expenses of the Committee shall be paid by the Company. The Company shall indemnify and hold harmless each member of the Committee from and against any and all claims and expenses (including, without limitation, attorneys' fees and related costs), in connection with the performance by such member of duties in that capacity, other than any of the foregoing arising in connection with the willful neglect or willful misconduct of the person so acting. 7.4 The Committee shall establish rules and procedures, not contrary to the provisions of the Plan, for the administration of the Plan and the transaction of its business. The Committee shall determine the eligibility of any individual to participate in the Plan, shall interpret the Plan in its sole and absolute discretion, and shall determine all questions arising in the administration, interpretation and application of the Plan. All determinations of the Committee shall be conclusive and binding on all employees, Participants and Beneficiaries. 7.5 Any action to be taken hereunder by the Company shall be taken by resolution adopted by the Board or by a committee thereof; provided, however, that by resolution, the Board or a committee thereof may delegate to any officer of the Company the authority to take any such actions hereunder. -9- ARTICLE VIII CLAIMS REVIEW PROCEDURE 8.1 In the event that a Participant or Beneficiary is denied a claim for benefits under this Plan (the "Claimant"), the Committee shall provide to the Claimant written notice of the denial which shall set forth: (a) the specific reason or reasons for the denial; (b) specific references to pertinent Plan provisions on which the Committee based its denial; (c) a description of any additional material or information needed for the Claimant to perfect the claim and an explanation of why the material or information is needed; (d) a statement that the Claimant may: (i) request a review upon written application to the Committee; (ii) review pertinent Plan documents; and (iii) submit issues and comments in writing; and (e) that any appeal the Claimant wishes to make of the adverse determination must be in writing and received by the Committee within sixty (60) days after receipt of the Committee's notice of denial of benefits. The Committee's notice must further advise the Claimant that failure to appeal the action to the Committee in writing within the sixty (60) day period will render the Committee's determination final, binding, and conclusive. 8.2 If the Claimant should appeal to the Committee, the Claimant, or the duly authorized representative of such Claimant, may submit, in writing, whatever issues and comments such Claimant, or the duly authorized representative of such Claimant, feels are pertinent. The Committee shall re-examine all facts related to the appeal and make a final determination as to whether the denial of benefits is justified under the circumstances. The Committee shall advise the Claimant in writing of its decision on the appeal, the specific reasons for the decision, and the specific Plan provisions on which the decision is based. The notice of the decision shall be given within sixty (60) days of the Claimant's written request for review, unless special circumstances (such as a hearing) would make the rendering of a decision within the sixty (60) day period infeasible, but in no event shall the Committee render a decision regarding the denial of a claim for benefits later than 120 days after its receipt of a request for review. If an extension of time for review is required because of special circumstances, written notice of the extension shall be furnished to the Claimant prior to the date the extension period commences. The Committee's notice of denial of benefits shall identify the address to which the Claimant may forward an appeal. -10- ARTICLE IX LIMITATION OF RIGHTS The establishment of this Plan shall not be construed as giving to any Participant, employee of the Company or any person whomsoever, any legal, equitable or other rights against the Company, or its officers, directors, agents or shareholders, or as giving to any Participant or Beneficiary any equity or other interest in the assets or business of the Company or shares of Company stock or as giving any employee the right to be retained in the employment of the Company. All employees of the Company and Participants shall be subject to discharge to the same extent they would have been if this Plan had never been adopted. ARTICLE X LIMITATION OF ASSIGNMENT AND PAYMENTS TO LEGALLY INCOMPETENT DISTRIBUTEE 10.1 No benefits which shall be payable under the Plan to any person shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge, and any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, charge or otherwise dispose of the same shall be void. No benefit shall in any manner be subject to the debts, contracts, liabilities, engagements or torts of any person, nor shall it be subject to attachment or legal process for or against any person, except to the extent required by law. 10.2 Whenever any benefit which shall be payable under the Plan is to be paid to or for the benefit of any person who is then a minor or determined by the Committee, on the basis of qualified medical advice, to be incompetent, the Committee need not require the appointment of a guardian or custodian, but shall be authorized to cause the same to be paid over to the person having custody of the minor or incompetent, or to cause the same to be paid to the minor or incompetent without the intervention of a guardian or custodian, or to cause the same to be paid to a legal guardian or custodian of the minor or incompetent, if one has been appointed, or to cause the same to be used for the benefit of the minor or incompetent. ARTICLE XI AMENDMENT TO OR TERMINATION OF THE PLAN The Committee reserves the right at any time to amend or terminate the Plan in whole or in part. No amendment shall have the effect of retroactively depriving Participants or Beneficiaries of rights already accrued under the Plan. Upon termination of the Plan, the Committee may, in its sole and absolute discretion, and notwithstanding any other provision hereunder to the contrary, direct that all benefits hereunder will be paid as soon as administratively practicable thereafter. -11- ARTICLE XII GENERAL AND MISCELLANEOUS 12.1 Severability. In the event that any provision of this Plan shall be declared illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining provisions of this Plan but shall be fully severable and this Plan shall be construed and enforced as if said illegal or invalid provision had never been inserted herein. 12.2 Construction. The Section headings and numbers are included only for convenience of reference and are not to be taken as limiting or extending the meaning of any of the terms and provisions of this Plan. Whenever appropriate, words used in the singular shall include the plural or the plural may be read as the singular. 12.3 Governing Law. The validity and effect of this Plan and the rights and obligations of all persons affected hereby shall be construed and determined in accordance with the laws of the State of Texas unless superseded by federal law. 12.4 No Requirement to Fund. The Company is not required to set aside any assets for payment of the benefits provided under this Plan. A Participant shall have no security interest in any amounts credited hereunder on such Participant's behalf. It is the Company's intention that this Plan be construed as a plan which is unfunded and maintained primarily for the purpose of providing deferred compensation for a select group of highly compensated employees. 12.5 Taxes. All amounts payable hereunder shall be reduced by any and all federal, state and local taxes imposed upon the Participant or a Beneficiary which are required to be paid or withheld by the Company. IN WITNESS WHEREOF, Dean Foods Company, the Company, has caused its corporate seal to be affixed hereto and these presents to be duly executed in its name and behalf by its proper officers thereunto duly authorized this 25th day of November, 2002. COMPANY: DEAN FOODS COMPANY By: /s/ Michelle P. Goolsby ---------------------------- Executive Vice President and General Counsel -12- EX-10.4 6 d13098exv10w4.txt AMENDED/RESTATED 1997 EMPLOYEE STOCK PURCHASE PLAN EXHIBIT 10.4 FOURTH AMENDED AND RESTATED 1997 EMPLOYEE STOCK PURCHASE PLAN OF DEAN FOODS COMPANY I. INTRODUCTION The purpose of the Fourth Amended and Restated 1997 Employee Stock Purchase Plan (the "Plan") is to make available to eligible employees of Dean Foods Company (the "Company"), and certain related companies a means of purchasing shares of Dean Common Stock through voluntary, regular payroll deductions. The Plan is not subject to the provisions of the Employee Retirement Income Security Act of 1974, but is intended to qualify as an "Employee Stock Purchase Plan" under Section 423 of the Internal Revenue Code of 1986, as amended (the "Code"). The Plan shall be administered, interpreted and construed in accordance with Section 423 of the Code. Participation in the Plan is entirely voluntary, and the Company makes no recommendations to employees as to whether they should or should not participate. II. DEFINITIONS 2.1. DEFINITIONS. The following words and phrases shall have the following meanings: "ADMINISTRATOR" means the entity or person designated to act as Administrator of the Plan pursuant to Section 6.1. "BASE COMPENSATION" means gross compensation for the relevant pay period, including overtime pay, but excluding all bonuses, severance pay, any extraordinary pay, expense allowances/reimbursements, moving expenses and income from restricted stock or stock option awards. For these purposes, gross compensation includes any amount that would be included in taxable income but for the fact that it was contributed to a qualified plan pursuant to an elective deferral under Section 401(k) of the Code or contributed under a salary reduction agreement pursuant to Section 125 of the Code. "BOARD" means the Board of Directors of the Company. "BROKER" means a duly licensed securities dealer, broker or agent designated to act as Broker of the Plan pursuant to Section 6.2. "COMMITTEE" means the Compensation Committee of the Board, which, to the extent required by Rule 16b-3, shall consist entirely of non-employee directors (as defined in Rule 16b-3). Page 1 of 9 "COMPANY" means Dean Foods Company (formerly known as Suiza Foods Corporation). "COMMON STOCK" means Dean's Common Stock, par value $.01 per share. "CODE" has the meaning set forth in Article I. "DEAN COMPANY" means the Company or any Related Corporation. "ELIGIBLE EMPLOYEE" means any employee of any Dean Company, excluding any employee (a) who has been employed by a Dean Company for less than 60 days, (b) whose customary employment with the employee's Employer is 20 hours or less per week, (c) whose customary employment with the employee's Employer is not for more than five months in any calendar year, or (d) who immediately after the grant of an option under this Plan to the employee would (in accordance with the provisions of Sections 423 and 424(d) of the Code) own stock possessing 5% or more of the total combined voting power or value of all classes of stock of the "employer corporation" or of its "Parent Corporations" or "Subsidiary Corporations," as defined in Section 424 of the Code. "EMPLOYER" means, with respect to any Participant, the Dean Company of which the Participant is an Eligible Employee. "FAIR MARKET VALUE" means, with respect to a share of Common Stock, the last sales price (or average of the quoted closing bid and asked prices if there is no closing sales price reported) of a share of Common Stock as reported by the New York Stock Exchange (or by the principal national stock exchange on which the Common Stock is then listed) on the date of valuation, if such date is a business day, or the immediately preceding business day, if such date is not a business day. "INDEMNIFIED PERSON" has the meaning set forth in SECTION 9.2. "INITIAL OPTION PERIOD" means the Option Period commencing on the Plan Start Date and ending on July 31, 1997. "1933 ACT" means the Securities Act of 1933, as amended. "OPTION" means an option granted pursuant to this Plan at the beginning of each Option Period to acquire Common Stock. "OPTION EXERCISE DATE" means the last day of each Option Period. "OPTION PERIOD" means each calendar month during the period beginning on the Plan Start Date and ending on June 30, 2007, unless the Plan is terminated earlier. Page 2 of 9 "PAYROLL DEDUCTION ACCOUNT" means, with respect to each Participant, the amounts credited to the Participant's account from the payroll deductions made by the Participant under this Plan, less any amounts withdrawn from such account (for payment of Common Stock, payment to the Participant, payment of withholding and other taxes or amounts or payment of other obligations or amounts). "PARTICIPANT" has the meaning set forth in SECTION 3.2. "PLAN" means the Third Amended and Restated 1997 Employee Stock Purchase Plan of Dean Foods Company as the same may be amended from time to time. "PLAN START DATE" means July 1, 1997. "RELATED CORPORATION" means any present or future corporation which would be a "subsidiary corporation" or "parent corporation" of the Company as such terms are defined in Section 424 of the Code. "RULE 16B-3" means Rule 16b-3 under the 1933 Act. "STOCK ACCOUNT" means, with respect to each Participant, the number of shares of Common Stock credited under this Plan to the Participant's account. Dividends with respect to shares of Common Stock credited to a Participant's Stock Account shall be paid to the Participant and shall not be held in either the Participant's Stock Account or Payroll Deduction Account. III. PARTICIPATION 3.1. ELIGIBLE EMPLOYEES. Subject to ARTICLE VIII, all Eligible Employees as of the beginning of each Option Period may participate in the Plan for such Option Period at their election. 3.2. PARTICIPATION PROCEDURES. If an Eligible Employee does not otherwise have an election to become a Participant in effect, each Eligible Employee choosing to participate in the Plan (herein called a "Participant") during an Option Period shall enroll as a Participant in the Plan by filing with the Participant's Employer a completed enrollment form (authorized by the Administrator) no later than 15 days prior to the beginning of any Option Period (including the Initial Option Period). 3.3. EMPLOYEE CONTRIBUTIONS. Subject to other limitations provided in this Plan, a Participant may contribute under the Plan a minimum of one percent (1%) and a maximum of fifteen percent (15%) of the Participant's Base Compensation. Contributions may be made only through regular payroll deductions, net of any tax or other withholdings. An enrollment form and payroll deduction authorization will remain effective for each Option Period until terminated in writing by a Participant or until the Participant is no longer Page 3 of 9 eligible to participate in the Plan. The payroll deduction authorization may be reduced or terminated at any time by the Participant's written request submitted to the Participant's Employer; provided, however, that a Participant may not recommence or increase payroll deductions until the beginning of the next Option Period, nor may a Participant make more than one revision of the Participant's payroll deduction authorization in any Option Period. Termination of deductions shall constitute withdrawal from the Plan as set forth in Section 3.5 and cancellation of any outstanding Options of the Participant. Reduction or termination of deductions will become effective as soon as practicable after a Participant's written request is received by the Participant's Employer. 3.4. PARTICIPANT RESTRICTION. Notwithstanding any provisions of this Plan to the contrary, no Participant will be granted an option under this Plan which would permit the Participant's rights to purchase shares of stock under all employee stock purchase plans of the Company and "parent corporations" and "subsidiary corporations" (within the meaning of Section 424 of the Code) to accrue at a rate which exceeds $25,000 of the Fair Market Value of such stock (determined at the time each Option is "Granted" (within the meaning of Code Section 423(b)(8)) for each calendar year during which any Option granted to such Participant is outstanding at any time, as provided in Sections 423 and 424(d) of the Code. 3.5. WITHDRAWAL FROM PLAN. A Participant may withdraw from the Plan (thereby canceling all Options then in existence) at any time by giving written notice to the Participant's Employer and to the Administrator. The Administrator shall, as soon as practicable after receiving written notice of a Participant's withdrawal from the Plan, cause to be delivered to the Participant a check representing any funds held to the credit of the Participant's Payroll Deduction Account. A Participant who has withdrawn from the Plan may thereafter reenter the Plan by following the procedure described under Section 3.2, but not sooner than the beginning of the next Option Period after the Participant has withdrawn from participation. 3.6. TERMINATION OF PARTICIPANT'S EMPLOYMENT. Upon termination of a Participant's employment from the Dean Companies for any reason, including death or disability, the Participant's Payroll Deduction Account in the Plan shall be closed, and all existing Options held by the Participant shall be canceled. The Administrator shall, as soon as practicable after termination of a Participant's employment, cause to be delivered to the Participant or the Participant's estate or the Participant's designated beneficiary as provided below, as applicable, a check representing any funds held to the credit of the Participant's Payroll Deduction Account. In the event of a Participant's death, the Participant's Payroll Deduction Account shall be delivered and paid to the estate of such Participant or to a beneficiary designated by the Participant in writing on a form approved by the Administrator. IV. OPTIONS TO PURCHASE STOCK; MAXIMUM SHARES AVAILABLE 4.1. MAXIMUM SHARES. The maximum number of shares which shall be issued under the Plan, subject to adjustment upon changes in Common Stock under Article VII, shall be 1,500,000 shares. Page 4 of 9 4.2. OFFERINGS. Subject to Article XIII, the Company shall make consecutive offerings on the beginning of each Option Period to Participants to purchase Common Stock as long as shares authorized remain available for issuance. Each offering as of the beginning of each Option Period shall be the total number of shares authorized under Section 4.1, less the number of shares issued by purchases of Common Stock under Section 5.5 in prior Option Periods. V. PURCHASE OF STOCK PURSUANT TO OPTIONS 5.1. PAYROLL DEDUCTION ACCOUNTS. Each Dean Company will deduct from its Participants' paychecks such amounts as have been authorized by the Participants and, promptly after the end of each month, remit to the Administrator all amounts so deducted during the month, together with a report showing each Participant and the amounts allocable to the Payroll Deduction Account of each Participant. The Administrator shall credit each Participant's Payroll Deduction Account with the amount of such deposits, and shall reduce the Participant's Payroll Deduction Account by the purchase price of all Common Stock purchased by the Participant under this Plan and by any other withdrawals from the Participant's Payroll Deduction Account. The Plan, through its Administrator, shall purchase for the Stock Accounts of the Participants shares of Common Stock with funds received under the Plan. 5.2. STOCK ACCOUNTS. The Broker will open and maintain a Stock Account in the name of each Participant to which will be credited all shares of Common Stock purchased for the Participant's benefit. All shares held under the Plan will be registered in the name of the Plan or the Broker, and will remain so registered until the shares are delivered to the Participant. The Participant shall have the right to sell all or any part of the shares held in the Participant's Stock Account, pursuant to procedures established by the Broker. 5.3. GRANT OF OPTIONS AND PURCHASE. Subject to ARTICLE VIII, each person who is a Participant on the first day of an Option Period will as of the first day of such Option Period be granted an Option for such period. Such Option will be for the number of shares of Common Stock to be determined by dividing (a) the balance in the Participant's Payroll Deduction Account on the Option Exercise Date, by (b) the purchase price per share of Common Stock determined under Section 5.4 below. The number of shares of Common Stock receivable by each Participant upon exercise of an Option for an Option Period shall be reduced, on a substantially proportionate basis, in the event that the number of shares then available under the Plan is otherwise insufficient. 5.4. PURCHASE PRICE. On Option Exercise Dates occurring prior to January 1, 2001, the purchase price of each share of Common Stock purchased pursuant to the exercise of an Option shall be .90 multiplied by the Fair Market Value of the Common Stock on the last day of the Option Period. On Option Exercise Dates occurring after January 1, 2001, the purchase price of each share of Common Stock purchased pursuant to the exercise of an Option shall be 0.85 multiplied by the Fair Market Value of the Common Stock on the last day of the Option Period. Page 5 of 9 5.5. EXERCISE OF OPTIONS. Each person who is a Participant in the Plan on each Option Exercise Date will be deemed to have exercised on that Option Exercise Date the Option granted to the Participant for that Option Period. Upon such exercise, the balance of the Participant's Payroll Deduction Account shall be applied to the purchase of the number of shares of Common Stock determined under Section 5.3, and the amount of shares of Common Stock purchased shall be credited to the Participant's Stock Account. In the event that the balance of the Participant's Payroll Deduction Account following an Option Period is in excess of the total purchase price of the shares of Common Stock so purchased, the balance of the Payroll Deduction Account shall be returned to the Participant. Notwithstanding anything herein to the contrary, the Company's obligation to sell and deliver shares of Common Stock under the Plan is subject to the approval required of any governmental authority in connection with the authorization, issuance, sale or transfer of such shares, to any requirements of the New York Stock Exchange or any national securities exchange applicable thereto, and to compliance by the Company with other applicable legal requirements in effect from time to time, including without limitation any applicable tax withholding requirements. 5.6. NO ASSIGNMENT OF PARTICIPANT'S INTEREST IN PLAN. A Participant may not assign, sell, transfer, pledge, hypothecate or alienate any Options or other interests in or rights under the Plan. Options under the Plan are exercisable by a Participant during the Participant's lifetime only by the Participant. All employees shall have the same rights and privileges under the Plan. 5.7. VESTING. Each Participant will immediately acquire full ownership of all shares of Common Stock at the time such shares are credited to the Participant's Stock Account. 5.8. DIVIDENDS, SPLITS AND DISTRIBUTIONS. Any stock dividends or stock splits in respect of shares held in the Participant's Stock Account will be credited to the Participant's account automatically. Any distributions to holders of Common Stock or other securities or rights to subscribe for additional shares of Common Stock will be handled in the same manner as a cash dividend, unless the Participant instructs the Administrator to the contrary. 5.9. VOTING RIGHTS. The Broker will deliver to each Participant as promptly as practicable, by mail or otherwise, all notices of meetings, proxy statements and other material distributed by the Company to its stockholders. The full shares of Common Stock in each Participant's Stock Account will be voted in accordance with the Participant's signed proxy instructions duly delivered to the Broker or pursuant to any other method of voting available to holders of Common Stock. There will be no charge to the Participant for the Administrator's retention or delivery of stock certificates, or in connection with notices, proxies or other such material. 5.10. NO INTEREST TO BE PAID. No interest will be paid to or credited to the Payroll Deduction Accounts or Stock Accounts of the Participants. Page 6 of 9 VI. ADMINISTRATION OF PLAN 6.1. THE ADMINISTRATOR AND THE COMMITTEE. To carry out the purposes of the Plan, the Committee shall appoint an Administrator. The Administrator may be any company or individual that the Committee deems qualified, including the Company. The Administrator shall be responsible for the implementation of the Plan, including allocation of funds to the Payroll Deduction Accounts and distribution of purchased Common Stock to the Stock Accounts, and keeping adequate and accurate records of such activities for the Participants. The Committee shall be entitled to adopt and apply guidelines and procedures consistent with the purposes of the Plan. In order to effectuate the purposes of the Plan, the Committee shall have the discretionary authority to construe and interpret the Plan, to supply any omissions therein, to reconcile and correct any errors or inconsistencies, to decide any questions in the administration and application of the Plan, and to make equitable adjustments for any mistakes or errors made in the administration of the Plan, and all such actions or determinations made by the Committee, and the application of rules and regulations to a particular case or issue by the Committee, in good faith, shall not be subject to review by anyone, but shall be final, binding and conclusive on all persons ever interested hereunder. 6.2. BROKER. The Administrator may, in its discretion, with the consent and approval of the Committee, appoint a Broker. The Broker may be any company or individual that the Committee deems qualified; provided, however, that the Broker shall be a licensed security dealer, broker, or agent authorized to make purchases and sales of Common Stock. 6.3. REPORTING TO PARTICIPANTS. The Broker will make available to each Participant an accounting of the Participant's Stock Account. VII. ADJUSTMENT UPON CHANGES IN COMMON STOCK 7.1. CHANGES IN COMMON STOCK. If any change is made in the Common Stock (through merger, consolidation, reorganization, recapitalization, stock dividend, dividend in property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or otherwise), the Administrator will make appropriate adjustments in the number of shares and price per share of Common Stock subject to the Plan or to any Option granted under the Plan. 7.2. DISSOLUTION; MERGER; CAPITAL REORGANIZATION; ETC. In the event of (i) a dissolution or liquidation of the Company; (ii) a merger or consolidation in which the Company is not the surviving corporation, or a reverse merger in which the Company is the surviving corporation but the shares of Common Stock by virtue of the merger are converted into other property, whether in the form of securities, cash or otherwise; or (iii) any other capital reorganization in which more than 50 percent of the shares of Common Stock entitled to vote are exchanged, the Plan shall terminate, unless another corporation assumes the responsibility of Page 7 of 9 continuing the operation of the Plan or the Committee determines in its discretion that the Plan shall nevertheless continue in full force and effect. If the Committee elects to terminate the Plan, the Administrator shall send to each Participant cash in an amount equal to the funds held to the credit of such Participant's Payroll Deduction Account. 7.3. COMPANY'S RIGHT TO RESTRUCTURE, ETC. The grant of any right to a Participant pursuant to the Plan shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structure or to merge or to consolidate or to dissolve, liquidate or sell, or transfer all or any part of its business or assets. VIII. AMENDMENT; TERMINATION OF PLAN 8.1. AMENDMENT. The Company, acting through the Committee, reserves the right to amend or terminate the Plan at any time or times; provided, however, any amendment that would require the consent of stockholders under applicable law, rule or regulation (including, without limitation, the Code, the Exchange Act or any self regulatory organization such as a national securities exchange), will not be made unless such stockholders' consent is obtained. 8.2. TERMINATION. In addition, the Plan shall terminate automatically on the tenth anniversary of the Plan Start Date, or on any Option Exercise Date when Participants become entitled to purchase a number of shares greater than the number of reserved shares remaining available for purchase, subject to the allocation of remaining shares pursuant to the last sentence of Section 5.3. Upon termination of the Plan, all amounts held in the Payroll Deduction Accounts shall, to the extent not used to purchase shares of Common Stock, be refunded to the Participants entitled thereto. IX. MISCELLANEOUS 9.1. EXPENSES OF PLAN. No fees or commissions will be charged for the purchase of Common Stock by Participants under the Plan. The Broker's brokerage commissions incurred in connection with sales of Common Stock by Participants or other transactions in Participants' Stock Accounts will be paid by the Participants. If the Company is acting as Administrator, no expenses of administration will be charged to the Participants. 9.2. INDEMNIFICATION. In the event and to the extent not insured against under any contract of insurance with an insurance company, the Company shall indemnify and hold harmless each "Indemnified Person," as defined below, against any and all claims, demands, suits, proceedings, losses, damages, interest, penalties, expenses (specifically including, but not limited to, counsel fees to the extent approved by the Board or otherwise provided by law, court costs and other reasonable expenses of litigation), and liability of every kind, including amounts paid in settlement, with the approval of the Board, arising from any action or cause of action related to the Indemnified Person's act or acts or failure to act. Such indemnity shall apply regardless of whether such claims, demands, suits, proceedings, losses, damages, interest, Page 8 of 9 penalties, expenses and liability arise in whole or in part from (a) the negligence or other fault of the Indemnified Person, or (b) from the imposition on such Indemnified Person of any civil penalties or excise taxes pursuant to the Code or any other applicable laws; except when the same is judicially determined to be due to gross negligence, fraud, recklessness, or willful or intentional misconduct of such Indemnified Person. "Indemnified Person" shall mean each member of the Board, the Administrator, each member of the Committee and each other employee of any Dean Company who is allocated fiduciary responsibility hereunder. 9.3. NO CONTRACT OF EMPLOYMENT INTENDED. The granting of any rights to an Eligible Employee under this Plan shall not constitute an agreement or understanding, express or implied, on the part of any Dean Company, to employ such Eligible Employee for any specified period. 9.4. GOVERNING LAW. The construction, validity and operation of this Plan shall be governed by the laws of the State of Delaware. 9.5. SEVERABILITY OF PROVISIONS. If any provision of this Plan is determined to be invalid, illegal or unenforceable, such invalidity, illegality or unenforcability shall not affect the remaining provisions of this Plan, but such invalid, illegal or unenforceable provisions shall be fully severable, and the Plan shall be construed and enforced as if such provision had never been inserted herein. 9.6. NO LIABILITY OF THE COMPANY. Neither the Company, its directors, officers or employees of the Committee, nor any Related Corporation which is in existence or hereafter comes into existence, shall be liable to any Participant or other person if it is determined for any reason by the Internal Revenue Service or any court having jurisdiction that the Plan does not qualify under Section 423 of the Code. The Company has caused this Plan to be adopted effective as of the Plan Start Date. Last Amended and Restated: August 2003 Page 9 of 9 EX-10.10 7 d13098exv10w10.txt AMENDED/RESTATED CREDIT AGREEMENT EXHIBIT 10.10 FOR INFORMATIONAL PURPOSES ONLY CONFORMED COPY (through and including Fifth Amendment) - -------------------------------------------------------------------------------- CREDIT AGREEMENT Among DEAN FOODS COMPANY (formerly known as SUIZA FOODS CORPORATION), as Borrower, CERTAIN OF THE DOMESTIC SUBSIDIARIES OF THE BORROWER FROM TIME TO TIME PARTIES HERETO, as Guarantors, THE LENDERS PARTIES HERETO, WACHOVIA BANK, NATIONAL ASSOCIATION (formerly known as FIRST UNION NATIONAL BANK), as Administrative Agent, and BANK ONE, NA, as Syndication Agent and WACHOVIA SECURITIES, LLC (formerly known as FIRST UNION SECURITIES, INC.) and BANC ONE CAPITAL MARKETS, INC., as Co-Lead Arrangers and Joint Book Runners and FLEET NATIONAL BANK, HARRIS TRUST AND SAVINGS BANK and SUNTRUST BANK, as Co-Documentation Agents Dated as of July 31, 2001 (as amended as of December 31, 2003) - -------------------------------------------------------------------------------- TABLE OF CONTENTS

Page ---- ARTICLE I DEFINITIONS.............................................................................................2 Section 1.1 Defined Terms...............................................................................2 Section 1.2 Other Definitional Provisions..............................................................34 Section 1.3 Accounting Terms...........................................................................35 ARTICLE II THE LOANS; AMOUNT AND TERMS..........................................................................35 Section 2.1 Revolving-1 Loans...........................................................................35 Section 2.2 Swingline Loan Subfacility..................................................................38 Section 2.4 Tranche A-1 Term Loan Facility.............................................................46 Section 2.5 Tranche B-1 Term Loan Facility.............................................................47 Section 2.7 Reduction of the Revolving-1 Commitments...................................................50 Section 2.8 Prepayments................................................................................51 Section 2.9 Minimum Borrowing Amounts and Principal Amounts of Tranches................................54 Section 2.10 Interest; Interest Payment Dates..........................................................54 Section 2.11 Conversion Options........................................................................55 Section 2.12 Computation of Interest and Fees..........................................................55 Section 2.13 Pro Rata Treatment and Payments...........................................................56 Section 2.14 Non-Receipt of Funds by the Administrative Agent..........................................58 Section 2.15 Inability to Determine Interest Rate......................................................59 Section 2.16 Illegality................................................................................59 Section 2.17 Requirements of Law.......................................................................60 Section 2.18 Indemnity.................................................................................61 Section 2.19 Taxes.....................................................................................62 Section 2.20 Indemnification; Nature of Issuing Lender's Duties........................................64 Section 2.21 Defaulting Lenders; Limitation on Claims..................................................65 Section 2.22 Replacement of Lenders....................................................................66 ARTICLE III REPRESENTATIONS AND WARRANTIES......................................................................69 Section 3.1 Financial Condition.........................................................................70 Section 3.2 No Change...................................................................................70 Section 3.3 Corporate Existence; Compliance with Law....................................................70 Section 3.4 Corporate Power; Authorization; Enforceable Obligations.....................................71 Section 3.5 No Legal Bar; No Default....................................................................71 Section 3.6 No Material Litigation......................................................................71 Section 3.7 Government Acts.............................................................................71 Section 3.8 Margin Regulations..........................................................................72 Section 3.9 ERISA.......................................................................................72 Section 3.10 Environmental Matters......................................................................72 Section 3.11 Purpose of Loans...........................................................................73 Section 3.12 Subsidiaries...............................................................................74 Section 3.13 Ownership..................................................................................74 Section 3.14 Indebtedness...............................................................................74 Section 3.15 Taxes......................................................................................74 Section 3.16 Intellectual Property......................................................................74

i Section 3.17 Solvency...................................................................................75 Section 3.18 Investments................................................................................75 Section 3.19 Location of Collateral.....................................................................75 Section 3.20 No Burdensome Restrictions.................................................................75 Section 3.21 Brokers' Fees..............................................................................76 Section 3.22 Labor Matters..............................................................................76 Section 3.23 Security Documents.........................................................................76 Section 3.24 Consummation of Acquisition................................................................76 Section 3.25 Material Contracts.........................................................................76 Section 3.26 Accuracy and Completeness of Information...................................................77 Section 3.27 Interest Rate Protection...................................................................77 ARTICLE IV CONDITIONS PRECEDENT.................................................................................77 Section 4.1 Conditions to Closing Date..................................................................77 Section 4.2 Conditions to Initial Extensions of Credit..................................................78 Section 4.3 Conditions to All Extensions of Credit......................................................85 ARTICLE V AFFIRMATIVE COVENANTS..................................................................................86 Section 5.1 Financial Statements........................................................................86 Section 5.2 Certificates; Other Information.............................................................88 Section 5.3 Payment of Obligations......................................................................89 Section 5.4 Conduct of Business and Maintenance of Existence............................................89 Section 5.5 Maintenance of Property, Insurance..........................................................89 Section 5.6 Inspection of Property; Books and Records; Discussions......................................90 Section 5.7 Notices.....................................................................................90 Section 5.8 Environmental Laws..........................................................................92 Section 5.9 Financial Covenants........................................................................93 Section 5.10 Obligations Regarding Subsidiaries; Additional Subsidiary Guarantors......................94 Section 5.11 Compliance with Law.......................................................................94 Section 5.12 Pledged Assets............................................................................94 Section 5.13 Additional Credit Parties.................................................................95 Section 5.14 Amendments, Modifications.................................................................96 Section 5.15 Further Assurances........................................................................96 ARTICLE VI NEGATIVE COVENANTS....................................................................................96 Section 6.1 Indebtedness................................................................................96 Section 6.2 Liens.......................................................................................98 Section 6.3 Nature of Business..........................................................................98 Section 6.4 Consolidation, Merger, Sale or Purchase of Assets, etc......................................98 Section 6.5 Advances, Investments and Loans.............................................................99 Section 6.6 Transactions with Affiliates...............................................................100 Section 6.7 Ownership of Subsidiaries; Restrictions....................................................100 Section 6.8 Fiscal Year; Organizational Documents; Material Contracts..................................100 Section 6.9 Limitation on Actions......................................................................101 Section 6.10 Restricted Payments.......................................................................102 Section 6.11 Payments of Subordinated Debt, etc........................................................102 Section 6.12 Sale Leasebacks...........................................................................103 Section 6.13 Use of Proceeds...........................................................................103 Section 6.14 Senior Notes..............................................................................103 ii ARTICLE VII EVENTS OF DEFAULT...................................................................................103 Section 7.1 Events of Default..........................................................................103 Section 7.2 Acceleration; Remedies.....................................................................106 ARTICLE VIII THE AGENT..........................................................................................107 Section 8.1 Appointment................................................................................107 Section 8.2 Delegation of Duties.......................................................................107 Section 8.3 Exculpatory Provisions.....................................................................108 Section 8.4 Reliance by Administrative Agent...........................................................108 Section 8.5 Notice of Default..........................................................................108 Section 8.6 Non-Reliance on Administrative Agent and Other Lenders.....................................109 Section 8.7 Indemnification............................................................................109 Section 8.8 Administrative Agent in Its Individual Capacity............................................110 Section 8.9 Successor Administrative Agent.............................................................110 Section 8.10 Responsibility of other Agents............................................................110 ARTICLE IX MISCELLANEOUS........................................................................................110 Section 9.1 Amendments, Waivers and Release of Collateral..............................................110 Section 9.2 Notices....................................................................................113 Section 9.3 No Waiver; Cumulative Remedies.............................................................113 Section 9.4 Survival of Representations and Warranties.................................................114 Section 9.5 Payment of Expenses and Taxes..............................................................114 Section 9.6 Successors and Assigns; Participations; Purchasing Lenders.................................114 Section 9.7 Adjustments; Set-off.......................................................................118 Section 9.8 Table of Contents and Section Headings.....................................................119 Section 9.9 Counterparts...............................................................................119 Section 9.10 Effectiveness.............................................................................119 Section 9.11 Severability..............................................................................120 Section 9.12 Integration...............................................................................120 Section 9.13 Governing Law.............................................................................120 Section 9.14 Consent to Jurisdiction and Service of Process............................................120 Section 9.15 Confidentiality...........................................................................121 Section 9.16 Acknowledgments...........................................................................121 Section 9.17 Waivers of Jury Trial.....................................................................121 ARTICLE X GUARANTY..............................................................................................122 Section 10.1 The Guaranty..............................................................................122 Section 10.2 Bankruptcy................................................................................123 Section 10.3 Nature of Liability.......................................................................123 Section 10.4 Independent Obligation....................................................................124 Section 10.5 Authorization.............................................................................124 Section 10.6 Reliance..................................................................................124 Section 10.7 Waiver....................................................................................124 Section 10.8 Limitation on Enforcement.................................................................125 Section 10.9 Confirmation of Payment...................................................................126 iii

SCHEDULES Schedule 1.1(a) Account Designation Letter Schedule 1.1(b) Investments Schedule 1.1(c) Liens Schedule 1.1(d) Mandatory Cost Formulae Schedule 2.1(a) Lenders and Commitments Schedule 2.1(b)(i) Form of Notice of Borrowing Schedule 2.1(d) Form of Revolving-1 Note Schedule 2.2(d) Form of Swingline Note Schedule 2.4(c) Form of Tranche A-1 Term Note Schedule 2.5(c) Form of Tranche B-1 Term Note Schedule 2.11 Form of Notice of Conversion/Extension Schedule 2.19 2.19 Certificate Schedule 3.1 Material Contingencies Not Otherwise Shown on Financial Statements Schedule 3.6 Litigation Schedule 3.12 Subsidiaries Schedule 3.16 Intellectual Property Schedule 3.19(a) Real Property Owned by Borrower and its Restricted Subsidiaries Schedule 3.19(b) Locations of Tangible Personal Property Schedule 3.19(c) Chief Executive Offices Schedule 3.22 Labor Matters Schedule 3.25 Material Contracts Schedule 4.1(b) Form of Secretary's Certificate Schedule 4.2(f)(ii) Significant Mortgaged Properties Schedule 4.2(j) Form of Solvency Certificate Schedule 5.5(b) Insurance Schedule 5.13 Form of Joinder Agreement Schedule 6.1(b) Indebtedness Schedule 9.2 Lenders' Lending Offices Schedule 9.6(c) Form of Commitment Transfer Supplement

iv FOR INFORMATIONAL PURPOSES ONLY CREDIT AGREEMENT, dated as of July 31, 2001, among DEAN FOODS COMPANY (formerly known as Suiza Foods Corporation), a Delaware corporation (the "Borrower"), those Domestic Subsidiaries of the Borrower identified as a "Guarantor" on the signature pages hereto and such other Domestic Subsidiaries of the Borrower as may from time to time become a party hereto (collectively, the "Guarantors" and individually, a "Guarantor"), the several banks and other financial institutions as may from time to time become parties to this Agreement (collectively, the "Lenders"; and individually, a "Lender"), WACHOVIA BANK, NATIONAL ASSOCIATION (formerly known as First Union National Bank), a national banking association, as administrative agent for the Lenders hereunder (in such capacity, the "Administrative Agent"), BANK ONE, NA, a national banking association, as syndication agent for the Lenders hereunder (in such capacity, the "Syndication Agent") and FLEET NATIONAL BANK, HARRIS TRUST AND SAVINGS BANK and SUNTRUST BANK, as co-documentation agents for the Lenders hereunder. * WITNESSETH: WHEREAS, the Borrower proposes: (a) to acquire Dean Foods Company, a Delaware corporation (the "Acquired Company") and its Subsidiaries pursuant to a series of transactions in which the Acquired Company will be merged (the "Merger") with and into a wholly-owned Subsidiary of the Borrower and the former shareholders of the Acquired Company will receive a combination of both stock and cash; (b) to acquire all partnership and other ownership interests currently held by Dairy Farmers of America, Inc. ("DFA") in Suiza Dairy Group, L.P., pursuant to a series of transactions in which DFA will receive cash, operating assets, and certain contingent obligations of the Borrower; (c) to refinance certain existing funded debt of the Acquired Company, the Borrower and their respective Subsidiaries (excluding outstanding senior unsecured notes and certain other indebtedness); (d) to obtain senior bank credit facilities in connection therewith which will also be used to (i) provide for working capital and other general corporate purposes of the Borrower and its Subsidiaries; (ii) to pay accrued quarterly dividends to the shareholders of the Acquired Company as agreed between the Borrower and the Acquired Company; and (iii) to pay fees, costs and expenses incurred in connection with the foregoing transactions; WHEREAS, in connection with the foregoing, the Borrower has requested that the Lenders make loans and other financial accommodations to the Borrower as more particularly described herein; and WHEREAS, the Lenders have agreed to make such loans and other financial accommodations to the Borrower on the terms and conditions contained herein. NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the parties hereto hereby agree as follows: - -------- * This Credit Agreement draft has been conformed to incorporate the provisions of the First, Second, Third, Fourth and Fifth Amendments thereto, as well as certain other purely historical changes (e.g., the name change of Suiza Foods Corporation to Dean Foods Company). 1 ARTICLE I DEFINITIONS SECTION 1.1 DEFINED TERMS. As used in this Agreement, terms defined in the preamble and recitals to this Agreement have the meanings therein indicated, and the following terms have the following meanings: "Account Designation Letter" shall mean the Notice of Account Designation Letter dated the Funding Date from the Borrower to the Administrative Agent substantially in the form attached hereto as Schedule 1.1(a). "Acquired Company" shall have the meaning set forth in the first recital above. "Acquisition" shall mean the acquisition of the Acquired Company and its Subsidiaries by the Borrower and/or one of its wholly-owned Subsidiaries pursuant to the terms of the Acquisition Documents. "Acquisition Documents" shall mean the Merger Agreement, the DFA Agreement, and each other document executed and delivered in connection with the consummation of the Acquisition as amended, modified or supplemented from time to time. "Additional Credit Party" shall mean each Person that becomes a Guarantor by execution of a Joinder Agreement in accordance with Section 5.10. "Administrative Agent" shall have the meaning set forth in the preamble to this Agreement and any successors in such capacity. "Administrative Agent's Correspondent" shall mean Wachovia Bank, National Association, London Branch, or any other financial institution designated by the Administrative Agent to act as its correspondent hereunder with respect to the distribution and payment of Alternative Currency Loans. "Affiliate" shall mean as to any Person, any Person that directly or indirectly controls, or is under common control with, or is controlled by, such Person and, if such Person is an individual, any member of the immediate family (including parents, spouse, children and siblings) of such individual and any trust whose principal beneficiary is such individual or one or more members of such immediate family and any Person who is controlled by any such member or trust. As used in this definition, "control" (including, with its correlative meanings, "controlled by" and "under common control with") shall mean possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise); provided that, in any event, any Person that owns directly or indirectly securities having 10% or more of the voting power for the election of directors or other governing body of a corporation or 10% or more of the partnership or other ownership interests of any other Person (other than as a limited partner of such other Person) will be deemed to control such corporation or other Person. Notwithstanding the foregoing, (a) no individual shall be an Affiliate solely by reason of his or 2 her being a director, officer or employee of the Borrower or any of its Subsidiaries, and (b) none of the Restricted Subsidiaries of the Borrower shall be considered Affiliates. For purposes hereof, all Unrestricted Subsidiaries shall be considered Affiliates. "Agents" shall mean a collective reference to the Administrative Agent and the Syndication Agent. "Agreement" shall mean this Credit Agreement, as amended, modified, supplemented or restated from time to time in accordance with its terms. "Alternate Base Rate" shall mean, for any day, a rate per annum equal to the greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. For purposes hereof: "Prime Rate" shall mean, at any time, the rate of interest per annum publicly announced from time to time by First Union at its principal office as its prime rate. Each change in the Prime Rate shall be effective as of the opening of business on the day such change in the Prime Rate occurs. The parties hereto acknowledge that the rate announced publicly by First Union as its Prime Rate is an index or base rate and shall not necessarily be its lowest or best rate charged to its customers or other banks; and "Federal Funds Effective Rate" shall mean, for any day, the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published on the next succeeding Business Day, the average of the quotations for the day of such transactions received by the Administrative Agent from three federal funds brokers of recognized standing selected by it. If for any reason the Administrative Agent shall have determined (which determination shall be conclusive in the absence of manifest error) that it is unable to ascertain the Federal Funds Effective Rate, for any reason, including the inability or failure of the Administrative Agent to obtain sufficient quotations in accordance with the terms thereof, the Alternate Base Rate shall be determined without regard to clause (b) of the first sentence of this definition, as appropriate, until the circumstances giving rise to such inability no longer exist. Any change in the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective on the opening of business on the date of such change. "Alternate Base Rate Loans" shall mean Loans that bear interest at an interest rate based on the Alternate Base Rate. "Alternative Currency" shall mean (a) euro and (b) with the prior written consent of each Lender with a Multi-currency Revolving-1 Subcommitment, any other lawful currency (other than Dollars); provided that such currency is freely transferable and convertible into Dollars and freely available to each Lender with a Multi-currency Revolving-1 Subcommitment in the London interbank deposit market. "Alternative Currency Amount" shall mean, with respect to each Alternative Currency Loan, the amount of such Alternative Currency which is equivalent to the principal amount in Dollars of such Loan at the most favorable spot exchange rate determined by the Administrative Agent to be available to it at approximately 11:00 a.m. (Charlotte time) two (2) Business Days 3 before such Loan is issued or extended (or to be issued or extended). When used with respect to any other sum expressed in Dollars, "Alternative Currency Amount" shall mean the amount of such Alternative Currency which is equivalent to the amount so expressed in Dollars at the most favorable spot exchange rate determined by the Administrative Agent to be available to it at the relevant time. "Alternative Currency Loan" shall mean any Multi-currency Revolving-1 Loan denominated in an Alternative Currency. "Applicable Percentage" shall mean, for any day, the rate per annum set forth below opposite the applicable level (the "Level") then in effect, it being understood that the Applicable Percentage for (a) Revolving-1 Loans and Tranche A-1 Term Loans which are Alternate Base Rate Loans shall be the percentage set forth under the column "Alternate Base Rate Margin for Revolving-1 Loans and Tranche A-1 Term Loans", (b) Revolving-1 Loans and Tranche A-1 Term Loans which are LIBOR Rate Loans shall be the percentage set forth under the column "LIBOR Rate Margin for Revolving-1 Loans, Tranche A-1 Term Loans and the Letter of Credit Fee", (c) Tranche B-1 Term Loans which are Alternate Base Rate Loans shall be the percentage set forth under the column "Alternate Base Rate Margin for Tranche B-1 Term Loans," (d) Tranche B-1 Term Loans which are LIBOR Rate Loans shall be the percentage set forth under the column "LIBOR Rate Margin for Tranche B-1 Term Loans", (e) the Letter of Credit Fee shall be the percentage set forth under the column "LIBOR Rate Margin for Revolving-1 Loans, Tranche A-1 Term Loans and Letter of Credit Fee" and (f) the Commitment Fee shall be the percentage set forth under the column "Commitment Fee":

LIBOR Rate Margin for Alternate Revolving-1 Base Rate Loans, Margin for Tranche Alternate Revolving-1 A-1 Term Base Rate LIBOR Rate Loans and Loans and Margin for Margin for Leverage Tranche Letter of Tranche Tranche Commitment Level Ratio A-1 Term Loans Credit Fee B-1 Term Loans B-1 Term Loans Fee ----- -------- -------------- ---------- -------------- -------------- ---------- I > or = 3.50 to 0.750% 2.000% 0.750% 2.000% 0.375% 1.00 < 3.50 to 1.00 but II > or = 3.00 to 0.500% 1.750% 0.750% 2.000% 0.375% 1.00 < 3.00 to 1.00 but III > or = 2.50 to 0.250% 1.500% 0.750% 2.000% 0.300% 1.00 IV < 2.50 to 1.00 0.000% 1.250% 0.750% 2.000% 0.250%

4 The Applicable Percentage shall, in each case, be determined and adjusted quarterly on the date (each an "Interest Determination Date") three (3) Business Days after the earlier of the date on which the Borrower provides or is required to provide to the Administrative Agent the annual or quarterly financial information and certifications in accordance with the provisions of Sections 5.1(a), 5.1(b) and 5.2(c). Such Applicable Percentage shall be effective from such Interest Determination Date until the next such Interest Determination Date. If the Borrower shall fail to provide the annual or quarterly financial information and certifications in accordance with the provisions of Sections 5.1(a), 5.1(b) and 5.2(c), the Applicable Percentage from such Interest Determination Date shall, on the date five (5) Business Days after the date by which the Borrower was so required to provide such financial information and certifications to the Administrative Agent and the Lenders, be based on Level I until such time as the date which is three (3) Business Days after the date such information and certifications are provided, whereupon the Level shall be determined by the then current Leverage Ratio; provided, that with respect to each LIBOR Rate Loan denominated in an Alternative Currency, the Applicable Percentage shall be increased by an amount equal to the applicable Mandatory Cost, as determined pursuant to the relevant formula set forth on Schedule 1.1(d) hereto. "Approved Fund" means with respect to any Lender under the Tranche A-1 Term Loan or the Tranche B-1 Term Loan that is a fund that invests in bank loans, any other fund that invests in commercial loans and is managed or advised by the same investment advisor as such Lender or by an Affiliate of such investment advisor. "Arrangers" shall mean a collective reference to FUSI and BOCM and "Arranger" shall mean either of them. "Asset Disposition" shall mean the disposition of any or all of the assets (including, without limitation, the Capital Stock of a Subsidiary or any ownership interest in a joint venture) of any Credit Party or any Restricted Subsidiary whether by sale, lease, transfer or otherwise; provided, however, the term "Asset Disposition" shall not include (i) Specified Sales, (ii) the sale, lease or transfer of assets permitted by Section 6.4(c)(iii) or (iv) hereof, or (iii) any Equity Issuance. "Attributed Principal Amount" means, on any day, with respect to any Permitted Receivables Financing entered into by any Credit Party, the aggregate amount (with respect to any such transaction, the "Invested Amount") paid to, or borrowed by, such Person as of such date under such Permitted Receivables Financing, minus the aggregate amount received by the applicable Receivables Financier and applied to the reduction of the Invested Amount under such Permitted Receivables Financing. "Bank One" shall mean Bank One, NA and its successors and assigns. 5 "Bankruptcy Code" shall mean the Bankruptcy Code in Title 11 of the United States Code, as amended, modified, succeeded or replaced from time to time. "BOCM" shall mean Banc One Capital Markets, Inc. "Borrower" shall have the meaning set forth in the first paragraph of this Agreement. "Borrowing Date" shall mean, in respect of any Loan, the date such Loan is made. "Business" shall have the meaning set forth in Section 3.10. "Business Day" shall mean a day (a) 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; (b) if such day relates to any interest rate settings as to a LIBOR Rate Loan denominated in Dollars, any fundings, disbursements, settlements and payments in Dollars in respect of any such LIBOR Rate Loan, or any other dealings in Dollars to be carried out pursuant to this Agreement in respect of any such LIBOR Rate Loan, on which dealings in deposits in Dollars are conducted by and between banks in the London interbank eurodollar market; (c) if such day relates to any interest rate settings as to a LIBOR Rate Loan denominated in euros, any fundings, disbursements, settlements and payments in euros in respect of any such LIBOR Rate Loan, or any other dealings in euro to be carried out pursuant to this Agreement in respect of any such LIBOR Rate Loan, which is a TARGET Day; (d) if such day relates to any interest rate settings as to a LIBOR Rate Loan denominated in a currency other than Dollars or euros, on which dealings in deposits in the relevant currency are conducted by and between banks in the London or other applicable offshore interbank market for such currency; and (e) if such day relates to any fundings, disbursements, settlements and payments in a currency other than Dollars or euro in respect of a LIBOR Rate Loan denominated in a currency other than Dollars or euro, or any other dealings in any currency other than Dollars or euro to be carried out pursuant to this Agreement in respect of any such LIBOR Rate Loan (other than any interest rate settings), on which banks are open for foreign exchange business in the principal financial center of the country of such currency. "Capital Lease" shall mean any lease of property, real or personal, the obligations with respect to which are required to be capitalized on a balance sheet of the lessee in accordance with GAAP. 6 "Capital Lease Obligations" shall mean the aggregate principal component of capitalized lease obligations relating to a Capital Lease determined in accordance with GAAP. "Capital Stock" shall mean (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), (iv) in the case of a limited liability company, membership interests and (v) 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. "Captive Insurance Company" shall mean any Subsidiary of the Borrower that is organized and subject to regulation as an insurance company, or the principal purpose of which is to procure insurance for the benefit of the Borrower and/or its Restricted Subsidiaries. "Cash Equivalents" shall mean (i) securities issued directly or fully guaranteed or insured by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States of America is pledged in support thereof) having maturities of not more than twelve months from the date of acquisition ("Government Obligations"), (ii) U.S. dollar denominated (or foreign currency fully hedged) time deposits, certificates of deposit, Eurodollar time deposits and Eurodollar certificates of deposit of (y) any domestic commercial bank of recognized standing having capital and surplus in excess of $250,000,000 or (z) 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 Bank"), in each case with maturities of not more than one year from the date of acquisition, (iii) commercial paper and variable or fixed rate notes issued by any Approved Bank (or by the parent company thereof) or any commercial paper or 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 nine months of the date of acquisition, (iv) repurchase agreements with a bank or trust company (including a Lender) or a 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 of America, (v) obligations of any state of the United States or any political subdivision thereof rated A-1 (or the equivalent thereof) or better by S&P or P-1 (or the equivalent thereof) or better by Moody's having maturities of not more than one year from the date of acquisition thereof, and (vi) auction preferred stock rated in the highest short-term credit rating category by S&P or Moody's. "Change of Control" shall mean (a) any Person or two or more Persons acting in concert (other than Mr. Gregg L. Engles or any other director or officer of the Borrower as of the Funding Date), shall have acquired "beneficial ownership," directly or indirectly, of, or shall have acquired by contract or otherwise, or shall have entered into a contract or arrangement that, upon consummation, will result in its or their acquisition of, control over, Voting Stock of the Borrower (or other securities convertible into such Voting Stock) representing 20% or more of the combined voting power of all Voting Stock of the Borrower, or (b) during any period of up to 25 consecutive months, commencing after the Funding Date, individuals who at the beginning of such 25 month period were directors of the Borrower (together with any new director whose election by the Borrower's Board of Directors or whose nomination for election by the 7 Borrower's shareholders was approved by 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 Borrower then in office. As used herein, "beneficial ownership" shall have the meaning provided in Rule 13d-3 of the Securities and Exchange Commission under the Securities Act of 1934. "Closing Date" shall mean the date of this Agreement. "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time. "Collateral" shall mean a collective reference to the collateral which is identified in, and at any time will be covered by, the Security Documents. "Commitment" shall mean the Revolving-1 Commitment, the LOC Commitment, the Swingline Commitment, the Tranche A-1 Term Loan Commitment and the Tranche B-1 Term Loan Commitment, individually or collectively, as appropriate. "Commitment Fee" shall have the meaning set forth in Section 2.6(a). "Commitment Percentage" shall mean the Dollar Revolving-1 Commitment Percentage, the Multi-currency Revolving-1 Commitment Percentage, the Tranche A-1 Term Loan Commitment Percentage and/or the Tranche B-1 Term Loan Commitment Percentage, as appropriate. "Commitment Period" shall mean the period from and including the Funding Date to but not including the Revolving-1 Commitment Termination Date. "Commitment Transfer Supplement" shall mean a Commitment Transfer Supplement, substantially in the form of Schedule 9.6(c). "Commonly Controlled Entity" shall mean an entity, whether or not incorporated, which is under common control with the Borrower within the meaning of Section 4001 of ERISA or is part of a group which includes the Borrower and which is treated as a single employer under Section 414 of the Code. "Compliance Certificate" shall mean the officer's certificate delivered pursuant to Section 5.2(c). "Consolidated Capital Expenditures" shall mean for any period, all expenditures of the Borrower and its Restricted Subsidiaries on a consolidated basis for such period which in accordance with GAAP would be classified as capital expenditures, including without limitation, Capital Lease Obligations. "Consolidated EBITDA" shall mean, for any period, the sum of (i) Consolidated Net Income for such period, plus (ii) an amount which, in the determination of Consolidated Net 8 Income for such period, has been deducted for (A) Consolidated Interest Expense, (B) total federal, state, local and foreign income, value added and similar taxes, (C) depreciation, amortization expense and other noncash charges, (D) pro forma cost savings add-backs resulting from non-recurring charges related to the Acquisition and other acquisitions to the extent permitted hereunder, as permitted pursuant to Regulation S-X of the Securities Exchange Act of 1934 or as approved by the Agents, and (E) other adjustments to Consolidated EBITDA reasonably acceptable to the Agents. Except as otherwise provided herein, the applicable period shall be for the four consecutive quarters ending as of the date of computation. "Consolidated Interest Expense" shall mean, for any period, all interest expense of the Borrower and its Restricted Subsidiaries, including the interest component under Capital Leases and the implied interest component under Permitted Receivables Financings, plus net amounts payable (or minus net amounts receivable) under Hedging Agreements, minus interest income for such period, in each case as determined in accordance with GAAP. Except as otherwise provided herein, the applicable period shall be for the four consecutive quarters ending as of the date of computation. "Consolidated Net Income" shall mean, for any period, net income (excluding extraordinary items) after taxes for such period of the Borrower and its Restricted Subsidiaries on a consolidated basis, as determined in accordance with GAAP, including net income attributable to Permitted Acquisitions after giving effect to such Permitted Acquisitions on a Pro Forma Basis. Except as otherwise provided herein, the applicable period shall be for the four consecutive quarters ending as of the date of computation. "Consolidated Net Worth" shall mean, as at any date, the sum for the Borrower and its Subsidiaries (including minority interests in any Person owned by the Borrower or any of its Subsidiaries), determined on a consolidated basis without duplication in accordance with GAAP, of (a) the amount of Capital Stock plus (b) the amount of additional paid in capital plus (c) the amount of retained earnings (or, in the case of any retained earnings deficit, minus the amount of such deficit). "Contractual Obligation" shall mean, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or undertaking to which such Person is a party or by which it or any of its property is bound. "Credit Documents" shall mean this Agreement, each of the Notes, any Joinder Agreement, the Letters of Credit, the LOC Documents and the Security Documents. "Credit Party" shall mean any of the Borrower or the Guarantors. "Credit Party Obligations" shall mean, without duplication, (i) all of the obligations of the Credit Parties to the Lenders (including the Issuing Lender) and the Administrative Agent, whenever arising, under this Agreement, the Notes or any of the other Credit Documents (including, but not limited to, any interest accruing after the occurrence of a filing of a petition of bankruptcy under the Bankruptcy Code with respect to any Credit Party, regardless of whether such interest is an allowed claim under the Bankruptcy Code) and (ii) all liabilities and 9 obligations, whenever arising, owing from the Borrower or any of its Restricted Subsidiaries under any Hedging Agreement (which such Hedging Agreement is permitted hereunder) with any Person that is a Lender (or an Affiliate of any such Lender) hereunder at the time such Hedging Agreement is executed or becomes a Lender (or an Affiliate of a Person that becomes a Lender) at any time after such Hedging Agreement was executed (all such obligations with respect to any such Hedging Agreement, "Hedging Obligations"). "Debt Issuance" shall mean the issuance of any Indebtedness for borrowed money by any Credit Party or any of its Restricted Subsidiaries (excluding, for purposes hereof, any Equity Issuance or any Indebtedness of the Borrower and its Restricted Subsidiaries permitted to be incurred pursuant to Section 6.1 hereof (other than Indebtedness permitted to be incurred pursuant to Section 6.1(j))). "Default" shall mean the occurrence of any of the events specified in Section 7.1, whether or not any requirement for the giving of notice or the lapse of time, or both, or any other condition, has been satisfied. "Defaulting Lender" shall mean, at any time, any Lender that, at such time (a) has failed to make a Loan required pursuant to the terms of this Credit Agreement, including the funding of a Participation Interest in accordance with the terms hereof, (b) has failed to pay to the Administrative Agent or any other Lender an amount owed by such Lender pursuant to the terms of this Credit Agreement, or (c) has been deemed insolvent by its principal regulator or has become subject to a bankruptcy or insolvency proceeding or to a receiver, trustee or similar official. "DFA Agreement" shall mean that certain Securities Purchase Agreement, dated as of April 4, 2001, among Dean Foods Company (formerly known as Suiza Foods Corporation), Suiza Dairy Group Holdings, Inc., Suiza Dairy Group, L.P., Suiza Southeast, LLC, Dairy Farmers of America, Inc., and, for certain limited purposes, Mid-Am Capital, L.L.C., as the same may be amended or modified from time to time. "Dollar Amount" shall mean (a) with respect to each Loan made or continued in Dollars, the principal amount thereof and (b) with respect to each Loan made or continued in an Alternative Currency, the amount of Dollars which is equivalent to the principal amount of such Loan, at the most favorable spot exchange rate determined by the Administrative Agent at approximately 11:00 a.m. (the time of the Administrative Agent's Correspondent) two (2) Business Days before such Loan is made or continued (or to be made or continued). When used with respect to any other sum expressed in an Alternative Currency, "Dollar Amount" shall mean the amount of Dollars which is equivalent to the amount so expressed in such Alternative Currency at the most favorable spot exchange rate determined by the Administrative Agent to be available to it at the relevant time. "Dollar Letter of Credit" shall mean each Letter of Credit issued under the Dollar Revolving-1 Committed Amount pursuant to Section 2.3(a). 10 "Dollar LOC Obligations" shall mean, at any time, the sum of (i) the maximum amount which is, or at any time thereafter may become, available to be drawn under Dollar Letters of Credit then outstanding, assuming compliance with all requirements for drawings referred to in such Dollar Letters of Credit plus (ii) the aggregate amount of all drawings under Dollar Letters of Credit honored by the Issuing Lender but not theretofore reimbursed. "Dollar Revolving-1 Commitment Percentage" shall mean, for each Lender, the percentage identified as its Dollar Revolving-1 Commitment Percentage on the Register, as such percentage may be modified in connection with any assignment made in accordance with the provisions of Section 9.6(c). "Dollar Revolving-1 Committed Amount" shall mean the sum of the Dollar Revolving-1 Subcommitments. As of the Fifth Amendment Effective Date, the Dollar Revolving-1 Committed Amount shall be $800,000,000, as such amount may be modified from time in accordance with the provisions hereof. "Dollar Revolving-1 Loans" shall have the meaning set forth in Section 2.1(a)(i). "Dollar Revolving-1 Subcommitment" shall mean, with respect to each Lender, the amount of such Lender's Revolving-1 Commitment available for Dollar Revolving-1 Loans in an aggregate principal amount at any time outstanding up to such Lender's Dollar Revolving-1 Subcommitment as specified in the Register, as such amount may be reduced from time to time in accordance with the provisions hereof or in connection with any assignment made in accordance with the provisions of Section 9.6(c). "Dollars" and "$" shall mean dollars in lawful currency of the United States of America. "Domestic Lending Office" shall mean, initially, the office of each Lender designated as such Lender's Domestic Lending Office shown on Schedule 9.2; and thereafter, such other office of such Lender as such Lender may from time to time specify to the Administrative Agent and the Borrower as the office of such Lender at which Alternate Base Rate Loans of such Lender are to be made. "Domestic Subsidiary" shall mean any Subsidiary that is organized and existing under the laws of the United States or any state or commonwealth thereof or under the laws of the District of Columbia. "EMU" shall mean economic and monetary union as contemplated in the Treaty on European Union. "EMU Legislation" shall mean legislative measures of the Council of European Union for the introduction of, change over to or operation of the euro. "Environmental Claim" shall mean, with respect to any Person, any written notice, claim, demand or other communication (collectively, a "claim") by any other Person alleging or asserting such Person's liability for investigatory costs, cleanup costs, governmental response 11 costs, damages to natural resources or other Property, personal injuries, fines or penalties arising out of, based on or resulting from (a) the presence, or release into the environment, of any Hazardous Material at any location, whether or not owned by such Person, or (b) circumstances forming the basis of any violation, or alleged violation, of any Environmental Law. The term "Environmental Claim" shall include, without limitation, any claim by any Governmental Authority for enforcement, cleanup, removal, response, remedial or other actions or damages pursuant to any applicable Environmental Law, and any claim by any third party seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief resulting from the presence of Hazardous Materials or arising from alleged injury or threat of injury to health, safety or the environment. "Environmental Laws" shall mean any and all applicable foreign, Federal, state, local or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, requirements of any Governmental Authority or other Requirement of Law (including common law) regulating, relating to or imposing liability or standards of conduct concerning protection of human health or the environment, as now or may at any time be in effect during the term of this Agreement. "Equity Issuance" shall mean any issuance by the Borrower or any of its Restricted Subsidiaries to any Person which is not a Credit Party of (a) shares of its Capital Stock, (b) any shares of its Capital Stock pursuant to the exercise of options (excluding for purposes hereof the issuance of Capital Stock pursuant to the exercise of stock options held by directors, officers or other employees or former employees of the Credit Parties or personal representatives or heirs or beneficiaries of any oil them) or warrants or (C) any shares of its Capital Stock pursuant to the conversion of any debt securities to equity. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time. "ERISA Affiliate" shall mean any corporation or trade or business that is a member of any group of organizations (i) described in Section 414(b) or (c) of the Code of which any Credit Party or any of its Subsidiaries is a member, (ii) solely for purposes of potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of the Code and the lien created under Section 302(f) of ERISA and Section 412(n) of the Code, described in Section 414(m) or (o) of the Code of which any Credit Party or any of its Subsidiaries is a member and (iii) which are under common control with any Credit Party or any of its Subsidiaries within the meaning of Section 4001(a)(14) of ERISA. "euro" shall mean the single currency to which the Participating Member States of the European Union have converted. "Eurodollar Reserve Percentage" shall mean for any day, the percentage (expressed as a decimal and rounded upwards, if necessary, to the next higher 1/100th of 1%) which is in effect for such day as prescribed by the Federal Reserve Board (or any successor) for determining the maximum reserve requirement (including without limitation any basic, supplemental or emergency reserves) in respect of Eurocurrency liabilities, as defined in Regulation D of such 12 Board as in effect from time to time, or any similar category of liabilities for a member bank of the Federal Reserve System in New York City. "Event of Default" shall mean any of the events specified in Section 7.1; provided, however, that any requirement for the giving of notice or the lapse of time, or both, or any other condition, has been satisfied. "Excess Cash Flow" shall mean, with respect to any fiscal year period of the Borrower and its Restricted Subsidiaries on a consolidated basis, an amount equal to (a) Consolidated EBITDA for such period minus (b) Consolidated Capital Expenditures for such period minus (c) Scheduled Funded Debt Payments made during such period minus (d) Consolidated Interest Expense minus (e) amounts paid in respect of federal, state, local and foreign income, value added and similar taxes with respect to such period minus (f) voluntary principal prepayments of Term Loans made during such period. "Excluded Disposition" shall mean the sale, transfer, or other disposition of (a) any motor vehicles or other equipment no longer used or useful in the business of the Borrower or any of its Restricted Subsidiaries, (b) any inventory, materials and other assets in the ordinary course of business and on ordinary business terms, (c) Permitted Investments described in clause (a) of the definition thereof and (d) an Investment Tax Credit. "Existing Letters of Credit" means the letters of credit outstanding on the Funding Date and identified on Schedule 1.1(d) hereto. "Existing Tranche A-1 Term Loan" shall have the meaning set forth in Section 2.4 hereof. "Existing Tranche B-1 Term Loan" shall have the meaning set forth in Section 2.5 hereof. "Extension of Credit" shall mean, as to any Lender, the making of a Loan by such Lender or the issuance of, or participation in, a Letter of Credit by such Lender. "Federal Funds Effective Rate" shall have the meaning set forth in the definition of "Alternate Base Rate". "Fee Letter" shall mean the letter agreement dated April 4, 2001 addressed to the Borrower from the Administrative Agent, the Syndication Agent, First Union Securities, Inc. and Banc One Capital Markets, Inc., as amended, modified or otherwise supplemented. "Fifth Amendment" shall mean that certain Fifth Amendment to Credit Agreement among the Borrower, the Administrative Agent and the Required Lenders dated as of December 31, 2003. "Fifth Amendment Effective Date" shall mean the date upon which all of the conditions precedent set forth in the Fifth Amendment shall have been satisfied. 13 "First Tier Foreign Subsidiary" shall mean any direct Foreign Subsidiary of a Credit Party. "First Union" shall mean Wachovia Bank, National Association (formerly known as First Union National Bank), a national banking association and its successors and assigns. "Foreign Subsidiary" shall mean any Subsidiary that is not a Domestic Subsidiary. "Fourth Amendment" shall mean that certain Fourth Amendment to Credit Agreement among the Borrower, the Administrative Agent and the Lenders dated as of August 29, 2003. "Fourth Amendment Effective Date" shall mean the date upon which all of the conditions precedent set forth in the Fourth Amendment shall have been satisfied. "Funded Debt" shall mean, with respect to any Person, without duplication, (a) all Indebtedness of such Person other than Indebtedness of the types referred to in clause (e), (g), (i) and (m) of the definition of "Indebtedness" set forth in this Section 1.1, (b) all Funded Debt of others of the type referred to in clause (a) above secured by (or for which the holder of such Funded Debt 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, (c) all Guaranty Obligations of such Person with respect to Funded Debt of the type referred to in clause (a) above of another Person and (d) Funded Debt of the type referred to in clause (a) above of any partnership or unincorporated joint venture in which such Person is legally obligated or has a reasonable expectation of being liable with respect thereto. "Funding Date" shall mean the date upon which all the conditions precedent to funding under Section 4.2 shall have been satisfied, and the initial Extensions of Credit are made hereunder, which in any event, shall occur no later than December 31, 2001. "FUSI" shall mean Wachovia Securities, LLC (formerly known as First Union Securities, Inc.). "GAAP" shall mean generally accepted accounting principles in effect in the United States of America applied on a consistent basis, subject, however, in the case of determination of compliance with the financial covenants set out in Section 5.9 to the provisions of Section 1.3. "Government Acts" shall have the meaning set forth in Section 2.18. "Governmental Authority" shall mean any nation or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government. 14 "Guarantor" shall mean any of the Domestic Subsidiaries identified as a "Guarantor" on the signature pages hereto and the Additional Credit Parties which execute a Joinder Agreement, together with their successors and permitted assigns. "Guaranty" shall mean the guaranty of the Guarantors set forth in Article X. "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 or similar agreements or arrangements) for the benefit of any holder of Indebtedness of such other Person, (iii) to lease or purchase assets, 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. "Hazardous Material" shall mean, collectively, (a) any petroleum or petroleum products, flammable materials, explosives, radioactive materials, asbestos, urea formaldehyde foam insulation, and transformers or other equipment that contain polychlorinated biphenyls ("PCB's"), (b) any chemicals or other materials or substances that are now or hereafter become defined as or included in the definition of "hazardous substances", "hazardous wastes", "hazardous materials", "extremely hazardous wastes", "restricted hazardous wastes", "toxic substances", "toxic pollutants", "contaminants", "pollutants" or words of similar import under any Environmental Law and (c) any other chemical or other material or substance, exposure to which is now or hereafter prohibited, limited or regulated under any Environmental Law. "Hedging Agreements" shall mean, with respect to any Person, any agreement entered into to protect such Person against fluctuations in interest rates, or currency values, including, without limitation, any interest rate swap, cap or collar agreement or similar arrangement between such Person and one or more counterparties, any foreign currency exchange agreement, currency protection agreements, or other interest or exchange rate hedging agreements. "Hedging Obligation" shall have the meaning set forth in the definition of Credit Party Obligations. "Indebtedness" shall mean, 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, or upon which interest payments are customarily made, (c) all obligations of such Person under conditional sale or other title retention agreements 15 relating to assets 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 assets or services purchased by such Person (other than 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 obligations of such Person under take-or-pay or similar arrangements, (f) 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, assets owned or acquired by such Person, whether or not the obligations secured thereby have been assumed, (g) all Guaranty Obligations of such Person with respect to Indebtedness of another Person, (h) the principal portion of all obligations of such Person under Capital Leases, (i) all obligations of such Person under Hedging Agreements, (j) 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), (k) 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, (l) the principal balance outstanding under any synthetic lease, tax retention operating lease, accounts receivable securitization program, off-balance sheet loan or similar off-balance sheet financing product, including without limitation, the outstanding Attributed Principal Amount under any Permitted Receivables Financing, and (m) the Indebtedness of any partnership or unincorporated joint venture in which such Person is a general partner or a joint venturer. "Insolvency" shall mean, with respect to any Multiemployer Plan, the condition that such Plan is insolvent within the meaning of such term as used in Section 4245 of ERISA. "Insolvent" shall mean being in a condition of Insolvency. "Intellectual Property" has the meaning set forth in Section 3.16. "Intercreditor Agreement" means the Intercreditor Agreement dated as of the Funding Date by and between the Administrative Agent and Bank One, NA (Main Office Chicago) (the "Receivables Agent"), as agent under the Amended and Restated Receivables Purchase Agreement, dated as of the Funding Date by and among the Borrower, the Subsidiaries of the Borrower party thereto, the Receivables Agent and the financial institutions parties thereto, as amended, modified or supplemented from time to time in accordance with its terms. "Interest Coverage Ratio" means, with respect to the Borrower and its Restricted Subsidiaries on a consolidated basis for the twelve month period ending on the last day of any fiscal quarter of the Borrower, the ratio of (a) Consolidated EBITDA to (b) Consolidated Interest Expense. Notwithstanding the foregoing, for purposes of calculating the Interest Coverage Ratio of the Borrower and its Restricted Subsidiaries for the first three complete fiscal quarters to occur after the Funding Date, the interest component thereof shall be determined by annualizing such component such that for the first complete fiscal quarter to occur after the Funding Date such component would be multiplied by four (4), the first two complete fiscal quarters would be 16 multiplied by two (2) and the first three complete fiscal quarters would be multiplied by one and one-third (1-1/3). "Interest Payment Date" shall mean (a) as to any Alternate Base Rate Loan or Swingline Loan, the last day of each March, June, September and December and on the applicable Maturity Date, (b) as to any LIBOR Rate Loan having an Interest Period of three months or less, the last day of such Interest Period, and (c) as to any LIBOR Rate Loan having an Interest Period longer than three months, the day which is three months after the first day of such Interest Period and the last day of such Interest Period. "Interest Period" shall mean, with respect to any LIBOR Rate Loan, (i) during the Syndication Period, the period commencing on the Borrowing Date or conversion date, as the case may be, with respect to such LIBOR Rate Loan and ending seven (7) days thereafter; and (ii) initially after the Syndication Period, the period commencing on the Borrowing Date or conversion date, as the case may be, with respect to such LIBOR Rate Loan and ending one, two, three or six months thereafter, as selected by the Borrower in the Notice of Borrowing or Notice of Conversion given with respect thereto; and (iii) thereafter, each period commencing on the last day of the immediately preceding Interest Period applicable to such LIBOR Rate Loan and ending one, two, three or six months thereafter, as selected by the Borrower by irrevocable notice to the Administrative Agent not less than three Business Days prior to the last day of the then current Interest Period with respect thereto; provided that the foregoing provisions are subject to the following: (A) if any Interest Period pertaining to a LIBOR Rate Loan would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month in which event such Interest Period shall end on the immediately preceding Business Day; (B) any Interest Period pertaining to a LIBOR Rate Loan that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the relevant calendar month; (C) if the Borrower shall fail to give notice as provided above, the Borrower shall be deemed to have selected an Alternate Base Rate Loan to replace the affected LIBOR Rate Loan; (D) no Interest Period in respect of any Loan shall otherwise extend beyond the applicable Maturity Date for such Loan and, further with regard to the 17 Tranche A-1 Term Loans and the Tranche B-1 Term Loans, no Interest Period shall extend beyond any principal amortization payment date unless the portion of such Tranche A-1 Term Loan or Tranche B-1 Term Loan consisting of Alternate Base Rate Loans together with the portion of such Tranche A-1 Term Loan and Tranche B-1 Term Loan consisting of LIBOR Rate Loans with Interest Periods expiring prior to or concurrently with the date such principal amortization payment date is due, is at least equal to the amount of such principal amortization payment due on such date; and (E) no more than sixteen (16) LIBOR Rate Loans may be in effect at any time. For purposes hereof, LIBOR Rate Loans with different Interest Periods shall be considered as separate LIBOR Rate Loans, even if they shall begin on the same date and have the same duration, 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 LIBOR Rate Loan with a single Interest Period. "Investment" shall mean an investment, in cash or by delivery of assets made, directly or indirectly in, to or from any Person, whether by acquisition of shares of Capital Stock, property, assets, indebtedness or other obligations or securities or by loan, advance, capital contribution or otherwise. "Investment Tax Credit" shall mean an investment tax credit to which the Borrower or any of its Restricted Subsidiaries may be entitled pursuant to the Puerto Rico Agricultural Tax Incentives Act of 1995. "Issuing Lender" means (a) with respect to any Existing Letter of Credit, the financial institutions shown on Schedule 1.1(d) as the issuer of such Letter of Credit and (b) with respect to any other Letter of Credit, (i) First Union or (ii) Bank One, as applicable. "Joinder Agreement" shall mean a Joinder Agreement substantially in the form of Schedule 5.10, executed and delivered by an Additional Credit Party in accordance with the provisions of Section 5.10. "Lender" shall have the meaning set forth in the first paragraph of this Agreement. "Letter of Credit" means any Existing Letter of Credit and any letter of credit issued by an Issuing Lender pursuant to the terms hereof, as such Letters of Credit may be amended, modified, extended, renewed or replaced from time to time. "Letter of Credit Fee" shall have the meaning set forth in Section 2.6(b). "Leverage Ratio" shall mean, with respect to the Borrower and its Restricted Subsidiaries on a consolidated basis for the twelve month period ending on the last day of any fiscal quarter, the ratio of (a) Funded Debt of the Borrower and its Restricted Subsidiaries on a consolidated 18 basis on the last day of such period, minus cash held on a consolidated basis on such day, to (b) Consolidated EBITDA for such period. "LIBOR" shall mean, for any LIBOR Rate Loan for any Interest Period therefor, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the London interbank offered rate for deposits in the Permitted Currency in which the applicable Loan is denominated 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 "LIBOR" shall mean, for any LIBOR Rate 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 the Permitted Currency in which the applicable Loan is denominated 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, for any reason, neither of such rates is available, then "LIBOR" shall mean the rate per annum at which, as determined by the Administrative Agent, the Permitted Currency in which the applicable Loan is denominated in an amount comparable to such LIBOR Rate Loan are being offered to leading banks at approximately 11:00 A.M. London time, two (2) Business Days prior to the commencement of the applicable Interest Period for settlement in immediately available funds by leading banks in the London interbank market for a period equal to the Interest Period selected. "LIBOR Lending Office" shall mean, initially, the office of each Lender designated as such Lender's LIBOR Lending Office shown on Schedule 9.2; and thereafter, such other office of such Lender as such Lender may from time to time specify to the Administrative Agent and the Borrower as the office of such Lender at which the LIBOR Rate Loans of such Lender are to be made. "LIBOR Rate" shall mean: (a) with respect to any LIBOR Rate Loan denominated in Dollars, a rate per annum (rounded upwards, if necessary, to the next higher 1/100th of 1%) determined by the Administrative Agent pursuant to the following formula: LIBOR Rate = LIBOR ----------------------------- 1.00 - Eurodollar Reserve Percentage and (b) with respect to any LIBOR Rate Loan denominated in an Alternative Currency, a rate per annum (rounded upwards, if necessary, to the next higher 1/100th of 1%) equal to LIBOR. 19 "LIBOR Rate Loan" shall mean Loans the rate of interest applicable to which is based on the LIBOR Rate. "Lien" shall mean any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement and any Capital Lease having substantially the same economic effect as any of the foregoing). "Loan" shall mean a Revolving-1 Loan, a Swingline Loan, the Tranche A-1 Term Loan and/or the Tranche B-1 Term Loan, as appropriate. "LOC Commitment" shall mean the commitment of the Issuing Lenders to issue Letters of Credit and with respect to each Lender, the commitment of such Lender to purchase participation interests in the Letters of Credit as provided in Section 2.3(c), as such amounts may be reduced from time to time in accordance with the provisions hereof. "LOC Committed Amount" shall have the meaning set forth in Section 2.3(a). "LOC Obligations" shall mean, collectively, the Dollar LOC Obligations and the Multi-currency LOC Obligations. "LOC Obligations" shall mean, at any time, the sum 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. "Mandatory Borrowing" shall have the meaning set forth in Section 2.2(b)(ii). "Mandatory Cost" shall mean the percentage rate per annum calculated by the Administrative Agent in accordance with Schedule 1.1(d) hereto. "Mandatory Dollar Borrowing" shall have the meaning set forth in Section 2.3(e)(i). "Mandatory Multi-currency Borrowing" shall have the meaning set forth in Section 2.3(e)(ii). "Material Adverse Effect" shall mean a material adverse effect on (a) the business, operations, property, prospects or financial condition of the Borrower and its Restricted Subsidiaries (including the Acquired Company and its Subsidiaries) taken as a whole, (b) the ability of the Borrower and Guarantors, taken as a whole, to perform their obligations, when such obligations are required to be performed, under this Agreement, any of the Notes or any other Credit Document or (c) the validity or enforceability of this Agreement, any of the Notes or any of the other Credit Documents or the rights or remedies of the Administrative Agent or the Lenders hereunder or thereunder. 20 "Material Contract" shall mean any contract or other arrangement, whether written or oral, to which the Borrower or any of its Restricted Subsidiaries is a party as to which the breach, nonperformance, cancellation or failure to renew by any party thereto could reasonably be expected to have a Material Adverse Effect. "Material Subsidiary" shall mean any Restricted Subsidiary (other than a Receivables Financing SPC) of a Credit Party with assets of $100,000 or more; provided, however, if the aggregate assets of Restricted Subsidiaries (other than Receivables Financing SPCs) that are not Material Subsidiaries at any time exceeds $1,000,000, the Borrower shall designate one or more of such Restricted Subsidiaries as Material Subsidiaries such that, after giving effect to such designations, the aggregate assets of Restricted Subsidiaries (other than Receivables Financing SPCs) that are not Material Subsidiaries shall be less than $1,000,000. "Maturity Date" shall mean (i) with respect to the Tranche A-1 Term Loan, the Tranche A-1 Term Loan Maturity Date, (ii) with respect to the Tranche B-1 Term Loan, the Tranche B-1 Term Loan Maturity Date and (iii) with respect to the Revolving-1 Loans and Swingline Loans, the Revolving-1 Commitment Termination Date. "Merger Agreement" shall mean that certain Agreement and Plan of Merger dated as of April 4, 2001 by and among the Borrower, Blackhawk Acquisition Corp. and the Acquired Company, as the same may be amended or modified from time to time. "Moody's" shall mean Moody's Investors Service, Inc. "Mortgage Instrument" shall have the meaning set forth in Section 4.2(f). "Mortgage Policies" shall have the meaning set forth in Section 4.2(f). "Mortgaged Property" shall have the meaning set forth in Section 4.2(f). "Multi-currency Letter of Credit" shall mean each Letter of Credit issued under the Multi-currency Revolving-1 Committed Amount pursuant to Section 2.3(a). "Multi-currency LOC Obligations" shall mean, at any time, the sum of (i) the maximum amount which is, or at any time thereafter may become, available to be drawn under Multi-currency Letters of Credit then outstanding, assuming compliance with all requirements for drawings referred to in such Multi-currency Letters of Credit plus (ii) the aggregate amount of all drawings under Multi-currency Letters of Credit honored by the Issuing Lender but not theretofore reimbursed. "Multi-currency Revolving-1 Commitment Percentage" shall mean, for each Lender, the percentage identified as its Multi-currency Revolving-1 Commitment Percentage on the Register, as such percentage may be modified in connection with any assignment made in accordance with the provisions of Section 9.6(c). "Multi-currency Revolving-1 Committed Amount" shall mean the sum of the Multi-currency Revolving-1 Subcommitments. As of the Fifth Amendment Effective Date, the Multi- 21 currency Revolving-1 Committed Amount shall be $200,000,000, as such amount may be modified from time in accordance with the provisions hereof. "Multi-currency Revolving-1 Loans" shall have the meaning set forth in Section 2.1(a)(ii). "Multi-currency Revolving-1 Subcommitment" shall mean, with respect to each Lender, the amount of such Lender's Revolving-1 Commitment available for Multi-currency Revolving-1 Loans in an aggregate principal amount at any time outstanding up to such Lender's Multi-currency Revolving-1 Subcommitment as specified in the Register, as such amount may be reduced from time to time in accordance with the provisions hereof or in connection with any assignment made in accordance with the provisions of Section 9.6(c). "Multiemployer Plan" shall mean a Plan which is a multiemployer plan as defined in Section 4001(a)(3) of ERISA. "Net Cash Proceeds" shall mean the aggregate cash proceeds received by any Credit Party or any Restricted Subsidiary in respect of any Asset Disposition, Equity Issuance or Debt Issuance, net of (a) direct costs (including, without limitation, legal, accounting and investment banking fees, and sales commissions) and (b) taxes paid or payable as a result thereof; it being understood that "Net Cash Proceeds" shall include, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received by the Borrower or any Restricted Subsidiary in any Asset Disposition, Equity Issuance or Debt Issuance. "Note" or "Notes" shall mean the Revolving-1 Notes, the Swingline Note, the Tranche A-1 Term Notes and/or the Tranche B-1 Term Notes, collectively, separately or individually, as appropriate. From and after the Fourth Amendment Effective Date, some or all of the Loans may not be evidenced by Notes, and consequently, with respect to any Lender that has made Loans not evidenced by Notes, any reference to a Revolving-1 Note, Tranche A-1 Term Note, Tranche B-1 Term Note, or Note, shall, as applicable, be deemed to be a reference to the related Credit Party Obligations that would be represented by such a Revolving-1 Note, Tranche A-1 Term Note, Tranche B-1 Term Note or Note had such Lender elected to have its Loans represented by Notes. "Notice of Borrowing" shall mean the written notice of borrowing as referenced and defined in Section 2.1(b)(i). "Notice of Conversion/Extension" shall mean the written notice of extension or conversion as referenced and defined in Section 2.11. "Obligations" shall mean, collectively, Loans and LOC Obligations. "Participant" shall have the meaning set forth in Section 9.6(b). "Original Tranche A-1 Term Loan" shall have the meaning set forth in Section 2.4 hereof. 22 "Original Tranche B-1 Term Loan" shall have the meaning set forth in Section 2.5 hereof. "Participation Interest" shall mean the purchase by a Lender of a participation interest in Swingline Loans as provided in Section 2.2(b)(ii) or in Letters of Credit as provided in Section 2.3. "Participating Member State" shall mean each state so described in any EMU Legislation. "Patent License" shall mean all agreements, whether written or oral, providing for the grant by or to a Credit Party of any right to manufacture, use or sell any invention covered by a Patent, including, without limitation, any thereof referred to in Schedule 3.16. "Patents" shall mean (a) all letters patent of the United States or any other country and all reissues and extensions thereof, including, without limitation, any thereof referred to in Schedule 3.16, and (b) all applications for letters patent of the United States or any other country and all divisions, continuations and continuations-in-part thereof, including, without limitation, any thereof referred to in Schedule 3.16. "PBGC" shall mean the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA. "Permitted Acquisition" shall mean an acquisition by the Borrower or any of its Restricted Subsidiaries which (i) is an acquisition of a Person or assets of a Person in a line of business permitted by Section 6.3 hereof, (ii) is in an amount not greater than $300,000,000 in total cash consideration (after deducting cash on the balance sheet of the Person acquired or included in the assets being acquired) for any single acquisition; provided, however, the total cash consideration (after deducting cash on the balance sheet of the Person acquired or included in the assets being acquired) for any single acquisition may exceed $300,000,000 with the consent of the Required Lenders, (iii) is approved by the Board of Directors or the requisite shareholders of the Person being acquired or Person transferring the assets being acquired, (iv) if an acquisition of Capital Stock of a Person, at least 51% of all issued and outstanding Capital Stock of such Person is acquired, and (v) after giving effect to such acquisition on a Pro Forma Basis, the Borrower and its Restricted Subsidiaries are in compliance with each of the financial covenants set forth in Section 5.9. "Permitted Currency" shall mean Dollars or any Alternative Currency, or each such currency, as the context requires. "Permitted Investments" shall mean: (a) cash or Cash Equivalents; (b) Investments outstanding as of the Funding Date and identified in Schedule 1.1(b) or other investments outstanding as of the Funding Date not exceeding in acquisition cost $20,000,000 in the aggregate; 23 (c) Investments by any Subsidiary of the Borrower in the Borrower and Investments by any Credit Party or any Restricted Subsidiary in any Credit Party or any Restricted Subsidiary (including, but not limited to, loans from a Restricted Subsidiary to another Restricted Subsidiary). (d) Permitted Acquisitions; (e) operating deposit accounts with depository institutions; (f) Hedging Agreements; (g) (i) Investments permitted under Section 6.4(b) hereof, (ii) investments received in connection with a disposition permitted by Section 6.4(c) hereof and (iii) indemnities executed in connection with the sale of Investment Tax Credits; (h) Investments by the Borrower and its Subsidiaries in the Capital Stock of their Subsidiaries to the extent outstanding as of the Funding Date; (i) loans and advances to employees in the ordinary course of business not exceeding $10,000,000 in the aggregate; (j) deposits to secure bids, tenders, utilities, vendors, leases, licenses, statutory obligations, surety and appeal bonds and other deposits of like nature arising in the ordinary course of business; (k) Investments by any Credit Party in a Receivables Financing SPC made in connection with a Permitted Receivables Financing; (l) Investments by the Borrower and its Subsidiaries in a Captive Insurance Company in a cumulative amount from the Funding Date not to exceed $75,000,000; (m) additional Investments up to but not exceeding $80,000,000 in the aggregate during each fiscal year, including investments in Unrestricted Subsidiaries; provided, however, that notwithstanding the foregoing, the Borrower shall be permitted to make additional investments in Unrestricted Subsidiaries during any fiscal year in an amount equal to the aggregate amount of dividends and other distributions received by the Borrower or its Restricted Subsidiaries from Unrestricted Subsidiaries and payments of Indebtedness by an Unrestricted Subsidiary to the Borrower or a Restricted Subsidiary during such fiscal year; and (n) Investments by the Borrower or any of its Restricted Subsidiaries, each of which (i) existed before the time of acquisition of the Person or assets of the Person who made such investment and (ii) was not made in anticipation of such acquisition. 24 "Permitted Liens" shall mean: (a) Liens created by or otherwise existing, under or in connection with this Agreement or the other Credit Documents in favor of the Lenders; (b) Liens in connection with Hedging Agreements, but only (i) to the extent such Liens secure Hedging Obligations, (ii) to the extent such Liens are on the same collateral as to which the Administrative Agent on behalf of the Lenders also has a Lien and (iii) if the provider of any such Hedging Agreement and the Lenders shall share pari passu in the collateral subject to such Liens; (c) Liens in existence on the Funding Date and listed on Schedule 1.1(c); (d) Liens imposed by any Governmental Authority for taxes, assessments or charges not yet delinquent or that are being contested in good faith and by appropriate proceedings if, unless the amount thereof is not material with respect to it or its financial condition, adequate reserves with respect thereto are maintained on the books of the Borrower or the affected Subsidiaries, as the case may be, in accordance with GAAP; (e) carriers', warehousemen's, mechanics', materialmen's, landlord's, repairmen's or other like Liens arising in the ordinary course of business that are not overdue for a period of more than 30 days or that are being contested in good faith and by appropriate proceedings; (f) Liens securing judgments but only to the extent for an amount and for a period not resulting in an Event of Default under Section 7.1(f) hereof; (g) pledges or deposits under worker's compensation, unemployment insurance and other social security legislation; (h) deposits or pledges to secure the performance of bids, trade contracts (other than for Indebtedness), leases, licenses, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business; (i) easements, rights-of-way, restrictions and other similar encumbrances incurred in the ordinary course of business and encumbrances consisting of zoning restrictions, easements, licenses, restrictions on the use of Property or minor imperfections in title thereto that, in the aggregate, are not material in amount, and that do not in any case materially detract from the value of the Property subject thereto or interfere with the ordinary conduct of the business of the Borrower or any of its Subsidiaries; (j) Liens upon personal Property acquired after the date hereof (by purchase, construction or otherwise), or upon other assets acquired after the date hereof as a capital expenditure, by the Borrower or any of its Subsidiaries, each of which Liens either (i) existed on such assets before the time of its acquisition and was not created in 25 anticipation thereof or (ii) was created solely for the purpose of securing Indebtedness representing, or incurred to finance, refinance or refund, the cost of such assets; provided that (A) no such Lien shall extend to or cover any assets of the Borrower or such Subsidiary other than the assets so acquired, (B) the principal amount of Indebtedness secured by any such Lien shall at no time exceed the fair market value (as determined in good faith by a Responsible Officer of the Borrower) of such assets at the time they were acquired, and (C) the principal amount of all Indebtedness (other than Indebtedness permitted by Section 6.1(c) hereof) secured by such Liens shall not exceed $30,000,000 in the aggregate; (k) Liens upon real Property heretofore leased or leased after the date hereof (under operating or Capital Leases) in the ordinary course of business by the Borrower or any of its Subsidiaries in favor of the lessor created at the inception of the lease transaction, securing obligations of the Borrower or any of its Subsidiaries under or in respect of such lease and extending to or covering only the Property subject to such lease and improvements thereon; (l) Liens of sellers or creditors of sellers of farm products encumbering such farm products when sold to any of the Borrower or its Subsidiaries pursuant to the Food Security Act of 1985 or pursuant to similar state laws to the extent such Liens may be deemed to extend to the assets of such Person; (m) protective Uniform Commercial Code filings with respect to personal Property leased by, or consigned to, any of the Borrower or its Subsidiaries; (n) Liens upon assets of Unrestricted Subsidiaries; (o) Liens in favor of a Receivables Financing SPC or Receivables Financier created or deemed to exist in connection with a Permitted Receivables Financing (including any related filings of any financing statements), but only to the extent that any such Lien relates to the applicable Transferred Assets actually sold, contributed, financed or otherwise conveyed or pledged pursuant to such transaction; (p) any extension, renewal or replacement of the foregoing; provided, however, that the Liens permitted under this clause (q) shall not be spread to cover any additional Indebtedness or assets and the principal amount of such Indebtedness shall not be increased; (q) Liens securing Indebtedness to the extent such Indebtedness is permitted pursuant to Section 6.1(g) and Section 6.1(k); and (r) Liens upon personal Property or fixtures granted in connection with the energy saving program with Enron Energy Services Operations Inc. ("Enron"); provided that (A) no such Lien shall extend to or cover any assets of the Borrower or any Subsidiary other than assets purchased by Enron and transferred to the Borrower or any 26 Subsidiary in connection with that program, and (B) the aggregate value of the assets covered by such Liens shall not exceed $50,000,000 in the aggregate at any time. "Permitted Receivables Financing" shall mean any one or more receivables financings in which (a) any Credit Party or any Restricted Subsidiary (i) sells (as determined in accordance with GAAP) any accounts receivable, notes receivable, rights to future lease payments or residuals (collectively, together with certain property relating thereto and the right to collections thereon, being the "Transferred Assets") to any Person that is not a Subsidiary or Affiliate of the Borrower (with respect to any such transaction, the "Receivables Financier"), (ii) borrows from such Receivables Financier and secures such borrowings by a pledge of such Transferred Assets and/or (iii) otherwise finances its acquisition of such Transferred Assets and, in connection therewith, conveys an interest in such Transferred Assets to the Receivables Financier or (b) any Credit Party or any Restricted Subsidiary sells, conveys or otherwise contributes any Transferred Assets to a Receivables Financing SPC, which Receivables Financing SPC then (i) sells (as determined in accordance with GAAP) any such receivables (or an interest therein) to any Receivables Financier, (ii) borrows from such Receivables Financier and secures such borrowings by a pledge of such receivables or (iii) otherwise finances its acquisition of such receivables and, in connection therewith, conveys an interest in such receivables to the Receivables Financier, provided that (A) the aggregate Attributed Principal Amount for all such receivables financings shall not at any time exceed $500,000,000, (B) such receivables financing shall not involve any recourse to any Credit Party or any Restricted Subsidiary for any reason other than (x) repurchases of non-eligible receivables or (y) indemnifications for losses other than credit losses related to the receivables sold in such financing, (C) the Administrative Agent shall be reasonably satisfied with the structure of and documentation for any such transaction and that the terms of such transaction, including the discount at which receivables are sold, the term of the commitment of the Receivables Financier thereunder and any termination events, shall be (in the good faith understanding of the Administrative Agent) consistent with those prevailing in the market for similar transactions involving a receivables originator/servicer of similar credit quality and a receivables pool of similar characteristics and (D) the documentation for such transaction shall not be amended or modified in any material manner without the prior written approval of the Administrative Agent. "Person" shall mean an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature. "Plan" shall mean, at any particular time, any employee benefit plan which is covered by Title IV of ERISA and in respect of which the Borrower or a Commonly Controlled Entity is (or, if such plan were terminated at such time, would under Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA. "Pledge Agreement" shall mean the Pledge Agreement dated as of the Funding Date given by the Borrower and certain of the other Credit Parties to the Administrative Agent, as amended, modified or supplemented from time to time in accordance with its terms. "Prime Rate" shall have the meaning set forth in the definition of Alternate Base Rate. 27 "Pro Forma Basis" shall mean, with respect to any Permitted Acquisition or any dividend made pursuant to Section 6.10(f), that such Permitted Acquisition or dividend shall be deemed to have occurred or made, as applicable, 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 Permitted Acquisition or dividend. "Pro Forma Opening Statements" shall have the meaning set forth in Section 4.2(s). "Property" shall mean any tangible property or assets, whether real or personal. "Puerto Rico Disposition" shall mean the disposition by the Credit Parties of substantially all the assets or Capital Stock, or both, of Suiza Dairy Corporation, Neva Plastics Manufacturing Corp., Suiza Fruit Corporation, Garrido y Compania, LLC, and Garrido Alto Grande Corp. "Purchasing Lenders" shall have the meaning set forth in Section 9.6(c). "Real Properties" shall have the meaning set forth in Section 3.10(a). "Receivables Financier" shall have the meaning set forth in the definition of Permitted Receivables Financing. "Receivables Financing SPC" shall mean, in respect of any Permitted Receivables Financing, any Subsidiary or Affiliate of the Borrower to which any Credit Party sells, contributes or otherwise conveys Transferred Assets in connection with such Permitted Receivables Financing and each general partner of any such Subsidiary or Affiliate. "Recovery Event" shall mean the receipt by the Borrower or any of its Restricted Subsidiaries of any cash insurance proceeds or condemnation award payable by reason of theft, loss, physical destruction or damage, taking or similar event with respect to any of their respective property or assets. "Register" shall have the meaning set forth in Section 9.6(d). "Reimbursement Agreement" means any agreement set forth on Schedule 1.1(e) hereto. "Reorganization" shall mean, with respect to any Multiemployer Plan, the condition that such Plan is in reorganization within the meaning of such term as used in Section 4241 of ERISA. "Reportable Event" shall mean any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the thirty-day notice period is waived under PBGC Reg. Section 4043. 28 "Required Lenders" shall mean Lenders holding in the aggregate greater than 50% of (i) the outstanding Loans plus the aggregate unused Revolving-1 Commitments at such time (and Participation Interests therein) (treating for purposes hereof in the case of Swingline Loans and LOC Obligations, in the case of the Swingline Lender and the Issuing Lender, only the portion of the Swingline Loans and the LOC Obligations of the Swingline Lender and the Issuing Lender, respectively, which is not subject to the Participation Interests of the other Lenders and, in the case of the Lenders other than the Swingline Lender and the Issuing Lender, the Participation Interests of such Lenders in Swingline Loans and LOC Obligations hereunder as direct Obligations of such Lenders) or (ii) if the Commitments have been terminated, the outstanding Loans and Participation Interests (including the Participation Interests of the Swingline Lender in Swingline Loans and the Participation Interests of the Issuing Lender in any Letters of Credit); provided, however, that if any Lender shall be a Defaulting Lender at such time, then there shall be excluded from the determination of Required Lenders, Obligations (including Participation Interests) owing to such Defaulting Lender and such Defaulting Lender's Commitments or, after termination of the Commitments, the principal balance of the Obligations owing to such Defaulting Lender. "Requirement of Law" shall mean, as to any Person, the Certificate of Incorporation and By-laws or other organizational or governing documents of such Person, and each 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 any of its property or to which such Person or any of its property is subject. "Responsible Officer" of any Person shall mean the President, the Chief Executive Officer, the Chief Financial Officer or the Vice President/Treasurer of such Person. "Restricted Payment" shall mean (a) any dividend or other distribution, direct or indirect, on account of any shares of any class of Capital Stock of the Borrower or any of its Restricted Subsidiaries, now or hereafter outstanding, (b) 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 the Borrower or any of its Restricted Subsidiaries, now or hereafter outstanding, (c) 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 the Borrower or any of its Restricted Subsidiaries, now or hereafter outstanding, or (d) any payment or prepayment of principal or premium, if any, or interest on, redemption, purchase, retirement defeasance, sinking fund or similar payment with respect to, any Subordinated Indebtedness. "Restricted Subsidiaries" shall mean the Subsidiaries of the Borrower other than the Unrestricted Subsidiaries. "Revaluation Date" shall mean (a) with respect to any Alternative Currency Loan, each of the following: (i) each date of a borrowing of such Alternative Currency Loan, (ii) each date of a continuation of such Alternative Currency Loan, and (iii) following the occurrence and during the continuance of an Event of Default, such additional dates as the Administrative Agent shall determine or the Required Lenders shall require; and (b) with respect to any Multi-currency Letter of Credit denominated in an Alternative Currency, each of the following: (i) each date of 29 issuance of such Multi-currency Letter of Credit, (ii) each date of an amendment of such Multi-currency Letter of Credit having the effect of increasing the amount thereof (solely with respect to the increased amount), (iii) each date of any payment by the Issuing Lender of any drawing under any Multi-currency Letter of Credit denominated in an Alternative Currency, and (iv) following the occurrence and during the continuance of an Event of Default, such additional dates as the Administrative Agent or the L/C Issuer shall determine or the Required Lenders shall require. "Revolving-1 Commitment" shall mean, with respect to each Lender, the commitment of such Lender to (a) make Dollar Revolving-1 Loans in an aggregate principal amount at any time outstanding up to such Lender's Dollar Revolving-1 Subcommitment as specified in the Register, and (b) make Multi-currency Revolving-1 Loans in an aggregate principal amount at any time outstanding up to such Lender's Multi-currency Revolving-1 Subcommitment as specified in the Register, in each case, as such amounts may be reduced from time to time in accordance with the provisions hereof or in connection with any assignment made in accordance with the provisions of Section 9.6(c). "Revolving-1 Commitment Termination Date" shall mean the earlier to occur of (a) July 15, 2007 or (b) the sixth anniversary of the Closing Date. "Revolving-1 Committed Amount" shall mean, collectively, the Dollar Revolving-1 Committed Amount and the Multi-currency Revolving-1 Committed Amount. "Revolving-1 Loans" shall mean, collectively, the Dollar Revolving-1 Loans and the Multi-currency Revolving-1 Loans. "Revolving-1 Note" or "Revolving-1 Notes" shall mean the promissory notes of the Borrower in favor of each of the Lenders evidencing the Revolving-1 Loans provided pursuant to Section 2.1(d), individually or collectively, as appropriate, as such promissory notes may be amended, modified, supplemented, extended, renewed or replaced from time to time. "S&P" shall mean Standard & Poor's Ratings Group, a division of McGraw Hill, Inc. "Scheduled Funded Debt Payments" shall mean, as of any date of determination for the Borrower and its Restricted Subsidiaries, the sum of all scheduled payments of principal on Funded Debt for the applicable period ending on the date of determination (including the principal component of payments due on Capital Leases during the applicable period ending on the date of determination). "SEC" shall mean the Securities and Exchange Commission or any successor thereto. "Security Agreement" shall mean the Security Agreement dated as of the Funding Date given by the Borrower and the other Credit Parties to the Administrative Agent, as amended, modified or supplemented from time to time in accordance with its terms. 30 "Security Documents" shall mean the Security Agreement, the Pledge Agreement, the Mortgage Instruments, the Intercreditor Agreement and such other documents executed in connection with the attachment and perfection of the Administrative Agent's security interests and liens arising thereunder, including, without limitation, UCC financing statements. "Senior Notes" shall mean those certain Senior Debt Securities issued pursuant to the terms of the Indenture dated as of January 15, 1998 by and between Dean Foods Company and The Bank of New York, as trustee, and issued pursuant to the Indenture dated as of January 15, 1995 by and between Dean Foods Company and Bank of America Illinois, as trustee, in an aggregate principal amount of $700,000,000. "Single Employer Plan" shall mean any Plan which is not a Multiemployer Plan. "Specified Sales" shall mean (a) the sale, transfer, lease or other disposition of inventory and materials in the ordinary course of business, (b) the sale, transfer, lease or other disposition of obsolete or worn-out property or assets in the ordinary course of business, (c) the sale, transfer or other disposition of Permitted Investments described in clause (a) of the definition thereof, (d) the sale, transfer or other disposition of Capital Stock of Unrestricted Subsidiaries, and (e) the Puerto Rico Disposition. "Subordinated Indebtedness" shall mean any publicly issued Indebtedness specifically subordinated in right of payment and priority to the Credit Party Obligations, with customary payment blockage and other provisions, having a maturity no earlier than the date which is one year after the Tranche B-1 Term Loan Maturity Date and which shall otherwise be on terms and conditions reasonably satisfactory to the Agents. "Subsidiary" shall mean, as to any Person, a corporation, partnership, limited liability company or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise qualified, all references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower. "Swingline Commitment" shall mean the commitment of the Swingline Lender to make Swingline Loans in an aggregate principal amount at any time outstanding up to the Swingline Committed Amount, and the commitment of the Lenders to purchase participation interests in the Swingline Loans as provided in Section 2.2(b)(ii), as such amounts may be reduced from time to time in accordance with the provisions hereof. "Swingline Committed Amount" shall mean the amount of the Swingline Lender's Swingline Commitment as specified in Section 2.2(a). "Swingline Lender" shall mean First Union, in its capacity as such. 31 "Swingline Loan" or "Swingline Loans" shall have the meaning set forth in Section 2.2(a). "Swingline Note" shall mean the promissory note of the Borrower in favor of the Swingline Lender evidencing the Swingline Loans provided pursuant to Section 2.2(d), as such promissory note may be amended, modified, supplemented, extended, renewed or replaced from time to time. "Syndication Period" shall mean the period from the Funding Date through the earlier of (i) the date that is 90 days following the Funding Date or (ii) the date on which the Arrangers determine in their sole discretion that syndication is complete. "TARGET Day" shall mean any day on which the Trans-European Automated Real-time Gross Settlement Express Transfer (TARGET) payment system (or, if such payment system ceases to be operative, such other payment system (if any) determined by the Administrative Agent to be a suitable replacement) is open for the settlement of payments in euro. "Taxes" shall have the meaning set forth in Section 2.19. "Term Loans" shall mean collectively, the Tranche A-1 Term Loans and the Tranche B-1 Term Loans. "Trademark License" shall mean any agreement, written or oral, providing for the grant by or to a Credit Party of any right to use any Trademark, including, without limitation, any thereof referred to in Schedule 3.16. "Trademarks" shall mean (a) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade dress and service marks, logos and other source or business identifiers, and the goodwill associated therewith, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, whether in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or any political subdivision thereof, or otherwise, including, without limitation, any thereof referred to in Schedule 3.16, and (b) all renewals thereof, including, without limitation, any thereof referred to in Schedule 3.16. "Tranche" shall mean the collective reference to LIBOR Rate Loans whose Interest Periods begin and end on the same day. A Tranche may sometimes be referred to as a "LIBOR Tranche". "Tranche A-1 Term Loan" shall have the meaning set forth in Section 2.4(a). "Tranche A-1 Term Loan Commitment" shall mean, with respect to each Lender, the commitment of such Lender to make its portion of the Tranche A-1 Term Loan in a principal amount equal to such Lender's Tranche A-1 Term Loan Commitment Percentage of the Tranche A-1 Term Loan Committed Amount (and for purposes of making determinations of Required 32 Lenders hereunder after the Closing Date, the principal amount outstanding on the Tranche A-1 Term Loan). "Tranche A-1 Term Loan Commitment Percentage" shall mean, for any Lender, the percentage identified as its Tranche A-1 Term Loan Commitment Percentage on the Register, as such percentage may be modified in connection with any assignment made in accordance with the provisions of Section 9.6. "Tranche A-1 Term Loan Committed Amount" shall have the meaning set forth in Section 2.4(a). "Tranche A-1 Term Loan Maturity Date" shall mean the earlier to occur of (a) July 15, 2007 and (b) the sixth anniversary of the Closing Date. "Tranche A-1 Term Note" or "Tranche A-1 Term Notes" shall mean the promissory notes of the Borrower in favor of each of the Lenders evidencing the portion of the Tranche A-1 Term Loan provided pursuant to Section 2.4(c), individually or collectively, as appropriate, as such promissory notes may be amended, modified, restated, supplemented, extended, renewed or replaced from time to time. "Tranche B-1 Term Loan" shall have the meaning set forth in Section 2.5(a). "Tranche B-1 Term Loan Commitment" shall mean, with respect to each Lender, the commitment of such Lender to make its portion of the Tranche B-1 Term Loan in a principal amount equal to such Lender's Tranche B-1 Term Loan Commitment Percentage of the Tranche B-1 Term Loan Committed Amount (and for purposes of making determinations of Required Lenders hereunder after the Closing Date, the principal amount outstanding on the Tranche B-1 Term Loan). "Tranche B-1 Term Loan Commitment Percentage" shall mean, for any Lender, the percentage identified as its Tranche B-1 Term Loan Commitment Percentage on the Register, as such percentage may be modified in connection with any assignment made in accordance with the provisions of Section 9.6. "Tranche B-1 Term Loan Committed Amount" shall have the meaning set forth in Section 2.5(a). "Tranche B-1 Term Loan Maturity Date" shall mean the earlier to occur of (a) July 15, 2008 and (b) the seventh anniversary of the Closing Date. "Tranche B-1 Term Note" or "Tranche B-1 Term Notes" shall mean the promissory notes of the Borrower in favor of each of the Lenders evidencing the portion of the Tranche B-1 Term Loan provided pursuant to Section 2.5(c), individually or collectively, as appropriate, as such promissory notes may be amended, modified, restated, supplemented, extended, renewed or replaced from time to time. 33 "Transfer Effective Date" shall have the meaning set forth in each Commitment Transfer Supplement. "Transferred Assets" shall have the meaning set forth in the definition of Permitted Receivables Financing. "2.19 Certificate" shall have the meaning set forth in Section 2.19. "Treaty on European Union" shall mean the Treaty of Rome of March 25, 1957, as amended by the Single European Act of 1986 and the Maastricht Treaty (signed February 7, 1992), as amended from time to time. "Type" shall mean, as to any Loan, its nature as an Alternate Base Rate Loan, LIBOR Rate Loan or Swingline Loan, as the case may be. "Unrestricted Subsidiaries" shall mean (a) Suiza International Holding Company and its Subsidiaries (including Suiza Netherlands, B.V., Leche Celta, S.L., and Lacteos de Santander, S.A.), (b) Continental Can Company, Inc., and its Subsidiaries (including Dixie Holding, Inc., and Franklin Plastics, Inc.), (c) on and after the Funding Date, E.B.I Foods, Ltd. and its Subsidiaries, (d) each Captive Insurance Company and (e) any other Subsidiary of the Borrower designated as such in writing, with the reasonable consent of the Agents. [NOTE: PURSUANT TO THE TERMS OF THE FIFTH AMENDMENT, DEAN INTERNATIONAL HOLDING COMPANY (FORMERLY KNOWN AS SUIZA INTERNATIONAL HOLDING COMPANY) AND ITS SUBSIDIARIES WERE DESIGNATED AS "RESTRICTED SUBSIDIARIES".] "Updated Projections" shall have the meaning set forth in Section 4.2(q). "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. SECTION 1.2 OTHER DEFINITIONAL PROVISIONS. (a) Unless otherwise specified therein, all terms defined in this Agreement shall have such defined meanings when used in the Notes or other Credit Documents or any certificate or other document made or delivered pursuant hereto. (b) The words "hereof", "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, subsection, Schedule and Exhibit references are to this Agreement unless otherwise specified. (c) The word "including" is by way of example and not limitation. 34 (d) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. SECTION 1.3 ACCOUNTING TERMS. Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared in accordance with GAAP applied on a basis consistent with the most recent audited consolidated financial statements of the Borrower delivered to the Lenders; provided that, if the Borrower notifies the Administrative Agent that it wishes to amend any covenant in Section 5.9 to eliminate the effect of any change in GAAP on the operation of such covenant (or if the Administrative Agent notifies the Borrower that the Required Lenders wish to amend Section 5.9 for such purpose), then the Credit Parties' compliance with such covenant shall be determined on the basis of GAAP in effect immediately before the relevant change in GAAP became effective, until either such notice is withdrawn or such covenant is amended in a manner satisfactory to the Borrower and the Required Lenders. The Borrower shall deliver to the Administrative Agent and each Lender at the same time as the delivery of any annual or quarterly financial statements given in accordance with the provisions of Section 5.1, (i) a description in reasonable detail of any material change in the application of accounting principles employed in the preparation of such financial statements from those applied in the most recently preceding quarterly or annual financial statements as to which no objection shall have been made in accordance with the provisions above and (ii) a reasonable estimate of the effect on the financial statements on account of such changes in application. ARTICLE II THE LOANS; AMOUNT AND TERMS SECTION 2.1 REVOLVING-1 LOANS (a) Revolving-1 Commitment. (i) Dollar Revolving-1 Loans. During the Commitment Period, subject to the terms and conditions hereof, each Lender with a Dollar Revolving-1 Subcommitment severally agrees to make revolving credit loans in Dollars ("Dollar Revolving-1 Loans") to the Borrower from time to time for the purposes hereinafter set forth; provided, however, that (i) with regard to each Lender individually, the sum of such Lender's share of outstanding Dollar Revolving-1 Loans plus such Lender's Dollar Revolving-1 Commitment Percentage of Swingline Loans plus such Lender's Dollar Revolving-1 Commitment Percentage of Dollar LOC Obligations shall not exceed such Lender's Dollar Revolving-1 Subcommitment and (ii) with regard to the Lenders collectively, the sum of the aggregate amount of outstanding Dollar Revolving-1 Loans plus Swingline Loans 35 plus Dollar LOC Obligations shall not exceed the Dollar Revolving-1 Committed Amount. Dollar Revolving-1 Loans may consist of Alternate Base Rate Loans or LIBOR Rate Loans, or a combination thereof, as the Borrower may request, and may be repaid and reborrowed in accordance with the provisions hereof. LIBOR Rate Loans shall be made by each Lender at its LIBOR Lending Office and Alternate Base Rate Loans at its Domestic Lending Office. (ii) Multi-currency Revolving-1 Loans. During the Commitment Period, subject to the terms and conditions hereof, each Lender with a Multi-currency Revolving-1 Subcommitment severally agrees to make revolving credit loans in a Permitted Currency ("Multi-currency Revolving-1 Loans") to the Borrower from time to time for the purposes hereinafter set forth; provided, however, that (i) with regard to each Lender individually, the sum of the Dollar Amount of such Lender's share of outstanding Multi-currency Revolving-1 Loans plus such Lender's Multi-currency Revolving-1 Commitment Percentage of the Dollar Amount of Multi-currency LOC Obligations shall not exceed such Lender's Multi-currency Revolving-1 Subcommitment and (ii) with regard to the Lenders collectively, the sum of the aggregate Dollar Amount of outstanding Multi-currency Revolving-1 Loans plus the Dollar Amount of Multi-currency LOC Obligations shall not exceed the Multi-currency Revolving-1 Committed Amount. Multi-currency Revolving-1 Loans denominated in Dollars may consist of Alternate Base Rate Loans or LIBOR Rate Loans, or a combination thereof, as the Borrower may request, and may be repaid and reborrowed in accordance with the provisions hereof. Alternative Currency Loans must be LIBOR Rate Loans, shall be funded in an amount equal to the Alternative Currency Amount of such Alternative Currency Loan and may be repaid and reborrowed in accordance with the provisions hereof. LIBOR Rate Loans shall be made by each Lender at its LIBOR Lending Office and Alternate Base Rate Loans at its Domestic Lending Office. (b) Revolving-1 Loan Borrowings. (i) Notice of Borrowing. The Borrower shall request Revolving-1 Loans by written notice (or telephone notice promptly confirmed in writing which confirmation may be by fax) to the Administrative Agent not later than 1:30 P.M. (Charlotte, North Carolina time) (A) on the date of the requested borrowing in the case of Alternate Base Rate Loans, (B) on the third Business Day prior to the date of the requested borrowing in the case of LIBOR Rate Loans denominated in Dollars and (C) on the fourth Business Day prior to the date of the requested borrowing in the case of Alternative Currency Loans. Each such request for borrowing shall be irrevocable and shall specify (1) that a Revolving-1 Loan is requested, (2) the date of the requested borrowing (which shall be a Business Day), (3) the aggregate principal amount to be borrowed, (4) whether the borrowing is to be made under the Dollar Revolving-1 Subcommitment or the Multi-currency Revolving-1 Subcommitment, (5) if such borrowing is to be made under the Multi-currency Revolving-1 Subcommitment, whether the borrowing 36 shall be denominated in Dollars or an Alternative Currency, (6) if such borrowing is denominated in Dollars, whether the borrowing shall be comprised of Alternate Base Rate Loans, LIBOR Rate Loans or a combination thereof, and (7) if LIBOR Rate Loans are requested, the Interest Period(s) therefor. A form of Notice of Borrowing (a "Notice of Borrowing") is attached hereto as Schedule 2.1(b)(i). If the Borrower shall fail to specify in any such Notice of Borrowing (I) an applicable Interest Period in the case of a LIBOR Rate Loan, then such notice shall be deemed to be a request for an Interest Period of one month, (II) the Type of Revolving-1 Loan requested, then such notice shall be deemed to be a request for an Alternate Base Rate Loan, or (III) the applicable portion for the Revolving-1 Loan requested, then such notice shall be deemed to be a request for first, a Dollar Revolving-1 Loan (up to the Dollar Revolving-1 Committed Amount), and then a Multi-currency Revolving-1 Loan denominated in Dollars (up to the Multi-currency Revolving-1 Committed Amount). The Administrative Agent shall give notice to each Lender promptly upon receipt of each Notice of Borrowing, the contents thereof and each such Lender's share thereof. (ii) Advances of Revolving-1 Loans Denominated in Dollars. Each Lender will make its Dollar Revolving-1 Commitment Percentage of each Dollar Revolving-1 Loan borrowing, or its Multi-currency Revolving-1 Commitment Percentage of each Multi-currency Revolving-1 Loan borrowing denominated in Dollars, as applicable, available to the Administrative Agent for the account of the Borrower at the office of the Administrative Agent specified in Section 9.2, or at such other office as the Administrative Agent may designate in writing, by 4:00 P.M. (Charlotte, North Carolina time) on the date specified in the applicable Notice of Borrowing in Dollars and in funds immediately available to the Administrative Agent. Such borrowing will then be made available to the Borrower by the Administrative Agent by crediting the account of the Borrower on the books of such office with the aggregate of the amounts made available to the Administrative Agent by the Lenders and in like funds as received by the Administrative Agent. (iii) Advances of Alternative Currency Loans. Each Lender will make its Multi-currency Revolving-1 Commitment Percentage of the Alternative Currency Amount of each Alternative Currency Loan borrowing available to the Administrative Agent for the account of the Borrower at the office of the Administrative Agent's Correspondent specified in Section 9.2, or at such other office as the Administrative Agent may designate in writing, by 11:00 A.M. (the time of the Administrative Agent's Correspondent) on the date specified in the applicable Notice of Borrowing in the Alternative Currency of the Alternative Currency Loan to be made and in funds immediately available to the Administrative Agent. Such borrowing will then be made available to the Borrower by the Administrative Agent by crediting the account of the Borrower on the books of such office with the aggregate of the amounts made available to the Administrative Agent by the Lenders and in like funds as received by the Administrative Agent. 37 (c) Repayment. The principal amount of all Revolving-1 Loans shall be due and payable in full, in the currency in which each Revolving-1 Loan was initially funded, on the Revolving-1 Commitment Termination Date. (d) Revolving-1 Notes. Each Lender's Revolving-1 Loans may, at the election of such Lender, of the Borrower to such Lender in the original amount of such Lender's Revolving-1 Commitment and in substantially the form of Schedule 2.1(d). SECTION 2.2 SWINGLINE LOAN SUBFACILITY (a) Swingline Commitment. During the Commitment Period, subject to the terms and conditions hereof, the Swingline Lender, in its individual capacity, agrees to make certain revolving credit loans to the Borrower (each a "Swingline Loan" and, collectively, the "Swingline Loans") for the purposes hereinafter set forth; provided, however, (i) the aggregate amount of Swingline Loans outstanding at any time shall not exceed ONE HUNDRED MILLION DOLLARS ($100,000,000) (the "Swingline Committed Amount"), and (ii) the sum of the aggregate amount of outstanding Dollar Revolving-1 Loans plus Swingline Loans plus Dollar LOC Obligations shall not exceed the Dollar Revolving-1 Committed Amount. Swingline Loans hereunder may be repaid and reborrowed in accordance with the provisions hereof. (b) Swingline Loan Borrowings. (i) Notice of Borrowing and Disbursement. The Swingline Lender will make Swingline Loans available to the Borrower on any Business Day upon request made by the Borrower not later than 4:00 P.M. (Charlotte, North Carolina time) on such Business Day. A request for a Swingline Loan borrowing shall be made in the form of a Notice of Borrowing with appropriate modifications. Swingline Loan borrowings hereunder shall be made in minimum amounts of $100,000 and integral multiples of $100,000 in excess thereof. (ii) Repayment of Swingline Loans. Each Swingline Loan borrowing shall be due and payable on or before the fifth Business Day after the date on which such Swingline Loan borrowing is made or such later date to which the Swingline Lender and Borrower agree and, in any event, on the Maturity Date. The Swingline Lender may, at any time, in its sole discretion, by written notice to the Borrower and the Administrative Agent, demand repayment of its Swingline Loans by way of a Dollar Revolving-1 Loan borrowing, in which case the Borrower shall be deemed to have requested a Dollar Revolving-1 Loan borrowing comprised entirely of Alternate Base Rate Loans in the amount of such Swingline Loans; provided, however, that, in the following circumstances, any such demand shall also be deemed to have been given one Business Day prior to each of (i) the Maturity Date, (ii) the occurrence of any Event of Default described in Section 7.1(e), (iii) upon acceleration of the Credit Party Obligations hereunder, whether on account of an Event of Default described in Section 7.1(e) 38 or any other Event of Default, and (iv) the exercise of remedies in accordance with the provisions of Section 7.2 hereof (each such Dollar Revolving-1 Loan borrowing made on account of any such deemed request therefor as provided herein being hereinafter referred to as a "Mandatory Borrowing"). Each Lender with a Dollar Revolving-1 Subcommitment hereby irrevocably agrees to make such Dollar Revolving-1 Loans promptly upon any such request or deemed request on account of each Mandatory Borrowing in the amount and in the manner specified in the preceding sentence and on the same such date notwithstanding (I) the amount of Mandatory Borrowing may not comply with the minimum amount for borrowings of Dollar Revolving-1 Loans otherwise required hereunder, (II) whether any conditions specified in Section 4.2 are then satisfied, (III) whether a Default or an Event of Default then exists, (IV) failure of any such request or deemed request for Dollar Revolving-1 Loans to be made by the time otherwise required in Section 2.1(b)(i), (V) the date of such Mandatory Borrowing, or (VI) any reduction in the Dollar Revolving-1 Committed Amount or termination of the Dollar Revolving-1 Subcommitments immediately prior to such Mandatory Borrowing or contemporaneously therewith. In the event that any Mandatory Borrowing 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), then each Lender with a Dollar Revolving-1 Subcommitment hereby agrees that it shall forthwith purchase (as of the date the Mandatory 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 participations in the outstanding Swingline Loans as shall be necessary to cause each such Lender to share in such Swingline Loans ratably based upon its respective Dollar Revolving-1 Commitment Percentage (determined before giving effect to any termination of the Commitments pursuant to Section 7.2), 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 is purchased, and (B) at the time any purchase of participations pursuant to this sentence is actually made, the purchasing Lender shall be required to pay to the Swingline Lender interest on the principal amount of such participation purchased for each day from and including the day upon which the Mandatory Borrowing would otherwise have occurred to but excluding the date of payment for such participation, at the rate equal to, if paid within two (2) Business Days of the date of the Mandatory Borrowing, the Federal Funds Effective Rate, and thereafter at a rate equal to the Alternate Base Rate. (c) Interest on Swingline Loans. Subject to the provisions of Section 2.10(b), Swingline Loans shall bear interest at a per annum rate equal to the lesser of (i) the Alternate Base Rate plus the Applicable Percentage for Dollar Revolving-1 Loans that are Alternate Base Rate Loans or (ii) a rate agreed upon by the Swingline Lender and the Borrower. Interest on Swingline Loans shall be payable in arrears on each Interest Payment Date. 39 (d) Swingline Note. The Swingline Loans may, at the election of such Lender, of the Borrower to the Swingline Lender in the original amount of the Swingline Committed Amount and substantially in the form of Schedule 2.2(d). SECTION 2.3 LETTER OF CREDIT SUBFACILITY. (a) Issuance. The Existing Letters of Credit have been previously issued by the applicable Issuing Lender and subject to the terms and conditions hereof and of the LOC Documents, if any, and any other terms and conditions which the applicable Issuing Lender may reasonably require, during the Commitment Period the applicable Issuing Lender shall issue, and the Lenders having a Revolving-1 Commitment shall participate in, Letters of Credit for the account of the Borrower from time to time upon request in a form acceptable to the applicable Issuing Lender; provided, however, that (i) the aggregate Dollar Amount of all LOC Obligations shall not at any time exceed TWO HUNDRED FIFTY MILLION DOLLARS ($250,000,000) (the "LOC Committed Amount"), (ii) the sum of the aggregate amount of Dollar Revolving-1 Loans plus Swingline Loans plus Dollar LOC Obligations shall not at any time exceed the Dollar Revolving-1 Committed Amount, (iii) the sum of the aggregate Dollar Amount of Multi-currency Revolving-1 Loans plus the Dollar Amount of Multi-currency LOC Obligations shall not at any time exceed the Multi-currency Revolving-1 Committed Amount, (iv) all Dollar Letters of Credit shall be denominated in Dollars, (v) all Multi-currency Letters of Credit shall be denominated in a Permitted Currency, and (vi) all Letters of Credit shall be issued for lawful corporate purposes and may be issued as standby letters of credit, including in connection with workers' compensation and other insurance programs, and trade letters of credit. Except as otherwise expressly agreed upon by the applicable Issuing Lender and the Administrative Agent, no Letter of Credit shall have an original expiry date more than twelve (12) months from the date of issuance; provided, however, (i) so long as no Default or Event of Default has occurred and is continuing and subject to the other terms and conditions to the issuance of Letters of Credit hereunder, the expiry dates of Letters of Credit may be extended annually or periodically from time to time on the request of the Borrower or by operation of the terms of the applicable Letter of Credit to a date not more than twelve (12) months from the date of extension; and (ii) a Letter of Credit may have an expiration date more than one year from the date of issuance if required under related industrial revenue bond documents and agreed to by the applicable Issuing Lender; provided, further, that no Letter of Credit, as originally issued or as extended, shall have an expiry date extending beyond the date which is five (5) Business Days prior to the Revolving-1 Commitment Termination Date. Each Letter of Credit shall comply with the related LOC Documents. The issuance and expiry date of each Letter of Credit shall be a Business Day. All Existing Letters of Credit shall, as of the Funding Date, be deemed to have been issued pursuant hereto as "Letters of Credit" hereunder and subject to and governed by the terms and conditions of this Credit Agreement. It is hereby further agreed that any Existing Letter of Credit which is issued by an Issuing 40 Lender other than First Union or Bank One shall not be renewed and will be replaced upon its expiration with a Letter of Credit issued by First Union or Bank One, as the case may be, in its capacity as an Issuing Lender hereunder. All Letters of Credit issued and outstanding as of the Fifth Amendment Effective Date shall be deemed to be Dollar Letters of Credit. (b) Notice and Reports. The request for the issuance of a Letter of Credit shall be submitted to the applicable Issuing Lender and the Administrative Agent (i) at least three (3) Business Days prior to the requested date of issuance of a Letter of Credit denominated in Dollars and (ii) at least four (4) Business Days prior to the requested date of issuance of a Letter of Credit denominated in an Alternative Currency, and shall specify (A) whether the Letter of Credit is to be issued as a Dollar Letter of Credit or a Multi-currency Letter of Credit and (B) if such Letter of Credit is to be issued as a Multi-currency Letter of Credit, whether the Letter of Credit shall be denominated in Dollars or an Alternative Currency. Each Issuing Lender will promptly upon request provide to the Administrative Agent for dissemination to the Lenders a detailed report specifying the Dollar Letters of Credit and Multi-currency Letters of Credit which are then issued and outstanding by such Issuing Lender and any activity with respect thereto which may have occurred since the date of any prior report, and including therein, among other things, the account party, the beneficiary, the face amount, expiry date as well as any payments or expirations which may have occurred. Each Issuing Lender will further provide to the Administrative Agent promptly upon request copies of the Letters of Credit issued by such Issuing Lender. Each Issuing Lender will provide to the Administrative Agent promptly upon request a summary report of the nature and extent of LOC Obligations then outstanding related to the Letters of Credit issued by such Issuing Lender. (c) Participations. (i) Dollar Letters of Credit. Each Lender with a Dollar Revolving-1 Subcommitment, upon issuance of a Dollar Letter of Credit (other than a Dollar Letter of Credit in an original face amount of less than $1,000,000), shall be deemed to have purchased without recourse a risk participation from the applicable Issuing Lender in such Dollar Letter of Credit (including each Existing Letter of Credit) and the obligations arising thereunder and any collateral relating thereto, in each case in an amount equal to its Dollar Revolving-1 Commitment Percentage of the obligations under such Dollar Letter of Credit (including each Existing Letter of Credit) and shall absolutely, unconditionally and irrevocably assume, as primary obligor and not as surety, and be obligated to pay to the applicable Issuing Lender therefor and discharge when due, its Dollar Revolving-1 Commitment Percentage of the obligations arising under such Dollar Letter of Credit, unless the applicable Issuing Lender acted with gross negligence or willful misconduct in issuing such Dollar Letter of Credit. 41 (ii) Multi-currency Letters of Credit. Each Lender with a Multi-currency Revolving-1 Subcommitment, upon issuance of a Multi-currency Letter of Credit (other than a Multi-currency Letter of Credit in an original face amount of less than $1,000,000), shall be deemed to have purchased without recourse a risk participation from the applicable Issuing Lender in such Multi-currency Letter of Credit and the obligations arising thereunder and any collateral relating thereto, in each case in an amount equal to its Multi-currency Revolving-1 Commitment Percentage of the obligations under such Multi-currency Letter of Credit and shall absolutely, unconditionally and irrevocably assume, as primary obligor and not as surety, and be obligated to pay to the applicable Issuing Lender therefor and discharge when due, its Multi-currency Revolving-1 Commitment Percentage of the obligations arising under such Multi-currency Letter of Credit, unless the applicable Issuing Lender acted with gross negligence or willful misconduct in issuing such Multi-currency Letter of Credit. (iii) Without limiting the scope and nature of each Lender's participation in any Letter of Credit, to the extent that an Issuing Lender has not been reimbursed as required hereunder or under any LOC Document, each such Lender shall pay to such Issuing Lender its Dollar Revolving-1 Commitment Percentage or Multi-currency Revolving-1 Commitment Percentage, as applicable, of such unreimbursed drawing in same day funds on the day of notification by such Issuing Lender of an unreimbursed drawing pursuant to the provisions of subsection (d) below if such notice is received at or before 2:00 P.M. (Charlotte, North Carolina time), 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. The obligation of each Lender to so reimburse the Issuing Lenders 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 applicable 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 applicable Issuing Lender will promptly notify the Borrower and the Administrative Agent. The Borrower shall reimburse the applicable Issuing Lender on the day of drawing under any Letter of Credit (either with the proceeds of a Swingline Loan or Revolving-1 Loan obtained hereunder or otherwise) in same day funds in the applicable Permitted Currency in which such Letter of Credit was denominated, as provided herein or in the LOC Documents. If the Borrower shall fail to reimburse such Issuing Lender as provided herein, the unreimbursed Dollar Amount of such drawing shall bear interest at a per annum rate equal to the Alternate Base Rate plus the Applicable Percentage. Unless the Borrower shall immediately notify the applicable Issuing Lender and the Administrative Agent of its intent to otherwise reimburse such Issuing Lender, the Borrower shall be deemed to have requested a Swingline Loan or Dollar Revolving-1 Loan (in the case of a Dollar Letter of Credit) or Multi-currency 42 Revolving-1 Loan (in the case of a Multi-currency Letter of Credit), in the Dollar Amount of the drawing as provided in subsection (e) below, the proceeds of which will be used to satisfy the reimbursement obligations. The Borrower's reimbursement obligations hereunder shall be absolute and unconditional under all circumstances irrespective of any rights of set-off, counterclaim or defense to payment the Borrower may claim or have against any Issuing Lender, the Administrative 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 to receive consideration or the legality, validity, regularity or unenforceability of the Letter of Credit. The applicable Issuing Lender will promptly notify the applicable Lenders of the Dollar Amount of any unreimbursed drawing and each applicable Lender shall promptly pay to the Administrative Agent for the account of such Issuing Lender in Dollars and in immediately available funds, the amount of such Lender's Dollar Revolving-1 Commitment Percentage or Multi-currency Revolving-1 Commitment Percentage, as applicable, of such unreimbursed drawing, unless such Issuing Lender acted with gross negligence or willful misconduct in issuing such Letter of Credit. Such payment shall be made on the day such notice is received by such Lender from the Administrative Agent for the applicable Issuing Lender if such notice is received at or before 2:00 P.M. (Charlotte, North Carolina time), 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 Administrative Agent for the account of the applicable Issuing Lender in full upon such request, such Lender shall, on demand, pay to the Administrative Agent for the account of the applicable Issuing Lender interest on the unpaid amount during the period from the date of such drawing until such Lender pays such amount to the Administrative, Agent for the account of the applicable Issuing Lender in full at a rate per annum equal to, if paid within two (2) Business Days of the date of drawing, the Federal Funds Effective Rate and thereafter at a rate equal to the Alternate Base Rate. Each Lender's obligation to make such payment to the Administrative Agent for the account of the applicable Issuing Lender, and the right of such 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 Agreement or the Commitments hereunder, the existence of a Default or Event of Default or the acceleration of the Credit Party Obligations hereunder and shall be made without any offset, abatement, withholding or reduction whatsoever. (e) Repayment with Revolving-1 Loans. (i) Mandatory Dollar Borrowings. On any day on which the Borrower shall have requested, or been deemed to have requested, (A) a Swingline Loan borrowing to reimburse a drawing under a Dollar Letter of Credit, the Swingline Lender shall make the Swingline Loan advance pursuant to the terms of the request or deemed request in accordance with the provisions for Swingline Loan advances hereunder, or (B) a Dollar Revolving-1 Loan to 43 reimburse a drawing under a Dollar Letter of Credit, the Administrative Agent shall give notice to the Lenders that a Dollar Revolving-1 Loan has been requested or deemed requested in connection with a drawing under a Dollar Letter of Credit, in which case a Dollar Revolving-1 Loan borrowing comprised entirely of Alternate Base Rate Loans (each such borrowing, a "Mandatory Dollar Borrowing") shall be immediately made (without giving effect to any termination of the Commitments pursuant to Section 7.2) pro rata based on each Lender's respective Dollar Revolving-1 Commitment Percentage (determined before giving effect to any termination of the Commitments pursuant to Section 7.2) and in the case of both clauses (A) and (B) the proceeds thereof shall be paid directly to the Administrative Agent for the account of the applicable Issuing Lender for application to the respective Dollar LOC Obligations. (ii) Mandatory Multi-currency Borrowings. On any day on which the Borrower shall have requested, or been deemed to have requested, a Multi-currency Revolving-1 Loan to reimburse a drawing under a Multi-currency Letter of Credit, the Administrative Agent shall give notice to the Lenders that a Multi-currency Revolving-1 Loan has been requested or deemed requested in connection with a drawing under a Multi-currency Letter of Credit, in which case a Multi-currency Revolving-1 Loan borrowing comprised entirely of Alternate Base Rate Loans in Dollars equal to the Dollar Amount of such drawing (each such borrowing, a "Mandatory Multi-currency Borrowing") shall be immediately made (without giving effect to any termination of the Commitments pursuant to Section 7.2) pro rata based on each Lender's respective Multi-currency Revolving-1 Commitment Percentage (determined before giving effect to any termination of the Commitments pursuant to Section 7.2) and the proceeds thereof shall be paid directly to the Administrative Agent for the account of the applicable Issuing Lender for application to the respective Multi-currency LOC Obligations. (iii) Obligation Irrevocable. Each Lender hereby irrevocably agrees to make such Dollar Revolving-1 Loans or Multi-currency Revolving-1 Loans, as applicable, pursuant to clauses (i) and (ii) above, immediately upon any such request or deemed request on account of each Mandatory Dollar Borrowing or Mandatory Multi-currency Borrowing, as applicable, in the amount and in the manner specified in the preceding sentence and on the same such date notwithstanding (i) the amount of such Mandatory Dollar Borrowing or Mandatory Multi-currency Borrowing, as applicable, may not comply with the minimum amount for borrowings of Dollar Revolving-1 Loans or Multi-currency Revolving-1 Loans, as applicable, otherwise required hereunder, (ii) whether any conditions specified in Section 4.2 are then satisfied, (iii) whether a Default or an Event of Default then exists, (iv) failure for any such request or deemed request for such Dollar Revolving-1 Loan or Multi-currency Revolving-1 Loan, as applicable, to be made by the time otherwise required in Section 2.1(b), (v) the date of such Dollar Revolving-1 Loan or Mandatory Multi-currency Borrowing, as applicable, or (vi) any reduction in the Dollar Revolving-1 Committed Amount or Multi-currency Revolving-1 Committed Amount, as applicable, after any such 44 Dollar Revolving-1 Letter of Credit or Multi-currency Letter of Credit, as applicable, may have been drawn upon. In the event that any Mandatory Dollar Borrowing or Mandatory Multi-currency Borrowing 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), then each applicable Lender hereby agrees that it shall forthwith fund (as of the date the Mandatory Dollar Borrowing or Mandatory Multi-currency Borrowing, as applicable, would otherwise have occurred, but adjusted for any payments received from the Borrower on or after such date and prior to such purchase) its Participation Interests in the outstanding Dollar LOC Obligations or Multi-currency LOC Obligations, as applicable; provided, further, that in the event any Lender shall fail to fund its Participation Interest on the day the Mandatory Dollar Borrowing or Mandatory Multi-currency Borrowing, as applicable, would otherwise have occurred, then the amount of such Lender's unfunded Participation Interest therein shall bear interest payable to Administrative Agent for the account of the applicable Issuing Lender upon demand, at the rate equal to, if paid within two (2) Business Days of such date, the Federal Funds Effective Rate, and thereafter at a rate equal to the Alternate Base Rate. (f) Designation of Subsidiaries as Account Parties. Notwithstanding anything to the contrary set forth in this Agreement, including, without limitation, Section 2.3(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 a Subsidiary of the Borrower; provided that notwithstanding such statement, the Borrower shall be the actual account party for all purposes of this 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) Modification, Extension. The issuance of any supplement, modification, amendment, renewal, or extension to 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. Unless otherwise agreed to by the applicable Issuing Lender and the Borrower when a Letter of Credit is issued, the applicable Issuing Lender shall have the Letters of Credit be subject to The Uniform Customs and Practice for Documentary Credits (the "UCP"), or the International Standby Practices 1998 ("ISP"), in each case as published as of the date of issue by the International Chamber of Commerce, in which case the UCP or ISP, as applicable, may be incorporated therein and deemed in all respects to be a part thereof. (i) Conflict with LOC Documents. In the event of any conflict between this Agreement and any LOC Document (including any letter of credit application), this Agreement shall control. Each of the Reimbursement 45 Agreements is and shall be deemed amended such that the representations and warranties covenants and events of default (and definitions related thereto) set out in each respective Reimbursement Agreement (the "Existing Provisions"), except to the extent they relate specifically to the relevant bonds or relevant remarketing program, conform with the representations and warranties, covenants and events of default (and definitions related thereto) set out in this Agreement (the "Incorporated Provisions"). So long as any obligations remain outstanding under the underlying revenue bonds related to any Letter of Credit or any documentation related thereto, such Incorporated Provisions shall survive (i) the payment in full of all obligations due the Lenders by the Borrower under this Agreement, (ii) the termination (for any reason) of this Agreement (iii) the sale or participation (in whole or in part) of a Lender's interest in this Agreement, or (iv) any other event which has an effect to terminate the obligations of the Borrower to the Lenders under this Agreement. Upon the happening of one of the events set forth in the immediately preceding sentence, the Borrower agrees to promptly execute a modification of the relevant Reimbursement Agreements to confirm such amendment. Notwithstanding the preceding sentence or the failure of any such modification to be executed the Credit Parties to the extent applicable, must remain in compliance with the Incorporated Provisions as if set forth in each of the Reimbursement Agreement. Any future modification of or amendment to the Incorporated Provisions shall be a modification of or amendment to the relevant Reimbursement Agreements for purposes of compliance with such Reimbursement Agreements. Likewise, if the Required Lenders grant a waiver of compliance of the Incorporated Provisions for any period, such waiver shall be deemed to be a waiver of compliance of the relevant Reimbursement Agreements for the limited period of time for which the waiver was granted. SECTION 2.4 TRANCHE A-1 TERM LOAN FACILITY (a) On the Funding Date the Lenders made available to the Borrower a term loan in Dollars in an aggregate principal amount of NINE HUNDRED MILLION DOLLARS ($900,000,000) (the "Original Tranche A-1 Term Loan"). After giving effect to scheduled amortization from the Funding Date to the Fourth Amendment Effective Date, the Original Tranche A-1 Term Loan has been reduced to SEVEN HUNDRED SIXTY FIVE MILLION DOLLARS ($765,000,000) as of the Fourth Amendment Effective Date (the "Existing Tranche A-1 Term Loans"). After giving effect to the conversion and reallocation of Existing Tranche A-1 Term Loans and advancing of additional Tranche A-1 Term Loans described in Section 1 of the Fourth Amendment and evidenced in the Register, the outstanding amount of all term loans made under this Section 2.4(a) shall be equal to ONE BILLION DOLLARS ($1,000,000,000), (the "Tranche A-1 Term Loan Committed Amount"); and the Tranche A-1 Term Loan may consist of Alternate Base Rate Loans or LIBOR Rate Loans, or a combination thereof, as the Borrower may request. LIBOR Rate Loans shall be made by each Lender at its LIBOR Lending Office and Alternate Base Rate Loans at its Domestic Lending Office. Amounts repaid on the Tranche A-1 Term Loan may not be reborrowed. 46 (b) Repayment of Tranche A-1 Term Loan. The principal amount of the Tranche A-1 Term Loan shall be repaid, unless accelerated sooner pursuant to Section 7.2, in accordance with the following schedule:

Principal Amortization Payment Tranche A-1 Term Loan Date Principal Amortization Payment - -------------------------------- ------------------------------------------- September 30, 2003 $37,500,000 December 31, 2003 $37,500,000 March 31, 2004 $37,500,000 June 30, 2004 $37,500,000 September 30, 2004 $37,500,000 December 31, 2004 $37,500,000 March 31, 2005 $43,750,000 June 30, 2005 $43,750,000 September 30, 2005 $43,750,000 December 31, 2005 $43,750,000 March 31, 2006 $50,000,000 June 30, 2006 $50,000,000 September 30, 2006 $50,000,000 December 31, 2006 $50,000,000 March 31, 2007 $62,500,000 June 30, 2007 $62,500,000 Tranche A-1 Term Loan Maturity $275,000,000 Date

(c) Tranche A-1 Term Notes. Each Lender's Tranche A-1 Term Loan Commitment Percentage of the Tranche A-1 Term Loan Committed Amount may, at the election of such Lender, of the Borrower to such Lender in substantially the form of Schedule 2.4(c). SECTION 2.5 TRANCHE B-1 TERM LOAN FACILITY (a) On the Funding Date, the Lenders made available to the Borrower a term loan in Dollars in an aggregate principal amount of ONE BILLION DOLLARS ($1,000,000,000) (the "Original Tranche B-1 Term Loan"). After giving effect to scheduled amortization from the Funding Date to the Fourth Amendment Effective Date, 47 the Original Tranche B-1 Term Loan has been reduced to NINE HUNDRED NINETY MILLION DOLLARS ($990,000,000) (the "Existing Tranche B-1 Term Loan"). After giving effect to the repayment, conversion and reallocation of the Existing Tranche B-1 Term Loan set forth in Section 1 of the Fourth Amendment, the outstanding amount of all term loans made under this Section 2.5(a) shall be equal to SEVEN HUNDRED FIFTY MILLION DOLLARS ($750,000,000) (the "Tranche B-1 Term Loan Committed Amount"); and The Tranche B-1 Term Loan may consist of Alternate Base Rate Loans or LIBOR Rate Loans, or a combination thereof, as the Borrower may request. LIBOR Rate Loans shall be made by each Lender at its LIBOR Lending Office and Alternate Base Rate Loans at its Domestic Lending Office. Amounts repaid on the Tranche B-1 Term Loan may not be reborrowed. (b) Repayment of Tranche B-1 Term Loan. The principal amount of the Tranche B-1 Term Loan shall be repaid, unless accelerated sooner pursuant to Section 7.2, in accordance with the following schedule:

Principal Amortization Payment Tranche B-1 Term Loan Date Principal Amortization Payment - -------------------------------- --------------------------------------- September 30, 2003 $1,875,000 December 31, 2003 $1,875,000 March 31, 2004 $1,875,000 June 30, 2004 $1,875,000 September 30, 2004 $1,875,000 December 31, 2004 $1,875,000 March 31, 2005 $1,875,000 June 30, 2005 $1,875,000 September 30, 2005 $1,875,000 December 31, 2005 $1,875,000 March 31, 2006 $1,875,000 June 30, 2006 $1,875,000 September 30, 2006 $1,875,000 December 31, 2006 $1,875,000 March 31, 2007 $1,875,000 June 30, 2007 $1,875,000 September 30, 2007 $1,875,000 December 31, 2007 $1,875,000 March 31, 2008 $358,125,000 Tranche B-1 Term Loan Maturity $358,125,000 Date

48 (c) Tranche B-1 Term Notes. Each Lender's Tranche B-1 Term Loan Commitment Percentage of the Tranche B-1 Term Loan Committed Amount may, at the election of such Lender, of the Borrower to such Lender in substantially the form of Schedule 2.5(c). SECTION 2.6 FEES. (a) Commitment Fee. In consideration of the Commitments, the Borrower agrees to pay to the Administrative Agent for the ratable benefit of the Lenders a commitment fee (the "Commitment Fee") in an amount equal to (1) with respect to the Tranche B-1 Term Loan Committed Amount, one-half percent (0.5%) per annum from the Closing Date until the Funding Date, and (2) with respect to the Tranche A-1 Term Loan Committed Amount and the Revolving-1 Committed Amount, from and after (A) the Closing Date until October 31, 2001, one-eighth percent (.125%) per annum on the Tranche A-1 Term Loan Committed Amount and the Revolving-1 Committed Amount and (B) November 1, 2001 until the Funding Date, one-quarter percent (.25%) per annum. After the Funding Date the Borrower agrees to pay to the Administrative Agent (i) for the ratable benefit of the Lenders holding a Dollar Revolving-1 Subcommitment, a Commitment Fee equal to the Applicable Percentage per annum on the average daily unused amount of the Dollar Revolving-1 Committed Amount and (ii) for the ratable benefit of the Lenders holding a Multi-currency Revolving-1 Subcommitment, a Commitment Fee equal to the Applicable Percentage per annum on the average daily unused amount of the Multi-currency Revolving-1 Committed Amount. For purposes of computing the Commitment Fee hereunder, (i) Dollar LOC Obligations shall be considered usage under the aggregate Dollar Revolving-1 Committed Amount, (ii) Multi-currency LOC Obligations shall be considered usage under the aggregate Multi-currency Revolving-1 Committed Amount and (iii) Swingline Loans shall not be considered usage under the aggregate Dollar Revolving-1 Committed Amount unless and until other Lenders having Dollar Revolving-1 Subcommitments purchase Participation Interests in such Swingline Loans pursuant to Section 2.2(b)(ii). The Commitment Fee shall be payable quarterly in arrears on the 15th day following the last day of each calendar quarter for the prior calendar quarter and upon termination of the Revolving-1 Commitments and the funding of the Term Loans. (b) Letter of Credit Fees. In consideration of the LOC Commitments, the Borrower agrees to pay to the Issuing Lender a fee (the "Letter of Credit Fee") equal to the Applicable Percentage per annum on the average daily maximum amount available to be drawn under each Letter of Credit (as such amount may be increased subject to the provisions of Section 2.10(b)) from the date of issuance (or in the case of Letters of 49 Credit outstanding on the Closing Date, from the Closing Date) to the date of expiration. In addition to such Letter of Credit Fee, the Issuing Lender may charge, and retain for its own account without sharing by the other Lenders, an additional facing fee of one-eighth of one percent (0.125%) per annum on the average daily maximum amount available to be drawn under each such Letter of Credit issued by it. The Issuing Lender shall promptly pay over to the Administrative Agent the Letter of Credit Fee (i) for the ratable benefit of the Lenders (including the Issuing Lender, as applicable) holding Dollar Revolving-1 Subcommitments, with respect to Letter of Credit Fees paid on Dollar Letters of Credit, and (ii) for the ratable benefit of the Lenders (including the Issuing Lender, as applicable) holding Multi-currency Revolving-1 Subcommitments, with respect to Letter of Credit Fees paid on Multi-currency Letters of Credit. The Letter of Credit Fee shall be payable quarterly in arrears on the 15th day following the last day of each calendar quarter for the prior calendar quarter. (c) Issuing Lender Fees. In addition to the Letter of Credit Fees payable pursuant to subsection (b) above, the Borrower shall pay to the Issuing Lender for its own account without sharing by the other Lenders the reasonable and customary charges from time to time of the Issuing Lender with respect to the amendment, transfer, administration, cancellation and conversion of, and drawings under, such Letters of Credit (collectively, the "Issuing Lender Fees"). (d) Administrative Fee. The Borrower agrees to pay to the Agents the annual administrative fee as described in the Fee Letter. (e) The commissions, fees, charges, costs and expenses payable pursuant to this Section 2.6 shall be payable in the Permitted Currency in which the applicable Letter of Credit is denominated. SECTION 2.7 REDUCTION OF THE REVOLVING-1 COMMITMENTS (a) Voluntary Reductions. The Borrower shall have the right to terminate or permanently reduce the unused portion of the Dollar Revolving-1 Committed Amount or the Multi-currency Revolving-1 Committed Amount at any time or from time to time upon not less than one Business Day prior notice to the Administrative Agent (which shall notify the Lenders thereof as soon as practicable) of each such termination or reduction, which notice shall specify the effective date thereof and the amount of any such reduction which shall be in a minimum amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof and shall be irrevocable and effective upon receipt by the Administrative Agent; provided that no such reduction or termination shall be permitted if after giving effect thereto, and to any prepayments of Revolving-1 Loans made on the effective date thereof, (i) the sum of the then outstanding aggregate principal amount of Dollar Revolving-1 Loans plus Swingline Loans plus Dollar LOC Obligations would exceed the Dollar Revolving-1 Committed Amount or (ii) the then outstanding aggregate principal Dollar Amount of Multi-currency Revolving-1 Loans plus the Dollar Amount of Multi-currency LOC Obligations would exceed the Multi-currency Revolving-1 Committed Amount. If the Borrower shall fail to specify in any such notice the 50 applicable portion of the Revolving-1 Committed Amount to be reduced, then such reduction shall be applied pro rata to the Dollar Revolving-1 Committed Amount and the Multi-currency Revolving-1 Committed Amount. (b) Maturity Date. The Revolving-1 Commitments, the LOC Commitments and the Swingline Commitments shall automatically terminate on the Revolving-1 Commitment Termination Date. SECTION 2.8 PREPAYMENTS (a) Optional Prepayments. The Borrower shall have the right to prepay Loans in whole or in part from time to time; provided, however, that (i) each partial prepayment of Loans (other than Swingline Loans) shall be in a minimum principal amount of $5,000,000 and integral multiples of $1,000,000 (or the Alternative Currency Amount thereof, as applicable) in excess thereof and (ii) each prepayment of Swingline Loans shall be in a minimum principal amount of $100,000 and integral multiples of $100,000 in excess thereof. The Borrower shall give irrevocable written notice (or telephone notice promptly confirmed in writing which confirmation may be by fax) of any such voluntary prepayment to the Administrative Agent (which shall notify the Lenders thereof as soon as practicable) not later than 1:30 P.M. (Charlotte, North Carolina time) on the Business Day prior to the date of the requested prepayment in the case of Alternate Base Rate Loans, on the third Business Day prior to the date of the requested prepayment in the case of LIBOR Rate Loans denominated in Dollars and on the fourth Business Day prior to the date of the requested prepayment in the case of Alternative Currency Loans. Each such notice of prepayment shall specify (A) the date of repayment, (B) the amount of repayment, (C) whether the repayment is of Dollar Revolving-1 Loans, Multi-currency Revolving-1 Loans (including the applicable Permitted Currency), Swingline Loans, Tranche A-1 Term Loans, Tranche B-1 Term Loans, or a combination thereof, and, if of a combination thereof, the amount allocable to each and (D) whether the repayment is of LIBOR Rate Loans or Alternate Base Rate Loans, or a combination thereof, and, if of a combination thereof, the amount allocable to each. Prepayments of the Tranche A-1 Term Loan or the Tranche B-1 Term Loan under this Section 2.8(a) shall be applied ratably to the remaining principal installments thereof (provided, however, promptly upon notification thereof, one or more holders of the Tranche B-1 Term Loan may decline to accept such prepayment to the extent there are sufficient amounts under the Tranche A-1 Term Loan outstanding to be paid with such prepayment, in which case, such declined prepayments shall be allocated pro rata among the Tranche A-1 Term Loan and the Tranche B-1 Term Loan held by Lenders accepting such payments). Subject to the foregoing terms, amounts prepaid under this Section 2.8(a) shall be applied first to Alternate Base Rate Loans and then to LIBOR Rate Loans in direct order of Interest Period maturities. All prepayments under this Section 2.8(a) shall be without premium or penalty except that (i) any prepayments of the Tranche B-1 Term Loan made during the period commencing on the Fourth Amendment Effective Date and ending on May 29, 2004 will require payment of a premium of 0.50% of the principal amount being prepaid on such date and (ii) all prepayments shall be subject to Section 2.18. Interest on the principal amount prepaid shall be payable on the date of such prepayment. Amounts 51 prepaid on the Swingline Loans and the Revolving-1 Loans may be reborrowed in accordance with the terms hereof. Amounts prepaid on the Tranche A-1 Term Loan and the Tranche B-1 Term Loan may not be reborrowed. (b) Mandatory Prepayments. (i) Revolving-1 Committed Amount. (A) Dollar Revolving-1 Subcommitment. If at any time after the Funding Date, the sum of the aggregate principal amount of outstanding Dollar Revolving-1 Loans plus Swingline Loans plus Dollar LOC Obligations shall exceed the Dollar Revolving-1 Committed Amount, the Borrower immediately shall prepay Dollar Revolving-1 Loans and (after all Dollar Revolving-1 Loans have been repaid) cash collateralize the Dollar LOC Obligations, in an amount sufficient to eliminate such excess (such prepayment to be applied as set forth in clause (vi) below). (B) Multi-currency Revolving-1 Subcommitment. If at any time after the Funding Date, for any reason, the sum of the aggregate principal Dollar Amount of outstanding Multi-currency Revolving-1 Loans plus the Dollar Amount of Multi-currency LOC Obligations shall exceed the Multi-currency Revolving-1 Committed Amount, the Borrower immediately shall prepay Multi-currency Revolving-1 Loans and (after all Multi-currency Revolving-1 Loans have been repaid) cash collateralize the Multi-currency LOC Obligations, in an amount sufficient to eliminate such excess and in the Permitted Currency in which each of the applicable Multi-currency Letters of Credit are denominated (such prepayment to be applied as set forth in clause (vi) below). (ii) Asset Dispositions. Promptly following any Asset Disposition in excess of $100,000,000 in any fiscal year, the Borrower shall prepay the Loans in an aggregate amount equal to 100% of the Net Cash Proceeds derived from all such Asset Dispositions (such prepayment to be applied as set forth in clause (vi) below); provided, however, that such Net Cash Proceeds shall not be required to be so applied to the extent (1) the Borrower delivers to the Administrative Agent a certificate stating that it intends to use such Net Cash Proceeds to acquire fixed or capital assets in replacement of the disposed assets, (2) such acquisition is committed to within 180 days of receipt of the Net Cash Proceeds and (3) such acquisition is consummated within 270 days of receipt of such Net Cash Proceeds, it being expressly agreed that any Net Cash Proceeds not so reinvested shall be applied to repay the Loans immediately thereafter. (iii) [Reserved]. 52 (iv) Recovery Event. To the extent of cash proceeds received in connection with a Recovery Event which are in excess of $10,000,000 in the aggregate and which are not applied to repair, replace or relocate damaged property or to purchase or acquire fixed or capital assets in replacement of the assets lost or destroyed within 270 days (or 360 days, in the case of improvements to real property) of the receipt of such cash proceeds, the Borrower shall prepay the Loans in an aggregate amount equal to one hundred percent (100%) of such cash proceeds (such prepayment to be applied as set forth in clause (vi) below). (v) [Reserved]. (vi) Application of Mandatory Prepayments. All amounts required to be paid pursuant to this Section 2.8(b) shall be applied as follows: (A) with respect to all amounts prepaid pursuant to Section 2.8(b)(i)(A), to the Dollar Revolving-1 Loans and then (after all Dollar Revolving-1 Loans have been repaid) to a cash collateral account in respect of Dollar LOC Obligations, (B) with respect to all amounts prepaid pursuant to Section 2.8(b)(i)(B), to the Multi-currency Revolving-1 Loans and then (after all Multi-currency Revolving-1 Loans have been repaid) to a cash collateral account in respect of Multi-currency LOC Obligations, and (C) with respect to all amounts prepaid pursuant to Sections 2.8(b)(ii) through (v), (1) first, pro rata to the Tranche A-1 Term Loan and the Tranche B-1 Term Loan (ratably to the remaining principal installments thereof); provided, however, promptly upon notification thereof, one or more holders of the Tranche B-1 Term Loan may decline to accept a mandatory prepayment to the extent there are sufficient amounts under the Tranche A-1 Term Loan outstanding to be paid with such prepayment, in which case, such declined payments shall be allocated pro rata among the Tranche A-1 Term Loan and the Tranche B-1 Term Loan held by Lenders accepting such prepayments, and (2) second, pro rata to the Dollar Revolving-1 Loans and the Multi-currency Revolving-1 Loans with corresponding permanent pro rata reductions of the Dollar Revolving-1 Committed Amount and the Multi-currency Revolving-1 Committed Amount and (after all Revolving-1 Loans have been repaid) to a cash collateral account in respect of Dollar LOC Obligations and Multi-currency LOC Obligations, pro rata. Within the parameters of the applications set forth above, prepayments shall be applied first to Alternate Base Rate Loans and then to LIBOR Rate Loans in direct order of Interest Period maturities. All prepayments under this Section 2.8(b) shall be subject to Section 2.18 and be accompanied by interest on the principal amount prepaid through the date of prepayment. Any prepayments of the Tranche B-1 Term Loan made during the period commencing on the Fourth Amendment Effective Date and ending on May 29, 2004 pursuant to Section 2.8(b)(ii) will require payment of a premium of 0.50% of the principal amount being prepaid on such date. (c) Notwithstanding anything contained in this Agreement to the contrary, any prepayment of Alternative Currency Loans denominated in an Alternative Currency shall 53 be made in such Alternative Currency not later than 11:00 A.M. (the time of the Administrative Agent's Correspondent) on the date specified for payment under this Agreement to the Administrative Agent's account with the Administrative Agent's Correspondent for the account of the Lenders. SECTION 2.9 MINIMUM BORROWING AMOUNTS AND PRINCIPAL AMOUNTS OF TRANCHES. (a) Each Alternate Base Rate Loan (other than Swingline Loans) borrowing shall be in a minimum amount of $5,000,000 and whole multiples of $1,000,000 in excess thereof. (b) Each LIBOR Rate Loan borrowing shall be in a minimum amount of $10,000,000 and whole multiples of $1,000,000 in excess thereof. (c) All borrowings, payments and prepayments in respect of Revolving-1 Loans shall be in such amounts and be made pursuant to such elections so that after giving effect thereto the aggregate principal amount of the Revolving-1 Loans comprising any Tranche shall either be zero or shall not be less than $10,000,000 or a whole multiple of $1,000,000 in excess thereof. SECTION 2.10 INTEREST; INTEREST PAYMENT DATES. (a) Subject to the provisions of Section 2.10(b), all Loans (other than Swingline Loans) shall bear interest as follows: (i) Alternate Base Rate Loans. During such periods as Loans shall be comprised of Alternate Base Rate Loans, each such Alternate Base Rate Loan shall bear interest at a per annum rate equal to the sum of the Alternate Base Rate plus the Applicable Percentage; and (ii) LIBOR Rate Loans. During such periods as Loans shall be comprised of LIBOR Rate Loans, each such LIBOR Rate Loan shall bear interest at a per annum rate equal to the sum of the applicable LIBOR Rate plus the Applicable Percentage. (b) Upon the occurrence, and during the continuance, of an Event of Default, the principal of and, to the extent permitted by law, interest on the Loans, and any other amounts owing hereunder or under the other Credit Documents shall bear interest, payable on demand, at a per annum rate 2% greater than the applicable rate (including the Applicable Percentage) then in effect or, if no rate is then in effect, at a per annum rate 2% greater than the Alternate Base Rate plus the Applicable Percentage and the Letter of Credit Fees shall be increased by 2% per annum. (c) Interest on Loans shall be payable in arrears on each Interest Payment Date, subject to Section 2.13; provided that (i) interest owing under Section 2.10(b) shall be payable on demand, (ii) interest owing in connection with any amounts repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) interest owing on LIBOR Loans which are converted pursuant to Section 2.11, shall be payable on the date of such conversion. 54 SECTION 2.11 CONVERSION OPTIONS. (a) The Borrower may elect from time to time to convert Alternate Base Rate Loans to LIBOR Rate Loans by giving irrevocable written notice (or telephone notice promptly confirmed in writing which confirmation may be by fax) to the Administrative Agent not later than 1:30 P.M. (Charlotte, North Carolina time) on the third Business Day prior to the date of the requested conversion (a "Notice of Conversion/Extension"). A form of Notice of Conversion/Extension is attached as Schedule 2.11. If the date upon which an Alternate Base Rate Loan is to be converted to a LIBOR Rate Loan is not a Business Day, then such conversion shall be made on the next succeeding Business Day and during the period from such last day of an Interest Period to such succeeding Business Day such Loan shall bear interest as if it were an Alternate Base Rate Loan. All or any part of outstanding Alternate Base Rate Loans may be converted as provided herein, provided that (i) no Loan may be converted into a LIBOR Rate Loan when any Default or Event of Default has occurred and is continuing and (ii) partial conversions shall be in an aggregate principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof. (b) Any LIBOR Rate Loans may be continued as such upon the expiration of an Interest Period with respect thereto by compliance by the Borrower with the notice provisions contained in Section 2.11(a); provided, that no LIBOR Rate Loan may be continued as such when any Default or Event of Default has occurred and is continuing, in which case such Loan shall be automatically converted to an Alternate Base Rate Loan at the end of the applicable Interest Period with respect thereto. If the Borrower shall fail to give timely notice of an election to continue a LIBOR Rate Loan, or the continuation of LIBOR Rate Loans is not permitted hereunder, such LIBOR Rate Loans shall be automatically converted to Alternate Base Rate Loans at the end of the applicable Interest Period with respect thereto. SECTION 2.12 COMPUTATION OF INTEREST AND FEES. (a) Interest payable hereunder with respect to Alternate Base Rate Loans based on the Prime Rate shall be calculated on the basis of a year of 365 days (or 366 days, as applicable) for the actual days elapsed. All other fees, interest and all other amounts payable hereunder shall be calculated on the basis of a 360 day year for the actual days elapsed. The Administrative Agent shall as soon as practicable notify the Borrower and the Lenders of each determination of a LIBOR Rate on the Business Day of the determination thereof. Any change in the interest rate on a Loan resulting from a change in the Alternate Base Rate shall become effective as of the opening of business on the day on which such change in the Alternate Base Rate shall become effective. The Administrative Agent shall as soon as practicable notify the Borrower and the Lenders of the effective date and the amount of each such change. (b) Each determination of an interest rate by the Administrative Agent pursuant to any provision of this Agreement shall be conclusive and binding on the Borrower and the Lenders in the absence of manifest error. The Administrative Agent shall, at the request of the Borrower, deliver to the Borrower a statement showing the computations used by the Administrative Agent in determining any interest :rate. 55 (c) It is the intent of the Lenders and the Credit Parties to conform to and contract in strict compliance with applicable usury law from time to time in effect. All agreements between the Lenders and the Credit Parties are hereby limited by the provisions of this paragraph which shall override and control all such agreements, whether now existing or hereafter arising and whether written or oral. In no way, nor in any event or contingency (including but not limited to prepayment or acceleration of the maturity of any obligation), shall the interest taken, reserved, contracted for, charged, or received under this Credit Agreement, under the Notes or otherwise, exceed the maximum nonusurious amount permissible under applicable law. If, from any possible construction of any of the Credit Documents or any other document, interest would otherwise be payable in excess of the maximum nonusurious amount, any such construction shall be subject to the provisions of this paragraph and such interest shall be automatically reduced to the maximum nonusurious amount permitted under applicable law, without the necessity of execution of any amendment or new document. If any Lender shall ever receive anything of value which is characterized as interest on the Loans under applicable law and which would, apart from this provision, be in excess of the maximum nonusurious amount, an amount equal to the amount which would have been excessive interest shall, without penalty, be applied to the reduction of the principal amount owing on the Loans and not to the payment of interest, or refunded to the Borrower or the other payor thereof if and to the extent such amount which would have been excessive exceeds such unpaid principal amount of the Loans. The right to demand payment of the Loans or any other Indebtedness evidenced by any of the Credit Documents does not include the right to receive any interest which has not otherwise accrued on the date of such demand, and the Lenders do not intend to charge or receive any unearned interest in the event of such demand. All interest paid or agreed to be paid to the Lenders with respect to the Loans shall, to the extent permitted by applicable law, be amortized, prorated, allocated, and spread throughout the full stated term (including any renewal or extension) of the Loans so that the amount of interest on account of such indebtedness does not exceed the maximum nonusurious amount permitted by applicable law. SECTION 2.13 PRO RATA TREATMENT AND PAYMENTS. (a) Each borrowing of Revolving-1 Loans and any reduction of the Revolving-1 Commitments shall be made pro rata according to the respective Commitment Percentages of the Lenders. Each payment under this Agreement or any Note shall be applied, first, to any fees then due and owing by the Borrower pursuant to Section 2.6, second, to interest then due and owing in respect of the Notes of the Borrower and, third, to principal then due and owing hereunder and under the Notes of the Borrower. Each payment on account of any fees pursuant to Section 2.6 shall be made pro rata in accordance with the respective amounts due and owing (except as to the portion of the Letter of Credit retained by the Issuing Lender, the Issuing Lender Fees and fees payable to the Agents). Each payment (other than prepayments) by the Borrower on account of principal of and interest on the Revolving-1 Loans, the Tranche A-1 Term Loan and/or the Tranche B-1 Term Loan shall be made pro rata according to the respective amounts due and owing first to Alternate Base Rate Loans and then to LIBOR Rate Loans in the direct order of Interest Period maturities. Each optional prepayment on account of principal of the Loans shall be applied as set forth in Section 2.8(a); provided, that prepayments made pursuant to Section 2.16 shall be applied in accordance with such section. Each mandatory prepayment on account of principal of the Loans shall be applied in accordance with Section 2.8(b). All payments 56 (including prepayments) to be made by the Borrower on account of principal, interest and fees shall be made without defense, set-off or counterclaim (except as provided in Section 2.19(b)) and shall be made to the Administrative Agent for the account of the Lenders at the Administrative Agent's office specified on Schedule 9.2 in Dollars and in immediately available funds not later than 2:00 P.M. (Charlotte, North Carolina time) on the date when due. The Administrative Agent shall distribute such payments to the Lenders entitled thereto promptly upon receipt in like funds as received. If any payment hereunder (other than payments on the LIBOR Rate Loans) becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day, and, with respect to payments of principal, interest thereon shall be payable at the then applicable rate during such extension. If any payment on a LIBOR Rate Loan becomes due and payable on a day other than a Business Day, the maturity thereof shall be extended to the next succeeding Business Day unless the result of such extension would be to extend such payment into another calendar month, in which event such payment shall be made on the immediately preceding Business Day. (b) Allocation of Payments After Event of Default. Notwithstanding any other provisions of this Credit Agreement to the contrary, after the occurrence and during the continuance of an Event of Default, all amounts collected or received by the Administrative Agent or any Lender on account of the Credit Party Obligations or any other amounts outstanding under any of the Credit Documents 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 Administrative Agent in connection with enforcing the rights of the Lenders under the Credit Documents and any protective advances made by the Administrative Agent with respect to the Collateral under or pursuant to the terms of the Security Documents; SECOND, to payment of any fees owed to the Administrative Agent; THIRD, 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; FOURTH, to the payment of all of the Credit Party Obligations consisting of accrued fees and interest; FIFTH, to the payment of the outstanding principal amount of the Credit Party Obligations (including the payment or cash collateralization of the outstanding LOC Obligations) and any Hedging Obligations (including any termination payments and any accrued and unpaid interest thereon) (pro rata in accordance with all such amounts due); 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 57 SEVENTH, to the payment of the surplus, if any, to whoever may be lawfully entitled to receive such surplus. 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 Administrative 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 2.13(b). SECTION 2.14 NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT. (a) Unless the Administrative Agent shall have been notified in writing by a Lender prior to the date a Loan is to be made by such Lender (which notice shall be effective upon receipt) that such Lender does not intend to make the proceeds of such Loan available to the Administrative Agent, the Administrative Agent may assume that such Lender has made such proceeds available to the Administrative Agent on such date, and the Administrative Agent may in reliance upon such assumption (but shall not be required to) make available to the Borrower a corresponding amount. If such corresponding amount is not in fact made available to the Administrative Agent, the Administrative Agent shall be able to recover such corresponding amount from such Lender. If such Lender does not pay such corresponding amount forthwith upon the Administrative Agent's demand therefor, the Administrative Agent will promptly notify the Borrower and the Borrower shall immediately pay such corresponding amount to the Administrative Agent. The Administrative 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 Administrative Agent to the Borrower to the date such corresponding amount is recovered by the Administrative 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 Effective Rate. (b) Unless the Administrative Agent shall have been notified in writing by the Borrower, prior to the date on which any payment is due from it hereunder (which notice shall be effective upon receipt) that the Borrower does not intend to make such payment, the Administrative Agent may assume that the Borrower has made such payment when due, and the Administrative Agent may in reliance upon such assumption (but shall not be required to) make available to each Lender on such payment date an amount equal to the portion of such assumed payment to which such Lender is entitled hereunder, and if the Borrower has not in fact made 58 such payment to the Administrative Agent, such Lender shall, on demand, repay to the Administrative Agent the amount made available to such Lender. If such amount is repaid to the Administrative Agent on a date after the date such amount was made available to such Lender, such Lender shall pay to the Administrative Agent on demand interest on such amount in respect of each day from the date such amount was made available by the Administrative Agent to such Lender to the date such amount is recovered by the Administrative Agent at a per annum rate equal to the Federal Funds Effective Rate. (c) A certificate of the Administrative Agent submitted to the Borrower or any Lender with respect to any amount owing under this Section 2.14 shall be conclusive in the absence of manifest error. SECTION 2.15 INABILITY TO DETERMINE INTEREST RATE. Notwithstanding any other provision of this Agreement, if (i) the Administrative Agent shall reasonably determine (which determination shall be conclusive and binding absent manifest error) that, (A) by reason of circumstances affecting the relevant market, reasonable and adequate means do not exist for ascertaining LIBOR for an Interest Period or for an Alternative Currency, (B) a fundamental change has occurred in the foreign exchange or interbank markets with respect to any Alternative Currency (including, without limitation, changes in national or international financial, political or economic conditions or currency exchange rates or exchange controls) or (C) it has become otherwise materially impractical for the Administrative Agent or the Lenders to make any Loan in an Alternative Currency, or (ii) the Required Lenders shall reasonably determine (which determination shall be conclusive and binding absent manifest error) that the LIBOR Rate does not adequately and fairly reflect the cost to such Lenders of funding LIBOR Rate Loans that the Borrower has requested be outstanding as a LIBOR Tranche during an Interest Period, the Administrative Agent shall forthwith give telephone notice of such determination, confirmed in writing, to the Borrower and the Lenders. Unless the Borrower shall have notified the Administrative Agent upon receipt of such telephone notice that it wishes to rescind or modify its request regarding such LIBOR Rate Loans or Alternative Currency Loans, as applicable, any Loans that were requested to be made as LIBOR Rate Loans or Alternative Currency Loans, as applicable, shall be made as Alternate Base Rate Loans in Dollars and any Loans that were requested to be converted into or continued as LIBOR Rate Loans or Alternative Currency Loans, as applicable, shall be converted into Alternate Base Rate Loans in Dollars. Until any such notice has been withdrawn by the Administrative Agent, no further Loans shall be made as, continued as, or converted into, LIBOR Rate Loans or Alternative Currency Loans, as applicable, for the Interest Periods or Alternative Currencies so affected. SECTION 2.16 ILLEGALITY. Notwithstanding any other provision of this Agreement, if the adoption of or any change in any Requirement of Law or in the interpretation or application thereof by the relevant Governmental Authority to any Lender shall make it unlawful for such Lender or its LIBOR Lending Office to make or maintain LIBOR Rate Loans or Alternative Currency Loans, as applicable, as contemplated by this Agreement or to obtain in the interbank eurodollar market through its LIBOR Lending Office the funds with which to make such Loans, (a) such Lender shall 59 promptly notify the Administrative Agent and the Borrower thereof, (b) the commitment of such Lender hereunder to make LIBOR Rate Loans or Alternative Currency Loans, as applicable, or continue LIBOR Rate Loans or Alternative Currency Loans, as applicable, as such shall forthwith be suspended until the Administrative Agent shall give notice that the condition or situation which gave rise to the suspension shall no longer exist, and (c) such Lender's Loans then outstanding as LIBOR Rate Loans or Alternative Currency Loans, as applicable, if any, shall be converted on the last day of the Interest Period for such Loans or within such earlier period as required by law as Alternate Base Rate Loans in Dollars. The Borrower hereby agrees promptly to pay any Lender, upon its demand, any additional amounts necessary to compensate such Lender for actual and direct costs (but not including anticipated profits) reasonably incurred by such Lender in making any repayment in accordance with this Section including, but not limited to, any currency exchange loss and any interest or fees payable by such Lender to lenders of funds obtained by it in order to make or maintain its LIBOR Rate Loans or Alternative Currency Loans, as applicable, hereunder. A certificate as to any additional amounts payable pursuant to this Section submitted by such Lender, through the Administrative Agent, to the Borrower shall be conclusive in the absence of manifest error. Each Lender agrees to use reasonable efforts (including reasonable efforts to change its LIBOR Lending Office) to avoid or to minimize any amounts which may otherwise be payable pursuant to this Section; provided, however, that such efforts shall not cause the imposition on such Lender of any additional costs or legal or regulatory burdens deemed by such Lender in its sole discretion to be material. SECTION 2.17 REQUIREMENTS OF LAW. (a) If the adoption of or any change in any Requirement of Law or in the interpretation or application thereof or compliance by any Lender with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority made subsequent to the date hereof: (i) shall subject such Lender to any tax of any kind whatsoever with respect to any Letter of Credit or any application relating thereto, any LIBOR Rate Loan made by it, any Alternative Currency Loan made by it, or change the basis of taxation of payments to such Lender in respect thereof (except for changes in the rate of tax on the overall net income of such Lender); (ii) shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, any office of such Lender which is not otherwise included in the determination of the LIBOR Rate hereunder; or (iii) shall impose on such Lender any other condition; and the result of any of the foregoing is to increase the cost to such Lender of making or maintaining LIBOR Rate Loans, Alternative Currency Loans, or the Letters of Credit or to reduce any amount receivable hereunder or under any Note and such Lender's costs have increased with respect to other customers under similar circumstances, then, in any such case, the Borrower shall promptly pay 60 such Lender, upon its demand, any additional amounts necessary to compensate such Lender for such additional cost or reduced amount receivable which such Lender reasonably deems to be material as determined by such Lender with respect to its LIBOR Rate Loans, Alternative Currency Loans, or Letters of Credit. A certificate as to any additional amounts payable pursuant to this Section submitted by such Lender, through the Administrative Agent, to the Borrower shall be conclusive in the absence of manifest error. Each Lender agrees to use reasonable efforts (including reasonable efforts to change its Domestic Lending Office or LIBOR Lending Office, as the case may be) to avoid or to minimize any amounts which might otherwise be payable pursuant to this paragraph of this Section; provided, however, that such efforts shall riot cause the imposition on such Lender of any additional costs or legal or regulatory burdens deemed by such Lender to be material. (b) If any Lender shall have reasonably determined that the adoption of or any change in any Requirement of Law regarding capital adequacy or in the interpretation or application thereof or compliance by such Lender or any corporation controlling such Lender with any request or directive regarding capital adequacy (whether or not having the force of law) from any central bank or Governmental Authority made subsequent to the date hereof does or shall have the effect of reducing the rate of return on such Lender's or such corporation's capital as a consequence of its obligations hereunder to a level below that which such Lender or such corporation could have achieved but for such adoption, change or compliance (taking into consideration such Lender's or such corporation's policies with respect to capital adequacy) by an amount reasonably deemed by such Lender to be material, and such Lender has experienced such effect with respect to other customers under similar circumstances, then from time to time, within fifteen (15) days after demand by such Lender, the Borrower shall pay to such Lender such additional amount as shall be certified by such Lender as being required to compensate it for such reduction. Such a certificate as to any additional amounts payable under this Section submitted by a Lender (which certificate shall include a description of the basis for the computation), through the Administrative Agent, to the Borrower shall be conclusive absent manifest error. (c) The agreements in this Section 2.17 shall survive the termination of this Agreement and payment of the Notes and all other amounts payable hereunder. SECTION 2.18 INDEMNITY. The Borrower hereby agrees to indemnify each Lender and to hold such Lender harmless from any funding loss or expense which such Lender may sustain or incur as a consequence of (a) default by the Borrower in payment of the principal amount of or interest on any Loan by such Lender in accordance with the terms hereof, (b) default by the Borrower in accepting a borrowing after the Borrower has given a notice in accordance with the terms hereof, (c) default by the Borrower in making any prepayment after the Borrower has given a notice in accordance with the terms hereof, and/or (d) the making by the Borrower of a prepayment of a Loan, or the conversion thereof, on a day which is not the last day of the Interest Period with respect thereto, or in a currency other than as required hereunder, in each case including, but not limited to, any foreign exchange cost and any such loss or expense arising from interest or fees payable by such 61 Lender to lenders of funds obtained by it in order to maintain its Loans hereunder. A certificate as to any additional amounts payable pursuant to this Section submitted by any Lender, through the Administrative Agent, to the Borrower (which certificate must be delivered to the Administrative Agent within thirty days following such default, prepayment or conversion) shall be conclusive in the absence of manifest error. The agreements in this Section shall survive termination of this Agreement and payment of the Notes and all other amounts payable hereunder. SECTION 2.19 TAXES. (a) All payments made by the Borrower hereunder or under any Note will be, except as provided in Section 2.19(b), made free and clear of, and without: deduction or withholding for, any present or future taxes, levies, imposts, duties, fees, assessments or other charges of whatever nature now or hereafter imposed by any Governmental Authority or by any political subdivision or taxing authority thereof or therein with respect to such payments (but excluding any tax imposed on or measured by the net income or profits of a Lender) and all interest, penalties or similar liabilities with respect thereto (all such non-excluded taxes, levies, imposts, duties, fees, assessments or other charges being referred to collectively as "Taxes"). If any Taxes are so levied or imposed, the Borrower agrees to pay the full amount of such Taxes, and such additional amounts as may be necessary so that every payment of all amounts due under this Agreement or under any Note, after withholding or deduction for or on account of any Taxes, will not be less than the amount provided for herein or in such Note. The Borrower will furnish to the Administrative Agent as soon as practicable after the date the payment of any Taxes is due pursuant to applicable law certified copies (to the extent reasonably available and required by law) of tax receipts evidencing such payment by the Borrower. The Borrower agrees to indemnify and hold harmless each Lender, and reimburse such Lender upon its written request, for the amount of any Taxes so levied or imposed and paid by such Lender but excluding any interest or penalties caused by such Lender's failure to pay any such taxes when due. (b) Each Lender that is not a United States person (as such term is defined in Section 7701(a)(30) of the Code) agrees to deliver to the Borrower and the Administrative Agent on or prior to the Closing Date, or in the case of a Lender that is an assignee or transferee of an interest under this Agreement pursuant to Section 9.6(d) (unless the respective Lender was already a Lender hereunder immediately prior to such assignment or transfer), on the date of such assignment or transfer to such Lender, (i) if the Lender is a "bank" within the meaning of Section 881(c)(3)(A) of the Code, two accurate and complete original signed copies of Internal Revenue Service Form W-8BEN or W-8ECI (or successor forms) certifying such Lender's entitlement to a complete exemption from United States withholding tax with respect to payments to be made under this Agreement and under any Note, or (ii) if the Lender is not a "bank" within the meaning of Section 881(c)(3)(A) of the Code, either Internal Revenue Service Form W8BEN or W-8ECI as set forth in clause (i) above, or (x) a certificate substantially in the form of Schedule 2.19 (any such certificate, a "2.19 Certificate") and (y) two accurate and complete original signed copies of Internal Revenue Service Form W-8 (or successor 62 form) certifying such Lender's entitlement to an exemption from United States withholding tax with respect to payments of interest to be made under this Agreement and under any Note. In addition, each Lender agrees that it will deliver upon the Borrower's request updated versions of the foregoing, as applicable, whenever the previous certification has become obsolete or inaccurate in any material respect, together with such other forms as may be required in order to confirm or establish the entitlement of such Lender to a continued exemption from or reduction in United States withholding tax with respect to payments under this Agreement and any Note. Notwithstanding anything to the contrary contained in Section 2.19(a), but subject to the immediately succeeding sentence, (x) each Borrower shall be entitled, to the extent it is required to do so by law, to deduct or withhold Taxes imposed by the United States (or any political subdivision or taxing authority thereof or therein) from interest, fees or other amounts payable hereunder for the account of any Lender which is not a United States person (as such term is defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes to the extent that such Lender has not provided to the Borrower U.S. Internal Revenue Service Forms that establish a complete exemption from such deduction or withholding and (y) the Borrower shall not be obligated pursuant to Section 2.19(a) hereof to gross-up payments to be made to a Lender in respect of Taxes imposed by the United States if (I) such Lender has not provided to the Borrower the Internal Revenue Service Forms required to be provided to the Borrower pursuant to this Section 2.19(b) or (II) in the case of a payment, other than interest, to a Lender described in clause (ii) above, to the extent that such Forms do not establish a complete exemption from withholding of such Taxes. Notwithstanding anything to the contrary contained in the preceding sentence or elsewhere in this Section 2.19, the Borrower agrees to pay additional amounts and to indemnify each Lender in the manner set forth in Section 2.19(a) (without regard to the identity of the jurisdiction requiring the deduction or withholding) in respect of any amounts deducted or withheld by it as described in the immediately preceding sentence as a result of any changes after the Closing Date in any applicable law, treaty, governmental rule, regulation, guideline or order, or in the interpretation thereof, relating to the deducting or withholding of Taxes. (c) Each Lender agrees to use reasonable efforts (including reasonable efforts to change its Domestic Lending Office or LIBOR Lending Office, as the case may be) to avoid or to minimize any amounts which might otherwise be payable pursuant to this Section; provided, however, that such efforts shall not cause the imposition on such Lender of any additional costs or legal or regulatory burdens deemed by such Lender in its sole discretion to be material. (d) If the Borrower pays any additional amount pursuant to this Section 2.19 with respect to a Lender, such Lender shall use reasonable efforts to obtain a refund of tax or credit against its tax liabilities on account of such payment; provided that such Lender shall have no obligation to use such reasonable efforts if either (i) it is in an excess foreign tax credit position or (ii) it believes in good faith, in its sole discretion, that claiming a refund or credit would cause adverse tax consequences to it. In the event that such Lender receives such a refund or credit, such Lender shall pay to the Borrower an amount that such Lender reasonably determines is equal to the net tax benefit obtained by 63 such Lender as a result of such payment by the Borrower. In the event that no refund or credit is obtained with respect to the Borrower's payments to such Lender pursuant to this Section 2.19(d), then such Lender shall upon request provide a certification that such Lender has not received a refund or credit for such payments. Nothing contained in this Section 2.19(d) shall require a Lender to disclose or detail the basis of its calculation of the amount of any tax benefit or any other amount or the basis of its determination referred to in the proviso to the first sentence of this Section 2.19(d) to the Borrower or any other party. (e) The agreements in this Section 2.19 shall survive the termination of this Agreement and the payment of the Notes and all other amounts payable hereunder. SECTION 2.20 INDEMNIFICATION; NATURE OF ISSUING LENDER'S DUTIES. (a) In addition to its other obligations under Section 2.3, the Borrower hereby agrees to protect, indemnify, pay and save the Issuing Lender harmless from and against any and all claims, demands, liabilities, damages, losses, costs, charges and expenses (including reasonable attorneys' fees) that the Issuing Lender may incur or be subject to as a consequence, direct or indirect, of (i) the issuance of any Letter of Credit or (ii) the failure of the Issuing 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"). (b) As between the Borrower and the Issuing Lender, the Borrower shall assume all risks of the acts, omissions or misuse of any Letter of Credit by the beneficiary thereof. The Issuing Lender shall not be responsible: (i) 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; (ii) 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; (iii) for failure of the beneficiary of a Letter of Credit to comply fully with conditions required in order to draw upon a Letter of Credit; (iv) 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; (v) for errors in interpretation of technical terms; (vi) 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 (vii) for any consequences arising from causes beyond the control of the Issuing 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. (c) In furtherance and extension and not in limitation of the specific provisions hereinabove set forth, any action taken or omitted by the Issuing Lender, 64 under or in connection with any Letter of Credit or the related certificates, if taken or omitted in good faith, shall not put such Issuing Lender under any resulting liability to the Borrower. It is the intention of the parties that this Agreement shall be construed and applied to protect and indemnify 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, including, without limitation, any and all risks of the acts or omissions, whether rightful or wrongful, of any Governmental Authority. The Issuing Lender shall not, in any way, be liable for any failure by the Issuing 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 the Issuing Lender. (d) Nothing in this Section 2.20 is intended to limit the reimbursement obligation of the Borrower contained in Section 2.3(d) hereof. The obligations of the Borrower under this Section 2.20 shall survive the termination of this Agreement. No act or omissions of any current or prior beneficiary of a Letter of Credit shall in any way affect or impair the rights of the Issuing Lender to enforce any right, power or benefit under this Agreement. (e) Notwithstanding anything to the contrary contained in this Section 2.20, the Borrower shall have no obligation to indemnify any Issuing Lender in respect of any liability incurred by such Issuing Lender arising out of the gross negligence or willful misconduct of the Issuing Lender (including action not taken by an Issuing Lender), as determined by a court of competent jurisdiction. SECTION 2.21 DEFAULTING LENDERS; LIMITATION ON CLAIMS. (a) Generally. In addition to the rights and remedies that may be available to the Administrative Agent or the Borrower under this Agreement or applicable law, if at any time a Lender is a Defaulting Lender such Defaulting Lender's right to participate in the administration of the Loans, this Agreement and the other Credit Documents (excluding for purposes hereof, those matters requiring the unanimous consent or approval of the Lenders, or requiring the approval of each Lender directly affected thereby, pursuant to Section 9.1(i) through 9.1(vii) hereof or Section 9.6(a)), including without limitation, any right to vote in respect of, to consent to or to direct any action or inaction of the Administrative Agent or to be taken into account in the calculation of the Required Lenders, shall be suspended during the pendency of such failure or refusal. If a Lender is a Defaulting Lender because it has failed to make timely payment to the Administrative Agent of any amount required to be paid to the Administrative Agent hereunder (without giving effect to any notice or cure periods), in addition to other rights and remedies which the Administrative Agent or the Borrower may have under the immediately preceding provisions or otherwise, the Administrative Agent shall be entitled (i) to collect interest from such Defaulting Lender on such delinquent payment for the period from the date on which the payment was due until the date on which the payment is made at the Federal Funds Effective Rate, (ii) to withhold or setoff and to apply in satisfaction of the defaulted payment and any related interest, any amounts otherwise payable to such Defaulting Lender under this Agreement or any other Credit 65 Document until such defaulted payment and related interest has been paid in full and such default no longer exists and (iii) to bring an action or suit against such Defaulting Lender in a court of competent jurisdiction to recover the defaulted amount and any related interest. Any amounts received by the Administrative Agent in respect of a Defaulting Lender's Loans shall not be paid to such Defaulting Lender and shall be held uninvested by the Administrative Agent and either applied against the purchase price of such Loans under the following subsection (b) or paid to such Defaulting Lender upon the default of such Defaulting Lender being cured. (b) Purchase of Defaulting Lender's Commitment. Any Lender who is not a Defaulting Lender shall have the right, but not the obligation, in its sole discretion, to acquire all of a Defaulting Lender's Commitment. If more than one Lender exercises such right, each such Lender shall have the right to acquire such proportion of such Defaulting Lender's Commitment on a pro rata basis. Upon any such purchase, the Defaulting Lender's interest in the Loans and its rights hereunder (but not its liability in respect thereof or under the Credit Documents or this Agreement to the extent the same relate to the period prior to the effective date of the purchase) shall terminate on the date of purchase, and the Defaulting Lender shall promptly execute all documents reasonably requested to surrender and transfer such interest to the purchaser thereof subject to and in accordance with the requirements set forth in Section 9.6, including an appropriate Commitment Transfer Supplement. The purchase price for the Commitment of a Defaulting Lender shall be equal to the sum of the amount of the principal balance of the Loans outstanding and owed by the Borrower to the Defaulting Lender, plus any accrued interest with respect thereto, plus any fees or other amounts owed by the Borrower to the Defaulting Lender. Prior to payment of such purchase price to a Defaulting Lender, the Administrative Agent shall apply against such purchase price any amounts retained by the Administrative Agent pursuant to the last sentence of the immediately preceding subsection (a). The Defaulting Lender shall be entitled to receive amounts owed to it by the Borrower on account of principal of and interest on the Loans and the Notes, and fees and other amounts due under the Credit Documents which accrued prior to the date of the default by the Defaulting Lender, to the extent the same are received by the Administrative Agent from or on behalf of the Borrower. There shall be no recourse against any Lender or the Administrative Agent for the payment of such sums by the Borrower except to the extent of the receipt of payments from any other party or in respect of the Loans. SECTION 2.22 REPLACEMENT OF LENDERS. If any Lender shall become affected by any of the changes or events described in Sections 2.15, 2.16, 2.17 or 2.19 (any such Lender being hereinafter referred to as a "Replaced Lender") and shall petition the Borrower for any increased cost or amounts thereunder, then in such case, the Borrower may, upon at least five (5) Business Days' notice to the Administrative Agent and such Replaced Lender, designate a replacement lender (a "Replacement Lender") acceptable to the Administrative Agent in its reasonable discretion, to which such Replaced Lender shall, subject to its receipt (unless a later date for the remittance thereof shall be agreed upon by the Borrower and the Replaced Lender) of all amounts owed to such Replaced Lender 66 under Sections 2.15, 2.16, 2.17 or 2.19 assign all (but not less than all) of its rights, obligations, Loans and Commitments hereunder; provided, that all amounts owed to such Replaced Lender by the Borrower (except liabilities which by the terms hereof survive the payment in full of the Loans and termination of this Agreement) shall be paid in full as of the date of such assignment. Upon any assignment by any Lender pursuant to this Section 2.22 becoming effective, the Replacement Lender shall thereupon be deemed to be a "Lender" for all purposes of this Agreement and such Replaced Lender shall thereupon cease to be a "Lender" for all purposes of this Agreement and shall have no further rights or obligations hereunder (other than pursuant to Sections 2.15, 2.16, 2.17 or 2.19 and 9.5 while such Replaced Lender was a Lender;). Notwithstanding any Replaced Lender's failure or refusal to assign its rights, obligations, Loans and Commitments under this Section 2.22, the Replaced Lender shall cease to be a "Lender" for all purposes of this Agreement and the Replacement Lender substituted therefor upon payment to the Replaced Lender by the Replacement Lender of all amounts set forth in this Section 2.22 without any further action of the Replaced Lender. SECTION 2.23 ALTERNATIVE CURRENCY MATTERS. (a) Effectiveness of euro Provisions. With respect to any state (or the currency of such state) that is not a Participating Member State on the date of this Agreement, the provisions of this Section 2.23 shall become effective in relation to such state (and the currency of such state) at and from the date on which such state becomes a Participating Member State. (b) Basis of Accrual. Subject to clause (a) above, with respect to the currency of any state that becomes a Participating Member State, the accrual of interest or fees expressed in this Agreement with respect to such currency shall be based upon the applicable convention or practice in the London Interbank Market for the basis of accrual of interest or fees in respect of the euro, which such convention or practice shall replace such expressed basis effective as of and from the date on which such state becomes a Participating Member State; provided that if any Loan in the currency of such state is outstanding immediately prior to such date, such replacement shall take effect, with respect to such Loan, at the end of the then current Interest Period. (c) Redenomination of Alternative Currency Loans. (i) Conversion to the Alternate Base Rate. If any Alternative Currency Loan is required to bear interest based on the Alternate Base Rate rather than the LIBOR Rate pursuant to Section 2.15, Section 2.16 or any other applicable provision hereof, such Loan shall be funded in Dollars in an amount equal to the Dollar Amount of such Loan, all subject to the provisions of Section 2.8(b). The Borrower shall reimburse the Lenders upon any such conversion for any amounts required to be paid under Section 2.18. 67 (ii) Redenomination of Loans. Subject to clause (a) above, any Loan to be denominated in the currency of the applicable Participating Member State shall be made in the euro. (iii) Redenomination of Obligations. Subject to clause (a) above hereof, any obligation of any party under this Agreement or any other Credit Document which has been denominated in the currency of a Participating Member State shall be redenominated into the euro. (iv) Further Assurances. The terms and provisions of this Agreement will be subject to such reasonable changes of construction as determined by the Administrative Agent to reflect the implementation of the EMU in any Participating Member State or any market conventions relating to the fixing and/or calculation of interest being changed or replaced and to reflect market practice at that time, and subject thereto, to put the Administrative Agent, the Lenders and the Borrower in the same position, so far as possible, that they would have been if such implementation had not occurred. In connection therewith, the Borrower agrees, at the request of the Administrative Agent, at the time of or at any time following the implementation of the EMU in any Participating Member State or any market conventions relating to the fixing and/or calculation of interest being changed or replaced, to enter into an agreement amending this Agreement in such manner as the Administrative Agent shall reasonably request. (d) Regulatory Limitation. In the event, as a result of increases in the value of Alternative Currencies against the Dollar or for any other reason, the obligation of any of the Lenders to make Multi-currency Revolving-1 Loans (taking into account the Dollar Amount of the Credit Party Obligations and all other indebtedness required to be aggregated under 12 U.S.C.A. Section 84, as amended, the regulations promulgated thereunder and any other Requirement of Law) is determined by such Lender to exceed its then applicable legal lending limit under 12 U.S.C.A. Section 84, as amended, and the regulations promulgated thereunder, or any other Requirement of Law, the amount of additional Multi-currency Revolving-1 Loans such Lender shall be obligated to make or issue or participate in hereunder shall immediately be reduced to the maximum amount which such Lender may legally advance (as determined by such Lender), the obligation of each of the remaining Lenders hereunder shall be proportionately reduced, based on their applicable Multi-currency Revolving-1 Commitment Percentages and, to the extent necessary under such laws and regulations (as determined by each of the Lenders, with respect to the applicability of such laws and regulations to itself), and the Borrower shall reduce, or cause to be reduced, complying to the extent practicable with the remaining provisions hereof, the Multi-currency Revolving-1 Loans outstanding hereunder by an amount sufficient to comply with such maximum amounts. (e) Exchange Indemnification and Increased Costs. The Borrower shall, upon demand from the Administrative Agent, pay to the Administrative Agent, any Issuing 68 Lender or any applicable Lender, the amount of (i) any loss or cost or increased cost incurred by the Administrative Agent, any Issuing Lender or any applicable Lender, (ii) any reduction in any amount payable to or in the effective return on the capital to the Administrative Agent, any Issuing Lender or any applicable Lender, (iii) any interest or any other return, including principal, foregone by the Administrative Agent or any applicable Lender as a result of the introduction of, change over to or operation of the euro, or (iv) any currency exchange loss, that Administrative Agent, any Issuing Lender or any Lender sustains as a result of any payment being made by the Borrower in a currency other than that originally extended to the Borrower or as a result of any other currency exchange loss incurred by the Administrative Agent or any applicable Lender under this Agreement. A certificate of the Administrative Agent, such Issuing Lender or such Lender setting forth the basis for determining such additional amount or amounts necessary to compensate the Administrative Agent, such Issuing Lender or the applicable Lender shall be conclusively presumed to be correct save for manifest error. (f) Exchange Rates. For purposes of determining the Borrower's compliance with Section 2.8(b)(i)(B) or the borrowing limits set forth in Section 2.1(a)(ii), Section 2.3(a)(i), Section 2.3(a)(iii) and Section 4.3(c), the Dollar Amount of any Multi-currency Revolving-1 Loan or Multi-currency LOC Obligation with respect to a Multi-currency Letter of Credit to be made, continued, converted or issued in an Alternative Currency shall be determined in accordance with the terms of this Agreement by the Administrative Agent (in respect of the most recent Revaluation Date). Such Dollar Amount shall become effective as of such Revaluation Date for such Multi-currency Revolving-1 Loan or Multi-currency Letter of Credit and shall be the Dollar Amount employed in converting any amounts between the applicable currencies until the next Revaluation Date to occur for such Multi-currency Revolving-1 Loan or Multi-currency Letter of Credit. (g) Rounding and Other Consequential Changes. Subject to clause (a) above, without prejudice and in addition to any method of conversion or rounding prescribed by any EMU Legislation and without prejudice to the respective obligations of the Borrower to the Administrative Agent and the Lenders and the Administrative Agent and the Lenders to the Borrower under or pursuant to this Agreement, except as expressly provided in this Agreement, each provision of this Agreement, including, without limitation, the right to combine currencies to effect a set-off, shall be subject to such reasonable changes of interpretation as the Administrative Agent may from time to time specify to be necessary or appropriate to reflect the introduction of or change over to the euro in Participating Member States. ARTICLE III REPRESENTATIONS AND WARRANTIES To induce the Lenders to enter into this Agreement and to make the Extensions of Credit herein provided for, the Credit Parties hereby represent and warrant to the Administrative Agent and to each Lender that as of the Funding Date and thereafter for so long as this Agreement is in 69 effect and until the Commitments have terminated, no Note remains outstanding and unpaid and the Credit Party Obligations, together with interest, Commitment Fees and all other amounts owing to the Administrative Agent or any Lender hereunder are paid in full: SECTION 3.1 FINANCIAL CONDITION. The consolidated balance sheets and the related statements of income, retained earnings and cash flows of the Borrower and its Subsidiaries (excluding the Acquired Company and its Subsidiaries) for the fiscal year ending December 31, 2000 and for the most recently ended fiscal quarter ending more than sixty (60) days prior to the Funding Date, and for the Acquired Company and its Subsidiaries for the fiscal year ending May 25, 2001 and for the most recently ended fiscal quarter ending more than sixty (60) days prior to the Funding Date, are complete and correct and present fairly, in all material respects, the financial condition of, and the results of operations for, such Persons as of such dates. All such financial statements, including the related schedules and notes thereto, have been prepared in accordance with GAAP applied consistently throughout the periods involved (except as disclosed therein). The Borrower and its Restricted Subsidiaries, taken as a whole, have on the date hereof no material contingent liabilities, liabilities for taxes, unusual forward or long-term commitments or unrealized or anticipated losses from any unfavorable commitments, except as referred to or reflected or provided for in the annual financial information provided as of the immediately preceding fiscal year end referred to above and as set forth on Schedule 3.1 or as set forth on Schedule 6.1(b). SECTION 3.2 NO CHANGE. Since December 31, 2000 (and after delivery of annual audited financial statements in accordance with Section 5.1(a), from the date of the most recently delivered annual audited financial statements) there has been no development or event which has had or could reasonably be expected to have a Material Adverse Effect. SECTION 3.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each of the Borrower and its Subsidiaries (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (b) has the requisite power and authority and the legal right to own and operate all its material property, to lease the material property it operates as lessee and to conduct the business in which it is currently engaged, (c) is duly qualified to conduct business 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 except to the extent that the failure to so qualify or be in good standing could not, in the aggregate, reasonably be expected to have a Material Adverse Effect and except for those Subsidiaries required to be so qualified and in good standing pursuant to the terms of Section 5.15 following their reorganization or restructure on or about the Funding Date and (d) is in compliance with all Requirements of Law except to the extent that the failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect. 70 SECTION 3.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. Each of the Borrower and the other Credit Parties has full power and authority and the legal right to make, deliver and perform the Credit Documents to which it is party and has taken all necessary limited liability company or corporate action to authorize the execution, delivery and performance by it of the Credit Documents to which it is party. No consent or authorization of, filing with, notice to or other act by or in respect of, any Governmental Authority or any other Person is required in connection with the borrowings hereunder or with the execution, delivery or performance of any Credit Document by the Borrower and the other Credit Parties (other than those which have been obtained) or with the validity or enforceability of any Credit Document against the Borrower and the other Credit Parties (except such filings as are necessary in connection with the perfection of the Liens created by such Credit Documents). Each Credit Document to which it is a party has been duly executed and delivered on behalf' of each of the Borrower and the other Credit Parties, as the case may be. Each Credit Document to which it is a party constitutes a legal, valid and binding obligation of each of the Borrower and the other Credit Parties, as the case may be, enforceable against each of the Borrower and Credit Parties, as the case may be, in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, 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). SECTION 3.5 NO LEGAL BAR; NO DEFAULT. The execution, delivery and performance of the Credit Documents, the borrowings thereunder and the use of the proceeds of the Loans will not violate any Requirement of Law or any Contractual Obligation of the Borrower or its Subsidiaries (except those as to which waivers or consents have been obtained), and will not result in, or require, the creation or imposition of any Lien on any of its or their respective properties or revenues pursuant to any Requirement of Law or Contractual Obligation other than the Liens arising under or contemplated in connection with the Credit Documents. Neither the Borrower nor any of its Subsidiaries is in default under or with respect to any of its Contractual Obligations in any respect which could reasonably be expected to have a Material Adverse Effect. No Default or Event of Default has occurred and is continuing. SECTION 3.6 NO MATERIAL LITIGATION. Except as set forth in Schedule 3.6, no litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the best knowledge of the Borrower, threatened by or against the Borrower or any of its Subsidiaries or against any of its or their respective properties or revenues (a) with respect to the Credit Documents or any Loan or any of the transactions contemplated hereby, or (b) which, if adversely determined, could reasonably be expected to have a Material Adverse Effect. SECTION 3.7 GOVERNMENT ACTS. (a) Neither the Borrower nor any Credit Party is an "investment company", or a company "controlled" by an "investment company", within the meaning of the Investment Company Act of 1940, as amended. 71 (b) Neither the Borrower nor any of its Subsidiaries is a "holding company", or an "affiliate" of a "holding company" or a "subsidiary company" of a "holding company", within the meaning of the Public Utility Holding Company Act of 1935, as amended. SECTION 3.8 MARGIN REGULATIONS. No part of the proceeds of any Loan hereunder will be used directly or indirectly for any purpose which violates, or which would be inconsistent with, the provisions of Regulation T, U or X of the Board of Governors of the Federal Reserve System as now and from time to time hereafter in effect. The aggregate value of all "margin stock" owned by the Borrower and its Subsidiaries taken as a group does not exceed 25% of the value of their assets. SECTION 3.9 ERISA. Except as could not reasonably be expected to have a Material Adverse Effect, (a) neither a Reportable Event nor an "accumulated funding deficiency" (within the meaning of Section 412 of the Code or Section 302 of ERISA) has occurred during the five-year period prior to the date on which this representation is made or deemed made with respect to any Plan, and each Plan has complied in all material respects with the applicable provisions of ERISA and the Code; (b) no termination of a Single Employer Plan has occurred resulting in any liability that has remained underfunded, and no Lien in favor of the PBGC or a Plan has arisen, during such five-year period; (c) the present value of all accrued benefits under each Single Employer Plan (based on those assumptions used to fund such Plans) did not, as of the last annual valuation date prior to the date on which this representation is made or deemed made, exceed the value of the assets of such Plan allocable to such accrued benefits; and (d) neither the Borrower, nor any of its Subsidiaries, nor any Commonly Controlled Entity is currently subject to any liability for a complete or partial withdrawal from a Multiemployer Plan. SECTION 3.10 ENVIRONMENTAL MATTERS. Except as to matters with respect to which the Borrower and its Subsidiaries could not reasonably be expected to incur liabilities in excess of $50,000,000 in the aggregate: (a) the facilities and properties owned, leased or operated by the Borrower or any of its Subsidiaries (the "Real Properties") do not contain any Hazardous Materials in amounts or concentrations which (i) constitute a violation of, or (ii) could give rise to liability under, any Environmental Law; 72 (b) the Real Properties and all operations of the Borrower and/or its Subsidiaries at the Real Properties are in compliance, and have in the last five years been in compliance, in all material respects with all applicable Environmental Laws, and there is no contamination at, under or about the Real Properties or violation of any Environmental Law with respect to the Real Properties or the business operated by the Borrower or any of its Subsidiaries (the "Business"); (c) neither the Borrower nor any of its Subsidiaries has received any written or actual notice of 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 Business, nor does the Borrower or any of its Subsidiaries have knowledge or reason to believe that any such notice will be received or is being threatened; (d) Hazardous Materials have not been transported or disposed of from the Real Properties in violation of, or in a manner or to a location which could give rise to liability under any Environmental Law, nor have any Hazardous Materials been generated, treated, stored or disposed of at, on or under any of the Real Properties 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 knowledge of the Borrower, threatened, under any Environmental Law to which the Borrower or any Subsidiary is or will be named as a party with respect to the Real Properties or the Business, 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 Real Properties or the Business; and (f) there has been no release or threat of release of Hazardous Materials at or from the Real Properties, or arising from or related to the operations of the Borrower or any Subsidiary in connection with the Real Properties or otherwise in connection with the Business, in violation of or in amounts or in a manner that could give rise to liability under Environmental Laws. SECTION 3.11 PURPOSE OF LOANS. The proceeds of the Loans hereunder shall be used solely by the Borrower to (i) consummate the Acquisition and to pay fees and expenses related thereto, and to pay accrued quarterly dividends to shareholders of the Acquired Company, (ii) acquire all partnership and other ownership interests currently held by Dairy Farmers of America, Inc. in Suiza Dairy Group, L.P., a Delaware limited partnership, (iii) refinance existing Indebtedness of Borrower, its Restricted Subsidiaries and the Acquired Company and (iv) provide for working capital, Permitted Acquisitions and other general corporate purposes (including Capital Stock repurchase programs). The Letters of Credit shall be used for general corporate purposes. 73 SECTION 3.12 SUBSIDIARIES. Set forth on Schedule 3.12 is a complete and accurate list of all Subsidiaries of the Borrower. Information on the attached Schedule includes jurisdiction of incorporation; the number of shares of each class of Capital Stock or other equity interests outstanding; the number and percentage of outstanding shares of each class of stock owned by Borrower or its Subsidiaries; and the number and effect, if exercised, of all outstanding options, warrants, rights of conversion or purchase and similar rights. The outstanding Capital Stock and other equity interests of all such Subsidiaries is validly issued, fully paid and non-assessable and is owned, free and clear of all Liens (other than those arising under or contemplated in connection with the Credit Documents). As of the Funding Date, there are no Unrestricted Subsidiaries other than the Unrestricted Subsidiaries specifically listed in the definition thereof. Schedule 3.12 shall be updated quarterly by the Borrower with the delivery of the financial information required pursuant to Section 5.1(b) by giving written notice thereof to the Administrative Agent. SECTION 3.13 OWNERSHIP. Each of the Borrower and its Restricted Subsidiaries (a) is the owner of, and has good and marketable title to, all of its respective assets, except as may be permitted pursuant to Section 6.12 hereof, and none of such assets is subject to any Lien other than Permitted Liens and (b) enjoys peaceful and undisturbed possession of all Real Properties that are necessary for the operation and conduct of its business. SECTION 3.14 INDEBTEDNESS. Except as otherwise permitted under Section 6.1, the Borrower and its Restricted Subsidiaries have no Indebtedness. SECTION 3.15 TAXES. Each of the Borrower and its Subsidiaries has filed, or caused to be filed, all tax returns (federal, state, local and foreign) required to be filed other than returns for which failure to file would not have a Material Adverse Effect and paid (a) all amounts of taxes shown thereon to be due (including interest and penalties) and (b) all other 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 or (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) for which nonpayment would not have a Material Adverse Effect. Neither the Borrower nor any of its Subsidiaries is aware as of the Closing Date of any proposed tax assessments against it or any of its Subsidiaries which could reasonably be expected to have a Material Adverse Effect. SECTION 3.16 INTELLECTUAL PROPERTY. Each of the Borrower and its Restricted Subsidiaries owns, or has the legal right to use, all trademarks, tradenames, patents, copyrights, technology, know-how and processes 74 (collectively, the "Intellectual Property") necessary for each of them to conduct its business as currently conducted. Set forth on Schedule 3.16 is a list of all Intellectual Property owned by the Borrower and its Restricted Subsidiaries or that the Borrower and its Restricted Subsidiaries has the right to use. Except as provided on Schedule 3.16, no claim has been asserted and is pending by any Person challenging or questioning the use of any such Intellectual Property or the validity or effectiveness of any such Intellectual Property, nor does the Borrower or any of its Restricted Subsidiaries know of any such claim, and, to the knowledge of the Borrower or any of its Restricted Subsidiaries, the use of such Intellectual Property by the Borrower or any of its Restricted Subsidiaries 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. Schedule 3.16 shall be updated (by additions and deletions of such claims) by the Borrower quarterly with the delivery of the financial information required pursuant to Section 5.1(b) by giving written notice thereof to the Administrative Agent. SECTION 3.17 SOLVENCY. The fair saleable value of all Credit Parties' assets, measured on a going concern basis, exceeds all probable liabilities, including those to be incurred pursuant to this Credit Agreement. The Credit Parties on a consolidated basis, will not (a) have unreasonably small capital in relation to the business in which they are engaged or (b) have incurred, or believe that they will have incurred after giving effect to the transactions contemplated by this Credit Agreement, Indebtedness beyond their ability to pay such Indebtedness as it becomes due. SECTION 3.18 INVESTMENTS. All Investments of each of the Borrower and its Restricted Subsidiaries are Permitted Investments. SECTION 3.19 LOCATION OF COLLATERAL. Set forth on Schedule 3.19(a) is a list of the owned real property of the Borrower and its Restricted Subsidiaries with street address, county and state where located. Set forth on Schedule 3.19(b) is a list of all locations where any material tangible personal property of the Borrower and its Restricted Subsidiaries is located, including county and state where located. Set forth on Schedule 3.19(c) is the chief executive office and principal place of business of each of the Borrower and its Restricted Subsidiaries. Schedule 3.19(a), 3.19(b) and 3.19(c) shall be updated by the Borrower, quarterly with the delivery of the financial information required pursuant to Section 5.1(b) by giving written notice thereof to the Administrative Agent. SECTION 3.20 NO BURDENSOME RESTRICTIONS. None of the Borrower or any of its Restricted Subsidiaries is a party to any agreement or instrument or subject to any other obligation or any charter or corporate restriction or any provision of any applicable law, rule or regulation which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. 75 SECTION 3.21 BROKERS' FEES. None of the Borrower or any of its Subsidiaries has any obligation to any Person in respect of any finder's, broker's, investment banking or other similar fee in connection with the Extensions of Credit contemplated under the Credit Documents other than the closing and other fees payable pursuant to this Credit Agreement and the Fee Letter. SECTION 3.22 LABOR MATTERS. None of the Borrower or any of its Restricted Subsidiaries (i) is currently suffering any strikes, walkouts, work stoppages or other material labor difficulty, other than as set forth in Schedule 3.22 hereto or (ii) has knowledge of any potential or pending strike, walkout or work stoppage, other than as set forth in Schedule 3.22 hereto. SECTION 3.23 SECURITY DOCUMENTS. The Security Documents create valid security interests in, and Liens on, the Collateral purported to be covered thereby, which security interests and Liens are currently (or will be, upon the filing of appropriate financing statements and the recordation of the applicable Mortgage Instruments in each case in favor of First Union, as Administrative Agent for the Lenders) perfected security interests and Liens, prior to all other Liens other than Permitted Liens to the extent required by the Security Documents. SECTION 3.24 CONSUMMATION OF ACQUISITION. The Acquisition and related transactions have been consummated substantially in accordance with the terms of the Acquisition Documents. As of the Closing Date and as of the Funding Date, the Acquisition Documents have not been altered, amended or otherwise modified or supplemented or any condition thereof waived in any material respect without the prior written consent of the Administrative Agent. Each of the representations and warranties made in the Acquisition Documents by each of the Credit Parties (other than the Acquired Company and its Subsidiaries) is true and correct except for any representation or warranty therein the failure of which to be true and correct does not have or could not reasonably be expected to have a Material Adverse Effect. SECTION 3.25 MATERIAL CONTRACTS. Schedule 3.25 sets forth a true and correct and complete list of all Material Contracts currently in effect. All of the Material Contracts are in full force and effect and no material defaults currently exist thereunder. Schedule 3.25 shall be updated by the Borrower quarterly with the delivery of the financial information required pursuant to Section 5.1(b) by giving written notice thereof to the Administrative Agent. 76 SECTION 3.26 ACCURACY AND COMPLETENESS OF INFORMATION. All factual information heretofore, contemporaneously or hereafter furnished by or on behalf of the Borrower or any of its Subsidiaries to the Administrative Agent or any Lender for purposes of or in connection with this Agreement or any other Credit Document, or any transaction contemplated hereby or thereby, is or will be true and accurate in all material respects and not incomplete by omitting to state any material fact necessary to make such information not misleading. There is no fact now known to the Borrower or any of its Subsidiaries which has, or could reasonably be expected to have, a Material Adverse Effect which fact has not been set forth herein, in the financial statements of the Borrower and its Subsidiaries furnished to the Administrative Agent and/or the Lenders, or in any certificate, opinion or other written statement made or furnished by the Borrower to the Administrative Agent and/or the Lenders. SECTION 3.27 INTEREST RATE PROTECTION. The Borrower has, as of the Funding Date, Hedging Agreements in place protecting against fluctuations in interest rates which provide for coverage of not less than $500,000,000 for a period of not less than two (2) years. ARTICLE IV CONDITIONS PRECEDENT SECTION 4.1 CONDITIONS TO CLOSING DATE. This Agreement shall become effective upon the satisfaction of the following conditions precedent: (a) Execution of Agreement. The Administrative Agent shall have received (i) counterparts of this Agreement, executed by a duly authorized officer of each party hereto and (ii) for the account of each Lender, a Revolving-1 Note, a Tranche A-1 Term Note and a Tranche B-1 Term Note and for the account of the Swingline Lender, a Swingline Note. (b) Authority Documents. The Administrative Agent shall have received a secretary's certificate substantially in the form of Schedule 4.1(b) with respect to the following: (i) Charter Documents. Copies of the certificate of incorporation of the Borrower certified to be true and complete as of a recent date by the appropriate Governmental Authority of the state of its incorporation. (ii) Resolutions. Copies of resolutions of the board of directors of the Borrower approving and adopting the Credit Documents, the transactions contemplated therein and authorizing execution and delivery thereof, certified by an officer of Borrower as of the Closing Date to be true and correct and in force and effect as of such date. 77 (iii) Bylaws. A copy of the bylaws of the Borrower certified by an officer of the Borrower as of the Closing Date to be true and correct and in force and effect as of such date. (iv) Good Standing. Copies of (i) certificates of good standing, existence or its equivalent with respect to the Borrower certified as of a recent date by the appropriate Governmental Authorities of the state of incorporation and each other state in which the failure to so qualify and be in good standing could reasonably be expected to have a Material Adverse Effect on the business or operations of the Borrower and its Subsidiaries, taken as a whole, and (ii) if available, a certificate indicating payment of all corporate franchise taxes certified as of a recent date by the appropriate governmental taxing authorities. (v) Incumbency. An incumbency certificate of the Borrower certified by a secretary or assistant secretary to be true and correct as of the Closing Date. (c) Legal Opinions of Counsel. The Administrative Agent shall have received an opinion of legal counsel for the Borrower, dated the Closing Date and addressed to the Administrative Agent and the Lenders, in form and substance reasonably acceptable to the Administrative Agent. (d) Disclosure Schedules. The Lenders shall have received and approved to their reasonable satisfaction copies of each of the disclosure schedules to this Agreement showing projected information to be included in the final versions of such schedules to be provided on the Funding Date. Such schedules shall have been prepared by the Borrower in good faith and based upon reasonable assumptions. SECTION 4.2 CONDITIONS TO INITIAL EXTENSIONS OF CREDIT. The obligation of each Lender to make the initial Extensions of Credit on the Funding Date is subject to the satisfaction of the following conditions precedent on or before December 31, 2001: (a) Execution of Agreements. The Administrative Agent shall have received counterparts of (i) the Security Agreement and Pledge Agreement and all other Security Documents executed by a duly authorized officer of the Borrower and (ii) a Joinder Agreement to this Agreement, the Pledge Agreement, the Security Agreement and all other Security Documents, in each case conforming to the requirements of this Agreement and executed by a duly authorized officer of each of the other Credit Parties party thereto. (b) Authority Documents. The Administrative Agent shall have received a secretary's certificate substantially in the form of Schedule 4.1(b) with respect to the following: 78 (i) Charter Documents. Copies of the articles of incorporation or other charter documents, as applicable, of the Credit Parties Joining on the Funding Date, including the Acquired Company and its Subsidiaries and each corporate general partner of such Person, as applicable, certified to be true and complete as of a recent date by the appropriate Governmental Authority of the state of its incorporation. (ii) Partnership Agreements; Disclosure Information. With respect to each such Person that is a partnership or limited partnership, a copy of the partnership agreement of such Person, together with all amendments thereto, schedules and any disclosure information, in each case certified) by a general partner of such Person as of the Closing Date to be true and correct and in force and effect as of such date. (iii) Resolutions. Copies of resolutions or certificate of authorization of the board of directors or general partner of each of the Credit Parties joining on the Funding Date, including the Acquired Company and its Subsidiaries approving and adopting the Credit Documents, the transactions contemplated therein and authorizing execution and delivery thereof, certified by an officer or general partner of such Person, as applicable, as of the Closing Date to be true and correct and in force and effect as of such date. (iv) Bylaws. A copy of the bylaws of each of the Acquired Company and its Subsidiaries and each corporate general partner of such Person, as applicable, certified by an officer of such Person or corporate general partner, as applicable, as of the Closing Date to be true and correct and in force and effect as of such date. (v) Good Standing. Copies of (i) certificates of good standing, existence or its equivalent with respect to each of the Credit Parties joining on the Funding Date, including the Acquired Company and its Subsidiaries certified as of a recent date by the appropriate Governmental Authorities of the state of incorporation or organization and each other state in which the failure to so qualify and be in good standing could reasonably be expected to have a Material Adverse Effect on the business or operations of the Borrower and its Subsidiaries, taken as a whole, except for those Subsidiaries required to be so qualified and in good standing pursuant to the terms of Section 5.15 following their :reorganization or restructure on or about the Funding Date, and (ii) if available, a certificate indicating payment of all corporate franchise taxes certified as of a recent date by the appropriate governmental taxing authorities. (vi) Incumbency. An incumbency certificate of each of the Credit Parties joining on the Funding Date, including the Acquired Company and its Subsidiaries and each corporate general partner of such Person, as applicable, certified by a secretary or assistant secretary to be true and correct as of the Funding Date. 79 (c) Legal Opinions of Counsel. (i) The Administrative Agent shall have received an opinion of legal counsel for the Borrower and its Subsidiaries (including the Acquired Company and its Subsidiaries), dated the Funding Date and addressed to the Administrative Agent and the Lenders, in form and substance reasonably acceptable to the Administrative Agent; and (ii) The Administrative Agent shall have received an opinion of Moore & Van Allen, PLLC, dated the Funding Date and addressed to the Administrative Agent and the Lenders, in form and substance reasonably acceptable to the Administrative Agent. (d) Litigation. There shall not exist any pending litigation or investigation or unresolved regulatory matters affecting or relating to the Borrower or any of its Subsidiaries, this Agreement and the other Credit Documents or the Acquisition that in the reasonable judgment of the Agents could be expected to have a Material Adverse Effect, that has not been settled, dismissed, vacated, discharged or terminated prior to the Closing Date. (e) Personal Property Collateral. The Administrative Agent shall have received, in form and substance satisfactory to the Agents: (i) searches of Uniform Commercial Code filings in the jurisdiction of the chief executive office and state of organization of each Credit Party and each jurisdiction where any Collateral is located or where a filing would need to be made in order to perfect the Administrative Agent's security interest in the Collateral, copies of the financing statements on file in such jurisdictions and evidence that no Liens exist other than Permitted Liens; (ii) duly executed UCC financing statements for each appropriate jurisdiction as is necessary to perfect the Administrative Agent's security interest in the Collateral; (iii) duly executed consents as are necessary to perfect the Lenders' security interest in the Collateral; and (iv) in the case of any personal property Collateral located at premises leased by a Credit Party, such estoppel letters, consents and waivers from the landlords on such real property as may be required by the Administrative Agent. (f) Real Property Collateral. The Administrative Agent shall have received, in form and substance satisfactory to the Agents: 80 (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 in the properties listed in Schedule 3.19(a) as properties owned by the Credit Parties and designated as a material property, other than real properties owned by the Acquired Company or its Subsidiaries (each a "Mortgaged Property" and collectively the "Mortgaged Properties") and a legal opinion with respect to the enforceability of the Mortgage Instruments in form and substance reasonably satisfactory to the Administrative Agent; (ii) a title report obtained by the Credit Parties in respect of each of the Mortgaged Properties attached as Schedule 4.2(fl(ii) (each a "Significant Mortgaged Property"); (iii) with respect to each Significant Mortgaged Property, an ALTA or substantially equivalent mortgagee title insurance policy issued by a title company acceptable to the Administrative Agent (the "Mortgage Policies"), in amounts acceptable to the Administrative Agent with respect to any particular Significant Mortgaged Property, assuring the Administrative Agent that each of the Mortgage Instruments creates a valid and enforceable first priority mortgage lien on the applicable Significant Mortgaged Property, free and clear of all defects and encumbrances except Permitted Liens, which Mortgage Policies shall be in form and substance reasonably satisfactory to the Administrative Agent and shall provide for affirmative insurance and such reinsurance as the Administrative Agent may reasonably request, all of the foregoing in form and substance reasonably satisfactory to the Administrative Agent; (iv) 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 Administrative 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 Borrower and its Subsidiaries evidencing flood insurance reasonably satisfactory to the Administrative Agent and naming the Administrative Agent as sole loss payee on behalf of the Lenders; and (v) existing maps or plats of an as-built survey of the sites of the Significant Mortgaged Properties certified to the Administrative Agent and the Title Insurance Company in a manner reasonably satisfactory to them, dated a date satisfactory to each of the Administrative Agent and the Title Insurance 81 Company by an independent professional licensed land surveyor reasonably satisfactory to each of the Administrative Agent and the Title Insurance Company, which maps or plats and the surveys on which they are based shall be (A) 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 1992 or (B) otherwise satisfactory to the Administrative Agent. (g) Liability, Casualty and Business Interruption Insurance. The Administrative Agent shall have received copies of insurance policies or certificates of insurance evidencing liability and casualty insurance meeting the requirements set forth herein or in the Security Documents and business interruption insurance satisfactory to the Agents. The Administrative Agent shall be named (to the extent permitted) as loss payee and/or additional insured on all such insurance policies for the benefit of the Lenders. (h) Fees. The Administrative Agent, the Syndication Agent and the Lenders shall have received all fees, if any, owing pursuant to the Fee Letter and Section 2.6. (i) Reliance. The Administrative Agent shall have received a copy of each opinion, report, agreement, and other document required to be delivered pursuant to the Acquisition Documents in connection with the Acquisition and related transactions, and to the extent available with a letter from each Person delivering any such opinion authorizing reliance thereon by the Agents and the Lenders, all in form and substance reasonably satisfactory to the Agents. (j) Solvency Evidence. The Administrative Agent shall have received an officer's certificate for the Credit Parties prepared by the chief financial officer or treasurer of the Borrower as to the financial condition, solvency and related matters of the Credit Parties taken as a whole, after giving effect to the initial borrowings under the Credit Documents, in substantially the form of Schedule 4.2(j) hereto. (k) Account Designation Letter. The Administrative Agent shall have received the executed Account Designation Letter in the form of Schedule 1.1(a) hereto. (l) Corporate Structure. The corporate capital and ownership structure of the Borrower and its Subsidiaries (after giving effect to the Acquisition) shall be as described in Schedule 3.12. The Agents shall be satisfied that the management structure, legal structure, voting control, liquidity and capitalization of the Borrower as of the Funding Date shall not have materially and adversely changed from the information relating thereto previously provided to the Lenders. (m) Consummation of Acquisition. The Administrative Agent shall have received evidence that the transactions contemplated by the Merger Agreement have been consummated in accordance with the terms thereof which shall be reasonably acceptable 82 to the Agents (including without limitation the amount and form of consideration to be paid to shareholders of the Acquired Company), that the representations and warranties in the Merger Agreement shall be accurate as of the Funding Date and the conditions contained therein shall have been satisfied as of such date, that the Senior Notes shall remain outstanding and that the Acquired Company shall remain in full compliance with the terms thereof and the Administrative Agent shall have received a final copy of the Merger Agreement, all material documents executed in connection therewith and all amendments or supplements thereto, certified by a Responsible Officer of the Borrower to be true and correct and in full force and effect. (n) Government Consent. The Administrative Agent shall have received evidence that all governmental, shareholder and material third party consents and approvals (including, without limitation, consents and approvals of the Board of Directors of the Acquired Company) necessary in connection with the transactions contemplated by the Merger Agreement and the financings and other transactions contemplated hereby have been obtained and all applicable waiting periods have expired without any action being taken by any authority that could restrain, prevent or impose any material adverse conditions on such transactions or that could seek or threaten any of the foregoing. (o) Compliance with Laws. The financings and other transactions contemplated hereby shall be in compliance with all applicable laws and regulations (including Environmental Laws and all applicable securities and banking laws, rules and regulations). (p) Bankruptcy. There shall be no bankruptcy or insolvency proceedings with respect to the Borrower or any of its Restricted Subsidiaries. (q) Financial Statements. The Administrative Agent shall have received copies of the financial statements referred to in Section 3.1 hereof. The Agents and the Lenders shall have received audited financial statements for the Borrower and the Acquired Company for the most recently ended fiscal year ending more than 90 days prior to the Funding Date. (r) Sources and Uses of Funds. The Administrative Agent shall have received a memorandum detailing the sources and uses of the funds to be used to consummate the Acquisition, the other transactions contemplated by this Agreement and the other Credit Documents and related expenses, in form and substance reasonably satisfactory to the Agents. (s) Pro Forma Opening Statements and Updated Projections: The Agents and the Lenders shall have received pro forma opening financial statements ("Pro Forma Opening Statements") giving effect to the Acquisition and projections ("Updated Projections") updating the projection previously provided to the Lenders, together with such information as the Agents and the Lenders may reasonably request to confirm the tax, legal, and business assumptions made in such Pro Forma Opening Statements and Updated Projections. The Pro Forma Opening Statements and 83 Updated Projections must demonstrate, in the reasonable judgment of the Agents, together with all other information then available to the Agents and the Lenders, the ability of the Borrower and its Subsidiaries, taken as a whole, to repay their debts and satisfy their respective other obligations as and when due and to comply with the financial covenants set forth in Section 5.9 hereof. (t) Fairness Opinion. Receipt by the Agents of a copy of any fairness opinion from the Acquired Company's investment banker addressed to the Acquired Company's board of directors, relating to the terms of the Acquisition. (u) Environmental Reports: The Administrative Agent shall have received a copy of each existing environmental review report detailing any environmental hazards or liabilities relating to the Mortgaged Properties, and, if requested by the Agents, a reliance letter satisfactory in form and substance to the Agents, from the environmental review firm that prepared such report. (v) Approval of Asset Disposition. The Agents shall have reviewed and approved (such approval not to be unreasonably withheld) any asset sale, disposition or other divestiture required by or in connection with any governmental or regulatory approval required in connection with the consummation of the Acquisition. (w) Leverage Ratio. The Borrower shall have demonstrated to the Agents that the ratio of Funded Debt to pro forma adjusted consolidated EBITDA for the Borrower and its Subsidiaries (to be determined by the Agents), after giving effect to the Acquisition, for the twelve consecutive calendar month period ending with the last calendar month immediately preceding the Funding Date, shall be no greater than 4.25 to 1.0. (x) Existing Indebtedness. All existing Indebtedness for borrowed money of the Borrower and its Restricted Subsidiaries (other than the Indebtedness listed on Schedule 6.1(b) and the Senior Notes which shall remain outstanding and with respect to which the Acquired Company shall remain in full compliance with the terms thereof) shall have been repaid in full with the proceeds of the initial Loans hereunder and terminated, and Indebtedness under that certain $300,000,000 Credit Agreement dated as of January 4, 2000 among the Borrower, First Union, as administrative agent, Bank One, NA, as syndication agent, and the lenders party thereto shall have been repaid in full and such credit agreement shall have been terminated and any Liens granted thereunder or pursuant thereto shall have been released or arrangements satisfactory to the Agents shall have been made with respect thereto. (y) Material Adverse Change. There shall not have been any occurrence or happening resulting in a Material Adverse Effect since (i) May 30, 2000 or (ii) the pro forma financial statements received by the Agents on March 22, 2001. 84 (z) Officer's Certificates. The Administrative Agent shall have received a certificate or certificates executed by the chief financial officer or treasurer of the Borrower on behalf of the Credit Parties as of the Funding Date stating that (A) the Credit Parties and each of their Subsidiaries are in compliance with all existing material financial obligations, (B) all 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 a Credit Party, any of the Credit Parties' Subsidiaries or any transaction contemplated by the Credit Documents, if such action, suit, investigation or proceeding would have or be reasonably expected to have a Material Adverse Effect, and (D) immediately after giving effect to this Credit Agreement, the other Credit Documents and all the transactions contemplated therein to occur on such date, (1) no Default or Event of Default exists, (2) all representations and warranties contained herein and in the other Credit Documents are true and correct in all material respects, and (3) the Credit Parties are in compliance with each of the financial covenants set forth in Section 5.9 on a pro forma basis. (aa) Disclosure Schedules. The Lenders shall have received final completed copies of each of the disclosure schedules to this Agreement and the Agents shall have approved the information contained therein to their reasonable satisfaction to the extent that such information varies materially and adversely from the disclosure schedules delivered on the Closing Date. (bb) Additional Matters. All other documents and legal matters in connection with the transactions contemplated by this Agreement shall be reasonably satisfactory in form and substance to the Administrative Agent and its counsel. SECTION 4.3 CONDITIONS TO ALL EXTENSIONS OF CREDIT. The obligation of each Lender to make any Extension of Credit hereunder is subject to the satisfaction of the following conditions precedent on the date of making such Extension of Credit: (a) Representations and Warranties. The representations and warranties made by the Credit Parties herein, in the Security Documents or which are contained in any certificate furnished at any time under or in connection herewith shall be true and correct in all material respects on and as of the date of such Extension of Credit as if made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date). (b) No Default or Event of Default. No Default or Event of Default shall have occurred and be continuing on such date or after giving effect to the Extension of Credit to be made on such date unless such Default or Event of Default shall have been waived in accordance with this Agreement. 85 (c) Compliance with Commitments. Immediately after giving effect to the making of any such Extension of Credit (and the application of the proceeds thereof), (i) the sum of the aggregate principal amount of outstanding Dollar Revolving-1 Loans plus Swingline Loans plus Dollar LOC Obligations shall not exceed the Dollar Revolving-1 Committed Amount, (ii) the sum of the aggregate principal Dollar Amount of outstanding Multi-currency Revolving-1 Loans plus the Dollar Amount of Multi-currency LOC Obligations shall not exceed the Multi-currency Revolving-1 Committed Amount, (iii) the Dollar Amount of the LOC Obligations shall not exceed the LOC Committed Amount and (iv) the Swingline Loans shall not exceed the Swingline Committed Amount. (d) Additional Conditions to Revolving-1 Loans. If such Loan is made pursuant to Section 2.1, all conditions set forth in such Section shall have been satisfied. (e) Additional Conditions to Swingline Loan. If such Loan is made pursuant to Section 2.2, all conditions set forth in such Section shall have been satisfied. (f) Additional Conditions to Letters of Credit. If such Extension of Credit is made pursuant to Section 2.3, all conditions set forth in such Section shall have been satisfied. Each request for an Extension of Credit and each acceptance by the Borrower of any such Extension of Credit shall be deemed to constitute a representation and warranty by the Borrower as of the date of such Extension of Credit that the applicable conditions in paragraphs (a) through (f) of this Section have been satisfied. ARTICLE V AFFIRMATIVE COVENANTS The Borrower hereby covenants and agrees that on the Closing Date or Funding Date (where so indicated), and thereafter for so long as this Agreement is in effect and until the Commitments have terminated, no Note remains outstanding and unpaid and the Credit Party Obligations, together with interest, Commitment Fees and all other amounts owing to the Administrative Agent or any Lender hereunder, are paid in full, the Borrower shall, and shall cause each of its Subsidiaries to: SECTION 5.1 FINANCIAL STATEMENTS. Furnish to the Administrative Agent and each of the Lenders: (a) Annual Financial Statements. As soon as available and in any event within 90 days after the end of each fiscal year of the Borrower: (i) (A) consolidated statements of income, stockholders' equity and cash flows of the Borrower and its Subsidiaries for such fiscal year and (B) the related consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal year, setting forth in each case after the first anniversary of the 86 Funding Date in comparative form the corresponding consolidated figures for the preceding fiscal year, and accompanied by an opinion thereon of independent certified public accountants of recognized national standing, which opinion shall state that such consolidated financial statements fairly present the consolidated financial condition and results of operations of the Borrower and its Subsidiaries, as at the end of, and for, such fiscal year in accordance with GAAP, and a certificate of such accountants stating that, in making the examination necessary for their opinion, they obtained no knowledge, except as specifically stated, of any Default or Event of Default; and (ii) (A) consolidated statements of income and cash flows of the Borrower and its Restricted Subsidiaries and (B) the related consolidated balance sheet of the Borrower and its directly owned Subsidiaries combined in significant groups, in each case as at the end of such fiscal year,, setting forth in each case after the first anniversary of the Funding Date in comparative form the corresponding consolidated figures for the preceding fiscal year, accompanied by a certificate of a Responsible Officer of the Borrower, which certificate shall state that such consolidated financial statements fairly present the consolidated financial condition and results of operations of the Borrower and its Subsidiaries as combined or of the Borrower and its Restricted Subsidiaries, as the case may be, and such consolidated financial statements fairly present the respective financial condition and results of operations of the Borrower and each group of such Subsidiaries, in accordance with GAAP consistently applied, as at the end of and for such period (subject to normal year-end audit adjustments); and (b) Quarterly Financial Statements. As soon as available and in any event within 45 days after the end of each of the first three quarterly fiscal periods of each fiscal year of the Borrower, (i) (A) consolidated statements of income and cash flows of the Borrower and its Subsidiaries, (B) consolidated statements of income and cash flows of the Borrower and its Restricted Subsidiaries, in each case for such period and for the period from the beginning of the respective fiscal year to the end of such period, and (C) consolidating statements of income of the Borrower and its directly owned Subsidiaries combined in significant groups for such period, and (ii) (A) the related consolidated and consolidating balance sheet of the Borrower and its Subsidiaries and (B) the related consolidated balance sheet of the Borrower and its Restricted Subsidiaries, in each case as at the end of such period, setting forth in each case after the first anniversary of the Funding Date (other than consolidating statements) in comparative form the corresponding consolidated figures for the corresponding periods in the preceding fiscal year, accompanied by a certificate of a Responsible Officer of the Borrower, which certificate shall state that such consolidated financial statements fairly present the consolidated financial condition and results of operations of the Borrower and its Subsidiaries or of the Borrower and its Restricted Subsidiaries, as the case may be, and such consolidating financial statements fairly present the respective unconsolidated financial condition and results of operations of the Borrower and each group of such Subsidiaries, in accordance with GAAP consistently applied, as at the end of, and for, such period (subject to normal year-end audit adjustments); 87 all such financial statements to be accompanied by a description of, and an estimation of the effect on the financial statements on account of, a change, if any, in the application of accounting principles as provided in Section 1.3. SECTION 5.2 CERTIFICATES; OTHER INFORMATION. Furnish to the Administrative Agent and each of the Lenders: (a) promptly upon their becoming available, to the extent not available by electronic means, copies of all registration statements and regular periodic reports, if any, that the Borrower shall have filed with the SEC or any national securities exchange; (b) promptly upon mailing thereof to the shareholders of the Borrower generally, copies of all financial statements, reports and proxy statements so mailed; (c) at the time it furnishes each set of financial statements pursuant to Sections 5.1(a) and 5.1(b) above, a certificate of a Responsible Officer of the Borrower (i) certifying that (A) each of the Credit Parties and its Subsidiaries during such period observed or performed in all material respects all of its covenants and other agreements, and satisfied in all material respects every condition, contained in this Agreement to be observed, performed or satisfied by it and (B) no Default or Event of Default has occurred and is continuing (or, if any Default or Event of Default has occurred and is continuing, describing the same in reasonable detail and describing the action that the Borrower has taken or proposes to take with respect thereto), (ii) setting forth in reasonable detail the computations necessary to determine whether the Credit Parties are in compliance with Section 5.9 hereof as of the end of the respective quarterly fiscal period or fiscal year and (iii) the information on Schedule 3.12, Schedule 3.16, Schedule 3.19 and Schedule 3.25 is updated to be true and correct as of such date; (d) within thirty (30) days after the same are sent, to the extent not available by electronic or other readily accessible means, copies of all reports (other than those otherwise provided pursuant to Section 5.1 and those which are of a promotional nature) and other financial information which the Borrower sends to its stockholders, and within thirty days after the same are filed, copies of all financial statements and non-confidential reports which the Borrower may make to, or file with the Securities and Exchange Commission or any successor or analogous Governmental Authority; (e) within ninety (90) days after the end of each fiscal year of the Borrower, a certificate containing information regarding the amount of all Asset Dispositions, Debt Issuances, and Equity Issuances that were made during such prior fiscal year and amounts received in connection with any Recovery Event during such prior fiscal year; and (f) from time to time such other information regarding the financial condition, operations, business or prospects of the Borrower or any of its Subsidiaries (including, without limitation, any Plan or Multiemployer Plan and any reports or other information 88 required to be filed under ERISA) as any Lender or the Administrative Agent may reasonably request. SECTION 5.3 PAYMENT OF OBLIGATIONS. Pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, in accordance with industry practice (subject, where applicable, to specified grace periods) all of its material obligations of whatever nature and any additional costs that are imposed as a result of any failure to so pay, discharge or otherwise satisfy such obligations, except when the amount or validity of such obligations and costs is currently being contested in good faith by appropriate proceedings and reserves, if applicable, in conformity with GAAP with respect thereto have been provided on the books of the Borrower or its Restricted Subsidiaries, as the case may be. SECTION 5.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. (a) Preserve and maintain its legal existence and all of its material rights, privileges, licenses and franchises (provided that nothing in this Section 5.4 shall prohibit any transaction expressly permitted under Section 6.4 hereof). (b) Pay and discharge all taxes, assessments and governmental charges or levies imposed on it or on its income or profits or on any of its assets prior to the date on which penalties attach thereto, except for any such tax, assessment, charge or levy the payment of which is being contested in good faith and by proper proceedings and against which adequate reserves are being maintained. SECTION 5.5 MAINTENANCE OF PROPERTY, INSURANCE. (a) Keep all material property used or useful in its business in ;good working order and condition (ordinary wear and tear and obsolescence excepted). (b) Maintain insurance with financially sound and reputable insurance companies, and with respect to Property and risks of a character usually maintained by corporations engaged in the same or similar business similarly situated, against loss, damage and liability of the kinds and in the amounts customarily maintained by such corporations; and furnish to the Administrative Agent, upon written request, full information as to the insurance carried; provided, however, that the Borrower and its Subsidiaries may maintain self insurance plans to the extent companies of similar size and in similar businesses do so. The Administrative 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 Administrative Agent, that it will give the Administrative Agent thirty (30) days' prior written notice before any such policy or policies shall be altered or canceled, and that no act or default of the Borrower or any of its Subsidiaries or any other Person shall affect the rights of the Administrative Agent or 89 the Lenders under such policy or policies. The present insurance coverage of the Borrower and its Subsidiaries is outlined as to carrier, policy number, expiration date, type and amount on Schedule 5.5(b). (c) On or before the Funding Date, deliver, to the extent not previously delivered, to the Administrative Agent certificates of insurance satisfactory to the Administrative Agent evidencing the existence of all insurance required to be maintained by the Borrower and its Restricted Subsidiaries hereunder and setting forth the respective coverages, limits of liability, carrier, policy number and period of coverage. Thereafter, each year the Borrower will deliver to the Administrative Agent certificates of insurance evidencing that all insurance required to be maintained by the Borrower and its Restricted Subsidiaries hereunder will be in effect through the calendar year following the date of such certificates, subject only to the payment of premiums as they become due. (d) In case of any material loss, damage to or destruction of the Property of any Credit Party or any part thereof, such Credit Party shall promptly give written notice thereof to the Administrative Agent generally describing the nature and extent of such damage or destruction. SECTION 5.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. (a) Keep adequate records and books of account in which complete entries in accordance with GAAP consistently applied and all Requirements of Law shall be made of all dealings and transactions in relation to its businesses and activities. (b) Upon reasonable prior notice, permit representatives of any Lender or the Administrative Agent, during normal business hours, to examine, copy and make extracts from its books and records, to inspect any of its Real Properties, and to discuss its business and affairs with its officers, all to the extent reasonably requested by such Lender or the Administrative Agent (as the case may be). SECTION 5.7 NOTICES. Give prompt notice in writing to the Administrative Agent (which shall promptly transmit such notice to each Lender) of: (a) within five Business Days after any Credit Party knows or has reason to know thereof, the occurrence of any Default or Event of Default or a change in the Borrower's long-term public debt rating by either S&P or Moody's; (b) any default or event of default under any Contractual Obligation of the Borrower or any of its Restricted Subsidiaries which could reasonably be expected to have a Material Adverse Effect; (c) any legal or arbitral proceedings before any Governmental Authority and any material development in respect of such legal or other proceedings affecting the 90 Borrower or any of its Restricted Subsidiaries, except proceedings that., if adversely determined, would not (either individually or in the aggregate) have a Material Adverse Effect; (d) as soon as possible, and in any event within ten days after any Credit Party or any of its Restricted Subsidiaries knows or has reason to believe that any of the events or conditions specified below with respect to any Plan or Multiemployer Plan has occurred or exists, a statement signed by a Responsible Officer of the Borrower or such Credit Party setting forth details respecting such event or condition and the action, if any, that the Borrower, any Credit Party or any ERISA Affiliate proposes to take with respect thereto (and a copy of any report or notice required to be filed with or given to PBGC by the Borrower, any Credit Party or any ERISA Affiliate with respect to such event or condition): (i) any Reportable Event with respect to a Plan, as to which PBGC has not by regulation waived the requirement of Section 4043(a) of ERISA that it be notified within 30 days of the occurrence of such event (provided; that a failure to meet the minimum funding standard of Section 412 of the Code or Section 302 of ERISA, including, without limitation, the failure to make on or before its due date a required installment under Section 412(m) of the Code or Section 302(e) of ERISA, shall be a reportable event regardless of the issuance of any waivers in accordance with Section 412(d) of the Code) and any request for a waiver under Section 412(d) of the Code for any Plan; (ii) the distribution under Section 4041 of ERISA of a notice of intent to terminate any Plan or any action taken by any Credit Party or any of its Subsidiaries or any ERISA Affiliate to terminate any Plan; (iii) the institution by PBGC of proceedings under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or the receipt by any Credit Party or any of its Subsidiaries or any ERISA Affiliate of a notice from a Multiemployer Plan that such action has been taken by PBGC with respect to such Multiemployer Plan; (iv) the complete or partial withdrawal from a Multiemployer Plan by any Credit Party or any of its Subsidiaries or any ERISA Affiliate that results in liability under Section 4201 or 4204 of ERISA (including the obligation to satisfy secondary liability as a result of a purchaser default) or the receipt by any Credit Party or any of its Subsidiaries or any ERISA Affiliate of notice from a Multiemployer Plan that it is in reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA or that it intends to terminate or has terminated under Section 4041A of ERISA; (v) the institution of a proceeding by a fiduciary of any Multiemployer Plan against any Credit Party or any of its Subsidiaries or any ERISA Affiliate to 91 enforce Section 515 of ERISA, which proceeding is not dismissed within 30 days; and (vi) the adoption of an amendment to any Plan that, pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA, would result in the loss of tax-exempt status of the trust of which such Plan is a part if any Credit Party or any of its Subsidiaries or any ERISA Affiliate fails to timely provide security to the Plan in accordance with the provisions of said Sections; (e) any assertion of any Environmental Claim by any Person against, or with respect to the activities of, the Borrower or any of its Subsidiaries and notice of any alleged violation of or non-compliance with any Environmental Laws or any permits, licenses or authorizations, other than any Environmental Claim or alleged violation that, if adversely determined, would not (either individually or in the aggregate) have a Material Adverse Effect; and (f) any other development or event which could reasonably be expected to have a Material Adverse Effect. Each notice pursuant to this Section shall be accompanied by a statement of a Responsible Officer setting forth- details of the occurrence referred to therein and stating what action the Borrower proposes to take with respect thereto. In the case of any notice of a Default or Event of Default, the Borrower shall specify that such notice is a Default or Event of Default notice on the face thereof. SECTION 5.8 ENVIRONMENTAL LAWS. Without limiting the general terms set forth in Section 5.11: (a) Comply in all material respects with, and ensure compliance in all material respects by all tenants and subtenants, if any, with, all applicable Environmental Laws and obtain and comply in all material respects with and maintain, and ensure that all tenants and subtenants obtain and comply in all material respects with and maintain, any and all licenses, approvals, notifications, registrations or permits required by applicable Environmental Laws except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect; (b) Conduct and complete all investigations, studies, sampling and testing, and all remedial, removal and other actions required under Environmental Laws and promptly comply in all material respects with all lawful orders and directives of all Governmental Authorities regarding Environmental Laws except to the extent that the same are being contested in good faith by appropriate proceedings and the pendency of such proceedings could not reasonably be expected to have a Material Adverse Effect; and 92 (c) Defend, indemnify and hold harmless the Administrative Agent and the Lenders, and their respective employees, agents, officers and directors, from and against any and all claims, demands, penalties, fines, liabilities, settlements, damages, costs and expenses of whatever kind or nature known or unknown, contingent or otherwise, arising out of, or in any way relating to the violation of, noncompliance with or liability under, any Environmental Law applicable to the operations of the Borrower any of its Subsidiaries or the Real Properties, or any orders, requirements or demands of Governmental Authorities related thereto, including, without limitation, reasonable attorney's and consultant's fees, investigation and laboratory fees, response costs, court costs and litigation expenses, except to the extent that any of the foregoing arise out of the gross negligence or willful misconduct of the party seeking indemnification therefor. The agreements in this paragraph shall survive repayment of the Notes and all other amounts payable hereunder. SECTION 5.9 FINANCIAL COVENANTS. The Borrower shall, and shall cause each of its Restricted Subsidiaries to, comply with the following financial covenants: (a) Leverage Ratio. The Leverage Ratio, as of the last day of each fiscal quarter of the Borrower and its Restricted Subsidiaries occurring during each of the periods set forth below, shall be less than or equal to the following:

Period Ratio ------ ----- Fifth Amendment Effective Date through and 4.00 to 1.00 including March 31, 2005 April 1, 2005 and thereafter 3.75 to 1.00

(b) Interest Coverage Ratio. The Interest Coverage Ratio, as of the last day of each fiscal quarter of the Borrower and its Restricted Subsidiaries, shall be greater than or equal to 3.00 to 1.0. (c) Minimum Consolidated Net Worth. The Consolidated Net Worth shall at all times be equal to or greater than $1,750,000,000, increased on a cumulative basis as of the end of each fiscal quarter of the Borrower and its Restricted Subsidiaries, commencing with the fiscal quarter ending September 30, 2003, by an amount equal to 50% of the Consolidated Net Income (with no deduction for net losses) for the fiscal quarter then ended plus 50% of the amount by which the "total stockholders equity" of the Borrower is increased as a result of any public or private offering of ownership interests of the Borrower after the Fourth Amendment Effective Date (other than increases to the extent such increases result from Equity Issuances to, or capital contributions from, any Affiliate of the Borrower or Equity Issuances pursuant to an employee or director stock option or incentive plan or other employee benefit plan or from Equity Issuances in connection with the acquisition of assets or Capital Stock). Promptly upon consummation of each such public or private offering, the Borrower shall 93 notify the Administrative Agent in writing of the amount of such increase in total stockholders equity. SECTION 5.10 OBLIGATIONS REGARDING SUBSIDIARIES; ADDITIONAL SUBSIDIARY GUARANTORS. (a) Except as permitted by Section 6.4, the Borrower will, and will cause each of its Restricted Subsidiaries to take such action from time to time as shall be necessary to ensure that each of its Restricted Subsidiaries remains a Subsidiary at all times. (b) The Credit Parties will cause each of their wholly-owned Domestic Subsidiaries that are Material Subsidiaries and Restricted Subsidiaries (other than Suiza Capital Trust II), whether newly formed, after acquired or otherwise existing, to promptly become a Guarantor hereunder by way of execution of a Joinder Agreement and take such other action as may be required pursuant to the terms of Section 5.13. The guaranty obligations of each Additional Credit Party shall be secured by all real and personal property assets of such Additional Credit Party pursuant to the requirements of Section 5.13; provided, that obligations of the Acquired Company and its Subsidiaries shall not be secured by any real property owned by the Acquired Company or any of its Subsidiaries nor by any equity ownership interests of any of the Acquired Company's Subsidiaries that own any real property. SECTION 5.11 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 imposed by all Governmental Authorities, applicable to it and its assets if noncompliance with any such law, rule, regulation, order or restriction could reasonably be expected to have a Material Adverse Effect. SECTION 5.12 PLEDGED ASSETS. (a) Each Credit Party will cause (i) (A) 100% of the Capital Stock (or, if less, the full amount owned by such Credit Party) of each of the direct or indirect Domestic Subsidiaries which are Material Subsidiaries of such Person and which are Restricted Subsidiaries, but which are not Subsidiaries of the Acquired Company, and (B) 65% of the Capital Stock (or, if less, the full amount owned by such Credit Party) of each of the First Tier Foreign Subsidiaries which are Material Subsidiaries of such Person (but which are not Subsidiaries of the Acquired Company), unless otherwise agreed by the Administrative Agent, and (ii) all of such Credit Party's real and personal property Collateral to be subject at all times to a first priority, perfected Lien in, favor of the Administrative Agent pursuant to the terms and conditions of the Security Documents or such other security documents as the Administrative Agent shall reasonably request subject only to Permitted Liens; provided, however, that notwithstanding the foregoing, no Unrestricted Subsidiary shall be required to pledge the Capital Stock of its Subsidiaries and the Borrower shall not be required to pledge the Capital Stock of Suiza Capital Trust II, and the Acquired Company and its Subsidiaries shall not be required to 94 grant Liens in any real property nor in any equity ownership interests of any of the Acquired Company's Subsidiaries that own any real property. (b) Within 30 days after a Credit Party changes the location of its chief executive office, the Borrower shall notify the Administrative Agent of such change and shall execute and deliver, or cause to be executed and delivered, to the Administrative Agent such UCC financing statements and other documentation as the Administrative Agent may reasonably request. SECTION 5.13 ADDITIONAL CREDIT PARTIES. As soon as practicable and in any event within 30 days after any Person (whether newly formed, acquired or otherwise) becomes a Material Subsidiary that is a Restricted Subsidiary of any Credit Party the Borrower shall provide the Administrative Agent with written notice thereof setting forth information in reasonable detail describing all of the assets of such Person and shall (a) if such Person is a wholly-owned Domestic Subsidiary of a Credit Party, cause such Person to execute a Joinder Agreement in substantially the same form as Schedule 5.13 (subject to exceptions regarding real property and ownership interests as collateral as set forth. herein in the case of a Subsidiary of the Acquired Company), (b) cause 100% (if such Person is a Domestic Subsidiary of a Credit Party other than a Subsidiary of the Acquired Company) or, unless otherwise agreed by the Administrative Agent, 65% (if such Person is a First Tier Foreign Subsidiary of a Credit Party that is also a Material Subsidiary) of the Capital Stock of such Person owned by a Credit Party to be delivered to the Administrative Agent (together with undated stock powers signed in blank (unless, with respect to a First Tier Foreign Subsidiary, such stock powers are deemed unnecessary by the Administrative Agent in its reasonable discretion under the law of the jurisdiction of incorporation of such Person)) and pledged to the Administrative Agent pursuant to an appropriate pledge agreement(s) in substantially the form of the Pledge Agreement or joinder to the Pledge Agreement and otherwise in form acceptable to the Administrative Agent, (c) if such Person is a Restricted Subsidiary, cause such Person to grant a security interest in its material real property (excluding real property owned by a Subsidiary of the Acquired Company) and the personal property Collateral of such Person pursuant to appropriate mortgages and/or security agreements in substantially the form of the Security Agreement or a joinder to the Security Agreement, subject to no other Liens other than Permitted Liens [NOTE: PURSUANT TO THE TERMS OF THE FIFTH AMENDMENT, ONLY RESTRICTED SUBSIDIARIES WHICH ARE DOMESTIC SUBSIDIARIES WILL BE REQUIRED TO JOIN THE SECURITY AGREEMENT AND PLEDGE A SECURITY INTEREST IN THEIR ASSETS], and (d) deliver such other documentation as the Administrative Agent may reasonably request in connection with the foregoing, including, without limitation, appropriate UCC-1 financing statements, certified resolutions and other organizational and authorizing documents of such Person and 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 Administrative Agent's liens thereunder). 95 SECTION 5.14 AMENDMENTS, MODIFICATIONS. The Borrower will furnish to the Administrative Agent a copy of each modification, supplement or waiver of any provisions of any agreement, instrument or other document evidencing or relating to the charter or bylaws of the Borrower or any of its Restricted Subsidiaries promptly upon the effectiveness thereof (and the Administrative Agent will promptly furnish a copy thereof to each Lender). SECTION 5.15 FURTHER ASSURANCES. Upon the request of the Administrative Agent promptly perform or cause to be performed any and all acts and execute or cause to be executed any and all documents (including, without limitation, financing statements and continuation statements) for filing under the provisions of the Uniform Commercial Code or any other Requirement of Law which are necessary or advisable to maintain in favor of the Administrative Agent, for the benefit of the Lenders, Liens on the Collateral that are duly perfected in accordance with all applicable Requirements of Law. SECTION 5.16 GOOD STANDING; POST-CLOSING QUALIFICATION. Within 30 days after the Funding Date, the Credit Parties will cause each of their Subsidiaries that are restructured or reorganized on or about the Funding Date to be duly qualified to conduct business 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 except to the extent that the failure to so qualify or be in good standing could not, in the aggregate, reasonably be expected to have a Material Adverse Effect. ARTICLE VI NEGATIVE COVENANTS The Borrower hereby covenants and agrees that on the Funding Date, and thereafter for so long as this Agreement is in effect and until the Commitments have terminated, no Note remains outstanding and unpaid and the Credit Party Obligations, together with interest, Commitment Fees and all other amounts owing to the Administrative Agent or any Lender hereunder, are paid in full, the Borrower shall, and shall cause each of its Subsidiaries, to act in accordance with the following: SECTION 6.1 INDEBTEDNESS. The Borrower will not, nor will it permit any Restricted Subsidiary to, contract, create, incur, assume or permit to exist any Indebtedness, except: (a) Indebtedness arising or existing under this Agreement and the other Credit Documents; (b) Indebtedness of the Borrower and its Restricted Subsidiaries existing as of the Funding Date (and not to be refinanced by the Loans as provided herein) as referenced in the financial statements referenced in Section 3.1 (and set out more specifically in Schedule 6.1(b)) hereto and renewals, refinancings or extensions thereof in 96 a principal amount not in excess of that outstanding as of the date of such renewal, refinancing or extension. (c) Indebtedness (including Capital Lease Obligations and obligations permitted under Section 6.12) incurred to finance the purchase of equipment, and other Capital Lease Obligations, not to exceed $50,000,000 in the aggregate outstanding at any time; provided that (i) such Indebtedness when incurred shall not exceed the purchase price or cost of construction of such asset and (ii) 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) intercompany Indebtedness of the Restricted Subsidiaries of the Borrower to the Borrower or to other Restricted Subsidiaries of the Borrower or of the Borrower to any of its Restricted Subsidiaries; (e) obligations in connection with any Permitted Receivables Financing, to the extent such obligations constitute Indebtedness; (f) additional unsecured Indebtedness and/or Subordinated Indebtedness on terms and conditions reasonably satisfactory to the Agents of the Borrower and its Restricted Subsidiaries up to but not exceeding $100,000,000 in the aggregate at any one time outstanding; (g) Indebtedness of a Restricted Subsidiary (i) consisting of tax-advantaged industrial revenue bond, industrial development bond or other similar financings assumed (or taken subject to) in connection with (but not incurred in connection with or in anticipation of) a Permitted Acquisition and (ii) existing at the time such Person becomes a Restricted Subsidiary pursuant to a Permitted Acquisition provided that such Indebtedness was not incurred by such Person in connection with, or in anticipation or contemplation of, such Person becoming a Restricted Subsidiary; (h) Indebtedness in respect of Hedging Agreements to the extent permitted hereunder; (i) Indebtedness of the Acquired Company and its Subsidiaries under the Senior Notes in an aggregate principal amount not to exceed $700,000,000 (as such amount may be reduced from time to time); (j) other Subordinated Indebtedness; and (k) other secured Indebtedness of the Borrower and its Restricted Subsidiaries up to but not exceeding $30,000,000 in the aggregate at any one time outstanding. 97 SECTION 6.2 LIENS. The Borrower will not, nor will it permit any Restricted Subsidiary to, contract, create, incur, assume or permit to exist any Lien with respect to any of its assets, whether now owned or hereafter acquired, except for Permitted Liens. SECTION 6.3 NATURE OF BUSINESS. Neither the Borrower nor any of its Restricted Subsidiaries will engage to any substantial extent in any line or lines of business activity other than operations involved in the manufacture, processing and distribution of food or packaging products or the lines of business conducted by the Borrower or any of its Restricted Subsidiaries as of the Closing Date or which are related thereto. SECTION 6.4 CONSOLIDATION, MERGER, SALE OR PURCHASE OF ASSETS, ETC. The Borrower will not, nor will it permit any Restricted Subsidiary to, (a) enter into any transaction of merger or consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution); (b) acquire any business or assets from, or Capital Stock of, or be a party to any acquisition of, any Person except: (i) for purchases of inventory and other assets to be sold or used in the ordinary course of business; (ii) Investments permitted under Section 6.5 hereof, and (iii) Permitted Acquisitions; (c) convey, sell, lease, transfer or otherwise dispose of, in one transaction or a series of transactions, any part of its business or assets, whether now owned or hereafter acquired (including, without limitation, receivables and leasehold interests), but excluding: (i) any Excluded Disposition or Specified Sale; (ii) obsolete or worn-out Property, tools or equipment no longer used or useful in its business (other than any Excluded Disposition) or real Property no longer used or useful in its business; (iii) any sale, lease or transfer of assets from a Credit Party to another Credit Party; (iv) any sale of Transferred Assets by such Person to a Receivables Financier in connection with a Permitted Receivables Financing; 98 (v) any sale to the extent permitted under Section 6.12; (vi) transfers of Capital Stock and assets pursuant to the DFA Agreement, and sales, transfers and other dispositions required or requested by any Governmental Authority in connection with any required consent to transactions contemplated by the Merger Agreement; and (vii) transfers of other assets so long as the aggregate amount thereof sold or otherwise disposed of in any single fiscal year by the Borrower and its Restricted Subsidiaries shall not have a book value in excess of ten percent of the book value of the total assets of the Borrower and its Restricted Subsidiaries owned on the later of the Funding Date or the first day of such fiscal year; provided, that in each case with respect to subsections (vii) above at least 85% of the consideration received therefor by the Borrower or any such Restricted Subsidiary is in the form of cash or Cash Equivalents or Capital Stock or assets acquired in connection with a Permitted Acquisition or Permitted Investment; and (d) Notwithstanding the foregoing provisions of this Section 6.4, so long as no Default or Event of Default shall have occurred and be continuing, and after giving effect to any of the succeeding transactions, no Default or Event of Default would exist hereunder and so long as the Liens created under the Security Documents continue to be in effect: (i) any Restricted Subsidiary of the Borrower may be merged or consolidated with or into: (A) the Borrower if the Borrower shall be the continuing or surviving corporation or (B) any other Subsidiary (so long as such surviving Subsidiary is either (x) a Credit Party or (y) an Additional Credit Party); (ii) any Restricted Subsidiary of the Borrower may sell, lease, transfer or otherwise dispose of any or all of its assets (upon voluntary liquidation or otherwise) to the Borrower or a Restricted Subsidiary of the Borrower; and (iii) any Unrestricted Subsidiary may be sold, liquidated, wound up or dissolved, or may sell, lease, transfer or otherwise dispose of any or all of its assets. SECTION 6.5 ADVANCES, INVESTMENTS AND LOANS. The Borrower will not, nor will it permit any Restricted Subsidiary to, lend money or extend credit or make advances to any Person, or purchase or acquire any stock, obligations or securities of, or any other interest in, or make any capital contribution to, any Person except for Permitted Investments. 99 SECTION 6.6 TRANSACTIONS WITH AFFILIATES. Except as expressly permitted by this Agreement, the Borrower will not, nor will it permit any of its Subsidiaries to, directly or indirectly: (a) make any investment in an Affiliate other than Permitted Investments; (b) transfer, sell, lease, assign or otherwise dispose of any assets to an Affiliate other than Permitted Investments; (c) merge into or consolidate with or purchase or acquire assets from an Affiliate other than Permitted Acquisitions; or (d) enter into any other transaction directly or indirectly with or for the benefit of an Affiliate (including, without limitation, guarantees and assumptions of obligations of an Affiliate); provided that (i) any Affiliate who is an individual may serve as a director, officer or employee of the Borrower or any of its Subsidiaries and receive reasonable compensation for his or her services in such capacity and (ii) the Borrower and its Subsidiaries may enter into transactions (other than extensions of credit by the Borrower or any of its Subsidiaries to an Affiliate that are not Permitted Investments) if the monetary or business consideration arising therefrom would be substantially as advantageous to the Borrower and its Restricted Subsidiaries as the monetary or business consideration that would be obtained in a comparable transaction with a Person not an Affiliate. SECTION 6.7 OWNERSHIP OF SUBSIDIARIES; RESTRICTIONS. The Borrower will not, nor will it permit any Restricted Subsidiary to, create, form or acquire any Subsidiaries, except for (a) wholly-owned Domestic Subsidiaries which, if Material Subsidiaries and not a Receivables Financing SPC, are joined as Additional Credit Parties in accordance with the terms hereof, (b) other Domestic Subsidiaries which are Restricted Subsidiaries, or (c) Foreign Subsidiaries. The Borrower will not, nor will it permit its Restricted Subsidiaries to, sell, transfer, pledge or otherwise dispose of any Capital Stock or other equity interests in any of its Restricted Subsidiaries, nor will it permit any of its Restricted Subsidiaries to issue, sell, transfer, pledge or otherwise dispose of any of its Capital Stock or other equity interests, except in a transaction permitted by Section 6.4. SECTION 6.8 FISCAL YEAR; ORGANIZATIONAL DOCUMENTS; MATERIAL CONTRACTS. The Borrower will not, nor will it permit any of its Subsidiaries to, change its fiscal year except in the event that any such change could not reasonably be expected to have a Material Adverse Effect. The Borrower will not, nor will it permit any Subsidiary to, amend, modify or change its articles of incorporation (or corporate charter or other similar organizational document) or bylaws (or other similar document) or its jurisdiction of incorporation in any manner that could reasonably be expected to have a Material Adverse Effect without the prior written consent of the Required Lenders. The Borrower will not, nor will it permit any of its Subsidiaries to, without the prior written consent of the Administrative Agent, amend, modify, cancel or terminate or fail to renew or extend or permit the amendment, modification, cancellation or termination of any of the Material Contracts, except in the event that such amendments, modifications, cancellations or terminations could not reasonably be expected to have a Material Adverse Effect. 100 SECTION 6.9 LIMITATION ON ACTIONS. (a) The Borrower will not, nor will it permit any Restricted Subsidiary 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 (i) 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, (ii) pay any Indebtedness or other obligation owed to any Credit Party, (iii) make loans or advances to any Credit Party, (iv) sell, lease or transfer any of its properties or assets to any Credit Party, or (v) act as a Guarantor and pledge its assets pursuant to the Credit Documents or any renewals, refinancings, exchanges, refundings or extension thereof, except (in respect of any of the matters referred to in clauses (i)-(v) above) for such encumbrances or restrictions existing under or by reason of (A) this Agreement and the other Credit Documents, (B) applicable law, (C) any document or instrument governing Indebtedness incurred pursuant to Section 6.1(c), provided that any such restriction contained therein relates only to the asset or assets constructed or acquired in connection therewith, (D) customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary or assets pending such sale, provided such restrictions and conditions apply only to the Subsidiary or assets that are to be sold and such sale is permitted hereunder, (E) restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the assets securing such Indebtedness, (F) customary provisions in leases and other contracts restricting the assignment thereof, (G) restrictions contained in documents executed in connection with any Permitted Receivables Financing, (H) 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, (I) restrictions or conditions existing as a result of the issuance of preferred stock by a Subsidiary pursuant to warrants outstanding as of the Funding Date for the acquisition thereof, (J) any document or instrument governing the Senior Notes as in effect on the Funding Date, and (K) any indenture agreement, instrument or other arrangement relating to the assets or business of any Subsidiary and existing prior to the consummation of the Permitted Acquisition in which such Subsidiary was acquired. (b) The Borrower will not, nor will it permit any Restricted Subsidiary to, enter into, assume or become subject to any agreement prohibiting or otherwise restricting the creation or assumption of any Lien upon its properties or assets, whether now owned or hereafter acquired, or requiring the grant of any security for such obligation if security is given for some other obligation except (i) pursuant to this Agreement and the other Credit Documents, (ii) pursuant to applicable law, (iii) pursuant to any document or instrument governing Indebtedness incurred pursuant to Section 6.1(c), provided that in the case of Section 6.1(c) any such restriction contained therein relates only to the asset or assets constructed or acquired in connection therewith, (iv) customary restrictions and conditions contained in agreements relating. to the sale of a Subsidiary or assets pending such sale, provided such restrictions and conditions apply only to the Subsidiary or assets that are to be sold and such sale is permitted hereunder, (v) restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the assets securing such Indebtedness, (vi) restrictions or conditions as the result of the issuance of 101 preferred stock by a Subsidiary pursuant to warrants outstanding as of the Funding Date for the acquisition thereof, (vii) customary provisions in leases and other contracts restricting the assignment thereof, (viii) pursuant to the documents executed in connection with any Permitted Receivables Financing (but only to the extent that the related prohibitions against other encumbrances pertain to the applicable Transferred Assets actually sold, contributed, financed or otherwise conveyed or pledged pursuant to such Permitted Receivables Financing), (ix) restrictions in 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, (x) restrictions or conditions contained in any document or instrument governing the Senior Notes as in effect on the Funding Date, and (xi) any indenture agreement, instrument or other arrangement relating to the assets or business of any Subsidiary and existing prior to the consummation of the Permitted Acquisition in which such Subsidiary was acquired. SECTION 6.10 RESTRICTED PAYMENTS. The Borrower will not, nor will it permit any Restricted Subsidiary to, directly or indirectly, declare, order, make or set apart any sum for or pay any Restricted Payment, except (a) to make dividends payable solely in the same class of Capital Stock of such Person, (b) to make dividends or other distributions payable to any Credit Party (directly or indirectly through Subsidiaries), (c) to make dividends or repurchases on or before the Funding Date in order to consummate the transactions contemplated by the Credit Documents, Merger Documents and DFA Agreement, (d) to make dividends to or repurchases from the Borrower or the holders of ownership interests of such Subsidiary the proceeds of which shall be used to pay taxes that are then due and payable, (e) in the case of a Receivables Financing SPC, to make Restricted Payments to its owners to the extent of net income or other assets available therefor under applicable law, and (f) to make other Restricted Payments; provided, however (i) for so long as the Leverage Ratio of the Borrower as of the end of the most recently ended fiscal quarter for which financial statements have been delivered in accordance with Section 5.1(b) is greater than or equal to 3.75 to 1.0, such Restricted Payments shall not exceed $50,000,000 during any fiscal year, and (ii) after giving effect to such Restricted Payments on a Pro Forma Basis, no Default or Event of Default shall have occurred and/or be continuing or be directly or indirectly caused as a result thereof. For the purpose of clarification, it is hereby understood and agreed that to the extent any Restricted Payments are made by the Borrower or any Restricted Subsidiary in a fiscal year prior to the time upon which subclause (f)(i)(A) above applies (i.e., at the time that the Leverage Ratio of the Borrower as of the end of the most recently ended fiscal quarter is less than 3.75 to 1.0), the amount of such Restricted Payments made prior to such time shall not be counted in the limitation set forth in subclause (f)(i)(A) above. SECTION 6.11 PAYMENTS OF SUBORDINATED DEBT, ETC. The Borrower will not, nor will it permit any Restricted Subsidiary to, after the issuance thereof, amend or modify (or permit the amendment or modification of) any of the terms of any Subordinated Indebtedness in a manner adverse to the interests of the Lenders (including 102 specifically shortening the final maturity or average life to maturity or requiring any payment to be made sooner than originally scheduled or increase the interest rate or fees applicable thereto or change any subordination provision thereof). The Borrower will not, nor will it permit any Restricted Subsidiary to make any optional or voluntary prepayment of Subordinated Indebtedness until the Credit Party Obligations shall have been paid in full and the Commitments relating thereto shall have been terminated. SECTION 6.12 SALE LEASEBACKS. The Borrower will not, nor will it permit any Restricted Subsidiary to, directly or indirectly, become or remain liable as lessee or as guarantor or other surety with respect to any lease, whether an operating lease or a Capital Lease, of any property (whether real, personal or mixed), whether now owned or hereafter acquired in excess of $50,000,000 in the aggregate on an annual basis, (a) which the Borrower or any Subsidiary has sold or transferred or is to sell or transfer to a Person which is not the Borrower or any Subsidiary or (b) which the Borrower or any Subsidiary intends to use for substantially the same purpose as any other property which has been sold or is to be sold or transferred by the Borrower or any Subsidiary to another Person which is not the Borrower or any Subsidiary in connection with such lease. SECTION 6.13 USE OF PROCEEDS. The Borrower will not use the proceeds of the Loans and Letters of Credit in a manner inconsistent with the uses permitted under Section 3.11 hereof. SECTION 6.14 SENIOR NOTES. The Borrower will not, nor will it permit any of its Subsidiaries to, make any prepayment of principal, interest or premium, if any, with respect to the Senior Notes prior to the date upon which the Commitments have been terminated and the Credit Party Obligations have been paid in full. ARTICLE VII EVENTS OF DEFAULT SECTION 7.1 EVENTS OF DEFAULT. An Event of Default shall exist upon the occurrence of any of the following specified events (each an "Event of Default"): (a) The Borrower shall fail to pay any principal on any Note when due in accordance with the terms thereof or hereof; or the Borrower shall fail to reimburse the Issuing Lender for any LOC Obligations when due in accordance with the terms hereof; or the Borrower shall fail to pay any interest on any Note or any fee or other amount payable hereunder when due in accordance with the terms thereof or hereof and such failure shall continue unremedied for three (3) Business Days (or any Guarantor shall fail 103 to pay on the Guaranty in respect of any of the foregoing or in respect of any other Guaranty Obligations thereunder); or (b) Any representation or warranty made or deemed made herein, in the Security Documents or in any of the other Credit Documents or which is contained in any certificate, document or financial or other statement furnished at any time under or in connection with this Agreement shall prove to have been incorrect, false or misleading in any material respect on or as of the date made or deemed made; or (c) (i) Any Credit Party shall fail to perform, comply with or observe any term, covenant or agreement applicable to it contained in Sections 5.4(a), 5.7(a) or 5.9 or Article VI hereof; or (ii) any Credit Party shall fail to comply with any other covenant, contained in this Credit Agreement or the other Credit Documents or any other agreement, document or instrument among any Credit Party, the Administrative Agent and the Lenders or executed by any Credit Party in favor of the Administrative Agent or the Lenders (other than as described in Sections 7.1 (a) or 7.1(c)(i) above), and in the event such breach or failure to comply is capable of cure, is not cured within thirty (30) days of its occurrence; or (d) The Borrower or any of its Restricted Subsidiaries shall (i) default in any payment of principal of or interest on any Indebtedness (other than the Notes) in a principal amount outstanding of at least $50,000,000 in the aggregate for the Borrower and any of its Restricted Subsidiaries beyond the period of grace (not to exceed 30 days), if any, provided in the instrument or agreement under which such Indebtedness was created; or (ii) default in the observance or performance of any other agreement or condition relating to any Indebtedness in a principal amount outstanding of at least $50,000,000 in the aggregate for the Borrower and its Restricted Subsidiaries or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such Indebtedness or beneficiary or beneficiaries of such Indebtedness (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with the giving of notice if required, such Indebtedness to become due prior to its stated maturity; or (e) (i) The Borrower or any of its Restricted Subsidiaries shall commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or the Borrower or any Restricted Subsidiary shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against the Borrower or any Restricted Subsidiary any case, proceeding or other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) 104 remains undismissed, undischarged or unbonded for a period of 60 days; or (iii) there shall be commenced against the Borrower or any Restricted Subsidiary any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal within 60 days from the entry thereof; or (iv) the Borrower or any Restricted Subsidiary shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) the Borrower or any Restricted Subsidiary shall generally not, or shall be unable to, or shall admit in writing its inability to., pay its debts as they become due; or (f) One or more judgments or decrees shall be entered against the Borrower or any of its Restricted Subsidiaries involving in the aggregate a liability (to the extent not paid when due or covered by insurance) of $50,000,000 or more and all such judgments or decrees shall not have been paid and satisfied, vacated, discharged, stayed or bonded pending appeal within 30 days from the entry thereof, or (g) (i) Any Person shall engage in any "prohibited transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302 of ERISA), whether or not waived, shall exist with respect to any Plan or any Lien in favor of the PBGC or a Plan (other than a Permitted Lien) shall arise on the assets of the Borrower, any of its Restricted Subsidiaries or any Commonly Controlled Entity, (iii) a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Single Employer Plan, which Reportable Event or commencement of proceedings or appointment of a Trustee is, in the reasonable opinion of the Required Lenders, likely to result in the termination of such Plan for purposes of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the Borrower, any of its Restricted Subsidiaries or any Commonly Controlled Entity shall, or in the reasonable opinion of the Required Lenders is likely to, incur any liability in connection with a withdrawal from, or the Insolvency or Reorganization of, any Multiemployer Plan or (vi) any other similar event or condition shall occur or exist with respect to a Plan; and in each case in clauses (i) through (vi) above, such event or condition, together with all other such events or conditions, if any, could have a Material Adverse Effect; or (h) A reasonable basis shall exist for the assertion against the Borrower or any of its Subsidiaries, or any predecessor in interest of the Borrower or any of its Subsidiaries, of (or there shall have been asserted against the Borrower or any of its Subsidiaries) an Environmental Claim that, in the judgment of the Required Lenders, is reasonably likely to be determined adversely to the Borrower or any of its Subsidiaries, and the amount thereof (either individually or in the aggregate) is reasonably likely to have a Material Adverse Effect (insofar as such amount is payable by the Borrower or any of its Subsidiaries but after deducting any portion thereof that is reasonably expected to be paid by other creditworthy Persons jointly and severally liable therefor); or 105 (i) A Change of Control shall occur; or (j) The Guaranty or any provision thereof shall cease to be in full force and effect or any Guarantor or any Person acting by or on behalf of any Guarantor shall deny or disaffirm any Guarantor's obligations under the Guaranty; or (k) Any other Credit Document shall fail to be in full force and effect or to give the Administrative Agent and/or the Lenders the security interests, liens, rights, powers and privileges purported to be created thereby (except as such documents may be terminated or no longer in force and effect in accordance with the terms thereof, other than those indemnities and provisions which by their terms shall survive). SECTION 7.2 ACCELERATION; REMEDIES. Upon the occurrence of an Event of Default, then, and in any such event, (a) if such event is an Event of Default specified in Section 7.1(e) above, automatically the Commitments shall immediately terminate and the Loans (with accrued interest thereon), and all other amounts under the Credit Documents (including without limitation the maximum amount of all contingent liabilities under Letters of Credit) shall immediately become due and payable, the Administrative Agent shall have the right to enforce any and all other rights and interests created and existing under the Credit Documents, including, without limitation, all rights and remedies existing under the Security Documents, all rights and remedies against a Guarantor and all rights of set-off, and the Administrative Agent shall have the right to enforce any and all other rights and remedies of a creditor under applicable law, and (b) if such event is any other Event of Default, with the written consent of the Required Lenders, the Administrative Agent may, or upon the written request of the Required Lenders, the Administrative Agent shall, by notice to the Borrower (a copy of which shall be sent to the Lenders), take any or all of the following actions: (i) declare the Commitments to be terminated forthwith, whereupon the Commitments shall immediately terminate; (ii) declare the Loans (with accrued interest thereon) and all other amounts owing under this Agreement and the Notes to be due and payable forthwith and direct the Borrower to pay to the Administrative Agent cash collateral as security for the LOC Obligations for subsequent drawings under then outstanding Letters of Credit in an amount equal to the maximum amount of which may be drawn under Letters of Credit then outstanding, whereupon the same shall immediately become due and payable; (iii) enforce any and all other rights and interests created and existing under the Credit Documents, including, without limitation, all rights and remedies existing under the Security Documents, all rights and remedies against a Guarantor and all rights of set-off; and (iv) enforce any and all rights and remedies of a creditor under applicable law. Except as expressly provided above in this Section 7.2, presentment, demand, protest and all other notices of any kind are hereby expressly waived. SECTION 7.3 JUDGMENT CURRENCY. The obligation of the Borrower to pay the Credit Party Obligations and the obligation of any such Person to make payments of any other amounts payable hereunder or pursuant to any other 106 Credit Document in the currency specified for such payment shall not be discharged or satisfied by any tender, or any recovery pursuant to any judgment, which is expressed in or converted into any other currency, except to the extent that such tender or recovery shall result in the actual receipt by each of the Administrative Agent and Lenders of the full amount of the particular Permitted Currency expressed to be payable pursuant to the applicable Credit Document. The Administrative Agent shall, using all amounts obtained or received from the Borrower pursuant to any such tender or recovery in payment of principal of and interest on the Credit Party Obligations, promptly purchase the applicable currency at the most favorable spot exchange rate determined by the Administrative Agent to be available to it. The obligation of the Borrower to make payments in the applicable currency shall be enforceable as an alternative or additional cause of action solely for the purpose of recovering in the applicable currency the amount, if any, by which such actual receipt shall fall short of the full amount of the currency expressed to be payable pursuant to the applicable Credit Document. ARTICLE VIII THE AGENT SECTION 8.1 APPOINTMENT. Each Lender hereby irrevocably designates and appoints First Union National Bank as the Administrative Agent of such Lender under this Agreement, and each such Lender irrevocably authorizes First Union National Bank, as the Administrative Agent for such Lender, to take such action on its behalf under the provisions of this Agreement and to exercise such powers and perform such duties as are expressly delegated to the Administrative Agent by the terms of this Agreement, together with such other powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere in this Agreement, the Administrative Agent shall not have any duties or responsibilities, except those expressly set forth herein, or any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or otherwise exist against the Administrative Agent. SECTION 8.2 DELEGATION OF DUTIES. The Administrative Agent may execute any of its duties under this Agreement by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Administrative Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care. Without limiting the foregoing, the Administrative Agent may appoint one of its Affiliates as its agent to perform the functions of the Administrative Agent hereunder relating to the advancing of funds to the Borrower and distribution of funds to the Lenders and to perform such other related functions of the Administrative Agent hereunder as are reasonably incidental to such functions. 107 SECTION 8.3 EXCULPATORY PROVISIONS. Neither the Administrative Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or affiliates shall be (i) liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection with this Agreement (except for its or such Person's own gross negligence or willful misconduct) or (ii) responsible in any manner to any of the Lenders for any recitals, statements, representations or warranties made by any Credit Party or any officer thereof contained in this Agreement or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent under or in connection with, this Agreement or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of any of the Credit Documents or for any failure of any Credit Party to perform its obligations hereunder or thereunder. The Administrative Agent shall not be under any obligation to any Lender to ascertain or to inquire as to the observance or performance by the Credit Parties of any of the agreements contained in, or conditions of, this Agreement, or to inspect the properties, books or records of the Credit Parties. SECTION 8.4 RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any Note, writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype message, statement, order or other document or conversation believed by it in good faith to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to the Credit Parties), independent accountants and other experts selected by the Administrative Agent. The Administrative Agent may deem and treat the payee of any Note as the owner thereof for all purposes unless (a) a written notice of assignment, negotiation or transfer thereof shall have been filed with the Administrative Agent and (b) the Administrative Agent shall have received the written agreement of such assignee to be bound hereby as fully and to the same extent as if such assignee were an original Lender party hereto, in each case in form satisfactory to the Administrative Agent. The Administrative Agent shall be fully justified in failing or refusing to take any action under this Agreement unless it shall first receive such advice or concurrence of the Required Lenders as it deems appropriate or 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 or continuing to take any such action. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under any of the Credit Documents in accordance with a request of the Required Lenders or all of the Lenders, as may be required under this Agreement, and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders and all future holders of the Notes. SECTION 8.5 NOTICE OF DEFAULT. The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default hereunder unless the Administrative Agent has received written notice from a Lender or the Borrower referring to this Agreement, describing such Default or Event of Default and stating that such notice is a "notice of default"'. In the event that the Administrative Agent receives such a notice, the Administrative Agent shall give prompt notice thereof to the Lenders. The Administrative Agent shall take such action with respect to such Default or Event of Default as shall be reasonably directed by the Required 108 Lenders; provided, however, that unless and until the Administrative Agent shall have received such directions, the Administrative 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 interests of the Lenders except to the extent that this Credit Agreement expressly requires that such action be taken, or not taken, only with the consent or upon the authorization of the Required Lenders, or all of the Lenders, as the case may be. SECTION 8.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS. Each Lender expressly acknowledges that neither the Administrative Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or affiliates has made any representation or warranty to it and that no act by the Administrative Agent hereinafter taken, including any review of the affairs of the Credit Parties, shall be deemed to constitute any representation or warranty by the Administrative Agent to any Lender. Each Lender represents to the Administrative Agent that it has, independently and without reliance upon the Administrative Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, operations, property, financial and other condition and creditworthiness of the Borrower and made its own decision to make its Loans hereunder and enter into this Agreement. Each Lender also represents that it will, independently and without reliance upon the Administrative 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 credit analysis, appraisals and decisions in taking or not taking action under this Agreement, and to make such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other condition and creditworthiness of the Borrower. Except for notices, reports and other documents expressly required to be furnished to the Lenders by the Administrative Agent hereunder, the Administrative Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, operations, property, condition (financial or otherwise), prospects or creditworthiness of the Credit Parties which may come into the possession of the Administrative Agent or any of its officers, directors, employees, agents, attorneys-in-fact or affiliates. SECTION 8.7 INDEMNIFICATION. The Lenders agree to indemnify the Administrative Agent in its capacity hereunder (to the extent not reimbursed by the Borrower and without limiting the obligation of the Borrower to do so), ratably according to their respective Commitment Percentages in effect on the date on which indemnification is sought under this Section, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever which may at any time (including, without limitation, at any time following the payment of the Notes) be imposed on, incurred by or asserted against the Administrative Agent in any way relating to or arising out of any Credit Document' or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by the Administrative Agent under or in connection with any of the foregoing; provided, however, that no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements to the extent resulting from the Administrative Agent's gross negligence or willful 109 misconduct, as determined by a court of competent jurisdiction. The agreements in this Section 8.7 shall survive the termination of this Agreement and payment of the Notes and all other amounts payable hereunder. SECTION 8.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. The Administrative Agent and its affiliates may make loans to, accept deposits from and generally engage in any kind of business with the Borrower as though the Administrative Agent were not the Administrative Agent hereunder. With respect to its Loans made or renewed by it and any Note issued to it, the Administrative Agent shall have the same rights and powers under this Agreement as any Lender and may exercise the same as though it were not the Administrative Agent, and the terms "Lender" and "Lenders" shall include the Administrative Agent in its individual capacity. SECTION 8.9 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may resign as Administrative Agent upon 30 days' prior notice to the Borrower and the Lenders. If the Administrative Agent shall resign as Administrative Agent under this Agreement and the Notes, then the Required Lenders shall appoint from among the Lenders a successor agent for the Lenders, which successor agent shall be approved by the Borrower, so long as no Default or Event of Default has occurred and is continuing, whereupon such successor agent shall succeed to the rights, powers and duties of the Administrative Agent, and the term "Administrative Agent" shall mean such successor agent effective upon such appointment and approval, and the former Administrative Agent's rights, powers and duties as Administrative Agent shall be terminated, without any other or further act or deed on the part of such former Administrative Agent or any of the parties to this Agreement or any holders of the Notes. If no successor Administrative Agent has accepted appointment as Administrative Agent within sixty (60) days after the retiring Administrative Agent's giving notice of resignation, the retiring Administrative Agent's resignation shall nevertheless become effective and the Lenders shall perform all duties of the Administrative Agent hereunder until such time, if any, as the Required Lenders appoint a successor Administrative Agent as provided for above. After any retiring Administrative Agent's resignation as Administrative Agent, the provisions of this Section 8.9 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement. SECTION 8.10 RESPONSIBILITY OF OTHER AGENTS. The Syndication Agent, the co-documentation agents and any other agents designated as such on the signature pages hereto (other than the Administrative Agent) shall have no responsibilities under this Agreement or the other Credit Documents other than as a Lender. ARTICLE IX MISCELLANEOUS SECTION 9.1 AMENDMENTS, WAIVERS AND RELEASE OF COLLATERAL. 110 Neither this Agreement, nor any of the Notes, nor any of the other Credit Documents, nor any terms hereof or thereof may be amended, supplemented, waived or modified except in accordance with the provisions of this Section nor may be released except as specifically provided herein or in the Security Documents or in accordance with the provisions of this Section 9.1. The Required Lenders may, or, with the written consent of the Required Lenders, the Administrative Agent may, from time to time, (a) enter into with the Borrower written amendments, supplements or modifications hereto and to the other Credit Documents for the purpose of adding any provisions to this Agreement or the other Credit Documents or changing in any manner the rights of the Lenders or of the Borrower hereunder or thereunder or (b) waive, on such terms and conditions as the Required Lenders may specify in such instrument, any of the requirements of this Agreement or the other Credit Documents or any Default or Event of Default and its consequences or (c) release Collateral in accordance with the terms hereof or of any Security Document or on such other terms and conditions as the Required Lenders may agree; provided, however, that no such waiver and no such amendment, waiver, supplement, modification or release shall: (i) reduce the amount or extend the scheduled date of maturity of any Loan or Note or any installment thereon, or the reimbursement obligations with respect to any Letters of Credit, or extend the expiry of any Letter of Credit beyond the Maturity Date, or reduce the stated rate of any interest or fee payable hereunder (other than interest at the increased post-default rate) or extend the scheduled date of any payment thereof or increase the amount or extend the expiration date of any Lender's Commitment, in each case without the written consent of each Lender directly affected thereby (it being understood and agreed that changes to the financial definitions and financial covenants herein shall only require the consent of the Required Lenders and waivers of mandatory prepayments of the Loans required pursuant to Section 2.8(b) hereof shall not constitute increases in the Commitment of any Lender or extensions of the scheduled date of any payments to any Lender); or (ii) amend, modify or waive any provision of Section 2.13 or this Section 9.1, or reduce the percentage specified in the definition of Required Lenders, without the written consent of all the Lenders; or (iii) amend, modify or waive any provision of Article VIII without the written consent of the then Administrative Agent; or (iv) release all or any substantial portion of the Guarantors from their obligations under the Guaranty without the written consent of all of the Lenders; or (v) release all or any substantial portion of the Collateral without the written consent of all of the Lenders, or (vi) amend, modify or waive the allocation of any payments or the realization of proceeds of Collateral among the Revolving-1 Loans, the Tranche 111 A-1 Term Loans and/or the Tranche B-1 Term Loans (or between any two of such Loans), or the order of application of payments specified in Section 2.8 without the consent of, if affected thereby, (i) Lenders holding greater than 50% of the Revolving-1 Committed Amount, (ii) Lenders holding greater than 50% of the outstanding Tranche A-1 Term Loans and (iii) Lenders holding greater than 50% of the outstanding Tranche B-1 Term Loans. (vii) amend, modify or waive the requirement that any issue be resolved or determined with the consent, approval or upon the request of the Required Lenders without the written consent of the Required Lenders, or with the consent, approval or upon the request of all Lenders, without the written consent of all of the Lenders to the change of such voting requirement and, provided, further, that no amendment, waiver or consent affecting the rights or duties of the Administrative Agent or the Issuing Lender under any Credit Document shall in any event be effective, unless in writing and signed by the Administrative Agent and/or the Issuing Lender, as applicable, in addition to the Lenders required hereinabove to take such action. Any such waiver, any such amendment, supplement or modification and any such release shall apply equally to each of the Lenders and shall be binding upon the Borrower, the other Credit Parties, the Lenders, the Administrative Agent and all future holders of the Notes. In the case of any waiver, the Borrower, the other Credit Parties, the Lenders and the Administrative Agent shall be restored to their former position and rights hereunder and under the outstanding Loans and Notes and other Credit Documents, and any Default or Event of Default waived shall be deemed to be cured and not continuing; but no such waiver shall extend to any subsequent or other Default or Event of Default, or impair any right consequent thereon. Notwithstanding any of the foregoing to the contrary, the consent of the Credit Parties shall not be required for any amendment, modification or waiver of the provisions of Article VIII (other than the provisions of Section 8.9); provided, however, that the Administrative Agent will provide written notice to the Borrower of any such amendment, modification or waiver. In addition, the Borrower and the Lenders hereby authorize the Administrative Agent to modify this Credit Agreement by unilaterally amending or supplementing the Register from time to time in the manner requested by the Borrower, the Administrative Agent or any Lender in order to reflect any assignments or transfers of the Loans as provided for hereunder; provided, however, that the Administrative Agent shall promptly deliver a copy of any such modification to the Borrower and each Lender. 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 supersede the unanimous consent provisions set forth herein and (y) the Required Lenders may consent to allow a Credit Party to use cash collateral in the context of a bankruptcy or insolvency proceeding. 112 SECTION 9.2 NOTICES. Except as otherwise provided in Article II, all notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including by telecopy), and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made (a) when delivered by hand, (b) when transmitted via telecopy (or other facsimile device) to the number set out herein and the appropriate confirmation is received, (c) the 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) on the earlier of receipt or the fifth Business Day following the day on which the same is sent by certified or registered mail, postage prepaid, return receipt requested, in each case, addressed as follows in the case of the Borrower, the other Credit Parties and the Administrative Agent, and as set forth on Schedule 9.2 in the case of the Lenders, or to such other address as may be hereafter notified by the respective parties hereto and any future holders of the Notes: The Borrower [Borrower/Name of Credit Party] and the other c/o Dean Foods Company Credit Parties: 2515 McKinney Ave., Suite 1200 Dallas, Texas 75201 Attention: Treasurer Telecopier: (214) 303-3499 Telephone: (214) 303-3400 The Administrative Wachovia Bank, National Association Agent: Charlotte Plaza, 23rd Floor 201 South College Street Charlotte, North Carolina 28288-0608 Attention: Syndication Agency Services Telecopier: (704) 383-0288 Telephone: (704) 374-2698 with a copy to: First Union National Bank One First Union Center, DC-5 Charlotte, North Carolina 28288-0737 Attention: Mr. Jorge Gonzalez Telecopier: (704) 715-1117 Telephone: (704) 383-8461 SECTION 9.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no delay in exercising, on the part of the Administrative Agent or any Lender, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or 113 privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law. SECTION 9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and warranties made hereunder and in any document;, certificate or statement delivered pursuant hereto or in connection herewith shall survive the execution and delivery of this Agreement and the Notes and the making of the Loans, provided that all such representations and warranties shall terminate on the date upon which the Commitments have been terminated and all amounts owing hereunder and under any Notes have been paid in full. SECTION 9.5 PAYMENT OF EXPENSES AND TAXES. The Credit Parties agree (a) to pay or reimburse the Administrative Agent for all its reasonable out-of-pocket costs and expenses incurred in connection with the development, preparation, negotiation, printing and execution of, and any amendment, supplement or modification to, this Agreement and the other Credit Documents and any other documents prepared in connection herewith or therewith, and the consummation and administration of the transactions contemplated hereby and thereby, together with the reasonable fees and disbursements of counsel to the Administrative Agent, (b) to pay or reimburse each Lender and the Administrative Agent for all its costs and expenses incurred in connection with the enforcement or preservation of any rights under this Agreement, the Notes and any such other documents, including, without limitation, the reasonable fees and disbursements of counsel to the Administrative Agent and to the Lenders (including reasonable allocated costs of in-house legal counsel), (c) on demand, to pay, indemnify, and hold each Lender and the Administrative Agent harmless from, any and all recording and filing fees and any and all liabilities with respect to, or resulting from any delay in paying, stamp, excise and other similar taxes, if any, which may be payable or determined to be payable in connection with the execution and delivery of, or consummation or administration of any of the transactions contemplated by, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, the Credit Documents and any such other documents, and (d) to pay, indemnify, and hold each Lender and the Administrative Agent and their Affiliates harmless from and against, any and all other liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of the Credit Documents and any such other documents and the use, or proposed use, of proceeds of the Loans (all of the foregoing, collectively, the "indemnified liabilities"); provided, however, that the Borrower shall not have any obligation hereunder to the Administrative Agent or any Lender with respect to indemnified liabilities arising from the gross negligence or willful misconduct of the Administrative Agent or any such Lender, as determined by a court of competent jurisdiction. The agreements in this Section 9.5 shall survive repayment or assignment of the Loans, Notes and all other amounts payable hereunder. SECTION 9.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; PURCHASING LENDERS. (a) This Agreement shall be binding upon and inure to the benefit of the Borrower, the Lenders, the Administrative Agent, all future holders of the Notes and their 114 respective successors and assigns, except that the Borrower may not assign or transfer any of its rights or obligations under this Agreement or the other Credit Documents without the prior written consent of each Lender. (b) Any Lender may, without notice to or consent of the Borrower and the Administrative Agent, in the ordinary course of its commercial banking business and in accordance with applicable law, at any time sell to one or more banks or other entities ("Participants") participating interests in any Loan owing to such Lender, any Note held by such Lender, any Commitment of such Lender, or any other interest of such Lender hereunder; (provided, however, that no settlement date relating to any such sale shall occur prior to the date which is one Business Day after the Funding Date).. In the event of any such sale by a Lender of participating interests to a Participant, such Lender's obligations under this Agreement to the other parties to this Agreement shall remain unchanged, such Lender shall remain solely responsible for the performance thereof, such Lender shall remain the holder of any such Note for all purposes under this Agreement, and the Borrower and the Administrative Agent shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement. No Lender shall transfer or grant any participation under which the Participant shall have rights to approve any amendment to or waiver of this Agreement or any other Credit Document except to the extent such amendment or waiver would (i) extend the scheduled maturity of any Loan or Note, or extend the expiry date of any Letter of Credit in which such Participant is participating beyond the Maturity Date, or any installment thereon in which such Participant is participating, or reduce the stated rate or extend the time of payment of interest or fees thereon (except in connection with a waiver of interest at the increased post-default rate) or reduce the principal amount thereof, or increase the amount of the Participant's participation over the amount thereof then in effect (it being understood that a waiver of any Default or Event of Default shall not constitute a change in the terms of such participation, and that an increase in any Commitment or Loan shall be permitted without consent of any Participant if the Participant's participation is not increased as a result thereof), (ii) release all or substantially all of the Guarantors from their obligations under the Guaranty, (iii) release all or substantially all of the Collateral, or (iv) consent to the assignment or transfer by the Borrower of any of its rights and obligations under this Agreement other than in accordance with this Agreement. In the case of any such participation, the Participant shall not have any rights under this Agreement or any of the other Credit Documents (the Participant's rights against such Lender in respect of such participation to be those set forth in the agreement executed by such Lender in favor of the Participant relating thereto) and all amounts payable by the Borrower hereunder shall be determined as if such Lender had not sold such participation; provided that each Participant shall be entitled to the benefits of Sections 2.15, 2.16, 2.17, 2.18, 2.19 and 9.5 with respect to its participation in the Commitments and the Loans outstanding from time to time, but no Participant shall be entitled to receive any greater amount pursuant to such Sections than the transferor Lender would have been entitled to receive in respect of the amount of the participation transferred by such transferor Lender to such Participant had no such transfer occurred. 115 (c) Any Lender may, in the ordinary course of its business and in accordance with applicable law, at any time after the Funding Date, sell or assign to any Lender, any Affiliate of a Lender or in the case of the Tranche A-1 Term Loan or the Tranche B-1 Term Loan, any special purpose entity created thereby (including, without limitation, any entity which is engaged in investing in bank loans and is administered by a Lender or an Affiliate of a Lender) or an Approved Fund and with the consent of the Administrative Agent (provided, however, that no settlement date relating to such sale or assignment shall occur prior to the date which is one Business Day after the Funding Date) and, so long as no Event of Default has occurred and is continuing, the Borrower (in each case, which consent shall not be unreasonably withheld or delayed), to one or more additional banks, funds or other financial institutions ("Purchasing Lenders"), all or any part of its rights and obligations under this Agreement and the Notes in minimum amounts of (x) $5,000,000 with respect to its Dollar Revolving-1 Subcommitment and its Dollar Revolving-1 Loans, (y) $5,000,000 with respect to its Multi-currency Revolving-1 Subcommitment and its Multi-currency Revolving-1 Loans or (z) $1,000,000 with respect to its Tranche A-1 Term Loan or Tranche B-1 Term Loan (or, if less, the entire amount of such Lender's obligations or such lesser amount agreed to by the Borrower and the Administrative Agent), pursuant to a Commitment Transfer Supplement, executed by such Purchasing Lender and such transferor Lender (and, in the case of a Purchasing Lender that is not then a Lender or an affiliate thereof, the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrower), and delivered to the Administrative Agent for its acceptance and recording in the Register; provided, however, that any sale or assignment to an existing Lender, an Affiliate of a Lender or in the case of the Tranche A-1 Term Loan or the Tranche B-1 Term Loan, a special purpose entity created thereby or an Approved Fund shall not require the consent of the Administrative Agent or the Borrower nor shall any such sale or assignment be subject to the minimum assignment amounts specified herein. Upon such execution, delivery, acceptance and recording, from and after the Transfer Effective Date specified in such Commitment Transfer Supplement, (x) the Purchasing Lender thereunder shall be a party hereto and, to the extent provided in such Commitment Transfer Supplement, have the rights and obligations of a Lender hereunder with a Commitment as set forth therein, and (y) the transferor Lender thereunder shall, to the extent provided in such Commitment Transfer Supplement, be released from its obligations under this Agreement (and, in the case of a Commitment Transfer Supplement covering all or the remaining portion of a transferor Lender's rights and obligations under this Agreement, such transferor Lender shall cease to be a party hereto). Such Commitment Transfer Supplement shall be deemed to amend this Agreement to the extent, and only to the extent, necessary to reflect the addition of such Purchasing Lender and the resulting adjustment of Commitment Percentages arising from the purchase by such Purchasing Lender of all or a portion of the rights and obligations of such transferor Lender under this Agreement and the Notes. On or prior to the Transfer Effective Date specified in such Commitment Transfer Supplement, the Borrower, at its own expense, and to the extent requested by the Purchasing Lender shall execute and deliver to the Administrative Agent in exchange for the Notes delivered to the Administrative Agent pursuant to such Commitment Transfer Supplement new Notes to the order of such Purchasing Lender in an amount equal to the Commitment assumed by 116 it pursuant to such Commitment Transfer Supplement and, unless the transferor Lender has not retained a Commitment hereunder, new Notes to the order of the transferor Lender in an amount equal to the Commitment retained by it hereunder. Such new Notes shall be dated the Closing Date and shall otherwise be in the form of the Notes replaced thereby. The Notes surrendered by the transferor Lender shall be returned by the Administrative Agent to the Borrower marked "canceled". (d) The Administrative Agent shall maintain at its address referred to in Section 9.2 a copy of each Commitment Transfer Supplement delivered to it and a register (the "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 entries in the Register shall be conclusive, in the absence of manifest error, and the Borrower, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register as the owner of the Loan recorded therein for all purposes of this Agreement. The Register shall be available for inspection by the Borrower or any Lender at any reasonable time and from time to time upon reasonable prior notice. (e) Upon its receipt of a duly executed Commitment Transfer Supplement, together with payment to the Administrative Agent by the transferor Lender or the Purchasing Lender, as agreed between them, of a registration and processing fee of $3,500 for each Purchasing Lender listed in such Commitment Transfer Supplement and the Notes subject to such Commitment Transfer Supplement, the Administrative Agent shall (i) accept such Commitment Transfer Supplement, (ii) record the information contained therein in the Register and (iii) give prompt notice of such acceptance and recordation to the Lenders and the Borrower. (f) The Credit Parties authorize each Lender to disclose to any Participant or Purchasing Lender (each, a "Transferee") and any prospective Transferee any and all financial information in such Lender's possession concerning the Credit Parties, their Subsidiaries and their Affiliates which has been delivered to such Lender by or on behalf of the Credit Parties pursuant to this Agreement or which has been delivered to such Lender by or on behalf of the Credit Parties in connection with such Lender's credit evaluation of the Credit Parties and their Affiliates prior to becoming a party to this Agreement, in each case subject to Section 9.15. (g) At the time of each assignment pursuant to this Section 9.6 to a Person which is not already a Lender hereunder and which is not a United States person (as such term is defined in Section 7701(a)(30) of the Code) for Federal income tax purposes, the respective assignee Lender shall provide to the Borrower and the Administrative Agent the appropriate Internal Revenue Service Forms (and, if applicable, a 2.19 Certificate) described in Section 2.19. (h) Nothing herein shall prohibit any Lender from pledging or assigning any of its rights under this Agreement (including, without limitation, any right to payment of principal and interest under any Note) to any creditor or representative of creditors 117 including any assignment to any Federal Reserve Bank in accordance with applicable laws. In the case of any Lender that is a fund that invests in bank loans, such Lender may, without the consent of the Borrower or Administrative Agent, assign or pledge all or any portion of its Tranche A-1 Term Note or its Tranche B-1 Term Note or any other instrument evidencing its rights as a Lender under the Tranche A-1 Term Loan or Tranche B-1 Term Loan under this Agreement to any trustee for, or any other representative of, holders of obligations owed or securities issued, by such fund, as security for such obligations or securities; provided that any foreclosure or similar action by such trustee or representative shall be subject to the provisions of this Section 9.6 concerning assignments. SECTION 9.7 ADJUSTMENTS; SET-OFF. (a) Each Lender agrees that if any Lender (a "benefited Lender") shall at any time receive any payment of all or part of its Loans, or interest thereon, or receive any collateral in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to events or proceedings of the nature referred to in Section 7.1(e), or otherwise) in a greater proportion than any such payment to or collateral received by any other Lender, if any, in respect of such other Lender's Loans, or interest thereon, such benefited Lender shall promptly notify the Administrative Agent thereof, and purchase for cash from the other Lenders a participating interest in such portion of each such other Lender's Loans, or shall provide such other Lenders with the benefits of any such collateral, or the proceeds thereof, as shall be necessary to cause such benefited Lender to share the excess payment or benefits of such collateral or proceeds ratably with each of the Lenders; provided, however, that if all or any portion of such excess payment or benefits is thereafter recovered from such benefited Lender, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest. The Borrower agrees that each Lender so purchasing a portion of another Lender's Loans may exercise all rights of payment (including, without limitation, rights of set-off) with respect to such portion as fully as if such Lender were the direct holder of such portion. (b) In addition to any rights and remedies of the Lenders provided by law (including, without limitation, other rights of set-off), each Lender shall have the right, without prior notice to the Borrower, any such notice being expressly waived by the Borrower to the extent permitted by applicable law, upon the occurrence of any Event of Default, to setoff and appropriate and apply any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Lender or any branch or agency thereof to or for the credit or the account of the Borrower, or any part thereof in such amounts as such Lender may elect, against and on account of the obligations and liabilities of the Borrower to such Lender hereunder and claims of every nature and description of such Lender against the Borrower, in any currency, whether arising hereunder, under the Notes or under any documents contemplated by or referred to herein or therein, as such Lender may elect, whether or not such Lender has made any demand for payment and although such obligations, liabilities and claims may be contingent or 118 unmatured. The aforesaid right of set-off may be exercised by such Lender against the Borrower or against any trustee in bankruptcy, debtor in possession, assignee for the benefit of creditors, receiver or execution, judgment or attachment creditor of the Borrower, or against anyone else claiming through or against the Borrower or any such trustee in bankruptcy, debtor in possession, assignee for the benefit of creditors, receiver, or execution, judgment or attachment creditor, notwithstanding the fact that such right of set-off shall not have been exercised by such Lender prior to the occurrence of any Event of Default. Each Lender agrees promptly to notify the Borrower and the Administrative Agent 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. (c) Any amount to be set-off pursuant to clause (b) above may be denominated in any Permitted Currency. Any such amount which is denominated in an Alternative Currency shall be converted to Dollars in an amount equal to the Dollar Amount of such amount at the most favorable spot exchange rate determined by the Administrative Agent to be available to it; provided that if at the time of any such determination no such spot exchange rate can reasonably be determined, the Administrative Agent may use any reasonable method as it deems applicable to determine such rate, any such determination to be conclusive absent manifest error. Each Lender and any assignee or participant of such Lender in accordance with Section 9.6 are hereby authorized by each Borrower to combine currencies, as deemed necessary by such Person, in order to effect any set-off pursuant to clause (b) above. SECTION 9.8 TABLE OF CONTENTS AND SECTION HEADINGS. The table of contents and the Section and subsection headings herein are intended for convenience only and shall be ignored in construing this Agreement. SECTION 9.9 COUNTERPARTS. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. A set of the copies of this Agreement signed by all the parties shall be lodged with the Borrower and the Administrative Agent. SECTION 9.10 EFFECTIVENESS. This Credit Agreement shall become effective on the date on which all of the parties have signed a copy hereof (whether the same or different copies) and shall have delivered the same to the Administrative Agent pursuant to Section 9.2 or, in the case of the Lenders, shall have given to the Administrative Agent written, telecopied or telex notice (actually received) at such office that the same has been signed and mailed to it. 119 SECTION 9.11 SEVERABILITY. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. SECTION 9.12 INTEGRATION. This Agreement, the Notes and the other Credit Documents represent the entire agreement of the Borrower, the Administrative Agent and the Lenders with respect to the subject matter hereof, and there are no promises, undertakings, representations or warranties by the Administrative Agent, the Borrower or any Lender relative to the subject matter hereof not expressly set forth or referred to herein or in the Notes or the other Credit Documents. SECTION 9.13 GOVERNING LAW. This Agreement and the Notes and the rights and obligations of the parties under this Agreement and the Notes shall be governed by, and construed and interpreted in accordance with, the law of the State of North Carolina (without giving effect to the principles thereof relating to conflict of laws). SECTION 9.14 CONSENT TO JURISDICTION AND SERVICE OF PROCESS. All judicial proceedings brought against the Borrower and/or any other Credit Party with respect to this Agreement, any Note or any of the other Credit Documents may be brought in any state or federal court of competent jurisdiction in the State of North Carolina, and., by execution and delivery of this Agreement, each of the Borrower and the other Credit Parties accepts, for itself and in connection with its properties, generally and unconditionally, the non-exclusive jurisdiction of the aforesaid courts and irrevocably agrees to be bound by any final judgment rendered thereby in connection with this Agreement from which no appeal has been taken or is available. Each of the Borrower and the other Credit Parties irrevocably agrees that all service of process in any such proceedings in any such court may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to it at its address set forth in Section 9.2 or at such other address of which the Administrative Agent shall have been notified pursuant thereto, such service being hereby acknowledged by each of the Borrower and the other Credit Parties to be effective and binding service in every respect. To the fullest extent it may legally and effectively do so, each of the Borrower, the other Credit Parties, the Administrative Agent and the Lenders irrevocably waives any objection, including, without limitation, any objection to the laying of venue or based on the grounds of forum non conveniens which it may now or hereafter have to the bringing of any such action or proceeding in any such jurisdiction. Nothing herein shall affect the right to serve process in any other manner permitted by law or shall limit the right of any Lender to bring proceedings against the Borrower or the other Credit Parties in the court of any other jurisdiction. 120 SECTION 9.15 CONFIDENTIALITY. The Administrative Agent and each of the Lenders agrees that it will use its best efforts not to disclose without the prior consent of the Borrower (other than to its employees, affiliates, auditors or counsel or to another Lender) any information with respect to the Borrower and its Subsidiaries which is furnished pursuant to this Agreement, any other Credit Document or any documents contemplated by or referred to herein or therein and which is designated by the Borrower to the Lenders in writing as confidential or as to which it is otherwise reasonably clear such information is not public, except that any Lender may disclose any such information (a) as has become generally available to the public other than by a breach of this Section 9.15, (b) as may be required or appropriate in any report, statement or testimony submitted to any municipal, state or federal regulatory body having or claiming to have jurisdiction over such Lender or to the Federal Reserve Board or the Federal Deposit Insurance Corporation or the Office of the Comptroller of the Currency ("OCC") or the National Association of Insurance Commissioners ("NAIC") or similar organizations (whether in the United States or elsewhere) or their successors, (c) as may be required or appropriate in response to any summons or subpoena or any law, order, regulation or ruling applicable to such Lender, after notice to the Borrower and opportunity to object to such disclosure to the extent reasonably practicable, (d) to any direct or indirect contractual counterparty in any swap, hedge or similar agreement (or to any such contractual counterparty's professional advisor), so long as such contractual counterparty (or such professional advisor) agrees to be bound by the provisions of this Section 9.15, (e) to any prospective Participant or assignee in connection with any contemplated transfer pursuant to Section 9.6, provided that such prospective transferee shall have been made aware of this Section 9.15 and shall have agreed to be bound by its provisions as if it were a party to this Agreement or (f) to Gold Sheets and other similar bank trade publications; such information to consist of deal terms and other information regarding the credit facilities evidenced by this Credit Agreement customarily found in such publications. SECTION 9.16 ACKNOWLEDGMENTS. The Borrower and the other Credit Parties each hereby acknowledges that: (a) it has been advised by counsel in the negotiation, execution and delivery of each Credit Document; (b) neither the Administrative Agent nor any Lender has any fiduciary relationship with or duty to the Borrower or any other Credit Party arising out of or in connection with this Agreement and the relationship between Administrative Agent and Lenders, on one hand, and the Borrower and the other Credit Parties, on the other hand, in connection herewith is solely that of debtor and creditor; and (c) no joint venture exists among the Lenders or among the Borrower or the other Credit Parties and the Lenders. SECTION 9.17 WAIVERS OF JURY TRIAL. THE BORROWER, THE OTHER CREDIT PARTIES, THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY 121 WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN. The parties hereto agree that they shall not have a remedy of punitive or exemplary damages against the other in any judicial proceeding, any dispute, claim or controversy arising out of, connected with or relating to this Agreement and other Credit Documents ("Disputes"), and hereby waive any right or claim to punitive or exemplary damages they have now or which may arise in the future in connection with any Dispute. SECTION 9.18 BORROWER NAME CHANGE EFFECTIVE ON FUNDING DATE It is hereby acknowledged and agreed that the Borrower will change its name to Dean Foods Company effective on the Funding Date and from after the Funding Date, all references in this Agreement or any other Credit Document, including without limitation, the Notes, shall be deemed to refer to Dean Foods Company, formerly known as Suiza Foods Corporation, as Borrower. ARTICLE X GUARANTY Each of the Guarantors hereby agrees as follows: SECTION 10.1 THE GUARANTY. In order to induce the Lenders to enter into this Agreement and to extend credit hereunder and in recognition of the direct benefits to be received by the Guarantors from the Extensions of Credit hereunder, each of the Guarantors hereby agrees with the Administrative Agent and the Lenders as follows: each Guarantor hereby unconditionally and irrevocably jointly and severally guarantees as primary obligor and not merely as surety the full and prompt payment when due, whether upon maturity, by acceleration or otherwise, of any and all indebtedness of the Borrower to the Administrative Agent and the Lenders. If any or all of the indebtedness of the Borrower to the Administrative Agent and the Lenders becomes due and payable hereunder, each Guarantor unconditionally promises to pay such indebtedness to the Administrative Agent and the Lenders, on order, on demand, together with any and all reasonable expenses which may be incurred by the Administrative Agent or the Lenders in collecting any of the indebtedness. The word "indebtedness" is used in this Article X in its most comprehensive sense and includes any and all advances, debts, obligations and liabilities of the Borrower arising in connection with this Agreement, including, without limitation, Hedging Obligations permitted hereunder, in each case, heretofore, now, or hereafter made, incurred or created, whether voluntarily or involuntarily, absolute or contingent, liquidated or unliquidated, determined or undetermined, whether or not such indebtedness is from time to time reduced, or extinguished and thereafter increased or incurred, whether the Borrower may be liable individually or jointly with others, whether or not recovery upon such indebtedness may be or hereafter become barred by any statute of limitations, and whether or not such indebtedness may be or hereafter become otherwise unenforceable. 122 Notwithstanding any provision to the contrary contained herein or in any other of the Credit Documents, to the extent the obligations of a Guarantor shall be adjudicated to be invalid or unenforceable for any reason (including, without limitation, because of any applicable state or federal law relating to fraudulent conveyances or transfers) then the obligations of each such Guarantor hereunder shall be limited to the maximum amount that is permissible under applicable law (whether federal or state and including, without limitation, the Bankruptcy Code). SECTION 10.2 BANKRUPTCY. Additionally, each of the Guarantors unconditionally and irrevocably guarantees jointly and severally the payment of any and all indebtedness of the Borrower to the Lenders whether or not due or payable by the Borrower upon the occurrence of any of the events specified in Section 7.1(e), and unconditionally promises to pay such indebtedness to the Administrative Agent for the account of the Lenders, or order, on demand, in lawful money of the United States. Each of the Guarantors further agrees that to the extent that the Borrower or a Guarantor shall make a payment or a transfer of an interest in any property to the Administrative Agent or any Lender, which payment or transfer or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, or otherwise is avoided, and/or required to be repaid to the Borrower or a Guarantor, the estate of the Borrower or a Guarantor, a trustee, receiver or any other party under any bankruptcy law, state or federal law, common law or equitable cause, then to the extent of such avoidance or repayment, the obligation or part thereof intended to be satisfied shall be revived and continued in full force and effect as if said payment had not been made. SECTION 10.3 NATURE OF LIABILITY. The liability of each Guarantor hereunder is exclusive and independent of any security for or other guaranty of the indebtedness of the Borrower whether executed by any such Guarantor, any other guarantor or by any other party, and no Guarantor's liability hereunder shall be affected or impaired by (a) any direction as to application of payment by the Borrower or by any other party, or (b) any other continuing or other guaranty, undertaking or maximum liability of a guarantor or of any other party as to the indebtedness of the Borrower, or (c) any payment on or in reduction of any such other guaranty or undertaking, or (d) any dissolution, termination or increase, decrease or change in personnel by the Borrower, or (e) any payment made to the Administrative Agent or the Lenders on the indebtedness which the Administrative Agent or such Lenders repay the Borrower pursuant to court order in any bankruptcy, reorganization, arrangement, moratorium or other debtor relief proceeding, and each of the Guarantors waives any right to the deferral or modification of its obligations hereunder by reason, of any such proceeding. The obligations of the Guarantors hereunder are absolute and unconditional, irrespective of the value, genuineness, validity, regularity or enforceability of any of the Credit Documents, any Hedging Agreement entered into in connection with this Agreement, or any other agreement or instrument referred to therein, 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 a guarantor. 123 SECTION 10.4 INDEPENDENT OBLIGATION. The obligations of each Guarantor hereunder are independent of the obligations of any other Guarantor or the Borrower, and a separate action or actions may be brought and prosecuted against each Guarantor whether or not action is brought against any other Guarantor or the Borrower and whether or not any other Guarantor or the Borrower is joined in any such action or actions. SECTION 10.5 AUTHORIZATION. Each of the Guarantors authorizes the Administrative Agent and each Lender without notice or demand (except as shall be required by applicable statute and cannot be waived), and without affecting or impairing its liability hereunder, from time to time to (a) renew, compromise, extend, increase, accelerate or otherwise change the time for payment of, or otherwise change the terms of the indebtedness or any part thereof in accordance with this Agreement, including any increase or decrease of the rate of interest thereon, (b) take and hold security from any Guarantor or any other party for the payment of this Guaranty or the indebtedness and exchange, enforce, waive and release any such security, (c) apply such security and direct the order or manner of sale thereof as the Administrative Agent and the Lenders in their discretion may determine and (d) release or substitute any one or more endorsers, guarantors, the Borrower or other obligors. SECTION 10.6 RELIANCE. It is not necessary for the Administrative Agent or the Lenders to inquire into the capacity or powers of the Borrower or the officers, directors, partners or agents acting or purporting to act on their behalf, and any indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteed hereunder. SECTION 10.7 WAIVER. (a) Each of the Guarantors waives any right (except as shall be required by applicable statute and cannot be waived) to require the Administrative Agent or any Lender to (i) proceed against the Borrower, any other Guarantor or any other party, (ii) proceed against or exhaust any security held from the Borrower, any other Guarantor or any other party, or (iii) pursue any other remedy in the Administrative Agent's or any Lender's power whatsoever. Each of the Guarantors waives any defense based on or arising out of any defense of the Borrower, any other Guarantor or any other party other than payment in full of the indebtedness, including without limitation any defense based on or arising out of the disability of the Borrower, any other Guarantor or any other party, or the unenforceability of the indebtedness or any part thereof from any cause, or the cessation from any cause of the liability of the Borrower other than payment in full of the indebtedness. Without limiting the generality of the provisions of this Article X, each of the Guarantors hereby specifically waives the benefits of N.C. Gen. Stat. Section 26-7 through 26-9, inclusive. The Administrative Agent or any of the Lenders may, at their election, foreclose on any security held by the Administrative Agent or a Lender by one or more judicial or nonjudicial sales, whether or not every aspect of any such sale is commercially reasonable (to the extent such sale is permitted by applicable law), or exercise any other right or remedy the Administrative Agent and any Lender may have 124 against the Borrower or any other party, or any security, without affecting or impairing in any way the liability of any Guarantor hereunder except to the extent the indebtedness has been paid. Each of the Guarantors waives any defense arising out of any such election by the Administrative Agent and each of the Lenders, even though such election operates to impair or extinguish any right of reimbursement or subrogation or other right or remedy of the Guarantors against the Borrower or any other party or any security. (b) Each of the Guarantors waives all presentments, demands for performance, protests and notices, including without limitation notices of nonperformance, notice of protest, notices of dishonor, notices of acceptance of this Guaranty, and notices of the existence, creation or incurring of new or additional indebtedness. Each Guarantor assumes all responsibility for being and keeping itself informed of each of the Borrower's financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the indebtedness and the nature, scope and extent of the risks which such Guarantor assumes and incurs hereunder, and agrees that neither the Administrative Agent nor any Lender shall have any duty to advise such Guarantor of information known to it regarding such circumstances or risks. (c) Each of the Guarantors hereby agrees it will not exercise any rights of subrogation which it may at any time otherwise have as a result of this Guaranty (whether contractual, under Section 509 of the U.S. Bankruptcy Code, or otherwise) to the claims of the Lenders against the Borrower or any other guarantor of the indebtedness of the Borrower owing to the Lenders (collectively,. the "Other Parties") and all contractual, statutory or common law rights of reimbursement, contribution or indemnity from any Other Party which it may at any time otherwise have as a result of this Guaranty until such time as the Loans hereunder shall have been paid and the Commitments have been terminated. Each of the Guarantors hereby further agrees not to exercise any right to enforce any other remedy which the Administrative Agent and the Lenders now have or may hereafter have against any Other Party, any endorser or any other guarantor of all or any part of the indebtedness of the Borrower and any benefit of, and any right to participate in, any security or collateral given to or for the benefit of the Lenders to secure payment of the indebtedness of the Borrower until such time as the Loans hereunder shall have been paid and the Commitments have been terminated. SECTION 10.8 LIMITATION ON ENFORCEMENT. The Lenders agree that this Guaranty may be enforced only by the action of the Administrative Agent acting upon the instructions of the Required Lenders and that no Lender shall have any right individually to seek to enforce or to enforce this Guaranty, it being understood and agreed that such rights and remedies may be exercised by the Administrative Agent for the benefit of the Lenders upon the terms of this Agreement. The Lenders further agree that this Guaranty may not be enforced against any director, officer, employee or stockholder of the Guarantors. 125 SECTION 10.9 CONFIRMATION OF PAYMENT. The Administrative Agent and the Lenders will, upon request after payment of the indebtedness and obligations which are the subject of this Guaranty and termination of the commitments relating thereto, confirm to the Borrower, the Guarantors or any other Person that such indebtedness and obligations have been paid and the commitments relating thereto terminated, subject to the provisions of Section 10.2. 126 IN WITNESS WHEREOF, each of the parties hereto have caused this Agreement to be duly executed and delivered by its proper and duly authorized officers as of the day and year first above written. BORROWER: DEAN FOODS COMPANY (FORMERLY KNOWN AS SUIZA FOODS CORPORATION), a Delaware corporation By: ------------------------------------ Name: Cory M Olson Title: VP/Treasure 127 AGENTS AND LENDERS WACHOVIA BANK, NATIONAL ASSOCIATION (FORMERLY KNOWN AS FIRST UNION NATIONAL BANK), in its capacity as Administrative Agent and individually in its capacity as a Lender By: ------------------------------------ Name: Title: 1 BANK ONE, N.A., in its capacity as Syndication Agent and individually in its capacity as a Lender By: ------------------------------------ Name: Title: [signature pages continue] 2 [LENDER SIGNATURE PAGES OMITTED] 3 EX-10.11 8 d13098exv10w11.txt AMENDED/RESTATED RECEIVABLES PURCHASE AGREEMENT EXHIBIT 10.11 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT dated as of November 20, 2003 Among DAIRY GROUP RECEIVABLES, L.P., as a Seller, DAIRY GROUP RECEIVABLES II, L.P., as a Seller, SPECIALTY GROUP RECEIVABLES, L.P., as a Seller, THE SERVICERS, THE COMPANIES, THE FINANCIAL INSTITUTIONS and BANK ONE, NA (MAIN OFFICE CHICAGO), as Agent THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT This Third Amended and Restated Receivables Purchase Agreement, dated as of November 20, 2003, is among Dairy Group Receivables, L.P., a Delaware limited partnership ("Dairy Group"), Dairy Group Receivables II, L.P., a Delaware limited partnership ("Dairy Group II"), Specialty Group Receivables, L.P., a Delaware limited partnership ("Specialty Group" and, together with Dairy Group and Dairy Group II, the "Sellers" and each a "Seller"), each of the parties listed on the signature pages hereof as a Servicer (the Servicers, together with the Sellers, the "Seller Parties," and each a "Seller Party"), the entities listed on Schedule A to this Agreement under the heading "Financial Institution" (together with any of their respective successors and assigns hereunder, the "Financial Institutions"), the entities listed on Schedule A to this Agreement under the heading "Company" (together with any of their respective successors and assigns hereunder, the "Companies") and Bank One, NA (Main Office Chicago), as agent for the Purchasers hereunder or any successor agent hereunder (together with its successors and assigns hereunder, the "Agent"). Unless defined elsewhere herein, capitalized terms used in this Agreement shall have the meanings assigned to such terms in Exhibit I. PRELIMINARY STATEMENTS Certain Seller Parties, certain Financial Institutions, certain Companies and the Agent are parties to that certain Receivables Purchase Agreement, dated as of June 30, 2000, as amended and restated by that certain Amended and Restated Receivables Purchase Agreement, dated as of December 21, 2001, and as further amended and restated by that certain Second Amended and Restated Receivables Purchase Agreement, dated as of May 15, 2002 and effective for all purposes as of March 31, 2002, as amended by the Amendment No. 1 thereto and Reaffirmation of Performance Undertakings, dated as of December 17, 2002, as further amended by the Amendment No. 2 thereto and Reaffirmation of Performance Undertakings, dated as of July 31, 2003, and as further amended by the Amendment No. 3 thereto and Reaffirmation of Performance Undertakings, dated as of September 2, 2003 (the "Original Agreement"). Dairy Group and Dairy Group II have transferred and assigned pursuant to the Original Agreement, and desire to continue to transfer and assign Purchaser Interests to the Purchasers from time to time. Specialty Group desires to become a party to the Original Agreement as a seller and to transfer and assign Purchaser Interests to the Purchasers from time to time. Each of Rabobank and Wachovia desire to become a party to the Original Agreement as a Financial Institution and each of the Rabo Company and the Wachovia Company THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT desire to become a party to the Original Agreement as a Company. Credit Ag desires to no longer be a party to the Original Agreement as a Financial Institution. The Bank One Company desires to assign and transfer an undivided 20% interest in its, and the Wachovia Company desires to acquire an undivided 20% interest in the Bank One Company's, rights and obligations under the Original Agreement and the other Transaction Documents (including, without limitation, the Capital of the Bank One Company's Purchaser Interests) as set forth herein. The CL Company desires to assign and transfer an undivided 60% interest in its, and the Wachovia Company desires to acquire an undivided 20% interest in and the Rabo Company desires to acquire an undivided 40% interest in the CL Company's, rights and obligations under the Original Agreement and the other Transaction Documents (including, without limitation, the Capital of the CL Company's purchaser interests) as set forth herein. Bank One, in its capacity as a Financial Institution, desires to assign and transfer an undivided 20% interest in its, and each of Rabobank and Wachovia desires to acquire an undivided 10% interest in Bank One's, rights and obligations as a Financial Institution under the Original Agreement and the other Transaction Documents (including, without limitation, Bank One's Commitment) as set forth herein. CLNY, in its capacity as a Financial Institution, desires to assign and transfer an undivided 20% interest in its, and each of Rabobank and Wachovia desires to acquire an undivided 10% interest in CLNY's, rights and obligations as a Financial Institution under the Original Agreement and the other Transaction Documents (including, without limitation, CLNY's Commitment) as set forth herein. Credit Ag, in its capacity as a Financial Institution, desires to assign and transfer an undivided 100% interest in its, and each of Rabobank and Wachovia desires to acquire an undivided 50% interest in Credit Ag's, rights and obligations as a Financial Institution under the Original Agreement and the other Transaction Documents (including, without limitation, Credit Ag's Commitment) as set forth herein. Each of the parties hereto desires to increase the Purchase Limit under the Original Agreement from $400,000,000 to $500,000,000 and to increase the aggregate amount of the Commitments under the Original Agreement from $408,000,000 to $510,000,000. Each Company may, in its absolute and sole discretion, purchase the Purchaser Interests from the Sellers from time to time. In the event that any Company declines to make any purchase, such Company's Related Financial Institutions shall, at the request of the Administrative Seller, purchase Purchaser Interests that such Company declined to purchase from time to time. 2 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT Bank One, NA (Main Office Chicago) has been requested and is willing to act as Agent on behalf of the Companies and the Financial Institutions in accordance with the terms hereof. The parties hereto now desire to amend and restate the Original Agreement in its entirety to read as set forth herein. AGREEMENT Now Therefore, in consideration of the foregoing and for other valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby agree that, subject to satisfaction of the conditions precedent set forth in Section 6.1 hereof, the Original Agreement is hereby amended and restated in its entirety to read as follows: ARTICLE I PURCHASE ARRANGEMENTS Section 1.1 Purchase Facility. (a) Upon the terms and subject to the conditions hereof, each Seller may, at its option, sell and assign Purchaser Interests to the Agent for the benefit of one or more of the Purchasers. In accordance with the terms and conditions set forth herein, each Company may, at its option, instruct the Agent to purchase on behalf of such Company, or if any Company shall decline to purchase, the Agent shall purchase, on behalf of such declining Company's Related Financial Institutions, Purchaser Interests from time to time in an amount not to exceed in the aggregate for all Sellers at such time (i) in the case of each Company, its Company Purchase Limit and (ii) in the aggregate, the lesser of (A) the Purchase Limit and (B) the aggregate amount of the Commitments during the period from the date hereof to but not including the Facility Termination Date. (b) The Administrative Seller may, upon at least 10 Business Days' notice to the Agent, each Company and each Financial Institution, terminate in whole or reduce in part, ratably among the Financial Institutions, the unused portion of the Purchase Limit; provided that (i) any such notice shall be irrevocable, (ii) each partial reduction of the Purchase Limit shall be in an amount equal to $5,000,000 or an integral multiple thereof and (iii) the aggregate of the Company Purchase Limits for all of the Companies shall also be terminated in whole or reduced in part, ratably among the Companies, by an amount equal to such termination or reduction in the Purchase Limit. 3 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT Section 1.2 Increases. The Administrative Seller shall provide the Agent and each Purchaser with at least two Business Days' prior notice in a form set forth as Exhibit II hereto of each Incremental Purchase (a "Purchase Notice") to be made by a Seller. Each Purchase Notice shall be subject to Section 6.2 hereof and, except as set forth below, (i) shall be irrevocable and shall specify the requested Purchase Price (which, in the case of the initial Incremental Purchase hereunder shall not be less than $10,000,000 and in the case of subsequent Incremental Purchases shall not be less than $1,000,000), (ii) the date of purchase (which, in the case of Incremental Purchases after the initial Incremental Purchase hereunder, shall not exceed four per calendar month), (iii) in the case of an Incremental Purchase to be funded by any of the Financial Institutions, the requested Discount Rate and Tranche Period and (iv) in the case of an Incremental Purchase to be funded by the CL Company or by any Pool Company (other than an Incremental Purchase funded by such Pool Company substantially with Pooled Commercial Paper), the requested CP (Tranche) Accrual Period. Following receipt of a Purchase Notice, the Agent will promptly notify each Company of such Purchase Notice and the Agent will identify the Companies that agree to make the purchase. If any Company declines to make a proposed purchase, the Administrative Seller may cancel the Purchase Notice as to all purchasers no later than 2:00 p.m. (Chicago time) on the Business Day immediately prior to the date of purchase specified in the Purchase Notice or, in the absence of such a cancellation, the Incremental Purchase Of the Purchaser Interest, which such Company has declined to purchase, will be made by such declining Company's related Financial Institutions in accordance with the rest of this Section 1.2. If the proposed Incremental Purchase or any portion thereof is to be made by any of the Financial Institutions, the Agent shall send notice of the Proposed Incremental Purchase to the applicable Financial Institutions concurrently by telecopier, telex or cable specifying (i) the date of such Incremental Purchase, which date must be at least one Business Day after such notice is received by the applicable Financial Institutions, (ii) each Financial Institution's Pro Rata Share of the aggregate Purchase Price of the Purchaser Interests the Financial Institutions in such Financial Institution's Purchaser Group are then purchasing and (iii) the requested Discount Rate and Tranche Period. On the date of each Incremental Purchase, upon satisfaction of the applicable conditions precedent set forth in Article VI and the conditions set forth in this Section 1.2, the Companies and/or the Financial Institutions, as applicable, shall use their reasonable best efforts to deposit to the Facility Account, in immediately available funds, no later than 12:00 noon (Chicago time), and in any event no later than 2:00 pm (Chicago time), an amount equal to (i) in the case of a Company that has agreed to make such Incremental Purchase, such Company's Pro Rata Share of the aggregate Purchase Price of the Purchaser Interests of such Incremental Purchase or (ii) in the case of a Financial Institution, such Financial Institution's Pro Rata Share of the aggregate Purchase Price of the Purchaser Interests the Financial Institutions in such Financial Institution's Purchaser Group are then purchasing. Each Financial Institution's Commitment hereunder 4 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT shall be limited to purchasing Purchaser Interests that the Company in such Financial Institution's Purchaser Group has declined to purchase. Each Financial Institution's obligation shall be several, such that the failure of any Financial Institution to make available to any Seller any funds in connection with any purchase shall not relieve any other Financial Institution of its obligation, if any, hereunder to make funds available on the date of such purchase, but no Financial Institution shall be responsible for the failure of any other Financial Institution to make funds available in connection with any purchase. Section 1.3 Decreases. The Administrative Seller shall provide the Agent with an irrevocable prior written notice in conformity with the Required Notice Period (a "Reduction Notice") of any proposed reduction of Aggregate Capital from Collections and the Agent will promptly notify each Purchaser of such Reduction Notice after Agent's receipt thereof. Such Reduction Notice shall designate (i) the date (the "Proposed Reduction Date") upon which any such reduction of Aggregate Capital shall occur (which date shall give effect to the applicable Required Notice Period), and (ii) the amount of Aggregate Capital to be reduced that shall be applied ratably to the Purchaser Interests of the Companies and the Financial Institutions in accordance with the amount of Capital (if any) owing to the Companies (ratably to each Company, based on the ratio of such Company's Capital at such time to the aggregate Capital of all the Companies at such time), on the one hand, and the amount of Capital (if any) owing to the Financial Institutions (ratably to each Financial Institution, based on the ratio of such Financial Institution's Capital at such time to the aggregate Capital of all of the Financial Institutions at such time), on the other hand (the "Aggregate Reduction"). Only one (1) Reduction Notice shall be outstanding at any time. Concurrently with any reduction of Aggregate Capital pursuant to this Section, the Sellers shall pay to the applicable Purchaser all Broken Funding Costs arising as a result of such reduction. No Aggregate Reduction will be made following the occurrence of the Amortization Date without the prior written consent of the Agent. Section 1.4 Payment Requirements. All amounts to be paid or deposited by any Seller Party pursuant to any provision of this Agreement or any other Transaction Documents shall be paid or deposited in immediately available funds in accordance with the terms hereof. Such Seller Party shall use its reasonable best efforts to pay or deposit all such amounts no later than 12:00 noon (Chicago time) on the day when due. Any such payment or deposit not received by 1:00 pm (Chicago time) shall be deemed to be received on the next succeeding Business Day. If such amounts are payable to a Purchaser, they shall be paid to such Purchaser at the "Payment Address" specified for such Purchaser on Schedule A or such other address specified in writing to each other party hereto. If such amounts are payable to the Agent, they shall be paid to the Agent at 1 Bank One Plaza, Chicago, Illinois 60670 until otherwise notified by the Agent. Upon notice to the Administrative Seller, the Agent may debit the Facility Account for all amounts due and payable hereunder. All computations of Yield, per annum fees or discount calculated as part of any 5 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT CP Costs, per annum fees hereunder and per annum fees under any Fee Letter shall be made on the basis of a year of 360 days for the actual number of days elapsed. If any amount hereunder or under any other Transaction Document shall be payable on a day that is not a Business Day, such amount shall be payable on the next succeeding Business Day. ARTICLE II PAYMENTS AND COLLECTIONS Section 2.1 Payments. Notwithstanding any limitation on recourse contained in this Agreement, the Sellers shall immediately pay to the Agent or relevant Purchaser, as applicable, when due, for the account of the relevant Purchaser or Purchasers on a full recourse basis, (i) such fees as set forth in each Fee Letter (which fees collectively shall be sufficient to pay all fees owing to the Financial Institutions and other Funding Sources), (ii) all CP Costs, (iii) all amounts payable as Yield, (iv) all amounts payable as Deemed Collections (which shall be immediately due and payable by the Sellers and applied to reduce outstanding Aggregate Capital hereunder in accordance with Sections 2.2 and 2.3 hereof), (v) all amounts required pursuant to Section 2.6, (vi) all amounts payable pursuant to Article X, if any, (vii) all Servicer costs and expenses, including the Servicing Fee, in connection with servicing, administering and collecting the Receivables, (viii) all Broken Funding Costs (any request for reimbursement of which shall be accompanied by a certificate in reasonable detail demonstrating the reasonable calculation of ay such amount) and (ix) all Default Fees (collectively, the "Obligations"). If any Person fails to pay any of the Obligations (other than the Default Fee) when due, such Person agrees to pay, on demand, the Default Fee in respect thereof until paid. Notwithstanding the foregoing, no provision of this Agreement or any Fee Letter shall require the payment or permit the collection of any amounts hereunder in excess of the maximum permitted by applicable law. If at any time any Seller receives any Collections or is deemed to receive any Collections, such Seller shall immediately pay such Collections or Deemed Collections to the applicable Servicer for application in accordance with the terms and conditions hereof and, at all times prior to such payment, such Collections or Deemed Collections shall be held in trust by such Seller for the exclusive benefit of the Purchasers and the Agent. Section 2.2 Collections Prior to Amortization. Prior to the Amortization Date, any Collections and/or Deemed Collections received by each Servicer shall be set aside and held in trust by such Servicer for the benefit of the Agent and the Purchasers for the payment of any accrued and unpaid Aggregate Unpaids or for a Reinvestment as provided in this Section 2.2. If at any time any Collections and/or Deemed Collections are received by any Servicer prior to the Amortization Date, (i) such Servicer shall set aside the Termination Percentage (hereinafter defined) of Collections and/or Deemed Collections evidenced by the Purchaser Interests of each Terminating Financial Institution and of each Company in 6 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT a Terminating Financial Institution's Purchaser Group, shall set aside Collections to be used to effect any Aggregate Reduction in accordance with Section 1.3 and shall set aside amounts necessary to pay Obligations due on the next succeeding Settlement Date and (ii) each Seller hereby requests and the Purchasers (other than any Terminating Financial Institutions and, to the extent applicable, any Company in a Terminating Financial Institution's Purchaser Group) hereby agree to make, simultaneously with such receipt, a reinvestment (each a "Reinvestment") with that portion of the balance of each and every Collection and Deemed Collection received by any Servicer that is part of any Purchaser Interest (other than any Purchaser Interests of Terminating Financial Institutions and, to the extent applicable, of any Company in a Terminating Financial Institution's Purchaser Group), such that after giving effect to such Reinvestment, the amount of Capital of such Purchaser Interest immediately after such receipt and corresponding Reinvestment shall be equal to the amount of Capital immediately prior to such receipt (but giving effect to any ratable reduction thereof pursuant to application of an Aggregate Reduction). On each Settlement Date prior to the occurrence of the Amortization Date, the Servicers shall remit to the Agent's or applicable Purchaser's account the amounts set aside during the preceding Settlement Period that have not been subject to a Reinvestment and apply such amounts (if not previously paid in accordance with Section 2.1) first, to reduce unpaid CP Costs, Yield and other Obligations and second, to reduce the Capital of all Purchaser Interests of Terminating Financial Institutions and, to the extent applicable, of each Company in a Terminating Financial Institution's Purchaser Group, applied ratably to such Terminating Financial Institution and each such Company according to its respective Termination Percentage. If such Capital, CP Costs, Yield and other Obligations shall be reduced to zero, any additional Collections received by any Servicer (i) if applicable, shall be remitted to the Agent's or applicable Purchaser's account to the extent required to fund any Aggregate Reduction on such Settlement Date and (ii) any balance remaining thereafter shall be remitted from such Servicer to the Sellers on such Settlement Date. Such Servicer shall use its reasonable best efforts to remit all deposit amounts in the Agent's or applicable Purchaser's account no later than 12:00 noon (Chicago time) on such Settlement Date. Any such amounts not received by Agent or the applicable Purchaser by 1:00 pm (Chicago time) shall be deemed to be received on the next succeeding Business Day. Each Terminating Financial Institution and each Company in such Terminating Financial Institution's Purchaser Group shall be allocated a ratable portion of Collections from its Termination Date until, with respect to a Terminating Financial Institution, such Terminating Financial Institution's Capital, if any, shall be paid in full and, with respect to a related Company (i) if any Related Financial Institution with respect to such Company continues to exist, the Capital of such Company is equal to the Company Purchase Limit (as reduced pursuant to Section 4.6(b)) of such Company or (ii) if there are no Related Financial Institutions with respect to such Company, the Capital of such Company shall be paid in full. The applicable ratable portion shall be calculated, with respect to any Terminating Financial Institution or applicable Company, on the Termination Date of each Terminating Financial Institution or 7 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT applicable Company as a percentage equal to (i) the Capital of such Terminating Financial Institution or applicable Company outstanding on its Termination Date, divided by (ii) the Aggregate Capital outstanding on such Termination Date (the "Termination Percentage"). Each Terminating Financial Institution's and applicable Company's Termination Percentage shall remain constant prior to the Amortization Date. On and after the Amortization Date, each Termination Percentage shall be disregarded, and each Terminating Financial Institution's and each applicable Company's Capital shall be reduced ratably with all Financial Institutions and Companies in accordance with Section 2.3. Section 2.3 Collections Following Amortization. On the Amortization Date and on each day thereafter, the Servicers shall set aside and hold in trust, for the holder of each Purchaser Interest, all Collections received on such day and an additional amount for the payment of any accrued and unpaid Aggregate Unpaids owed by the Sellers and not previously paid by the Sellers in accordance with Section 2.1. On and after the Amortization Date, the Servicers shall, at any time upon the request from time to time by (or pursuant to standing instructions from) the Agent (i) remit to the Agent's or applicable Purchaser's account the amounts set aside pursuant to the preceding sentence, and (ii) apply such amounts to reduce the Capital associated with each such Purchaser Interest and any other Aggregate Unpaids. Section 2.4 Application of Collections. If there shall be insufficient funds on deposit for the Servicers to distribute funds in payment in full of the aforementioned amounts pursuant to Section 2.2 or 2.3 (as applicable), the Servicers shall distribute funds to the applicable payee: first, to the payment of each Servicer's reasonable actual out-of-pocket costs and expenses in connection with servicing, administering and collecting the Receivables, including the Servicing Fee, provided no Seller nor any of its Affiliates is then acting as a Servicer, second, to the reimbursement of the Agent's and the Purchasers' costs of collection and enforcement of this Agreement, third, ratably to the payment of all accrued and unpaid fees under the Fee Letters, CP Costs and Yield, fourth, (to the extent applicable) to the ratable reduction of the Aggregate Capital (without regard to any Termination Percentage), fifth, for the ratable payment of all other unpaid Obligations, provided that to the extent such Obligations relate to the payment of Servicer costs and expenses, 8 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT including the Servicing Fee, when any Seller or any of its Affiliates is acting as a Servicer, such costs and expenses will not be paid until after the payment in full of all other Obligations, and sixth, after the Aggregate Unpaids have been indefeasibly reduced to zero, to the Administrative Seller for ratable distribution to the Sellers. Collections applied to the payment of Aggregate Unpaids shall be distributed in accordance with the aforementioned provisions, and, giving effect to each of the priorities set forth in Section 2.4 above, shall be shared ratably (within each priority) among the Agent and the Purchasers in accordance with the amount of such Aggregate Unpaids owing to each of them in respect of each such priority. Section 2.5 Payment Rescission. No payment of any of the Aggregate Unpaids shall be considered paid or applied hereunder to the extent that, at any time, all or any portion of such payment or application is rescinded by application of law or judicial authority, or must otherwise be returned or refunded for any reason. Each Seller shall remain obligated for the amount of any payment or application so rescinded, returned or refunded, and shall promptly pay to the Agent (for application to the Person or Persons who suffered such rescission, return or refund) the full amount thereof, plus the Default Fee from the date of any such rescission, return or refunding. Section 2.6 Maximum Purchaser Interests. Each Seller shall ensure that the Purchaser Interests of the Purchasers shall at no time exceed in the aggregate 100%. If the aggregate of the Purchaser Interests of the Purchasers exceeds 100%, the Sellers shall pay to the Purchasers (ratably based on the ratio of each Purchaser's Capital at such time to the Aggregate Capital at such time) within one (1) Business Day an amount to be applied to reduce the Aggregate Capital, such that after giving effect to such payment the aggregate of the Purchaser Interests equals or is less than 100%. Section 2.7 Clean Up Call. In addition to the Sellers' rights pursuant to Section 1.3, the Sellers shall have the right, upon two Business Days' prior written notice to the Agent and the Purchasers, at any time following the reduction of the Aggregate Capital to a level that is less than 20.0% of the original Purchase Limit hereunder, to repurchase from the Purchasers all, but not less than all, of the then outstanding Purchaser Interests. The purchase price in respect thereof shall be an amount equal to the Aggregate Unpaids (including any Broken Funding Costs arising as a result of such repurchase) through the date of such repurchase, payable in immediately available funds. Such repurchase shall be without representation, warranty or recourse of any kind by, on the part of, or against any Purchaser or the Agent. 9 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT ARTICLE III COMPANY FUNDING Section 3.1 CP Costs. The Sellers shall pay CP Costs with respect to the Capital associated with each Purchaser Interest of the Companies for each day that any Capital in respect of any such Purchaser Interest is outstanding. Each Purchaser Interest of any Pool Company funded substantially with Pooled Commercial Paper will accrue CP Costs each day on a pro rata basis, based upon the percentage share the Capital in respect of such Purchaser Interest represents in relation to all assets held by the applicable Pool Company and funded substantially with Pooled Commercial Paper. Each Purchaser Interest of the CL Company and each Purchaser Interest of any Pool Company not funded substantially with Pooled Commercial Paper shall accrue CP Costs for each day during its CP (Tranche) Accrual Period at the rate determined in accordance with the definition of "Company Costs" set forth in Exhibit I. Section 3.2 CP Costs Payments. On each Settlement Date relating to a CP (Tranche) Accrual Period, the Sellers shall pay to the applicable Company an aggregate amount equal to all accrued and unpaid CP Costs in respect of the Capital associated with all Purchaser Interests of such Company for the related CP (Tranche) Accrual Period in accordance with Article II. Section 3.3 Calculation of Pool Company Costs. On the third Business Day immediately preceding each Settlement Date relating to a CP (Pool) Accrual Period, each Pool Company shall calculate the aggregate amount of its Company Costs with respect to all Purchaser Interests funded substantially with Pooled Commercial Paper for the applicable CP (Pool) Accrual Period and shall notify the Administrative Seller of such aggregate amount of such Company Costs due and payable on such Settlement Date. Section 3.4 Selection and Calculation of CP (Tranche) Accrual Periods. (a) In the case of Purchaser Interests of each Pool Company, the Administrative Seller shall (and following the occurrence and during the continuance of a Potential Amortization Event or an Amortization Event, shall with consultation from, and approval by, each Pool Company), from time to time request CP (Tranche) Accrual Periods for the Purchaser Interests of each Pool Company other than those funded substantially with Pooled Commercial Paper, provided, that (i) the consent of the Agent and each Purchaser shall be required, (ii) the Administrative Seller must elect CP (Tranche) Accrual Periods for all Purchaser Interests of each Pool Company, such that after giving effect to such election, no Purchaser Interest of any Pool Company is funded with Pooled Commercial Paper and (iii) the Administrative Seller may only make such election once hereunder. In the case of 10 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT Purchaser Interests of the CL Company, the Administrative Seller shall, with consultation from, and approval by, the CL Company (such approval not to be unreasonably withheld), from time to time request CP (Tranche) Accrual Periods for the Purchaser Interests of the CL Company. (b) The Administrative Seller or the applicable Company, upon notice to and consent by the other received at least three (3) Business Days prior to the end of a CP (Tranche) Accrual Period (the "Terminating CP Tranche") for any Purchaser Interest, may, effective on the last day of the Terminating CP Tranche: (i) divide any such Purchaser Interest into multiple Purchaser Interests, (ii) combine any such Purchaser Interest with one or more other Purchaser Interests that have a Terminating CP Tranche ending on the same day as such Terminating CP Tranche or (iii) combine any such Purchaser Interest with a new Purchaser Interest (other than a Purchaser Interest funded substantially with Pooled Commercial Paper) to be purchased on the day such Terminating CP Tranche ends, provided, that in no event may a Purchaser Interest of any Purchasers be combined with a Purchaser Interest of any other Purchaser. (c) The Administrative Seller shall, at least three (3) Business Days prior to the expiration of any Terminating CP Tranche, give the applicable Company (or its agent) irrevocable notice of the new CP (Tranche) Accrual Period associated with such Terminating CP Tranche and the amount of Capital to be allocated to such new CP (Tranche) Accrual Period. The Administrative Seller shall use its reasonable best efforts to give such notice such that the applicable Company (or its agent) receives it no later than 12:00 noon (Chicago time) on the day such request is being made. Any such request not received by the applicable Company by 1:00 pm (Chicago time) shall be deemed to be received on the next succeeding Business Day. ARTICLE IV FINANCIAL INSTITUTION FUNDING Section 4.1 Financial Institution Funding. Each Purchaser Interest of the Financial Institutions shall accrue Yield for each day during its Tranche Period at either the LIBO Rate or the Prime Rate in accordance with the terms and conditions hereof. Until the Administrative Seller gives notice to the Agent of another Discount Rate in accordance with Section 4.4, the initial Discount Rate for any Purchaser Interest transferred to the Financial Institutions pursuant to the terms and conditions hereof shall be the Prime Rate. If any Purchaser Interest of any Company is assigned or transferred to, or funded by, any Funding Source of such Company pursuant to any Funding Agreement or to or by any other Person, each such Purchaser Interest so assigned, transferred or funded shall each be deemed to have a new Tranche Period commencing on the date of any such transfer or funding and shall accrue Yield for each day during its Tranche Period at either the LIBO Rate or the 11 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT Prime Rate in accordance with the terms and conditions hereof as if each such Purchaser Interest was held by a Financial Institution, and with respect to each such Purchaser Interest, the transferee thereof or lender with respect thereto shall be deemed to be a Financial Institution in the transferring Company's Purchaser Group for purposes hereof; provided that until the Administrative Seller gives notice to the Agent of another Discount Rate in accordance with Section 4.4, the initial Discount Rate for any Purchaser Interest so transferred shall be the Prime Rate. Section 4.2 Yield Payments. On the Settlement Date for each Purchaser Interest of the Financial Institutions, the Sellers shall pay to the applicable Financial Institutions an aggregate amount equal to the accrued and unpaid Yield for the entire Tranche Period of each such Purchaser Interest in accordance with Article II. Section 4.3 Selection and Continuation of Tranche Periods. (a) In the case of Purchaser Interests of any Financial Institution in the Purchaser Group of the Bank One Company, the Administrative Seller shall (and following the occurrence and during the continuance of a Potential Amortization Event or an Amortization Event, shall with consultation from, and approval by, the applicable Financial Institution), from time to time request Tranche Periods for the Purchaser Interests of such Financial Institutions. In the case of Purchaser Interests of any Financial Institution in the Purchaser Group of any Company other than the Bank One Company, the Administrative Seller shall, with consultation from, and approval by, the applicable Financial Institution (such approval not to be unreasonably withheld), from time to time request Tranche Periods for the Purchaser Interests of such Financial Institution. Notwithstanding the foregoing provisions of this subsection (a), if at any time the Financial Institutions shall have a Purchaser Interest, the Administrative Seller shall always request Tranche Periods such that at least one Tranche Period shall end on the date specified in clause (A) of the definition of Settlement Date. (b) The Administrative Seller or the applicable Financial Institution, upon notice to and consent by the other received at least three (3) Business Days prior to the end of a Tranche Period (the "Terminating Tranche") for any Purchaser Interest, may, effective on the last day of the Terminating Tranche: (i) divide any such Purchaser Interest into multiple Purchaser Interests, (ii) combine any such Purchaser Interest with one or more other Purchaser Interests that have a Terminating Tranche ending on the same day as such Terminating Tranche or (iii) combine any such Purchaser Interest with a new Purchaser Interest to be purchased on the day such Terminating Tranche ends, provided, that in no event may a Purchaser Interest of any Purchasers be combined with a Purchaser Interest of any other Purchaser. 12 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT Section 4.4 Financial Institution Discount Rates. The Administrative Seller may select the LIBO Rate or the Prime Rate for each Purchaser Interest of the Financial Institutions. The Administrative Seller shall: (i) at least three (3) Business Days prior to the expiration of any Terminating Tranche with respect to which the LIBO Rate is being requested as a new Discount Rate and (ii) at least one (1) Business Day prior to the expiration of any Terminating Tranche with respect to which the Prime Rate is being requested as a new Discount Rate, give the applicable Financial Institution irrevocable notice of the new Discount Rate for the Purchaser Interest associated with such Terminating Tranche. The Administrative Seller shall use its reasonable best efforts to give such notice such that the applicable Financial Institution receives it no later than 12:00 noon (Chicago time) on the day such request is being made. Any such request not received by the applicable Financial Institution by 1:00 pm (Chicago time) shall be deemed to be received on the next succeeding Business Day. Until the Administrative Seller gives notice to the applicable Financial Institution of another Discount Rate, the initial Discount Rate for any Purchaser Interest transferred to the Financial Institutions pursuant to the terms and conditions hereof (or transferred to, or funded by, any Funding Source pursuant to any Funding Agreement or to or by any other Person) shall be the Prime Rate. Section 4.5 Suspension of the LIBO Rate. (a) If any Financial Institution notifies the Agent that it has determined that funding its Pro Rata Share of the Purchaser Interests of the Financial Institutions in such Financial Institution's Purchaser Group at the LIBO Rate would violate any applicable law, rule, regulation or directive of any governmental or regulatory authority, whether or not having the force of law, or that (i) deposits of a type and maturity appropriate to match fund its Purchaser Interests at the LIBO Rate are not available or (ii) the LIBO Rate does not accurately reflect the cost of acquiring or maintaining a Purchaser Interest at the LIBO Rate, then the Agent shall suspend the availability of the LIBO Rate for the Financial Institutions in such Financial Institution's Purchaser Group and require Seller to select the Prime Rate for any Purchaser Interest funded by the Financial Institutions in such Financial Institution's Purchaser Group accruing Yield at the LIBO Rate. (b) If less than all of the Financial Institutions in such Financial Institution's Purchaser Group give a notice to the Agent pursuant to Section 4.5(a), each Financial Institution which gave such a notice shall be obliged, at the request of the Administrative Seller, the Company in such Financial Institution's Purchaser Group or the Agent, to assign all of its rights and obligations hereunder to (i) another Financial Institution in such Financial Institution's Purchaser Group or (ii) another funding entity nominated by the Administrative Seller or the Agent that is acceptable to the Company in such Financial Institution's Purchaser Group and willing to participate in this Agreement through the Liquidity Termination Date in the place of such notifying Financial Institution; provided 13 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT that (i) the notifying Financial Institution receives payment in full, pursuant to an Assignment Agreement, of an amount equal to such notifying Financial Institution's Pro Rata Share of the Capital and Yield owing to all of the Financial Institutions in such Financial Institution's Purchaser Group and all accrued but unpaid fees and other costs and expenses payable in respect of its Pro Rata Share of the Purchaser Interests of the Financial Institutions in such Financial Institution's Purchaser Group, and (ii) the replacement Financial Institution otherwise satisfies the requirements of Section 12.1(b). Section 4.6 Extension of Liquidity Termination Date. (a) The Administrative Seller may request one or more 364-day extensions of the Liquidity Termination Date then in effect by giving written notice of such request to the Agent (each such notice an "Extension Notice") at least 60 days prior to the Liquidity Termination Date then in effect. After the Agent's receipt of any Extension Notice, the Agent shall promptly advise each Financial Institution of such Extension Notice. Each Financial Institution may, in its sole discretion, by a written irrevocable notice (a "Consent Notice") given to the Agent on or prior to the 30th day prior to the Liquidity Termination Date then in effect (such period from the date of the Extension Notice to such 30th day being referred to herein as the "Consent Period"), consent to such extension of such Liquidity Termination Date; provided, however, that such extension shall not be effective with respect to a Financial Institution if such Financial Institution: (i) notifies the Agent during the Consent Period that such Financial Institution does not wish to consent to such extension or (ii) fails to respond to the Agent within the Consent Period (each Financial Institution that does not wish to consent to such extension or fails to respond to the Agent within the Consent Period is herein referred to as a "Non-Renewing Financial Institution"). If at the end of the Consent Period, there is no Non-Renewing Financial Institution then, the Liquidity Termination Date shall be irrevocably extended until the date that is 364 days after the Liquidity Termination Date then in effect. If at the end of the Consent Period there is a Non-Renewing Financial Institution, then unless such Non-Renewing Financial Institution assigns its rights and obligations hereunder pursuant to Section 4.6(b) (each such Non-Renewing Financial Institution whose rights and obligations under this Agreement and the other applicable Transaction Documents are not so assigned is herein referred to as a "Terminating Financial Institution"), the then existing Liquidity Termination Date shall be extended for an additional 364 days with respect to all Financial Institutions other than the Terminating Financial Institution; provided, however, that (i) the Purchase Limit shall be reduced on the Termination Date applicable to each Terminating Financial Institution by an aggregate amount equal to the Terminating Commitment Availability of each Terminating Financial Institution and shall thereafter continue to be reduced by amounts equal to any reduction in the Capital of any Terminating Financial Institution (after application of Collections pursuant to Sections 2.2 and 2.3), (ii) the Company Purchase Limit of each Company shall be reduced by the aggregate amount of the Terminating Commitment 14 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT Amount of each Terminating Financial Institution in such Company's Purchaser Group and (iii) the Commitment of each Terminating Financial Institution shall be reduced to zero on the Termination Date applicable to such Terminating Financial Institution. Upon reduction to zero of the Capital of all of the Purchaser Interests of a Terminating Financial Institution (after application of Collections thereto pursuant to Sections 2.2 and 2.3) all rights and obligations of such Terminating Financial Institution hereunder shall be terminated and such Terminating Financial Institution shall no longer be a "Financial Institution"; provided, however, that the provisions of Article X shall continue in effect for its benefit with respect to Purchaser Interests held by such Terminating Financial Institution prior to its termination as a Financial Institution. (b) Upon receipt of notice from the Agent pursuant to Section 4.6(a) of any Non-Renewing Financial Institution, one or more of the Financial Institutions (including any Non-Renewing Financial Institution) may proffer to the Agent and the Company in such Non-Renewing Financial Institution's Purchaser Group the names of one or more institutions meeting the criteria set forth in Section 12.1(b)(i) that are willing to accept assignments of and assume the rights and obligations under this Agreement and the other applicable Transaction Documents of the Non-Renewing Financial Institution. Provided the proffered name(s) are acceptable to the Agent and the Company in such Non-Renewing Financial Institution's Purchaser Group, the Agent shall notify the remaining Financial Institutions of such fact, and the then existing Liquidity Termination Date shall be extended for an additional 364 days upon satisfaction of the conditions for an assignment in accordance with Section 12.1, and the Commitment of each Non-Renewing Financial Institution shall be reduced to zero. (c) Any requested extension may be approved or disapproved by a Financial Institution in its sole discretion. In the event that the Commitments are not extended in accordance with the provisions of this Section 4.6, the Commitment of each Financial Institution shall be reduced to zero on the Liquidity Termination Date. Upon reduction to zero of the Commitment of a Financial Institution and upon reduction to zero of the Capital of all of the Purchaser Interests of such Financial Institution all rights and obligations of such Financial Institution hereunder shall be terminated and such Financial Institution shall no longer be a "Financial Institution"; provided, however, that the provisions of Article X shall continue in effect for its benefit with respect to Purchaser Interests held by such Financial Institution prior to its termination as a Financial Institution. ARTICLE V REPRESENTATIONS AND WARRANTIES 15 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT Section 5.1 Representations and Warranties of the Seller Parties. Each Seller Party hereby represents and warrants to the Agent and the Purchasers, as to itself, as of the date hereof and as of the date of each Incremental Purchase and the date of each Reinvestment that: (a) Corporate Existence and Power. Such Seller Party is a corporation, limited liability company or limited partnership duly organized and validly existing in good standing under the laws of its state of organization. Each such Seller Party is duly qualified to do business and is in good standing as a foreign corporation or entity, and has and holds all corporate or other power and all governmental licenses, authorizations, consents and approvals required to carry on its business in each jurisdiction in which its business is conducted except to the extent that the failure to so qualify or hold could not reasonably be expected to have a Material Adverse Effect. (b) Power and Authority; Due Authorization, Execution and Delivery. The execution and delivery by such Seller Party of this Agreement and each other Transaction Document to which it is a party, and the performance of its obligations hereunder and thereunder and, in the case of each Seller, such Seller's use of the proceeds of purchases made hereunder, are within its corporate or other powers and authority and have been duly authorized by all necessary corporate or other action on its part. This Agreement and each other Transaction Document to which such Seller Party is a party has been duly executed and delivered by such Seller Party. (c) No Conflict. The execution and delivery by such Seller Party of this Agreement and each other Transaction Document to which it is a party, and the performance of its obligations hereunder and thereunder do not contravene or violate (i) its certificate or articles of incorporation or by-laws (or equivalent organizational documents) or any shareholder agreements, voting trusts or similar arrangements applicable to its authorized shares or other equity interests, (ii) any law, rule or regulation applicable to it, (iii) any restrictions under any material agreement, contract or instrument to which it is a party or by which it or any of its property is bound or (iv) any order, writ, judgment, award, injunction or decree binding on or affecting it or its property, and do not result in the creation or imposition of any Adverse Claim on assets of such Seller Party or its Subsidiaries (except as created hereunder); and no transaction contemplated hereby requires compliance with any bulk sales act or similar law. (d) Governmental Authorization. Other than the filing of the financing statements required hereunder, no authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the due execution and delivery by such Seller Party of this Agreement and each other Transaction 16 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT Document to which it is a party and the performance of its obligations hereunder and thereunder. (e) Actions, Suits. There are no actions, suits or proceedings pending, or to the best of such Seller Party's knowledge, threatened, against or affecting such Seller Party, or any of its properties, in or before any court, arbitrator or other body, that could reasonably be expected to have a Material Adverse Effect. Such Seller Party is not in default with respect to any order of any court, arbitrator or governmental body. (f) Binding Effect. This Agreement and each other Transaction Document to which such Seller Party is a party constitute the legal, valid and binding obligations of such Seller Party enforceable against such Seller Party in accordance with their respective terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors' rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law). (g) Accuracy of Information. All information heretofore furnished by or on behalf of such Seller Party or any of its Affiliates to the Agent or the Purchasers for purposes of or in connection with this Agreement, any of the other Transaction Documents or any transaction contemplated hereby or thereby is, and all such information hereafter furnished by or on behalf of such Seller Party or any of its Affiliates to the Agent or the Purchasers will be, true and accurate in every material respect on the date such information is stated or certified and does not and will not contain any material misstatement of fact or omit to state a material fact or any fact necessary to make the statements contained therein not misleading in light of the circumstances made or presented. (h) Use of Proceeds. No proceeds of any purchase hereunder will be used (i) for a purpose that violates, or would be inconsistent with, Regulation T, U or X promulgated by the Board of Governors of the Federal Reserve System from time to time or (ii) to acquire any security in any transaction that is subject to Section 12, 13 or 14 of the Securities Exchange Act of 1934, as amended. (i) Good Title. Immediately prior to each purchase hereunder, each Seller shall be the legal and beneficial owner of the Receivables and Related Security with respect thereto, free and clear of any Adverse Claim, except as created by the Transaction Documents. There have been duly filed all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect each Seller's ownership interest in each of its Receivables, its Collections and the Related Security. 17 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT (j) Perfection. This Agreement, together with the filing of the financing statements contemplated hereby, is effective to, and shall, upon each purchase hereunder, transfer to the Agent for the benefit of the relevant Purchaser or Purchasers (and the Agent for the benefit of such Purchaser or Purchasers shall acquire from each Seller) a valid and perfected first priority undivided percentage ownership or security interest in each Receivable existing or hereafter arising and in the Related Security and Collections with respect thereto, free and clear of any Adverse Claim, except as created by the Transactions Documents. There have been duly filed all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect the Agent's (on behalf of the Purchasers) ownership or security interest in the Receivables, the Related Security and the Collections. (k) Jurisdiction of Organization; Places of Business, etc. Exhibit III correctly sets forth such Seller Party's legal name, jurisdiction of organization, Federal Employer's Identification Number and State Organizational Identification Number. Such Seller Party's principal places of business and chief executive office and the offices where such Seller Party keeps all of its Records are located at the address(es) listed on Exhibit III, or such other locations of which the Agent has been notified in accordance with Section 7.2(a) in jurisdictions where all action required by Section 14.4(a) has been taken and completed. Such Seller Party has not within the period of six months prior to the date hereof, (i) changed its location (as defined in Section 9-307 of the UCC), except as set forth on Exhibit III or (ii) changed its legal name (except as set forth on Exhibit III), corporate structure or become a "new debtor" (as defined in Section 9-102(a)(56) of the UCC) with respect to a currently effective security agreement previously entered into by any other Person. Each Seller is a Delaware limited partnership and is a "registered organization" (within the meaning of Section 9-102 of the UCC in effect in the State of Delaware). (l) Collections. the conditions and requirements set forth in Section 7.1(j) and Section 8.2 have at all times been satisfied and duly performed. the names and addresses of all Collection Banks, together with the account numbers of the Collection Accounts of each seller at each Collection Bank and the post office box number of each Lock-box, are listed on Exhibit IV. No Seller has granted any Person, other than the Agent as contemplated by this Agreement, dominion and control or "control" (within the meaning of Section 9-104 of the UCC of all applicable jurisdictions) of any Lock-box or Collection Account, or the right to take dominion and control or "control" (within the meaning of Section 9-104 of the UCC of all applicable jurisdictions) of any such Lock-Box or Collection Account at a future time or upon the occurrence of a future event. (m) Material Adverse Effect. (i) Each of the Initial Servicers represents and warrants that since December 31, 1999, and each of the Additional Servicers represents and warrants that since December 31, 2000, and each of the Dean Entities represents and 18 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT warrants that since May 31, 2001, and each of the New Entities represents and warrants that since December 31, 2002, no event has occurred that would have a material adverse effect on the financial condition or operations of such Servicer and its Subsidiaries taken as a whole, or the ability of such Servicer to perform its obligations under this Agreement, and (ii) Dairy Group represents and warrants that since June 30, 2000, and Dairy Group II represents and warrants that since May 14, 2002, and Specialty Group represents and warrants that since November 20, 2003, no event has occurred that would have a material adverse effect on (A) the financial condition or operations of such Seller, (B) the ability of such Seller to perform its obligations under the Transaction Documents or (C) the collectibility of the Receivables generally or of any material portion of the Receivables. (n) Names. In the past five (5) years, no Seller has used any corporate names, trade names or assumed names other than the name in which it has executed this Agreement and, in the case of Dairy Group, other than Suiza Receivables, L.P. (o) Ownership of Sellers. (i) Suiza Dairy Group, L.P. and Provider own, directly or indirectly, 100% of the limited partnership interests and 99.9% of the partnership interests of Dairy Group, free and clear of any Adverse Claim (except any Adverse Claim in favor of the Collateral Agent in accordance with the Dean Credit Agreement). Dairy Group Receivables GP, LLC (f/k/a Suiza Receivables GP, LLC) is the general partner of Dairy Group and owns, directly or indirectly, 100% of the general partnership interests and 0.1% of the partnership interests of Dairy Group, free and clear of any Adverse Claim (except any Adverse Claim in favor of the Collateral Agent in accordance with the Dean Credit Agreement). There are no options or other rights to acquire any partnership interest of Dairy Group. 100% of the membership interests of Dairy Group Receivables GP, LLC are owned, directly or indirectly by Provider. (ii) Dean Holding Company and Provider own, directly or indirectly, 100% of the limited partnership interests and 99.9% of the partnership interests of Dairy Group II, free and clear of any Adverse Claim (except any Adverse Claim in favor of the Collateral Agent in accordance with the Dean Credit Agreement). Dairy Group Receivables GP II, LLC is the general partner of Dairy Group II and owns, directly or indirectly, 100% of the general partnership interests and 0.1% of the partnership interests of Dairy Group II, free and clear of any Adverse Claim (except any Adverse Claim in favor of the Collateral Agent in accordance with the Dean Credit Agreement). There are no options or other rights to acquire any partnership interest of Dairy Group II. 100% of the membership interests of Dairy Group Receivables GP II, LLC are owned, directly or indirectly by Provider. (iii) Dean Holding Company and Provider own, directly or indirectly, 100% of the limited partnership interests and 99.9% of the partnership interests 19 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT of Specialty Group, free and clear of any Adverse Claim (except any Adverse Claim in favor of the Collateral Agent in accordance with the Dean Credit Agreement). Specialty Group Receivables GP, LLC is the general partner of Specialty Group and owns, directly or indirectly, 100% of the general partnership interests and 0.1% of the partnership interests of Specialty Group, free and clear of any Adverse Claim (except any Adverse Claim in favor of the Collateral Agent in accordance with the Dean Credit Agreement). There are no options or other rights to acquire any partnership interest of Specialty Group. 100% of the membership interests of Specialty Group Receivables GP, LLC are owned, directly or indirectly by Provider. (p) Not a Holding Company or an Investment Company. Such Seller Party is not a "holding company" or a "subsidiary holding company" of a "holding company" within the meaning of the Public Utility Holding Company Act of 1935, as amended, or any successor statute. Such Seller Party is not an "investment company" within the meaning of the Investment Company Act of 1940, as amended, or any successor statute. (q) Compliance with Law. Such Seller Party has complied in all respects with all applicable laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it may be subject, except where the failure to so comply could not reasonably be expected to have a Material Adverse Effect. Each Receivable, together with any Writing or Contract related thereto, does not contravene any laws, rules or regulations applicable thereto (including, without limitation, laws, rules and regulations relating to truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy), and no part of such Writing or Contract is in violation of any such law, rule or regulation. (r) Compliance with Credit and Collection Policies. Such Seller Party has complied in all material respects with its Credit and Collection Policy with regard to each Receivable and any related Writing or Contract, and has not made any material change to such Credit and Collection Policy, except such material change as to which the Agent has been notified in accordance with Section 7.1(a)(vii). (s) Payments to Originators and Morningstar. With respect to each Receivable transferred to the applicable Seller by each Originator under the Receivables Sale Agreement to which it is a party, such Seller has given reasonably equivalent value to such Originator in consideration therefor and such transfer was not made for or on account of an antecedent debt. No transfer by any Originator of any Receivable under any Receivables Sale Agreement is or may be voidable under any section of the Bankruptcy Reform Act of 1978 (11 U.S.C. ss.ss. 101 et seq.), as amended. With respect to each Receivable transferred to MRC by Morningstar under the Transfer Agreement, MRC has given reasonably equivalent value to Morningstar in consideration therefor and such transfer was 20 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT not made for or on account of an antecedent debt. No transfer by Morningstar of any Receivable under the Transfer Agreement is or may be voidable under any section of the Bankruptcy Reform Act of 1978 (11 U.S.C. ss.ss. 101 et seq.), as amended. (t) Enforceability of Contracts. Each Contract, if any, with respect to each Receivable is effective to create, and has created, a legal, valid and binding obligation of the related Obligor to pay the Outstanding Balance of the Receivable created thereunder and any accrued interest thereon, enforceable against the Obligor in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors' rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law). (u) Eligible Receivables. Each Receivable included in the Net Receivables Balance as an Eligible Receivable on the date of its purchase under the applicable Receivables Sale Agreement was an Eligible Receivable on such purchase date. (v) Net Receivables Balance. Each Seller has determined that, immediately after giving effect to each purchase hereunder, the Net Receivables Balance is at least equal to the sum of (i) the Aggregate Capital, plus (ii) the Aggregate Reserves. (w) Accounting. The manner in which such Seller Party accounts for the transactions contemplated by this Agreement, each Receivables Sale Agreement and the Transfer Agreement does not jeopardize the true sale analysis. Section 5.2 Financial Institution Representations and Warranties. Each Financial Institution hereby represents and warrants to the Agent and the Company in such Financial Institution's Purchaser Group that: (a) Existence and Power. Such Financial Institution is a corporation or a banking association duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or organization, and has all corporate power to perform its obligations hereunder. (b) No Conflict. The execution and delivery by such Financial Institution of this Agreement and the performance of its obligations hereunder are within its corporate powers, have been duly authorized by all necessary corporate action, do not contravene or violate (i) its certificate or articles of incorporation or association or by-laws, (ii) any law, rule or regulation applicable to it, (iii) any restrictions under any material agreement, contract or instrument to which it is a party or by which it or any of its property is bound, or (iv) any order, writ, judgment, award, injunction or decree binding on or 21 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT affecting it or its property, and do not result in the creation or imposition of any Adverse Claim on its assets, except, in any case, where such contravention or violation could not reasonably be expected to have a material adverse effect on (i) the financial condition or operations of such Financial Institution, (ii) the ability of such Financial Institution to perform its obligations under this Agreement or (iii) the legality, validity or enforceability of this Agreement. This Agreement has been duly authorized, executed and delivered by such Financial Institution. (c) Governmental Authorization. No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the due execution and delivery by such Financial Institution of this Agreement and the performance of its obligations hereunder, except that has already been received. (d) Binding Effect. This Agreement constitutes the legal, valid and binding obligation of such Financial Institution enforceable against such Financial Institution in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors' rights generally and by general principles of equity (regardless of whether such enforcement is sought in a proceeding in equity or at law). ARTICLE VI CONDITIONS OF PURCHASES Section 6.1 Conditions Precedent to Initial Incremental Purchase. The effectiveness of this Agreement is subject to the conditions precedent that (a) the Agent shall have received on or before the date hereof those documents listed on Schedule B and (b) the Agent and the Purchasers shall have received all fees and expenses required to be paid on or prior to the date hereof pursuant to the terms of this Agreement and the Fee Letters. Section 6.2 Conditions Precedent to All Purchases and Reinvestments. Each purchase of a Purchaser Interest and each Reinvestment shall be subject to the further conditions precedent that (a) in the case of each such purchase or Reinvestment: (i) the Servicers shall have delivered to the Agent on or prior to the date of such purchase, in form and substance satisfactory to the Agent, all Periodic Reports, including, without limitation, the most recent Periodic Report as and when due under Section 8.5, and (ii) upon the Agent's request, the Servicers shall have delivered to the Agent at least three (3) days prior to such purchase or Reinvestment an interim Monthly Report showing the amount of Eligible Receivables; (b) the Facility Termination Date shall not have occurred; (c) the Agent shall have received such other approvals, opinions or documents as it may reasonably 22 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT request and (d) on the date of each such Incremental Purchase or Reinvestment, the following statements shall be true (and acceptance of the proceeds of such Incremental Purchase or Reinvestment shall be deemed a representation and warranty by Seller that such statements are then true): (i) the representations and warranties set forth in Section 5.1 are true and correct on and as of the date of such Incremental Purchase or Reinvestment as though made on and as of such date; (ii) no event has occurred and is continuing, or would result from such Incremental Purchase or Reinvestment, that will constitute an Amortization Event, and no event has occurred and is continuing, or would result from such Incremental Purchase or Reinvestment, that would constitute a Potential Amortization Event; and (iii) the Aggregate Capital does not exceed the Purchase Limit and the aggregate Purchaser Interests do not exceed 100%. It is expressly understood that each Reinvestment shall, unless otherwise directed by the Agent or any Purchaser, occur automatically on each day that any Servicer shall receive any Collections without the requirement that any further action be taken on the part of any Person and notwithstanding the failure of any Seller to satisfy any of the foregoing conditions precedent in respect of such Reinvestment. The failure of any Seller to satisfy any of the foregoing conditions precedent in respect of any Reinvestment shall give rise to a right of the Agent, which right may be exercised at any time on demand of the Agent, to rescind the related purchase and direct the Sellers to pay to the Agent for the benefit of the Purchasers an amount equal to the Collections prior to the Amortization Date that shall have been applied to the affected Reinvestment. ARTICLE VII COVENANTS Section 7.1 Affirmative Covenants of the Seller Parties. Until the date on which the Aggregate Unpaids have been indefeasibly paid in full and this Agreement terminates in accordance with its terms, each Seller Party hereby covenants, as to itself, as set forth below: (a) Financial Reporting. Such Seller Party will maintain, for itself and each of its Subsidiaries, a system of accounting established and administered in accordance with GAAP, and furnish or cause to be furnished to the Agent and each Financial Institution: 23 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT (i) Annual Reporting. Within 90 days after the close of each of its respective fiscal years, audited, unqualified consolidated financial statements (which shall include balance sheets, statements of income and retained earnings and a statement of cash flows) for Provider for such fiscal year certified in a manner acceptable to the Agent by independent public accountants acceptable to the Agent. (ii) Quarterly Reporting. Within 45 days after the close of the first three (3) quarterly periods of each of its respective fiscal years, (A) consolidated balance sheets of Provider and its Subsidiaries as at the close of each such period, (B) consolidated statements of income and retained earnings and a statement of cash flows for Provider for the period from the beginning of such fiscal year to the end of such quarter, (C) the balance sheet of each Seller as at the close of each such period and (D) statements of income and retained earnings and a statement of cash flows for each Seller, all certified by its respective chief financial officer or treasurer. (iii) Compliance Certificate. Together with the financial statements required hereunder, a compliance certificate in substantially the form of Exhibit V signed by an Authorized Officer of the Seller Parties and dated the date of such annual financial statement or such quarterly financial statement, as the case may be. (iv) Shareholders Statements and Reports. Promptly upon the furnishing thereof to the shareholders of such Seller Party, to the extent not available electronically, copies of all financial statements, reports and proxy statements so furnished. (v) S.E.C. Filings. Promptly upon the filing thereof, to the extent not available electronically, copies of all annual, quarterly, monthly or other regular reports that Provider or any of its Subsidiaries files with the Securities and Exchange Commission. (vi) Copies of Notices. Promptly upon its receipt of any notice, request for consent, financial statements, certification, report or other communication under or in connection with any Transaction Document from any Person other than the Agent, copies of the same. 24 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT (vii) Change in Credit and Collection Policies. At least thirty (30) days prior to the effectiveness of any material change in or material amendment to any Credit and Collection Policy, a copy of such Credit and Collection Policy then in effect and a notice (A) indicating such change or amendment, and (B) if such proposed change or amendment would be reasonably likely to adversely affect the collectibility of the Receivables or decrease the credit quality of any newly created Receivables, requesting the Agent's and the Required Purchasers' consent thereto. (viii) Copies of Dean Credit Agreement Amendments. Promptly after execution thereof, copies of each amendment to the Dean Credit Agreement as in effect from time to time notwithstanding any language to the contrary contained in the definition of "Dean Credit Agreement." (ix) Other Information. Promptly, from time to time, such other information, documents, records or reports relating to the Receivables or the condition or operations, financial or otherwise, of such Seller Party as the Agent may from time to time reasonably request in order to protect the interests of the Agent and the Purchasers under or as contemplated by this Agreement. (b) Notices. Such Seller Party will notify the Agent and each Financial Institution in writing of any of the following promptly upon learning of the occurrence thereof, describing the same and, if applicable, the steps being taken with respect thereto: (i) Amortization Events or Potential Amortization Events. The occurrence of each Amortization Event and each Potential Amortization Event, by a statement of an Authorized Officer of such Seller Party. (ii) Judgment and Proceedings. (A) (1) The entry of any judgment or decree against Provider or any Servicer or any of its respective Subsidiaries if the aggregate amount of all judgments and decrees then outstanding against Provider or such Servicer and its respective Subsidiaries could reasonably be expected to have a Material Adverse Effect, and (2) the institution of any litigation, arbitration proceeding or governmental proceeding against Provider that, if adversely determined, could reasonably be expected to have a Material Adverse Effect, or against any Servicer; and (B) the entry of any judgment or decree or the institution 25 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT of any litigation, arbitration proceeding or governmental proceeding against any Seller. (iii) Material Adverse Effect. The occurrence of any event or condition that has had, or could reasonably be expected to have, a Material Adverse Effect. (iv) Termination Date. The occurrence of the "Termination Date" under and as defined in each Receivables Sale Agreement. (v) Defaults Under Other Agreements. The occurrence of a default or an event of default under any other financing arrangement pursuant to which such Seller Party is a debtor or an obligor that could reasonably be expected to have a Material Adverse Effect. (c) Compliance with Laws and Preservation of Corporate Existence. Such Seller Party will comply in all respects with all applicable laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it may be subject if noncompliance with any such law, rule, regulation, order, writ, judgment, injunction, decree or award could reasonably be expected to have a Material Adverse Effect. Such Seller Party will preserve and maintain its legal existence, rights, franchises and privileges in the jurisdiction of its organization, and qualify and remain qualified in good standing as a foreign entity in each jurisdiction where its business is conducted, except where the failure to so qualify or remain qualified could not reasonably be expected, either individually or in the aggregate, to have a Material Adverse Effect. (d) Audits. Such Seller Party will furnish to the Agent (with the Agent providing copies thereof to each Financial Institution, subject to the Agent receiving any necessary consents to disclosure) from time to time such information with respect to it and the Receivables as the Agent or the Required Purchasers may reasonably request. Such Seller Party will, from time to time during regular business hours as requested by the Agent upon reasonable notice, permit the Agent, or its agents or representatives (and shall cause each Originator and Morningstar) to permit the Agent or its agents or representatives), (i) to examine and make copies of and abstracts from all Records in the possession or under the control of such Person relating to the Receivables and the Related Security, including, without limitation, the related Writings or Contracts, and (ii) to visit the offices and properties of such Person for the purpose of examining such materials described in clause (i) above, and to discuss matters relating to such Person's financial condition or the Receivables and the Related Security or any Person's performance under any of the 26 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT Transaction Documents or any Person's performance under the Writings or Contracts and, in each case, with any of the officers or employees of any Seller Party having knowledge of such matters. All such examinations and visits shall be at the sole cost of such Seller Party; provided, however, that (i) for so long as no Amortization Event or Potential Amortization Event shall have occurred and be continuing and (ii) the result of the immediately preceding examination and/or visit of such Seller Party shall have been reasonably satisfactory to the Agent, such cost shall be borne by such Seller Party not more than twice per calendar year in 2004 and once per calendar year thereafter (although in no event shall the foregoing be construed to limit the Agent or its agents or representatives to one such examination and/or visit during such calendar year period with respect to such Seller Party, provided, that if the Agent or its agents or representatives fails to make any such examination and/or visit during any calendar year period, any Financial Institution or its agent or representatives may make such examination and/or visit in the Agent's stead). Such Seller Party agrees that one of the two audits to be completed in calender year 2004 shall be completed by March 31, 2004. (e) Keeping and Marking of Records and Books. (i) The Servicers will (and will cause each Originator and Morningstar to) maintain and implement administrative and operating procedures (including, without limitation, an ability to recreate records evidencing Receivables in the event of the destruction of the originals thereof), and keep and maintain all documents, books, records and other information reasonably necessary or advisable for the collection of all Receivables (including, without limitation, records adequate to permit the immediate identification of each new Receivable and all Collections of and adjustments to each existing Receivable). The Servicers will (and will cause each Originator and Morningstar to) give the Agent notice of any material change in the administrative and operating procedures referred to in the previous sentence. (ii) Such Seller Party will (and will cause each Originator and Morningstar to) (A) on or prior to June 30, 2000 with respect to any Seller Party or Originator (other than GTL, Tuscan Dairies, each Dean Entity, each New Entity, Dairy Group II and Specialty Group), on or prior to June 28, 2001 with respect to GTL and Tuscan Dairies, on or prior to December 21, 2001 with respect to any Seller Party or Originator that is a Dean Entity, on or prior to May 15, 2002 with respect to Dairy Group II, and on and prior to the date hereof with respect to each New Entity and Specialty Group mark its master data processing records and other books and records relating to the Purchaser Interests with a legend, acceptable to the Agent, describing the Purchaser Interests and (B) upon the 27 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT request of the Agent following the occurrence and during the continuance of an Amortization Event (x) mark each Writing or Contract with a legend describing the Purchaser Interests and (y) deliver to the Agent all Writings and Contracts (including, without limitation, all multiple originals of any such Writing or Contract) relating to the Receivables. (f) Compliance with Contracts and Credit and Collection Policies. Such Seller Party will timely and fully (i) perform and comply with all provisions, covenants and other promises required to be observed by it under the Contracts related to the Receivables, and (ii) comply in all material respects with its respective Credit and Collection Policy in regard to each Receivable and any related Contract. (g) Performance and Enforcement of Receivables Sale Agreements. Each Seller will, and will require each Originator party thereto to, perform each of their respective obligations and undertakings under and pursuant to the Receivables Sale Agreement to which it is a party, will purchase Receivables thereunder in strict compliance with the terms thereof and will vigorously enforce the rights and remedies accorded to such Seller under such Receivables Sale Agreement. Each Seller will require MRC to perform its obligations and undertakings under the Transfer Agreement, to purchase Receivables thereunder in strict compliance with the terms thereof and to vigorously enforce the rights and remedies accorded to it under the Transfer Agreement. Each Seller will take all actions to perfect and enforce its rights and interests (and the rights and interests of the Agent and the Purchasers as assignees of Seller) under the Receivables Sale Agreement to which it is a party as the Agent may from time to time reasonably request, including, without limitation, making claims to which it may be entitled under any indemnity, reimbursement or similar provision contained in such Receivables Sale Agreement and requiring MRC to make claims to which it may be entitled under any indemnity, reimbursement or similar provision contained in the Transfer Agreement. (h) Ownership. Each Seller will (or will cause each Originator to) take all necessary action to (i) vest legal and equitable title to the Receivables, the Related Security and the Collections purchased under the Receivables Sale Agreement to which it is a party irrevocably in such Seller, free and clear of any Adverse Claims other than Adverse Claims in favor of the Agent and the Purchasers (including, without limitation, the filing of all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect such Seller's interest in such Receivables, Related Security and Collections and such other action to perfect, protect or more fully evidence the interest of such Seller therein as the Agent may reasonably request), and (ii) establish and maintain, in favor of the Agent, for the benefit of the Purchasers, a valid and perfected first priority undivided percentage ownership interest (and/or a valid and perfected first priority security interest) in all Receivables, Related 28 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT Security and Collections to the full extent contemplated herein, free and clear of any Adverse Claims other than Adverse Claims in favor of the Agent for the benefit of the Purchasers (including, without limitation, the filing of all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect the Agent's (for the benefit of the Purchasers) interest in such Receivables, Related Security and Collections and such other action to perfect, protect or more fully evidence the interest of the Agent for the benefit of the Purchasers as the Agent may reasonably request). (i) Purchasers' Reliance. Each Seller acknowledges that the Purchasers are entering into the transactions contemplated by this Agreement in reliance upon such Seller's identity as a legal entity that is separate from the Originators. Therefore, from and after June 30, 2000 (or, May 15, 2002, in the case of Dairy Group II and the date hereof, in the case of Specialty Group), each Seller shall take all reasonable steps, including, without limitation, all steps that the Agent or any Purchaser may from time to time reasonably request, to maintain such Seller's identity as a separate legal entity and to make it manifest to third parties that such Seller is an entity with assets and liabilities distinct from those of the Originators and any Affiliates thereof and not just a division of an Originator or any such Affiliate. Without limiting the generality of the foregoing and in addition to the other covenants set forth herein, each Seller will: (A) conduct its own business in its own name and require that all full-time employees of such Seller, if any, identify themselves as such and not as employees of any Originator or any Affiliate thereof (including, without limitation, by means of providing appropriate employees with business or identification cards identifying such employees as such Seller's employees); (B) compensate all employees, consultants and agents directly, from such Seller's own funds, for services provided to such Seller by such employees, consultants and agents and, to the extent any employee, consultant or agent of such Seller is also an employee, consultant or agent of any Originator or any Affiliate thereof, allocate the compensation of such employee, consultant or agent between such Seller and Originator or such Affiliate, as applicable, on a basis that reflects the services rendered to such Seller and such Originator or such Affiliate, as applicable; (C) clearly identify its offices (by signage or otherwise) as its offices and, if such office is located in the 29 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT offices of any Originator or any Affiliate thereof, allocate fairly any overhead for shared office space; (D) have a separate telephone number or extension, which will be answered only in its name and separate stationery, invoices and checks in its own name; (E) conduct all transactions with the Originators and the Servicers (including, without limitation, any delegation of its obligations hereunder as Servicers) strictly on an arm's-length basis, allocate all overhead expenses (including, without limitation, telephone and other utility charges) for items shared between such Seller and each Originator (or any Affiliate thereof) on the basis of actual use to the extent practicable and, to the extent such allocation is not practicable, on a basis reasonably related to actual use; (F) at all times have as its general partner a limited liability company having at least one Independent Manager; (G) observe all corporate and/or limited partnership formalities as a distinct entity, and ensure that all corporate and/or limited partnership actions relating to (A) the selection, maintenance or replacement of the general partner, (B) the dissolution or liquidation of such Seller or (C) the initiation of, participation in, acquiescence in or consent to any bankruptcy, insolvency, reorganization or similar proceeding involving Seller, are duly authorized by the Independent Manager of the general partner; (H) maintain such Seller's books and records separate from those of each Originator and any Affiliate thereof and otherwise readily identifiable as its own assets rather than assets of such Originator and any Affiliate thereof; (I) prepare its financial statements separately from those of each Originator and Morningstar and insure that any consolidated financial statements of such Originator or any Affiliate thereof that include such Seller and that are filed with the Securities and Exchange Commission or any other governmental agency have notes clearly stating that such Seller is a separate corporate entity and that its 30 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT assets will be available first and foremost to satisfy the claims of the creditors of such Seller; (J) except as herein specifically otherwise provided, maintain the funds or other assets of such Seller separate from, and not commingled with, those of any Originator or any Affiliate thereof and only maintain bank accounts or other depository accounts to which such Seller alone is the account party and from which such Seller alone (or the Agent hereunder) has the sole power to make withdrawals; (K) pay all of such Seller's operating expenses from such Seller's own assets (except for certain payments by the Originators or other Persons pursuant to allocation arrangements that comply with the requirements of this Section 7.1(i)); (L) operate its business and activities such that: it does not engage in any business or activity of any kind, or enter into any transaction or indenture, mortgage, instrument, agreement, contract, lease or other undertaking, other than the transactions contemplated and authorized by this Agreement and the Receivables Sale Agreement to which it is a party (it being understood that Dairy Group, Dairy Group Ii and Specialty Group may enter into the transactions contemplated by the respective Demand Notes); and does not create, incur, guarantee, assume or suffer to exist any indebtedness or other liabilities, whether direct or contingent, other than (1) as a result of the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business, (2) the incurrence of obligations under this Agreement, (3) the incurrence of obligations, as expressly contemplated in the Receivables Sale Agreement to which it is a party, to make payment to each Originator thereunder for the purchase of Receivables from any Originator under such Receivables Sale Agreement, and (4) the incurrence of operating expenses in the ordinary course of business of the type otherwise contemplated by this Agreement; (M) maintain its limited partnership agreement in conformity with this Agreement, such that it does not amend, restate, supplement or otherwise modify its limited partnership agreement in any respect that would impair its ability to comply with the terms or provisions of any of the Transaction Documents, including, without limitation, Section 7.1(i) of this Agreement; 31 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT (N) maintain the effectiveness of, and continue to perform under the Receivables Sale Agreement to which it is a party (and, in the case of Dairy Group, Dairy Group II and Specialty Group, the respective Demand Notes), such that it does not amend, restate, supplement, cancel, terminate or otherwise modify such Receivables Sale Agreement or the Demand Notes, or give any consent, waiver, directive or approval under such Receivables Sale Agreement or the Demand Notes, or waive any default, action, omission or breach under such Receivables Sale Agreement or under the Demand Notes, or otherwise grant any indulgence under such Receivables Sale Agreement or the Demand Notes, without (in each case) the prior written consent of the Agent and the Required Purchasers; (O) maintain its limited partnership separateness such that it does not merge or consolidate with or into, or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions, and except as otherwise contemplated herein) all or substantially all of its assets (whether now owned or hereafter acquired) to, or acquire all or substantially all of the assets of, any Person, nor at any time create, have, acquire, maintain or hold any interest in any Subsidiary; (P) maintain at all times the Required Capital Amount (as defined in the Receivables Sale Agreement to which it is a party) and refrain from making any dividend, distribution, redemption of capital stock or partnership interest or payment of any subordinated indebtedness that would cause such Required Capital Amount to cease to be so maintained; (Q) take such other actions as are necessary on its part to ensure that the facts and assumptions set forth in the opinion issued by Locke & Liddell & Sapp LLP, as counsel for such Seller, in connection with the closing or initial Incremental Purchase or initial Reinvestment under this Agreement and relating to substantive consolidation issues, and in the certificates accompanying such opinion, remain true and correct in all material respects at all times. (j) Collections. Such Seller Party will cause (1) all proceeds from all Lock-Boxes to be directly deposited by a Collection Bank into a Collection Account and (2) each Lock-Box and Collection Account 32 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT to be subject at all times to a Collection Account Agreement that is in full force and effect. In the event any payments relating to Receivables are remitted directly to any Seller or any Affiliate of any Seller, such Seller will (except as otherwise specified in Section 8.2(b)) remit (or will cause all such payments to be remitted) directly to a Collection Bank and deposited into a Collection Account within two (2) Business Days following receipt thereof, and, at all times prior to such remittance, such Seller will itself hold or, if applicable, will cause such payments to be held in trust for the exclusive benefit of the Agent and the Purchasers. Each Seller will maintain exclusive ownership, dominion and control (subject to the terms of this Agreement) of each applicable Lock-Box and Collection Account and shall not grant the right to take dominion and control or grant "control" (within the meaning of Section 9-104 of the UCC of all applicable jurisdictions) of any such Lock-Box or Collection Account at a future time or upon the occurrence of a future event to any Person, except to the Agent as contemplated by this Agreement. (k) Taxes. Such Seller Party will file all tax returns and reports required by law to be filed by it and will promptly pay all taxes and governmental charges at any time owing except, in the case of each Seller Party other than the Sellers, for taxes not yet due or that are being diligently contested in good faith by appropriate proceedings and that have been adequately reserved against in accordance with GAAP. Each Seller will pay when due any taxes payable in connection with the Receivables, exclusive of taxes on or measured by income or gross receipts of any Company, the Agent or any Financial Institution. (l) Payment to Originators and Morningstar. With respect to any Receivable purchased by any Seller from any Originator, such sale shall be effected under, and in strict compliance with the terms of, the Receivables Sale Agreement to which such Seller is a party, including, without limitation, the terms relating to the amount and timing of payments to be made to such Originator in respect of the purchase price for such Receivable. With respect to any Receivable purchased by MRC from Morningstar, such sale shall be effected under, and in strict compliance with the terms of, the Transfer Agreement, including, without limitation, the terms relating to the amount and timing of payments to be made to MRC in respect of the purchase price for such Receivable. Section 7.2 Negative Covenants of The Seller Parties. Until the date on which the Aggregate Unpaids have been indefeasibly paid in full and this Agreement terminates in accordance with its terms, each Seller Party hereby covenants, as to itself, that: (a) Name Change, Jurisdiction of Organization, Offices, Records and Books of Accounts. Such Seller Party will not change its name, identity, corporate or other organizational structure or jurisdiction of organization (within the meaning of Sections 9-503 and/or 9-507 of the UCC of all applicable jurisdictions) or relocate its chief executive 33 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT office, principal place of business or any office where Records are kept unless it shall have: (i) given the Agent at least thirty (30) days' prior written notice thereof and (ii) delivered to the Agent all financing statements, instruments and other documents requested by the Agent in connection with such change or relocation. (b) Change in Payment Instructions to Obligors. Except as may be required by Section 7.1(m) or by the Agent pursuant to Section 8.2(b), such Seller Party will not add or terminate any bank as a Collection Bank, or make any change in the instructions to Obligors regarding payments to be made to any Lock-Box or Collection Account, unless the Agent shall have received, at least ten (10) days before the proposed effective date therefor, (i) written notice of such addition, termination or change and (ii) with respect to the addition of a Collection Bank or a Collection Account or Lock-Box, an executed Collection Account Agreement acceptable to the Agent with respect to the new Collection Account or Lock-Box; provided, however, that the Servicers may make changes in instructions to Obligors regarding payments if such new instructions require such Obligor to make payments to another existing Collection Account. (c) Modifications to Writings, Contracts and Credit and Collection Policies. Such Seller Party will not, and will not permit any Originator or Morningstar to, make any change to such Originator's or Morningstar's Credit and Collection Policy that could materially (either individually or in the aggregate) adversely affect the collectibility of the Receivables or materially (either individually or in the aggregate) decrease the credit quality of any newly created Receivables. Except as provided in Section 8.2(d), the Servicers will not, and will not permit any Originator or Morningstar to, extend, amend or otherwise modify the terms of any Receivable or the Writing or Contract related thereto other than in accordance with such Originator's or Morningstar's Credit and Collection Policy. (d) Sales, Liens. No Seller will sell, assign (by operation of law or otherwise) or otherwise dispose of, or grant any option with respect to, or create or suffer to exist any Adverse Claim upon (including, without limitation, the filing of any financing statement) or with respect to, any Receivable, Related Security or Collections, or upon or with respect to the Writing or Contract under which any Receivable arises, or any Lock-Box or Collection Account, or assign any right to receive income with respect thereto (other than, in each case, the creation of the interests therein in favor of the Agent and the Purchasers provided for herein), and each Seller will defend the right, title and interest of the Agent and the Purchasers in, to and under any of the foregoing property, against all claims of third parties claiming through or under such Seller or any Originator or Morningstar. No Seller will create or suffer to exist any mortgage, pledge, security interest, encumbrance, lien, charge or other similar arrangement on any of its inventory, the financing or lease of which gives rise to any Receivable. Notwithstanding this Section 7.2(d), so 34 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT long as no Amortization Event or Potential Amortization Event exists, the Sellers collectively may, at their discretion and in a single transaction occurring on a single day, sell all of the Fleming Receivables to White Wave, Inc., a Delaware corporation ("White Wave"); provided that no later than 3 Business Days after such sale, each Seller shall deliver to the Agent a certificate executed by an Authorized Officer of such Seller (A) stating that, with respect to all Fleming Receivables sold in such sale, (I) neither Seller nor any Servicer (in its capacity as Servicer hereunder) has made, and neither Seller nor the Servicer (in its capacity as Servicer hereunder) will make, any representations or warranties in connection with such sale of Fleming Receivables, (II) both before and after giving effect to such sale, no Amortization Event or Potential Amortization Event exists, (III) White Wave has, and will have, no recourse to the Seller or the assets of the Seller (other than the Fleming Receivables subject to such sale), (IV) such sale is solely to (x) enable White Wave to further sell such Fleming Receivables through an arm's-length, fair market transaction to a purchaser that is not an Affiliate of any Seller Party, Morningstar or Provider and (y) to receive advertising trade credits in exchange for such Fleming Receivables, (V) such Fleming Receivables have been or will be included as Charged-Off Receivables in at least one Monthly Report and (VI) White Wave has given fair consideration and reasonably equivalent value to each Seller in consideration of such sale of the Fleming Receivables, the cash purchase price for such Fleming Receivables is no less than the fair market value to be paid to White Wave upon White Wave's subsequent transfer of such Fleming Receivables and the sale of such Fleming Receivables to White Wave was not made for or on account of an antecedent debt, (B) setting forth the aggregate Outstanding Balance of all such Fleming Receivables and (C) setting forth the aggregate purchase price paid for all such Fleming Receivables. Upon any such sale of the Fleming Receivables in accordance with the terms of this Section 7.2(d) and the Sellers' receipt of the purchase price therefor in immediately available funds in a Collection Account and Agent's receipt of the certificate described above, such Fleming Receivables shall be automatically released without any further action by any party hereto from the security interest granted to the Agent for the ratable benefit of the Purchasers pursuant to Section 14.14(b). For the avoidance of doubt, each party hereto agrees that the purchase price paid upon any such sale of Fleming Receivables shall constitute Collections hereunder and shall be applied in accordance with the terms hereof, including, without limitation, Article II. (e) Net Receivables Balance. At no time prior to the Amortization Date shall any Seller permit the Net Receivables Balance to be less than an amount equal to the sum of (i) the Aggregate Capital plus (ii) the Aggregate Reserves. (f) Termination Date Determination. No Seller will designate the Termination Date (as defined in each Receivables Sale Agreement) under the Receivables Sale Agreement to which it is a party, or send any written notice to any Originator in respect thereof, without the prior written consent of the Agent and the Required Purchasers, except 35 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT with respect to the occurrence of such Termination Date arising pursuant to Section 5.1(d) of such Receivables Sale Agreement. (g) Restricted Junior Payments. From and after the occurrence of any Amortization Event, no Seller will make any Restricted Junior Payment if, after giving effect thereto, such Seller would fail to meet its obligations set forth in Section 7.2(e). (h) Demand Notes. At no time shall (i) Dairy Group cause or permit the aggregate outstanding principal balance of its Demand Note to exceed $21,325,653, (ii) Dairy Group II cause or permit the aggregate outstanding principal balance of its Demand Note to exceed $13,181,876, and (iii) Specialty Group cause or permit the aggregate outstanding principal balance of its Demand Note to exceed $3,000,000. ARTICLE VIII ADMINISTRATION AND COLLECTION Section 8.1 Designation of Servicers. (a) The servicing, administration and collection of the Receivables shall be conducted by such Person or Persons (each such Person, a "Servicer") so designated from time to time in accordance with this Section 8.1. Each of Morningstar, Country Fresh, Land-O-Sun, Southern Foods, GTL, Tuscan Dairies, each Dean Entity and each New Entity is hereby designated as, and hereby agrees to perform the duties and obligations of, Servicer pursuant to the terms of this Agreement with respect to the Receivables originated by such entity. The Agent may, and at the direction of the Required Purchasers shall, at any time following an Amortization Event, designate as Servicer any Person to succeed Morningstar, Country Fresh, Land-O-Sun, Southern Foods, GTL, Tuscan Dairies, any Dean Entity or any New Entity, or any successor Servicer. (b) Without the prior written consent of the Agent and the Required Purchasers, neither Morningstar, Country Fresh, Land-O-Sun, Southern Foods, GTL, Tuscan Dairies, any Dean Entity nor any New Entity shall be permitted to delegate any of its duties or responsibilities as Servicer to any Person other than (i) a Seller and (ii) with respect to certain Charged-Off Receivables, outside collection agencies in accordance with its customary practices. No Seller shall be permitted to further delegate to any other Person any of the duties or responsibilities of a Servicer delegated to it by Morningstar, Country Fresh, Land-O-Sun, Southern Foods, GTL, Tuscan Dairies, any Dean Entity or any New Entity. If at any time following an Amortization Event the Agent shall designate as Servicer any Person other than Morningstar, Country Fresh, Land-O-Sun, Southern Foods, GTL, Tuscan Dairies, any Dean Entity or any New Entity, all duties and responsibilities theretofore delegated by Morningstar, Country Fresh, Land-O-Sun, Southern Foods, GTL, Tuscan Dairies, any Dean Entity or any New Entity to any Seller may, at the discretion of the 36 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT Agent, be terminated forthwith on notice given by the Agent to Morningstar, Country Fresh, Land-O-Sun, Southern Foods, GTL, Tuscan Dairies, any Dean Entity or any New Entity, as applicable, and to the Administrative Seller. (c) Notwithstanding the foregoing subsection (b), (i) each of Morningstar, Country Fresh, Land-O-Sun, Southern Foods, GTL, Tuscan Dairies, each Dean Entity and each New Entity shall be and remain primarily liable to the Agent and the Purchasers for the full and prompt performance of all of its duties and responsibilities as a Servicer hereunder and (ii) the Agent and the Purchasers shall be entitled to deal exclusively with Morningstar, Country Fresh, Land-O-Sun, Southern Foods, GTL, Tuscan Dairies, each Dean Entity and each New Entity in matters relating to the discharge by a Servicer of its duties and responsibilities hereunder. The Agent and the Purchasers shall not be required to give notice, demand or other communication to any Person other than Morningstar, Country Fresh, Land-O-Sun, Southern Foods, GTL, Tuscan Dairies, each Dean Entity or each New Entity in order for communication to a Servicer and its sub-servicer or other delegate with respect thereto to be accomplished. Each of Morningstar, Country Fresh, Land-O-Sun, Southern Foods, GTL, Tuscan Dairies, each Dean Entity and each New Entity, at all times that it is a Servicer, shall be responsible for providing any sub-servicer or other delegate of a Servicer with any notice given to a Servicer under this Agreement. Section 8.2 Duties of Servicer. (a) Each Servicer shall take or cause to be taken all such actions as may be necessary or advisable to collect each Receivable originated by such entity from time to time, all in accordance in all material respects with applicable laws, rules and regulations, with reasonable care and diligence, and in accordance in all material respects with the applicable Originator's or Morningstar's Credit and Collection Policy. (b) Each Servicer will instruct all Obligors to pay all Collections with respect to the Receivables originated by such entity directly to a Lock-Box or Collection Account; provided, however, that to the extent that the Originator (other than a Local Originator) of the Receivable giving rise to such Collections or Morningstar, as applicable, currently permits the Obligor of such Receivable to pay such Collections to a local employee of such Originator or Morningstar, as applicable, such Servicer will insure that such local employees remit such Collections to a local depository account no less frequently than weekly, and within two (2) Business Days of such local employee's deposit of such Collections, such Servicer will cause such Collections to be deposited directly to a Lock-Box or Collection Account. With respect to payments relating to Receivables that are remitted directly to any Servicer, such Servicer will remit such payments (or will cause all such payments to be remitted) directly to a Collection Bank and deposited into a Collection Account within two (2) Business Days following receipt thereof, and, at all times prior to 37 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT such remittance, such Servicer will itself hold or, if applicable, will cause such payments to be held in trust for the exclusive benefit of the Agent and the Purchasers. Each Servicer shall effect a Collection Account Agreement substantially in the form of Exhibit VI with each bank party to a Collection Account at any time. Prior to the delivery of any Collection Notice to any Collection Bank, in the case of any remittances received in any Lock-Box or Collection Account that shall have been identified, to the satisfaction of the applicable Servicer, to not constitute Collections or other proceeds of the Receivables or the Related Security (which identification shall occur no later than two (2) Business Days after such amounts are received therein), such Servicer shall promptly (and, in any event, no later than one (1) Business Day after such identification) remit such items to the Person identified to it as being the owner of such remittances and cause such amounts to be removed from such Lock-Box or Collection Account. From and after the date the Agent delivers to any Collection Bank a Collection Notice pursuant to Section 8.3, the Agent may request that the Servicers, and the Servicers thereupon promptly shall instruct all Obligors with respect to the Receivables, to remit all payments thereon to a new depositary account specified by the Agent and, at all times thereafter, each Seller and the Servicers shall not deposit or otherwise credit, and shall not permit any other Person to deposit or otherwise credit to such new depositary account any cash or payment item other than Collections. (c) The Servicers shall administer the Collections with respect to the Receivables originated by each such entity in accordance with the procedures described herein and in Article II. The Servicers shall set aside and hold in trust for the account of Seller and the Purchasers their respective shares of the Collections in accordance with Article II. The Servicers shall, upon the request of the Agent, segregate, in a manner acceptable to the Agent, all cash, checks and other instruments received by it from time to time constituting Collections from the general funds of each of the Servicers or the Sellers prior to the remittance thereof in accordance with Article II. If the Servicers shall be required to segregate Collections pursuant to the preceding sentence, the Servicers shall segregate and deposit with a bank designated by the Agent such allocable share of Collections of Receivables set aside for the Purchasers on the second Business Day following receipt by any Servicer of such Collections, duly endorsed or with duly executed instruments of transfer. (d) The Servicers may, in accordance with the applicable Originator's or Morningstar's Credit and Collection Policy, extend the maturity of any Receivable or adjust the Outstanding Balance of any Receivable as the Servicers determine to be appropriate to maximize Collections thereof; provided, however, that such extension or adjustment shall not alter the status of such Receivable as a Delinquent Receivable or Charged-Off Receivable or limit the rights of the Agent or the Purchasers under this Agreement. Notwithstanding anything to the contrary contained herein, upon the occurrence and during the continuance of an Amortization Event and until such time as the Aggregate Unpaids 38 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT have been indefeasibly paid in full, the Agent shall have the absolute and unlimited right to direct the Servicers to commence or settle any legal action with respect to any Receivable or to foreclose upon or repossess any Related Security. (e) The Servicers shall hold in trust for the Sellers and the Purchasers all Records that (i) evidence or relate to the Receivables, the related Writings and Contracts and Related Security or (ii) are otherwise necessary or desirable to collect the Receivables and shall, as soon as reasonably practicable upon demand of the Agent, deliver or make available to the Agent all such Records, at a place selected by the Agent. The Servicers shall, as soon as reasonably practicable following receipt thereof turn over to the Sellers any cash collections or other cash proceeds received with respect to Indebtedness not constituting Receivables. The Servicers shall, from time to time at the request of any Purchaser, furnish to the Purchasers (promptly after any such request) a calculation of the amounts set aside for the Purchasers pursuant to Article II. (f) Any payment by an Obligor in respect of any indebtedness owed by it to any Originator or Morningstar or any Seller shall, except as otherwise specified by such Obligor or otherwise required by contract or law and unless otherwise instructed by the Agent, be applied as a Collection of any Receivable of such Obligor (starting with the oldest such Receivable) to the extent of any amounts then due and payable thereunder before being applied to any other receivable or other obligation of such Obligor. Section 8.3 Collection Notices. The Agent is authorized at any time to date and to deliver to the Collection Banks the Collection Notices. Each Seller hereby agrees that, effective when the Agent delivers such notice, the Agent (for the benefit of the Purchasers) shall have exclusive ownership and sole "control" (within the meaning of Section 9-104 of the UCC of all applicable jurisdictions) of each Lock-Box, the Collection Accounts and the amounts on deposit therein. In case any authorized signatory of any Seller whose signature appears on a Collection Account Agreement shall cease to have such authority before the delivery of such notice, such Collection Notice shall nevertheless be valid as if such authority had remained in force. Each Seller hereby authorizes the Agent, and agrees that the Agent shall be entitled to (i) endorse such Seller's name on checks and other instruments representing Collections, (ii) enforce the Receivables, the related Writings and Contracts and the Related Security and (iii) take such action as shall be necessary or desirable to cause all cash, checks and other instruments constituting Collections of Receivables to come into the possession of the Agent rather than the Sellers or any Servicer. Section 8.4 Responsibilities of the Sellers. Anything herein to the contrary notwithstanding, the exercise by the Agent and the Purchasers of their rights hereunder shall not release the Servicers, the Originators, Morningstar or any Seller from any of their duties or obligations with respect to any Receivables or under the related Writings or Contracts. 39 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT The Purchasers shall have no obligation or liability with respect to any Receivables or related Writings or Contracts, nor shall any of them be obligated to perform the obligations of any Seller. Section 1.32 Reports. The Servicers shall prepare and forward to the Agent and each Financial Institution (i) on the 20th calendar day of each month and at such times as the Agent or the Required Purchasers shall request, a Monthly Report and (ii) at such times as the Agent or the Required Purchasers shall request, a listing by Obligor of all Receivables together with an aging of such Receivables. In addition, during any time when the long-term debt rating of Provider is rated Ba3 or lower by Moody's Investors Service, Inc. and BB- or lower by Standard & Poor's Ratings Group, the Servicers shall prepare and forward to the Agent and each Financial Institution on Wednesday of each calendar week, an abbreviated Monthly Report in a form acceptable to the Agent (each such report, a "Weekly Report") with respect to and as of the end of the immediately preceding calendar week. Section 8.6 Servicing Fees. In consideration of each of Morningstar's, Country Fresh's, Land-O-Sun's, Southern Foods', GTL's, Tuscan Dairies', each Dean Entity's and each New Entity's agreement to each act as a Servicer hereunder, the Purchasers hereby agree that, so long as each of Morningstar, Country Fresh, Land-O-Sun, Southern Foods, GTL, Tuscan Dairies, each Dean Entity and each New Entity shall continue to perform as a Servicer hereunder, Seller shall pay over to Morningstar, Country Fresh, Land-O-Sun, Southern Foods, GTL, Tuscan Dairies, each Dean Entity and each New Entity collectively, a fee (the "Servicing Fee") on each Settlement Date (other than a Settlement Date relating to a CP (Tranche) Accrual Period) for the immediately preceding Settlement Period equal to 1% (one percent) of the lesser of the (a) the average Net Receivables Balance during such Settlement Period and (b) the average Capital of all Receivables during such period, as compensation for its servicing activities. Such Servicing Fee shall be allocated among Morningstar, Country Fresh, Land-O-Sun, Southern Foods, GTL, Tuscan Dairies, each Dean Entity and each New Entity as such parties shall mutually determine. ARTICLE IX AMORTIZATION EVENTS Section 9.1 Amortization Events. The occurrence of any one or more of the following events shall constitute an Amortization Event: (a) Any Seller Party shall fail (i) to make any payment or deposit of any amount consisting of Capital required hereunder when due, or (ii) to make any payment or deposit of any other amount required hereunder when due and such failure shall continue for two (2) consecutive Business Days, or (iii) to perform or observe any term, covenant or 40 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT agreement set forth in Section 7.2 hereof, or (iv) to perform or observe any term, covenant or agreement set forth in Section 7.1(a)(iv), (a)(v), (a)(viii) or (c)(second sentence only), and such failure shall continue for thirty (30) consecutive days or (v) to perform or observe any other term, covenant or agreement hereunder (other than as referred to in clauses (i), (ii), (iii) or (iv) of this paragraph (a)) and such failure shall continue for five (5) consecutive Business Days. (b) Any representation, warranty, certification or statement made by any Seller Party in this Agreement, any other Transaction Document or in any other document delivered pursuant hereto or thereto shall prove to have been incorrect when made or deemed made. (c) Failure of any Seller to pay any Indebtedness when due or the failure of any other Seller Party to pay Indebtedness when due in excess of $50,000,000 or the default by any Seller Party in the performance of any term, provision or condition contained in any agreement under which any such Indebtedness was created or is governed, the effect of which is to cause, or to permit the holder or holders of such Indebtedness to cause, such Indebtedness to become due prior to its stated maturity or any such Indebtedness of any Seller Party shall be declared to be due and payable or required to be prepaid (other than by a regularly scheduled payment) prior to the date of maturity thereof. (d) (i) Any Seller Party or Provider shall generally not pay its debts as such debts become due or shall admit in writing its inability to pay its debts generally or shall make a general assignment for the benefit of creditors, or (ii) any proceeding shall be instituted by or against any Seller Party or Provider seeking to adjudicate it bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee or other similar official for it or any substantial part of its property or (iii) any Seller Party or Provider shall take any corporate action to authorize any of the actions set forth in clauses (i) or (ii) above in this subsection (d). (e) Any Seller shall fail to comply with the terms of Section 2.6 hereof and such failure shall not have been remedied within one Business Day. (f) (i) As at the end of any calendar month, the average of the Default Ratios for the three most recently-ended calendar months shall exceed 7.75%, or (ii) as at the end of any calendar month, the average of the Dilution Ratios for the three most recently-ended calendar months shall exceed 4%, or (iii) as at the end of any calendar month, the average of the Delinquency Ratios for the three most recently-ended calendar months shall exceed 3.00%. 41 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT (g) A Change of Control shall occur. (h) (i) One or more final judgments for the payment of money shall be entered against any Seller or (ii) one or more final judgments for the payment of money in an amount in excess of $50,000,000, individually or in the aggregate, shall be entered against any Servicer on claims not covered by insurance or as to which the insurance carrier has denied its responsibility, and such judgment shall continue unsatisfied and in effect for thirty (30) consecutive days without a stay of execution. (i) The "Termination Date" under and as defined in any Receivables Sale Agreement shall occur under any such Receivables Sale Agreement or any Seller or any Originator shall fail to observe any term or condition of any Receivables Sale Agreement or shall waive its right to enforce the terms and conditions of any Receivables Sale Agreement, or any Originator shall for any reason cease to transfer, or cease to have the legal capacity to transfer, or otherwise be incapable of transferring Receivables to any Seller under any Receivables Sale Agreement (other than an Immaterial Originator which ceases to transfer Receivables subject to and in accordance with Section 1.7 of any Receivables Sale Agreement). (j) This Agreement shall terminate in whole or in part (except in accordance with its terms), or shall cease to be effective or to be the legally valid, binding and enforceable obligation of any Seller, or any Obligor shall directly or indirectly contest in any manner such effectiveness, validity, binding nature or enforceability, or the Agent for the benefit of the Purchasers shall cease to have a valid and perfected first priority security interest in the Receivables, the Related Security and the Collections with respect thereto and the Collection Accounts. (k) Provider shall fail to perform or observe any term, covenant or agreement required to be performed by it under any Performance Undertaking, or any Performance Undertaking shall cease to be effective or to be the legally valid, binding and enforceable obligation of Provider, or Provider shall directly or indirectly contest in any manner such effectiveness, validity, binding nature or enforceability. (l) The Agreement of General Partner shall terminate in whole or in part or shall cease to be effective or to be the legally valid, binding and enforceable obligation of the general partner of Dairy Group or Dairy Group shall directly or indirectly contest in any manner such effectiveness, validity, binding nature or enforceability, or the general partner of Dairy Group shall fail in any respect to perform its obligations under the Agreement of General Partner. 42 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT (m) (i) Provider shall fail to own, free and clear of any Adverse Claims, in the aggregate, either directly or indirectly, 100% of the limited partnership interests of Dairy Group and 99.9% of the partnership interests of Dairy Group, or Dairy Group Receivables GP, LLC (f/k/a Suiza Receivables GP, LLC) shall fail to own, free and clear of any Adverse Claims (except any Adverse Claim in favor of the Collateral Agent in accordance with the Dean Credit Agreement), 100% of the general partnership interests of Dairy Group and 0.1% of the partnership interests of Dairy Group, or Provider and Suiza Dairy Group, L.P. shall fail to own, free and clear of any Adverse Claims (except any Adverse Claim in favor of the Collateral Agent in accordance with the Dean Credit Agreement), in the aggregate, either directly or indirectly, 100% of the membership interests of Dairy Group Receivables GP, LLC. (ii) Provider shall fail to own, free and clear of any Adverse Claims, in the aggregate, either directly or indirectly, 100% of the limited partnership interests of Dairy Group II and 99.9% of the partnership interests of Dairy Group II, or Dairy Group Receivables GP II, LLC shall fail to own, free and clear of any Adverse Claims (except any Adverse Claim in favor of the Collateral Agent in accordance with the Dean Credit Agreement), 100% of the general partnership interests of Dairy Group II and 0.1% of the partnership interests of Dairy Group II, or Provider and Dean Holding Company shall fail to own, free and clear of any Adverse Claims (except any Adverse Claim in favor of the Collateral Agent in accordance with the Dean Credit Agreement), in the aggregate, either directly or indirectly, 100% of the membership interests of Dairy Group Receivables GP II, LLC. (iii) Provider shall fail to own, free and clear of any Adverse Claims, in the aggregate, either directly or indirectly, 100% of the limited partnership interests of Specialty Group and 99.9% of the partnership interests of Specialty Group, or Specialty Group Receivables GP, LLC shall fail to own, free and clear of any Adverse Claims (except any Adverse Claim in favor of the Collateral Agent in accordance with the Dean Credit Agreement), 100% of the general partnership interests of Specialty Group and 0.1% of the partnership interests of Specialty Group, or Provider and Dean Holding Company shall fail to own, free and clear of any Adverse Claims (except any Adverse Claim in favor of the Collateral Agent in accordance with the Dean Credit Agreement), in the aggregate, either directly or indirectly, 100% of the membership interests of Specialty Group Receivables GP, LLC. (n) Provider shall fail to comply with the Dean Financial Covenants. 43 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT Section 9.2 Remedies. Upon the occurrence and during the continuation of an Amortization Event, the Agent may, or upon the direction of the Required Purchasers shall, take any of the following actions: (i) replace any Person then acting as Servicer, (ii) declare the Amortization Date to have occurred, whereupon the Amortization Date shall forthwith occur, without demand, protest or further notice of any kind, all of which are hereby expressly waived by each Seller Party; provided, however, that (A) upon the occurrence of an Amortization Event described in Section 9.1(d)(ii), or of an actual or deemed entry of an order for relief with respect to any Seller Party under the Federal Bankruptcy Code, the Amortization Date shall automatically occur, without demand, protest or any notice of any kind, all of which are hereby expressly waived by each Seller Party and (B) upon the occurrence of an Amortization Event described in Section 9.1(a), 9.1(d) or 9.1(e), by three (3) Business Days' notice to the Agent, each other Purchaser and the Administrative Seller, the affected Financial Institution in the case of a Section 9.1(a) Amortization Event and any Financial Institution in the case of a Section 9.1(d) or 9.1(e) Amortization Event may terminate its Commitment hereunder, whereupon such Financial Institution shall be deemed to be a "Terminating Financial Institution" for all purposes hereof, (iii) to the fullest extent permitted by applicable law, declare that the Default Fee shall accrue with respect to any of the Aggregate Unpaids outstanding at such time, (iv) deliver the Collection Notices to the Collection Banks, (v) notify Obligors of the Purchasers' interest in the Receivables, and (vi) notify Provider of the Purchaser's interest in the Demand Notes, make demand for any and all payments due thereunder and direct that such payments be made directly to the Agent or its designee. the aforementioned rights and remedies shall be without limitation, and shall be in addition to all other rights and remedies of the Agent and the Purchasers otherwise available under any other provision of this Agreement, by operation of law, at equity or otherwise, all of which are hereby expressly preserved, including, without limitation, all rights and remedies provided under the UCC, all of which rights shall be cumulative. ARTICLE X INDEMNIFICATION Section 10.1 Indemnities by the Seller Parties. Without limiting any other rights that the Agent, any Purchaser, any Funding Source or any of their respective Affiliates may have hereunder or under applicable law, (A) each Seller hereby agrees to indemnify (and pay upon demand to) the Agent, each Purchaser, each Funding Source and their respective Affiliates, assigns, officers, directors and employees (each an "Indemnified Party") from and against any and all damages, losses, claims, taxes, liabilities, costs, expenses and for all other amounts payable, including reasonable attorneys' fees (which attorneys may be employees of any Indemnified Party) and disbursements (all of the foregoing being collectively referred to as "Indemnified Amounts") awarded against or incurred by any of them arising out of or as a result of this Agreement, or the use of the proceeds of any 44 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT purchase hereunder, or the acquisition, funding or ownership, either directly or indirectly, by a Purchaser or a Funding Source of a Purchaser Interest or of an interest in the Receivables, or any Receivable or any Contract or any Writing, or any action of any Seller Party, any Originator, Morningstar or any Affiliate of any of the foregoing and (B) the Servicers hereby agree to indemnify (and pay upon demand to) each Indemnified Party for Indemnified Amounts awarded against or incurred by any of them arising out of any Servicer's activities as Servicer hereunder excluding, however, in all of the foregoing instances under the preceding clauses (A) and (B): (i) Indemnified Amounts to the extent a final judgment of a court of competent jurisdiction holds that such Indemnified Amounts resulted from gross negligence or willful misconduct on the part of the Indemnified Party seeking indemnification; (ii) Indemnified Amounts to the extent the same includes losses in respect of Receivables that are uncollectible on account of the insolvency, bankruptcy or lack of creditworthiness of the related Obligor; or (iii) franchise taxes and taxes imposed by the jurisdiction in which such Indemnified Party's principal executive office is located, on or measured by the overall net income of such Indemnified Party to the extent that the computation of such taxes is consistent with the characterization for income tax purposes of the acquisition by the Purchasers of Purchaser Interests as a loan or loans by the Purchasers to the Sellers secured by the Receivables, the Related Security, the Collection Accounts and the Collections; provided, however, that nothing contained in this sentence shall limit the liability of any Seller Party or limit the recourse of the Purchasers to any Seller Party for amounts otherwise specifically provided to be paid by such Seller Party under the terms of this Agreement. Without limiting the generality of the foregoing indemnification, each Seller shall indemnify each Indemnified Party for Indemnified Amounts (including, without limitation, losses in respect of uncollectible receivables, regardless of whether reimbursement therefor would constitute recourse to any Seller or any Servicer) relating to or resulting from: (i) any representation or warranty made by any Seller Party or any Originator or Morningstar in its capacity as seller under any Receivables Sale Agreement or the Transfer Agreement, as applicable (or any officers of any such Person) under or in connection with this Agreement, any other Transaction Document or any other information 45 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT or report delivered by any such Person pursuant hereto or thereto, which shall have been false or incorrect when made or deemed made; (ii) the failure by any Seller, any Servicer, any Originator or Morningstar to comply with any applicable law, rule or regulation with respect to any Receivable or Writing or Contract related thereto, or the nonconformity of any Receivable or Writing or Contract included therein with any such applicable law, rule or regulation or any failure of any Originator or Morningstar to keep or perform any of its obligations, express or implied, with respect to the Writing or Contract; (iii) any failure of any Seller, any Servicer, any Originator or Morningstar to perform its duties, covenants or other obligations in accordance with the provisions of this Agreement or any other Transaction Document; (iv) any products liability, personal injury or damage suit, or other similar claim arising out of or in connection with merchandise, insurance or services that are the subject of any Writing or Contract or any Receivable; (v) any dispute, claim, offset or defense (other than discharge in bankruptcy of the Obligor) of the Obligor to the payment of any Receivable (including, without limitation, a defense based on such Receivable or the related Writing or Contract not being a legal, valid and binding obligation of such Obligor enforceable against it in accordance with its terms), or any other claim resulting from the sale of the merchandise or service related to such Receivable or the furnishing or failure to furnish such merchandise or services; (vi) the commingling of Collections of Receivables at any time with other funds; (vii) any investigation, litigation or proceeding related to or arising from this Agreement or any other Transaction Document, the transactions contemplated hereby, the use of the proceeds of an Incremental Purchase or a Reinvestment, the ownership of the Purchaser Interests or any other investigation, litigation or proceeding relating to any Seller, any Servicer, any Originator or Morningstar in which any Indemnified Party becomes involved as a result of any of the transactions contemplated hereby; 46 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT (viii) any inability to litigate any claim against any Obligor in respect of any Receivable as a result of such Obligor being immune from civil and commercial law and suit on the grounds of sovereignty or otherwise from any legal action, suit or proceeding; (ix) any Amortization Event described in Section 9.1(d); (x) any failure of any Seller to acquire and maintain legal and equitable title to, and ownership of any Receivable and the Related Security and Collections with respect thereto from the applicable Originator or Morningstar, free and clear of any Adverse Claim (other than as created hereunder); or any failure of any Seller to give reasonably equivalent value to applicable Originator under the Receivables Sale Agreement to which it is a party in consideration of the transfer thereunder by such Originator of any Receivable, or any failure of MRC to give reasonably equivalent value to Morningstar under the Transfer Agreement in consideration of the transfer by MRC of any Receivable thereunder or any attempt by any Person to void such transfer under statutory provisions or common law or equitable action; (xi) any failure to vest and maintain vested in the Agent for the benefit of the Purchasers, or to transfer to the Agent for the benefit of the Purchasers, legal and equitable title to, and ownership of, a first priority perfected undivided percentage ownership interest (to the extent of the Purchaser Interests contemplated hereunder) or security interest in the Receivables, the Related Security and the Collections, free and clear of any Adverse Claim (except as created by the Transaction Documents); (xii) the failure to have filed, or any delay in filing, financing statements or other similar instruments or documents under the UCC of any applicable jurisdiction or other applicable laws with respect to any Receivable, the Related Security and Collections with respect thereto, and the proceeds of any thereof, whether at the time of any Incremental Purchase or Reinvestment or at any subsequent time; (xiii) any action or omission by any Seller Party that reduces or impairs the rights of the Agent or the Purchasers with respect to any Receivable or the value of any such Receivable; 47 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT (xiv) any attempt by any Person to void any Incremental Purchase or Reinvestment hereunder under statutory provisions or common law or equitable action; and (xv) the failure of any Receivable included in the calculation of the Net Receivables Balance as an Eligible Receivable to be an Eligible Receivable at the time so included. Section 10.2 Increased Cost and Reduced Return. (a) If after June 30, 2000 with respect to any Funding Source relating to the Bank One Company, after the Original Closing Date with respect to any Funding Source relating to the CL Company, or after the date hereof with respect to any Funding Source relating to the Rabo Company, the Wachovia Company or any other Funding Source, any such Funding Source shall be charged any fee, expense or increased cost on account of the adoption of any applicable law, rule or regulation (including any applicable law, rule or regulation regarding capital adequacy), any accounting principles or any change in any of the foregoing, or any change in the interpretation or administration thereof by the Financial Accounting Standards Board ("FASB"), any governmental authority, any central bank or comparable agency charged with the interpretation or administration thereof, or compliance with any request or directive (whether or not having the force of law) of any such authority or agency (a "Regulatory Change"): (i) that subjects any Funding Source to any charge or withholding on or with respect to any Funding Agreement or a Funding Source's obligations under a Funding Agreement, or on or with respect to the Receivables, or changes the basis of taxation of payments to any Funding Source of any amounts payable under any Funding Agreement (except for changes in the rate of tax on the overall net income of a Funding Source or taxes excluded by Section 10.1) or (ii) that imposes, modifies or deems applicable any reserve, assessment, insurance charge, special deposit or similar requirement against assets of, deposits with or for the account of a Funding Source, or credit extended by a Funding Source pursuant to a Funding Agreement or (iii) that imposes any other condition the result of which is to increase the cost to a Funding Source of performing its obligations under a Funding Agreement, or to reduce the rate of return on a Funding Source's capital as a consequence of its obligations under a Funding Agreement, or to reduce the amount of any sum received or receivable by a Funding Source under a Funding Agreement or to require any payment calculated by reference to the amount of interests or loans held or interest received by it, then, upon demand by the Agent, each Seller shall pay to the Agent, for the benefit of the relevant Funding Source, such amounts charged to such Funding Source or such amounts to otherwise compensate such Funding Source for such increased cost or such reduction. For the avoidance of doubt, if the issuance of FASB Interpretation No. 46, or any other change in accounting standards or the 48 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT issuance of any other pronouncement, release or interpretation, causes or requires the consolidation of all or a portion of the assets and liabilities of any Company or any Seller with the assets and liabilities of the Agent, any Financial Institution or any other Funding Source, such event shall constitute a circumstance on which such Funding Source may base a claim for reimbursement under this Section. (b) If less than all of the Financial Institutions are subject to any Regulatory Change giving rise to a demand by the Agent pursuant to Section 10.2(a), each Financial Institution so subject, at the request of the Administrative Seller, the Company in such Financial Institution's Purchaser Group or the Agent, shall assign all of its rights and obligations hereunder to (i) another Financial Institution in such Financial Institution's Purchaser Group or (ii) another funding entity nominated by the Administrative Seller or the Agent that is acceptable to the Company in such Financial Institution's Purchaser Group and willing to participate in this Agreement through the Liquidity Termination Date in the place of such notifying Financial Institution and that is not so subject; provided that (i) the subject Financial Institution receives payment in full, pursuant to an Assignment Agreement, of an amount equal to such notifying Financial Institution's Pro Rata Share of the Capital and Yield owing to all of the Financial Institutions in such Financial Institution's Purchaser Group and all accrued but unpaid fees and other costs and expenses payable in respect of its Pro Rata Share of the Purchaser Interests of the Financial Institutions in such Financial Institution's Purchaser Group, and (ii) the replacement Financial Institution otherwise satisfies the requirements of Section 12.1(b). Section 10.3 Other Costs and Expenses. Each Seller shall reimburse the Agent and each Purchaser on demand for all costs and out-of-pocket expenses in connection with the preparation, execution, delivery and administration of this Agreement, the transactions contemplated hereby and the other documents to be delivered hereunder, including without limitation, the cost of any Purchaser's auditors auditing the books, records and procedures of any Seller Party, reasonable fees and out-of-pocket expenses of legal counsel for each Purchaser and the Agent (which such counsel may be employees of any Purchaser or the Agent) with respect thereto and with respect to advising any Purchaser or the Agent as to their respective rights and remedies under this Agreement. Each Seller shall reimburse the Agent on demand for any and all costs and expenses of the Agent and the Purchasers, if any, including reasonable counsel fees and expenses in connection with the enforcement of this Agreement and the other documents delivered hereunder and in connection with any restructuring or workout of this Agreement or such documents, or the administration of this Agreement following an Amortization Event. Each Seller shall reimburse each Company on demand for all other costs and expenses incurred by such Company ("Other Costs"), including, without limitation, the cost of auditing such Company's books by certified public accountants, the cost of rating the Commercial Paper by independent financial rating agencies, and the reasonable fees and out-of-pocket expenses of counsel for such Company 49 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT or any counsel for any shareholder of such Company with respect to advising such Company or such shareholder as to matters relating to such Company's operations. Section 10.4 Allocations. Each Company shall allocate the liability for Other Costs among the Sellers and other Persons with whom such Company has entered into agreements to purchase interests in receivables ("Other Sellers"). If any Other Costs are attributable to the Sellers and not attributable to any Other Seller, the Sellers shall be solely liable for such Other Costs. However, if Other Costs are attributable to Other Sellers and not attributable to the Sellers, such Other Sellers shall be solely liable for such Other Costs. All allocations to be made pursuant to the foregoing provisions of this Article X shall be made by the applicable Company in its sole discretion and shall be binding on the Sellers and the Servicers. ARTICLE XI THE AGENT Section 11.1 Authorization and Action. Each Purchaser hereby designates and appoints Bank One to act as its agent hereunder and under each other Transaction Document, and authorizes the Agent to take such actions as agent on its behalf and to exercise such powers as are delegated to the Agent by the terms of this Agreement and the other Transaction Documents together with such powers as are reasonably incidental thereto. The Agent shall not have any duties or responsibilities, except those expressly set forth herein or in any other Transaction Document, or any fiduciary relationship with any Purchaser, and no implied covenants, functions, responsibilities, duties, obligations or liabilities on the part of the Agent shall be read into this Agreement or any other Transaction Document or otherwise exist for the Agent. In performing its functions and duties hereunder and under the other Transaction Documents, the Agent shall act solely as agent for the Purchasers and does not assume nor shall be deemed to have assumed any obligation or relationship of trust or agency with or for any Seller Party or any of such Seller Party's successors or assigns. The Agent shall not be required to take any action that exposes the Agent to personal liability or that is contrary to this Agreement, any other Transaction Document or applicable law. The appointment and authority of the Agent hereunder shall terminate upon the indefeasible payment in full of all Aggregate Unpaids. Each Purchaser hereby authorizes the Agent to execute each of the Uniform Commercial Code financing statements on behalf of such Purchaser (the terms of which shall be binding on such Purchaser). Section 11.2 Delegation of Duties. The Agent may execute any of its duties under this Agreement and each other Transaction Document by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining 50 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT to such duties. The Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care. Section 11.3 Exculpatory Provisions. Neither the Agent nor any of its directors, officers, agents or employees shall be (i) liable for any action lawfully taken or omitted to be taken by it or them under or in connection with this Agreement or any other Transaction Document (except for its, their or such Person's own gross negligence or willful misconduct), or (ii) responsible in any manner to any of the Purchasers for any recitals, statements, representations or warranties made by any Seller Party contained in this Agreement, any other Transaction Document or any certificate, report, statement or other document referred to or provided for in, or received under or in connection with, this Agreement, or any other Transaction Document or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement, or any other Transaction Document or any other document furnished in connection herewith or therewith, or for any failure of any Seller Party to perform its obligations hereunder or thereunder, or for the satisfaction of any condition specified in Article VI, or for the perfection, priority, condition, value or sufficiency of any collateral pledged in connection herewith. The Agent shall not be under any obligation to any Purchaser to ascertain or to inquire as to the observance or performance of any of the agreements or covenants contained in, or conditions of, this Agreement or any other Transaction Document, or to inspect the properties, books or records of the Seller Parties. The Agent shall not be deemed to have knowledge of any Amortization Event or Potential Amortization Event unless the Agent has received notice from a Seller or a Purchaser. Section 11.4 Reliance by Agent. The Agent shall in all cases be entitled to rely, and shall be fully protected in relying, upon any document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to the Sellers), independent accountants and other experts selected by the Agent. The Agent shall in all cases be fully justified in failing or refusing to take any action under this Agreement or any other Transaction Document unless it shall first receive such advice or concurrence of the Required Purchasers or all of the Purchasers, as applicable, as it deems appropriate and it shall first be indemnified to its satisfaction by the Financial Institutions, provided that unless and until the Agent shall have received such advice, the Agent may take or refrain from taking any action, as the Agent shall deem advisable and in the best interests of the Purchasers. The Agent shall in all cases be fully protected in acting, or in refraining from acting, in accordance with a request of the Required Purchasers or all of the Purchasers, as applicable, and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Purchasers. 51 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT Section 11.5 Non-Reliance on Agent and Other Purchasers. Each Purchaser expressly acknowledges that neither the Agent, nor any of its officers, directors, employees, agents, attorneys-in-fact or affiliates has made any representations or warranties to it and that no act by the Agent hereafter taken, including, without limitation, any review of the affairs of any Seller Party, shall be deemed to constitute any representation or warranty by the Agent. Each Purchaser represents and warrants to the Agent that it has and will, independently and without reliance upon the Agent or any other Purchaser and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, operations, property, prospects, financial and other conditions and creditworthiness of any Seller and made its own decision to enter into this Agreement, the other Transaction Documents and all other documents related hereto or thereto. Section 11.6 Reimbursement and Indemnification. The Financial Institutions agree to reimburse and indemnify the Agent and its officers, directors, employees, representatives and agents, ratably based on the ratio of each Financial Institution's Commitment to the aggregate Commitment, to the extent not paid or reimbursed by the Seller Parties (i) for any amounts for which the Agent, acting in its capacity as Agent, is entitled to reimbursement by the Seller Parties hereunder and (ii) for any other expenses incurred by the Agent, in its capacity as Agent and acting on behalf of the Purchasers, in connection with the administration and enforcement of this Agreement and the other Transaction Documents; provided that the Agent shall not be entitled to any indemnity or reimbursement under this Section 11.6 for any expenses resulting from the gross negligence or willful misconduct of the Agent, as determined by a final and non-appealable judgment rendered by a court of competent jurisdiction. Section 11.7 Agent in Its Individual Capacity. The Agent and its Affiliates may make loans to, accept deposits from and generally engage in any kind of business with any Seller or any Affiliate of any Seller as though the Agent were not the Agent hereunder. With respect to the acquisition of Purchaser Interests pursuant to this Agreement, the Agent shall have the same rights and powers under this Agreement in its individual capacity as any Purchaser and may exercise the same as though it were not the Agent, and the terms "Financial Institution," "Related Financial Institution," "Purchaser," "Financial Institutions," "Related Financial Institutions," and "Purchasers" shall include the Agent in its individual capacity. Section 11.8 Successor Agent. The Agent may, upon five days' notice to the Administrative Seller and the Purchasers, and the Agent will, upon the direction of all of the Purchasers (other than the Agent, in its individual capacity) resign as Agent. If the Agent shall resign, then the Required Purchasers during such five-day period shall appoint, with the consent of the Administrative Seller, such consent not to be unreasonably withheld or 52 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT delayed, from among the Purchasers a successor agent. If for any reason no successor Agent is appointed by the Required Purchasers during such five-day period, then effective upon the termination of such five day period, the Purchasers shall perform all of the duties of the Agent hereunder and under the other Transaction Documents and the Sellers and the Servicers (as applicable) shall make all payments in respect of the Aggregate Unpaids directly to the applicable Purchasers and for all purposes shall deal directly with the Purchasers. After the effectiveness of any retiring Agent's resignation hereunder as Agent, the retiring Agent shall be discharged from its duties and obligations hereunder and under the other Transaction Documents and the provisions of this Article XI and Article X shall continue in effect for its benefit with respect to any actions taken or omitted to be taken by it while it was Agent under this Agreement and under the other Transaction Documents. ARTICLE XII ASSIGNMENTS; PARTICIPATIONS Section 12.1 Assignments. (a) Each Seller Party, the Agent and each Purchaser hereby agree and consent to the complete or partial assignment by any Company of all or any portion of its rights under, interest in, title to and obligations under this Agreement to any Funding Source pursuant to any Funding Agreement or to any other Person, and upon such assignment, such Company shall be released from its obligations so assigned. Further, each Seller Party, the Agent and each Purchaser hereby agree that any assignee of any Company of this Agreement or of all or any of the Purchaser Interests of any Company shall have all of the rights and benefits under this Agreement as if the term "Company" explicitly referred to and included such party (provided that (i) the Purchaser Interests of any such assignee that is a Company or a commercial paper conduit shall accrue CP Costs based on such Company's Company Costs or on such commercial paper conduit's cost of funds, respectively, and (ii) the Purchaser Interests of any other such assignee shall accrue Yield pursuant to Section 4.1), and no such assignment shall in any way impair the rights and benefits of any Company hereunder. Neither any Seller nor any Servicer shall have the right to assign its rights or obligations under this Agreement. (b) Any Financial Institution may at any time and from time to time assign to one or more Persons ("Purchasing Financial Institutions") all or any part of its rights and obligations under this Agreement pursuant to an assignment agreement, substantially in the form set forth in Exhibit VII hereto (the "Assignment Agreement") executed by such Purchasing Financial Institution and such selling Financial Institution. The consent of the Company in such selling Financial Institution's Purchaser Group and the consent of the Administrative Seller shall be required prior to the effectiveness of any such assignment; provided, however, that in the event the Administrative Seller fails to consent to any proposed Purchasing Financial Institution during the thirty (30) day period following the 53 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT Administrative Seller's initial receipt of a request for its consent to any such assignment, only the consent of the Company in such selling Financial Institution's Purchaser Group shall thereafter be required with respect to any such assignment. Each assignee of a Financial Institution must (i) have a short-term debt rating of A-1 or better by Standard & Poor's Ratings Group and P-1 by Moody's Investor Service, Inc. and (ii) agree to deliver to the Agent, promptly following any request therefor by the Agent or the Company in such selling Financial Institution's Purchaser Group, an enforceability opinion in form and substance satisfactory to the Agent and such Company (such opinion may be delivered by in-house counsel of such assignee). Upon delivery of the executed Assignment Agreement to the Agent, such selling Financial Institution shall be released from its obligations hereunder to the extent of such assignment. Thereafter the Purchasing Financial Institution shall for all purposes be a Financial Institution party to this Agreement and shall have all the rights and obligations of a Financial Institution (including, without limitation, the applicable obligations of a Related Financial Institution) under this Agreement to the same extent as if it were an original party hereto and no further consent or action by any Seller, the Purchasers or the Agent shall be required. (c) Each of the Financial Institutions agrees that in the event that it shall cease to have a short-term debt rating of A-1 or better by Standard & Poor's Ratings Group and P-1 by Moody's Investor Service, Inc. (or, solely in the case of CLNY, a short-term debt rating of A-2 or better by Standard & Poor's Ratings Group and P-2 by Moody's Investor Service, Inc.) (an "Affected Financial Institution"), such Affected Financial Institution shall be obliged, at the request of the Company in such Affected Financial Institution's Purchaser Group or the Agent, to assign all of its rights and obligations hereunder to (x) another Financial Institution in such Affected Financial Institution's Purchaser Group or (y) another funding entity nominated by the Agent and acceptable to the Company in such Affected Financial Institution's Purchaser Group, and willing to participate in this Agreement through the Liquidity Termination Date in the place of such Affected Financial Institution; provided that the Affected Financial Institution receives payment in full, pursuant to an Assignment Agreement, of an amount equal to such Financial Institution's Pro Rata Share of the Aggregate Capital and Yield owing to the Financial Institutions in such Affected Financial Institution's Purchaser Group and all accrued but unpaid fees and other costs and expenses payable in respect of its Pro Rata Share of the Purchaser Interests of the Financial Institutions in such Affected Financial Institution's Purchaser Group. Section 12.2 Participations. Any Financial Institution may, in the ordinary course of its business at any time sell to one or more Persons (each a "Participant") participating interests in its Pro Rata Share of the Purchaser Interests of the Financial Institutions in such Financial Institution's Purchaser Group or any other interest of such Financial Institution hereunder. Notwithstanding any such sale by a Financial Institution of a participating interest to a Participant, such Financial Institution's rights and obligations 54 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT under this Agreement shall remain unchanged, such Financial Institution shall remain solely responsible for the performance of its obligations hereunder, and each Seller, each Company and the Agent shall continue to deal solely and directly with such Financial Institution in connection with such Financial Institution's rights and obligations under this Agreement. Each Financial Institution agrees that any agreement between such Financial Institution and any such Participant in respect of such participating interest shall not restrict such Financial Institution's right to agree to any amendment, supplement, waiver or modification to this Agreement, except for any amendment, supplement, waiver or modification described in Section 14.1(b)(i). ARTICLE XIII INTENTIONALLY OMITTED ARTICLE XIV MISCELLANEOUS Section 14.1 Waivers and Amendments. (a) No failure or delay on the part of the Agent or any Purchaser in exercising any power, right or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or remedy preclude any other further exercise thereof or the exercise of any other power, right or remedy. The rights and remedies herein provided shall be cumulative and nonexclusive of any rights or remedies provided by law. Any waiver of this Agreement shall be effective only in the specific instance and for the specific purpose for which given. (b) No provision of this Agreement may be amended, supplemented, modified or waived except in writing in accordance with the provisions of this Section 14.1(b). Each Company, each Seller and the Agent, at the direction of the required purchasers, may enter into written modifications or waivers of any provisions of this agreement, provided, however, that with respect to any modification or waiver, the Rating Agencies then rating the commercial paper notes of the Rabo Company and the CL Company shall have confirmed that the ratings of the commercial paper notes of the Rabo Company and the CL Company will not be downgraded or withdrawn as a result of such modification or waiver; and provided, further, that no such modification or waiver shall: (i) without the consent of each affected Purchaser, (A) extend the Liquidity Termination Date or the date of any payment or deposit of Collections by any Seller or any Servicer, (B) reduce the rate or extend the time of payment of Yield or any CP Costs (or any component of Yield or CP Costs), (C) reduce any fee payable to the Agent 55 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT for the benefit of the Purchasers, (D) except pursuant to Article XII hereof, change the amount of the Capital of any Purchaser, any Financial Institution's Pro Rata Share, any Company's Pro Rata Share, any Financial Institution's Commitment or any Company's Company Purchase Limit (other than, to the extent applicable, pursuant to Section 4.6), (E) amend, modify or waive any provision of the definition of Required Purchasers or this Section 14.1(b), (F) consent to or permit the assignment or transfer by any Seller of any of its rights and obligations under this Agreement, (G) change the definition of "Eligible Receivable,""Loss Reserve," Yield and Servicer Reserve," "Default Ratio," "Delinquency Ratio," "Dilution Reserve," or "Dilution Ratio" or amend or modify Section 9.1(f) or (H) amend or modify any defined term (or any defined term used directly or indirectly in such defined term) used in clauses (A) through (G) above in a manner that would circumvent the intention of the restrictions set forth in such clauses; or (ii) without the written consent of the then Agent, amend, modify or waive any provision of this Agreement if the effect thereof is to affect the rights or duties of such Agent. Notwithstanding the foregoing, (i) without the consent of the Financial Institutions, but with the consent of the Administrative Seller, the Agent may amend this Agreement solely to add additional Persons as Financial Institutions hereunder and (ii) the Agent, the Required Purchasers and each Company may enter into amendments to modify any of the terms or provisions of Article XI, Article XII, Section 14.13 or any other provision of this Agreement without the consent of any Seller Party, provided that such amendment has no negative impact upon such seller party and provided further that the Rating Agencies then rating the commercial paper notes of the Rabo Company and the CL Company shall have confirmed that the ratings of the commercial paper notes of the Rabo Company and the CL Company will not be downgraded or withdrawn as a result of such amendments. any modification or waiver made in accordance with this section 14.1 shall apply to each of the purchasers equally and shall be binding upon each Seller Party, the Purchasers and the Agent. Section 14.2 Notices. Except as provided in this Section 14.2, all communications and notices provided for hereunder shall be in writing (including bank wire, telecopy or electronic facsimile transmission or similar writing) and shall be given to the other parties hereto at their respective addresses or telecopy numbers set forth on Schedule E hereto or at such other address or telecopy number as such Person may hereafter specify for the purpose of notice to each of the other parties hereto. Each such notice or other communication shall be effective (i) if given by telecopy, upon the receipt thereof, (ii) if given by mail, three (3) Business Days after the time such communication is deposited in the mail with first class postage prepaid or (iii) if given by any other means, when received at the 56 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT address specified in this Section 14.2. Each Seller hereby authorizes the Agent and the Purchasers to effect purchases and, selections of CP (Tranche) Accrual Periods, Tranche Periods and Discount Rates based on telephonic notices made by any Person whom the Agent or applicable Purchaser in good faith believes to be acting on behalf of such Seller. Each Seller agrees to deliver promptly to the Agent and each applicable Purchaser a written confirmation of each telephonic notice signed by an authorized officer of such Seller; provided, however, the absence of such confirmation shall not affect the validity of such notice. If the written confirmation differs from the action taken by the Agent or applicable Purchaser, the records of the Agent or applicable Purchaser shall govern absent manifest error. Section 14.3 Ratable Payments. If any Purchaser, whether by setoff or otherwise, has payment made to it with respect to any portion of the Aggregate Unpaids owing to such Purchaser (other than payments received pursuant to Section 10.2 or 10.3) in a greater proportion than that received by any other Purchaser entitled to receive a ratable share of such Aggregate Unpaids, such Purchaser agrees, promptly upon demand, to purchase for cash without recourse or warranty a portion of such Aggregate Unpaids held by the other Purchasers so that after such purchase each Purchaser will hold its ratable proportion of such Aggregate Unpaids; provided that if all or any portion of such excess amount is thereafter recovered from such Purchaser, such purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest. Section 14.4 Protection of Ownership Interests of the Purchasers. (a) Each Seller agrees that from time to time, at its expense, it will promptly execute and deliver all instruments and documents, and take all actions, that may be necessary or reasonably desirable, or that the Agent may request, to perfect, protect or more fully evidence the Purchaser Interests, or to enable the Agent or the Purchasers to exercise and enforce their rights and remedies hereunder. Without limiting the foregoing, each Seller will, upon the request of the Agent or the Required Purchasers, execute and file such financing or continuation statements, or amendments thereto or assignments thereof, and such other instruments and documents, that may be necessary or desirable, or that the Agent may reasonably request, to perfect, protect or evidence such Purchaser Interests. At any time after the occurrence and during the continuation of an Amortization Event, the Agent may, or the Agent may direct any Seller or any Servicer to, notify the Obligors of Receivables, at the Sellers' expense, of the ownership or security interests of the Purchasers under this Agreement and may also direct that payments of all amounts due or that become due under any or all Receivables be made directly to the Agent or its designee. The Sellers or the Servicers (as applicable) shall, at any Purchaser's request, withhold the identity of such Purchaser in any such notification. 57 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT (b) If any Seller Party fails to perform any of its obligations hereunder, the Agent or any Purchaser may (but shall not be required to) perform, or cause performance of, such obligations, and the Agent's or such Purchaser's costs and expenses incurred in connection therewith shall be payable by the Sellers as provided in Section 10.3. Each Seller Party irrevocably authorizes the Agent at any time and from time to time in the sole discretion of the Agent, and appoints the Agent as its attorney-in-fact, to act on behalf of such Seller Party (i) to execute on behalf of any Seller as debtor and to file financing or continuation statements (and amendments thereto and assignments thereof) necessary or desirable in the Agent's sole discretion to perfect and to maintain the perfection and priority of the interest of the Purchasers in the Receivables and (ii) to file a carbon, photographic or other reproduction of this Agreement or any financing statement with respect to the Receivables as a financing statement in such offices as the Agent in its sole discretion deems necessary or desirable to perfect and to maintain the perfection and priority of the interests of the Purchasers in the Receivables. The financing statements described in this Section 14.4(b) may describe the collateral in the same manner as described herein or may contain an indication or description of collateral that describes such property in any other manner as the Agent may determine, in its sole and absolute discretion, is necessary, advisable or prudent to ensure the perfection and priority of the interests of the Purchasers in the Receivables, the Related Security and the Collections, and of the security interest granted hereunder, including, without limitation, describing such property as "all assets" or "all personal property" or "all assets, whether now owned or hereafter acquired" or "all personal property of the debtor, whether now owned or hereafter acquired".This appointment is coupled with an interest and is irrevocable. The authorization set forth in the second sentence of this Section 14.4(b) is intended to meet all requirements for authorization by a debtor under Article 9 of any applicable enactment of the UCC, including, without limitation, Section 9-509 thereof. Section 14.5 Confidentiality. (a) Each Seller Party and each Purchaser shall maintain and shall cause each of its employees and officers to maintain the confidentiality of this Agreement and the other confidential or proprietary information with respect to the Agent and each Purchaser and their respective businesses obtained by it or them in connection with the structuring, negotiating and execution of the transactions contemplated herein, except that such Seller Party and such Purchaser and its officers and employees may disclose such information to such Seller Party's and such Purchaser's external accountants and attorneys and as required by any applicable law or order of any judicial or administrative proceeding. Anything herein to the contrary notwithstanding, each Seller Party, each Purchaser, the Agent, each Indemnified Party and any successor or assign of any of the forgoing (and each employee, representative or other agent of any of the foregoing) may disclose to any and all Persons, without limitation of any kind, the "tax treatment" and "tax structure" (in each case, within the meaning of Treasury Regulation Section 1.6011-4) of the transactions contemplated herein and all materials of any kind (including opinions or 58 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT other tax analyses) that are or have been provided to any of the foregoing relating to such tax treatment or tax structure, and it is hereby confirmed that each of the foregoing have been so authorized since the commencement of discussions regarding the transactions. (b) Anything herein to the contrary notwithstanding, each Seller Party hereby consents to the disclosure of any nonpublic information with respect to it (i) to the Agent, the Financial Institutions or the Companies by each other, (ii) by the Agent or the Purchasers to any prospective or actual assignee or participant of any of them and (iii) by the Agent or any Purchaser to any rating agency, Funding Source, Commercial Paper dealer or provider of a surety, guaranty or credit or liquidity enhancement to any Company or any entity organized for the purpose of purchasing, or making loans secured by, financial assets for which Bank One, Rabobank, Wachovia, Wachovia Capital Markets, LLC or CLNY acts as the administrative agent and to any officers, directors, employees, outside accountants and attorneys of any of the foregoing. In addition, the Purchasers and the Agent may disclose any such nonpublic information pursuant to any law, rule, regulation, direction, request or order of any judicial, administrative or regulatory authority or proceedings (whether or not having the force or effect of law). Section 14.6 Bankruptcy Petition. Each Seller, the Servicers, the Agent, each Financial Institution and each Company (except with respect to itself) hereby covenants and agrees that, prior to the date that is one year and one day after the payment in full of all outstanding senior indebtedness of any Funding Source that is a special purpose bankruptcy remote entity or of any Company, it will not institute against, or join any other Person in instituting against, any such entity or any Company any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other similar proceeding under the laws of the United States or any state of the United States. Section 14.7 Limitation of Liability. Except with respect to any claim arising out of the willful misconduct or gross negligence of any Company, the Agent or any Financial Institution, no claim may be made by any Seller Party or any other Person against any Company, the Agent or any Financial Institution or their respective Affiliates, directors, officers, employees, attorneys or agents for any special, indirect, consequential or punitive damages in respect of any claim for breach of contract or any other theory of liability arising out of or related to the transactions contemplated by this Agreement, or any act, omission or event occurring in connection therewith; and each Seller Party hereby waives, releases, and agrees not to sue upon any claim for any such damages, whether or not accrued and whether or not known or suspected to exist in its favor. 59 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT Section 14.8 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS. Section 14.9 CONSENT TO JURISDICTION. EACH SELLER PARTY HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH PERSON PURSUANT TO THIS AGREEMENT AND EACH SELLER PARTY HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR ANY PURCHASER TO BRING PROCEEDINGS AGAINST ANY SELLER PARTY IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY SELLER PARTY AGAINST THE AGENT OR ANY PURCHASER OR ANY AFFILIATE OF THE AGENT OR ANY PURCHASER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH SELLER PARTY PURSUANT TO THIS AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS. Section 14.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY ANY SELLER PARTY PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER. Section 14.11 Integration; Binding Effect; Survival of Terms. (a) This Agreement and each other Transaction Document contain the final and complete integration of all prior expressions by the parties hereto with respect to the subject matter hereof and shall constitute the entire agreement among the parties hereto with respect to the subject matter hereof superseding all prior oral or written understandings. 60 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT (b) This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns (including any trustee in bankruptcy). This Agreement shall create and constitute the continuing obligations of the parties hereto in accordance with its terms and shall remain in full force and effect until terminated in accordance with its terms; provided, however, that the rights and remedies with respect to (i) any breach of any representation and warranty made by any Seller Party pursuant to Article V, (ii) the indemnification and payment provisions of Article X, and Sections 14.5 and 14.6 shall be continuing and shall survive any termination of this Agreement. Section 14.12 Counterparts; Severability; Section References. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same Agreement. Any provisions of this Agreement that are prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Unless otherwise expressly indicated, all references herein to "Article," "Section," "Schedule" or "Exhibit" shall mean articles and sections of, and schedules and exhibits to, this Agreement. Section 14.13 Bank One Roles. Each of the Purchasers acknowledges that Bank One acts, or may in the future act, (i) as administrative agent for the Bank One Company or any Financial Institution in the Bank One Company's Purchaser Group, (ii) as issuing and paying agent for certain Commercial Paper, (iii) to provide credit or liquidity enhancement for the timely payment for certain Commercial Paper and (iv) to provide other services from time to time for the Bank One Company or any Financial Institution in the Bank One Company's Purchaser Group (collectively, the "Bank One Roles"). Without limiting the generality of this Section 14.13, each Purchaser hereby acknowledges and consents to any and all Bank One Roles and agrees that in connection with any Bank One Role, Bank One may take, or refrain from taking, any action that it, in its discretion, deems appropriate, including, without limitation, in its role as administrative agent for the Bank One Company. Section 14.14 Characterization. (a) It is the intention of the parties hereto that each purchase hereunder shall constitute and be treated as an absolute and irrevocable sale, which purchase shall provide the applicable Purchaser with the full benefits of ownership of the applicable Purchaser Interest. Except as specifically provided in this Agreement, each sale of a Purchaser Interest hereunder is made without recourse to any Seller; provided, however, that (i) each Seller shall be liable to each Purchaser and the Agent for all representations, warranties, covenants and indemnities made by such Seller pursuant to the terms of 61 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT this Agreement, and (ii) such sale does not constitute and is not intended to result in an assumption by any Purchaser or the Agent or any assignee thereof of any obligation of any Seller or any Originator or any other Person arising in connection with the Receivables, the Related Security, or the related Writings or Contracts, or any other obligations of any Seller or any Originator. (b) In addition to any ownership interest that the Agent may from time to time acquire pursuant hereto, each Seller hereby grants to the Agent for the ratable benefit of the Purchasers a valid and perfected security interest in all of such Seller's right, title and interest in, to and under all Receivables now existing or hereafter arising, the Collections, each Lock-Box, each Collection Account, all Related Security, all other rights and payments relating to such Receivables, and all proceeds of any thereof prior to all other liens on and security interests therein to secure the prompt and complete payment of the Aggregate Unpaids. The Agent and the Purchasers shall have, in addition to the rights and remedies that they may have under this Agreement, all other rights and remedies provided to a secured creditor under the UCC and other applicable law, which rights and remedies shall be cumulative. Section 14.15 Withholding. Any Purchaser that is not incorporated under the laws of the United States of America, or a state thereof, agrees to deliver to the Agent (with copies to Seller) two duly completed copies of United States Internal Revenue Service Forms W-8BEN or W-8ECI, certifying in either case that such Purchaser is entitled to receive payments under this Agreement without deduction or withholding of any United States federal income taxes. Section 14.16 Assignment of Interests under the Original Agreement. In furtherance of, and without limiting any other provision of, this Agreement and the transactions contemplated hereby, the parties hereto hereby effect the following assignments and assumptions: (a) Assignment to the Rabo Company. Before 12:00 noon (Chicago time) on the date hereof, the Rabo Company shall pay to the CL Company, in immediately available funds, and the CL Company shall have received, an amount equal to $60,500,000.00, representing 40% of the outstanding Capital of the CL Company's Purchaser Interests (such amount, being hereinafter referred to as the "Rabo Capital"); whereupon, the CL Company shall be deemed to have sold, transferred and assigned to the Rabo Company, without recourse, representation or warranty, and the Rabo Company shall be deemed to have hereby irrevocably taken, received and assumed from the CL Company, the Rabo Capital and all related rights and obligations hereunder, under the Original Agreement and under the other Transaction Documents. 62 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT (b) Assignment to the Wachovia Company. Before 12:00 noon (Chicago time) on the date hereof, the Wachovia Company shall pay to the Bank One Company, in immediately available funds, and the Bank One Company shall have received, an amount equal to $30,250,000.00, representing 20% of the outstanding Capital of the Bank One Company's Purchaser Interests (such amount, being hereinafter referred to as the "First Wachovia Capital"); whereupon, the Bank One Company shall be deemed to have sold, transferred and assigned to the Wachovia Company, without recourse, representation or warranty, and the Wachovia Company shall be deemed to have hereby irrevocably taken, received and assumed from the Bank One Company, the First Wachovia Capital and all related rights and obligations hereunder, under the Original Agreement and under the other Transaction Documents. Before 12:00 noon (Chicago time) on the date hereof, the Wachovia Company shall pay to the CL Company, in immediately available funds, and the CL Company shall have received, an amount equal to $30,250,000, representing 20% of the outstanding Capital of the CL Company's Purchaser Interests (such amount, being hereinafter referred to as the "Second Wachovia Capital"); whereupon, the CL Company shall be deemed to have sold, transferred and assigned to the Wachovia Company, without recourse, representation or warranty, and the Wachovia Company shall be deemed to have hereby irrevocably taken, received and assumed from the CL Company, the Second Wachovia Capital and all related rights and obligations hereunder, under the Original Agreement and under the other Transaction Documents. (c) Assignment to Rabobank. On the date hereof, Bank One shall be deemed to have hereby transferred and assigned to Rabobank, without recourse, representation or warranty, and Rabobank shall be deemed to have hereby irrevocably taken, received and assumed from Bank One, 10% of Bank One's Commitment under the Original Agreement representing $20,400,000.00 and all rights and obligations associated therewith (including, without limitation, the rights and obligations of a Financial Institution) under the terms hereof and of the Original Agreement, including, without limitation, Bank One's future funding obligations under Article I of the Original Agreement; provided that Rabobank shall be the Rabo Company's Related Financial Institution and not the Bank One Company's Related Financial Institution; and provided, further, that following such assignment the Commitment of Rabobank and the Commitment of Bank One shall be in the applicable amount set forth on Schedule A. On the date hereof, CLNY shall be deemed to have hereby transferred and assigned to Rabobank, without recourse, representation or warranty, and Rabobank shall be deemed to have hereby irrevocably taken, received and assumed from CLNY, 10% of CLNY's Commitment under the Original Agreement representing $10,200,000.00 and all rights and obligations associated therewith (including, without limitation, the rights and obligations of a Financial Institution) under the terms hereof and of the Original Agreement, including, without limitation, CLNY's future funding obligations under Article I of the Original Agreement; provided that Rabobank shall be the Rabo Company's Related Financial Institution and not the CLNY Company's Related 63 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT Financial Institution; and provided, further, that following such assignment the Commitment of Rabobank and the Commitment of CLNY shall be in the applicable amount set forth on Schedule A. On the date hereof, Credit Ag shall be deemed to have hereby transferred and assigned to Rabobank, without recourse, representation or warranty, and Rabobank shall be deemed to have hereby irrevocably taken, received and assumed from Credit Ag, 50% of Credit Ag's Commitment under the Original Agreement representing $51,000,000 and all rights and obligations associated therewith (including, without limitation, the rights and obligations of a Financial Institution) under the terms hereof and of the Original Agreement, including, without limitation, Credit Ag's future funding obligations under Article I of the Original Agreement; provided that Rabobank shall be the Rabo Company's Related Financial Institution and not the CLNY Company's Related Financial Institution; and provided, further, that following such assignment the Commitment of Rabobank shall be in the applicable amount set forth on Schedule A and the Commitment of Credit Ag shall be $0. (d) Assignment to Wachovia. On the date hereof, Bank One shall be deemed to have hereby transferred and assigned to Wachovia, without recourse, representation or warranty, and Wachovia shall be deemed to have hereby irrevocably taken, received and assumed from Bank One, 10% of Bank One's Commitment under the Original Agreement representing $20,400,000.00 and all rights and obligations associated therewith (including, without limitation, the rights and obligations of a Financial Institution) under the terms hereof and of the Original Agreement, including, without limitation, Bank One's future funding obligations under Article I of the Original Agreement; provided that Wachovia shall be the Wachovia Company's Related Financial Institution and not the Bank One Company's Related Financial Institution; and provided, further, that following such assignment the Commitment of Wachovia and the Commitment of Bank One shall be in the applicable amount set forth on Schedule A. On the date hereof, CLNY shall be deemed to have hereby transferred and assigned to Wachovia, without recourse, representation or warranty, and Wachovia shall be deemed to have hereby irrevocably taken, received and assumed from CLNY, 10% of CLNY's Commitment under the Original Agreement representing $10,200,000.00 and all rights and obligations associated therewith (including, without limitation, the rights and obligations of a Financial Institution) under the terms hereof and of the Original Agreement, including, without limitation, CLNY's future funding obligations under Article I of the Original Agreement; provided that Wachovia shall be the Wachovia Company's Related Financial Institution and not the CLNY Company's Related Financial Institution; and provided, further, that following such assignment the Commitment of Wachovia and the Commitment of CLNY shall be in the applicable amount set forth on Schedule A. On the date hereof, Credit Ag shall be deemed to have hereby transferred and assigned to Wachovia, without recourse, representation or warranty, and Wachovia shall be deemed to have hereby irrevocably taken, received and assumed from Credit Ag, 50% of Credit Ag's Commitment under the Original Agreement representing $51,000,000 and all 64 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT rights and obligations associated therewith (including, without limitation, the rights and obligations of a Financial Institution) under the terms hereof and of the Original Agreement, including, without limitation, Credit Ag's future funding obligations under Article I of the Original Agreement; provided that Wachovia shall be the Wachovia Company's Related Financial Institution and not the CLNY Company's Related Financial Institution; and provided, further, that following such assignment the commitment of Wachovia shall be in the applicable amount set forth on Schedule A and the Commitment of credit Ag shall be $0. Section 14.17 Confirmation and Ratification of Terms. (a) Upon the effectiveness of this Agreement, each reference to the Original Agreement in any other Transaction Document, and any document, instrument or agreement executed and/or delivered in connection with the Original Agreement or any other Transaction Document, shall mean and be a reference to this Agreement. (b) The other Transaction Documents and all agreements, instruments and documents executed or delivered in connection with the Original Agreement or any other Transaction Document shall each be deemed to be amended to the extent necessary, if any, to give effect to the provisions of this Agreement, as the same may be amended, modified, supplemented or restated from time to time. (c) The effect of this Agreement is to amend and restate the Original Agreement in its entirety, and to the extent that any rights, benefits or provisions in favor of the Agent or any Purchaser existed in the Original Agreement and continue to exist in this Agreement without any written waiver of any such rights, benefits or provisions prior to the date hereof, then such rights, benefits or provisions are acknowledged to be and to continue to be effective from and after June 30, 2000. This Agreement is not a novation. (d) The parties hereto agree and acknowledge that any and all rights, remedies and payment provisions under the Original Agreement, including, without limitation, any and all rights, remedies and payment provisions with respect to (i) any representation and warranty made or deemed to be made pursuant to the Original Agreement, or (ii) any indemnification provision, shall continue and survive the execution and delivery of this Agreement. (e) The parties hereto agree and acknowledge that any and all amounts owing as or for Capital, Yield, CP Costs, fees, expenses or otherwise under or pursuant to the Original Agreement, immediately prior to the effectiveness of this Agreement shall be owing as or for Capital, Yield, CP Costs, fees, expenses or otherwise, respectively, under or pursuant to this Agreement. 65 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT Section 14.18 Excess Funds. Each of the Sellers, each Servicer, each Purchaser and the Agent agrees that any Company shall be liable for any claims that such party may have against such Company only to the extent that such Company has funds in excess of those funds necessary to pay matured and maturing Commercial Paper of such Company and to the extent such excess funds are insufficient to satisfy the obligations of such Company hereunder, such Company shall have no liability with respect to any amount of such obligations remaining unpaid and such unpaid amount shall not constitute a claim against such Company. Any and all claims against any Company shall be subordinate to the claims against such Company of the holders of such Company's Commercial Paper and any Person providing liquidity support to such Company. Section 14.19 Administrative Seller. Each Seller hereby irrevocably appoints Dairy Group as its agent and attorney-in-fact (the "Administrative Seller") which appointment shall remain in full force and effect unless and until the Agent shall have received prior written notice signed by each of the Sellers that such appointment has been revoked and that another Seller has been appointed the Administrative Seller. Each Seller hereby irrevocably appoints and authorizes the Administrative Seller (i) to provide the Agent with all Purchase Notices for the benefit of any Seller and all other notices and instructions under this Agreement, (ii) to receive all notices and instructions from the Agent or any Purchaser hereunder and (iii) to exercise such other powers as are reasonably incidental thereto to carry out the purposes of this Agreement. Section 14.20 Joint and Several. (a) Each of the Sellers is accepting joint and several liability hereunder and under the other Transaction Documents in consideration of the financial accommodations to be provided by the Purchasers under this Agreement, for the mutual benefit, directly and indirectly, of each of the Sellers and in consideration of the undertakings of the other Seller to accept joint and several liability for the Aggregate Unpaids. (b) Each of the Sellers, jointly and severally, hereby irrevocably and unconditionally accepts, not merely as a surety but also as a co-debtor, joint and several liability with the other Seller, with respect to the payment and performance of all of the Aggregate Unpaids, it being the intention of the parties hereto that all the Aggregate Unpaids shall be the joint and several obligations of each of the Sellers without preferences or distinction between them. (c) Except as otherwise expressly provided in this Agreement, each Seller hereby waives notice of acceptance of its joint and several liability, notice of the occurrence of any Amortization Event or Potential Amortization Event, or of any demand 66 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT for any payment under this Agreement, notice of any action at any time taken or omitted by the Agent or any Purchaser under or in respect of the Aggregate Unpaids, any requirement of diligence or to mitigate damages and, generally, to the extent permitted by applicable law, all demands, notices and other formalities of every kind in connection with this Agreement (except as otherwise provided in this Agreement). Each Seller hereby assents to, and waives notice of, any extension or postponement of the time for the payment of any of the Aggregate Unpaids, the acceptance of any payment of any of the Aggregate Unpaids, the acceptance of any partial payment thereon, any waiver, consent or other action or acquiescence by the Agent or any Purchaser at any time or times in respect of any default by any Seller in the performance or satisfaction of any term, covenant, condition or provision of this Agreement, any and all other indulgences whatsoever by the Agent or any Purchaser in respect of any of the Aggregate Unpaids, and the taking, addition, substitution or release, in whole or in part, at any time or times, of any security for any of the Aggregate Unpaids or the addition, substitution or release, in whole or in part, of any Seller. Without limiting the generality of the foregoing, each Seller assents to any other action or delay in acting or failure to act on the part of the Agent or any Purchaser with respect to the failure by any Seller to comply with any of its respective obligations, it being the intention of each Seller that, so long as any of the Aggregate Unpaids hereunder remain unsatisfied, the obligations of such Seller under this Section 14.19 shall not be discharged except by performance and then only to the extent of such performance. The obligations of each Seller under this Section 14.19 shall not be diminished or rendered unenforceable by any winding up, reorganization, arrangement, liquidation, reconstruction or similar proceeding with respect to any Seller or the Agent or any Purchaser. (d) Each Seller represents and warrants to the Agent and the Purchasers that such Seller is currently informed of the financial condition of the other Seller and of all other circumstances which a diligent inquiry would reveal and which bear upon the risk of nonpayment of the Aggregate Unpaids. Each Seller hereby covenants that such Seller will continue to keep informed of the other Seller's financial condition, the financial condition of other guarantors, if any, and of all other circumstances which bear upon the risk of nonpayment or nonperformance of the Aggregate Unpaids. (e) Each Seller agrees that the Agent and the Purchasers may, in their sole and absolute discretion, select the Receivables of any one of the Sellers for sale or application to the Aggregate Unpaids, without regard to the ownership of such Receivables, and shall not be required to make such selection ratably from the Receivables owned by any of the Sellers. (f) The provisions of this Section 14.19 are made for the benefit of the Agent, the Purchasers and their respective successors and assigns, and may be enforced by it or them from time to time against any or all of the Sellers as often as occasion therefor 67 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT may arise and without requirement on the part of the Agent, any Purchasers or any such successor or assign first to marshal any of its or their claims or to exercise any of its or their rights against any of the other Sellers or to exhaust any remedies available to it or them against any of the other Sellers or to resort to any other source or means of obtaining payment of any of the Aggregate Unpaids hereunder or to elect any other remedy. The provisions of this Section 14.19 shall remain in effect until all of the Aggregate Unpaids shall have been paid in full or otherwise fully satisfied. If at any time, any payment, or any part thereof, made in respect of any of the Aggregate Unpaids, is rescinded or must otherwise be restored or returned by the Agent or any Purchaser upon the insolvency, bankruptcy or reorganization of any of the Sellers, or otherwise, the provisions of this Section 14.19 will forthwith be reinstated in effect, as though such payment had not been made. (g) Each Seller hereby agrees that it will not enforce any of its rights of contribution or subrogation against the other Seller with respect to any liability incurred by it hereunder or under any of the other Transaction Documents, any payments made by it to the Agent or any Purchaser with respect to any of the Aggregate Unpaids or any collateral security therefor until such time as all of the Aggregate Unpaids have been paid in full in cash. Any claim which any Seller may have against any other Seller with respect to any payments to the Agent or any Purchaser hereunder or under any other Transaction Documents are hereby expressly made subordinate and junior in right of payment, without limitation as to any increases in the Aggregate Unpaids arising hereunder or thereunder, to the prior payment in full in cash of the Aggregate Unpaids and, in the event of any insolvency, bankruptcy, receivership, liquidation, reorganization or other similar proceeding under the laws of any jurisdiction relating to any Seller, its debts or its assets, whether voluntary or involuntary, all such Aggregate Unpaids shall be paid in full in cash before any payment or distribution of any character, whether in cash, securities or other property, shall be made to any other Seller therefor. (h) Each of the Sellers hereby agrees that, after the occurrence and during the continuance of any Amortization Event or Potential Amortization Event, the payment of any amounts due with respect to the indebtedness owing by any Seller to any other Seller is hereby subordinated to the prior payment in full in cash of the Aggregate Unpaids. Each Seller hereby agrees that after the occurrence and during the continuance of any Amortization Event or Potential Amortization Event, such Seller will not demand, sue for or otherwise attempt to collect any indebtedness of any other Seller owing to such Seller until the Aggregate Unpaids shall have been paid in full in cash. If, notwithstanding the foregoing sentence, such Seller shall collect, enforce or receive any amounts in respect of such indebtedness, such amounts shall be collected, enforced and received by such Seller as trustee for the Agent and the Purchasers, and such Seller shall deliver any such amounts to the Agent for application to the Aggregate Unpaids in accordance with Article II. 68 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT (SIGNATURE PAGES FOLLOW) 69 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered by their duly authorized officers as of the date hereof. DAIRY GROUP RECEIVABLES, L.P., as Seller By: Dairy Group Receivables GP, LLC, Its: General Partner By: /s/ CORY OLSON ------------------------- Name: Cory Olson Title: Authorized Signatory DAIRY GROUP RECEIVABLES II, L.P., as Seller By: Dairy Group Receivables GP II, LLC, Its: General Partner By: /s/ CORY OLSON ------------------------- Name: Cory Olson Title: Authorized Signatory SPECIALTY GROUP RECEIVABLES, L.P., as Seller By: Specialty Group Receivables GP, LLC, Its: General Partner By: /s/ CORY OLSON ------------------------- Name: Cory Olson Title: Authorized Signatory S-1 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT FALCON ASSET SECURITIZATION CORPORATION, as a Company By: /s/ SHERRI GERNER ------------------------- Name: Sherri Gerner Title: Authorized Signer BANK ONE, NA (MAIN OFFICE CHICAGO), as a Financial Institution and as Agent By: /s/ SHERRI GERNER ------------------------- Name: Sherri Gerner Title: Director, Capital Markets S-2 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT ATLANTIC ASSET SECURITIZATION CORP., as a Company By: Credit Lyonnais New York Branch Its: Attorney-In-Fact By: /s/ ANTHONY M. BROWN JR. ------------------------ Name: Anthony M. Brown Jr. Title: Vice President CREDIT LYONNAIS NEW YORK BRANCH, as a Financial Institution By: /s/ ANTHONY M. BROWN JR. ------------------------ Name: Anthony M. Brown Jr. Title: Vice President S-3 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT NIEUW AMSTERDAM RECEIVABLES CORPORATION, as a Company By: /s/ TONY WONG ------------------------- Name: Tony Wong Title: Vice President COOPERATIEVE CENTRALE RAIFFEISEN - BOERENLEENBANK B.A. "Rabobank International", New York Branch, as a Financial Institution By: /s/ WING NG ------------------------- Name: Wing Ng Title: Executive Director By: /s/ BRETT DELFINO ------------------------- Name: Brett Delfino Title: Executive Director S-4 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT BLUE RIDGE ASSET FUNDING CORPORATION, as a Company By: Wachovia Capital Markets, LLC Its: Attorney-In-Fact By: /s/ DOUGLAS R. WILSON SR. ------------------------- Name: Douglas R. Wilson Sr. Title: Vice President WACHOVIA BANK, NATIONAL ASSOCIATION, as a Financial Institution By: /s/ RODNEY SANDERS ------------------------- Name: Rodney Sanders Title: Director S-5 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT CREDIT AGRICOLE INDOSUEZ, as a Financial Institution By: /s/ ERIC ROBISON ------------------------- Name: Eric Robison Title: Vice President By: /s/ ALAN SCHMELZER ------------------------- Name: Alan Schmelzer Title: Vice President S-6 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT ALTA-DENA CERTIFIED DAIRY, INC., as a Servicer BARBER MILK, INC., as a Servicer BERKELEY FARMS, INC., as a Servicer BROUGHTON FOODS, LLC, as a Servicer COUNTRY DELITE FARMS, LLC, as a Servicer COUNTRY FRESH, LLC, as a Servicer CREAMLAND DAIRIES, INC., as a Servicer DAIRY FRESH, LLC, as a Servicer DEAN DAIRY PRODUCTS COMPANY, as a Servicer DEAN FOODS COMPANY OF CALIFORNIA, INC., as a Servicer DEAN FOODS COMPANY OF INDIANA, INC., as a Servicer DEAN FOODS NORTH CENTRAL, INC., as a Servicer DEAN MILK COMPANY, INC., as a Servicer DEAN NORTHEAST, LLC (f/k/a SUIZA GTL, LLC), as a Servicer DEAN SOCAL, LLC, as a Servicer DEAN SPECIALTY FOODS GROUP, LLC, as a Servicer GANDY'S DAIRIES, INC., as a Servicer LAND-O-SUN DAIRIES, LLC, as a Servicer LIBERTY DAIRY COMPANY, as a Servicer LOUIS TRAUTH DAIRY, LLC, as a Servicer MAYFIELD DAIRY FARMS, INC., as a Servicer MCARTHUR DAIRY, INC., as a Servicer MEADOW BROOK DAIRY COMPANY, as a Servicer MIDWEST ICE CREAM COMPANY, as a Servicer MODEL DAIRY, LLC, as a Servicer MORNINGSTAR FOODS INC., as a Servicer PURITY DAIRIES, INCORPORATED, as a Servicer REITER DAIRY OF AKRON, INC., as a Servicer By: /s/ CORY OLSON ------------------------- Name: Cory Olson Title: Authorized Signatory of each of the above named Servicers S-7 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT ROBINSON DAIRY, LLC, as a Servicer SCHENKEL'S ALL-STAR DAIRY, LLC, as a Servicer SHENANDOAH'S PRIDE, LLC, as a Servicer SULPHUR SPRINGS CULTURED SPECIALTIES, LLC, as a Servicer T. G. LEE FOODS, INC., as a Servicer TUSCAN/LEHIGH DAIRIES, INC., as a Servicer VERIFINE DAIRY PRODUCTS CORPORATION OF SHEBOYGAN, INC., as a Servicer By: /s/ CORY OLSON ------------------------- Name: Cory Olson Title: Authorized Signatory of each of the above named Servicers SOUTHERN FOODS GROUP, L.P., as a Servicer By: SFG Management Limited Liability Company Its: General Partner By: /s/ CORY OLSON ------------------------- Name: Cory Olson Title: Authorized Signatory S-8 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT EXHIBIT I DEFINITIONS As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined): "Additional Servicers" means each of GTL and Tuscan Dairies. "Administrative Seller" has the meaning set forth in Section 14.18. "Adverse Claim" means a lien, security interest, charge or encumbrance, or other right or claim in, of or on any Person's assets or properties in favor of any other Person. "Affected Financial Institution" has the meaning specified in Section 12.1(c). "Affiliate" means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with, such Person or any Subsidiary of such Person. A Person shall be deemed to control another Person if the controlling Person owns 10% or more of any class of voting securities of the controlled Person or possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of the controlled Person, whether through ownership of stock, by contract or otherwise. "Agent" has the meaning set forth in the preamble to this Agreement. "Aggregate Capital" means, on any date of determination, the aggregate amount of Capital of all Purchaser Interests outstanding on such date. "Aggregate Reduction" has the meaning specified in Section 1.3. "Aggregate Reserves" means, on any date of determination, the sum of the Loss Reserve, the Dilution Reserve, and the Yield and Servicer Reserve. "Aggregate Unpaids" means, at any time, an amount equal to the sum of all, Aggregate Capital and all other unpaid Obligations (whether due or accrued) at such time. Exh. I-1 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT "Agreement" means this Third Amended and Restated Receivables Purchase Agreement, as it may be amended, restated, supplemented or otherwise modified and in effect from time to time. "Agreement of General Partner" means that certain agreement dated as of June 30, 2000 between the Agent for the benefit of the Purchasers and Dairy Group Receivables GP, LLC (f/k/a Suiza Receivables GP, LLC), as general partner of Dairy Group. "Amortization Date" means the earliest to occur of (i) the day on which any of the conditions precedent set forth in Section 6.2 are not satisfied, (ii) the Business Day immediately prior to the occurrence of an Amortization Event set forth in Section 9.1(d)(ii), (iii) the Business Day specified in a written notice from the Agent following the occurrence of any other Amortization Event, and (iv) the date that is 15 Business Days after the Agent's receipt of written notice from the Administrative Seller that it wishes to terminate the facility evidenced by this Agreement. "Amortization Event" has the meaning specified in Article IX. "Applicable Percentage" means, as of any date of determination, the Applicable Percentage, under and as defined in the Dean Credit Agreement (as in effect from time to time notwithstanding any language to the contrary contained in the definition of "Dean Credit Agreement"), applicable to Revolving-1 Loans under and as defined in the Dean Credit Agreement (as in effect from time to time notwithstanding any language to the contrary contained in the definition of "Dean Credit Agreement"); provided, that, as of any date of determination that the Dean Credit Agreement is not in effect (whether by reason of termination or otherwise), the Applicable Percentage hereunder shall be the Applicable Percentage under and as defined in the Dean Credit Agreement as in effect immediately prior to such ineffectiveness (notwithstanding any language to the contrary contained in the definition of "Dean Credit Agreement") applicable to Revolving-1 Loans under and as defined in the Dean Credit Agreement as in effect immediately prior to such ineffectiveness (notwithstanding any language to the contrary contained in the definition of "Dean Credit Agreement"). "Assignment Agreement" has the meaning set forth in Section 12.1(b). "Authorized Officer" means, with respect to any Person, its president, corporate controller, treasurer or chief financial officer. "Bank One" means Bank One, NA (Main Office Chicago) in its individual capacity and its successors. Exh. I-2 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT "Bank One Company" means Falcon Asset Securitization Corporation, a Delaware Corporation, together with its successors and assigns. "Broken Funding Costs" means for any Purchaser Interest that: (i) has its Capital reduced (A) without compliance by the Administrative Seller with the notice requirements hereunder or (B) in the case of any Purchaser Interest of the CL Company or any Purchaser Interest of any Pool Company other than any Purchaser Interest funded substantially with Pooled Commercial Paper, on any date other than a Settlement Date hereunder or (ii) does not become subject to an Aggregate Reduction following the delivery of any Reduction Notice or (iii) is assigned or funded pursuant to a Funding Agreement or otherwise transferred or terminated prior to the date on which it was originally scheduled to end; an amount equal to the excess, if any, of (A) the CP Costs or Yield (as applicable) that would have accrued during the remainder of the Tranche Periods or the tranche periods for Commercial Paper determined by the applicable Purchaser to relate to such Purchaser Interest (as applicable) subsequent to the date of such reduction, assignment or termination (or in respect of clause (ii) above, the date such Aggregate Reduction was designated to occur pursuant to the Reduction Notice) of the Capital of such Purchaser Interest if such reduction, assignment or termination had not occurred or such Reduction Notice had not been delivered, over (B) the sum of (x) to the extent all or a portion of such Capital is allocated to another Purchaser Interest, the amount of CP Costs or Yield actually accrued during the remainder of such period on such Capital for the new Purchaser Interest, and (y) to the extent such Capital is not allocated to another Purchaser Interest, the income, if any, actually received net of any costs of redeployment of funds during the remainder of such period by the holder of such Purchaser Interest from investing the portion of such Capital not so allocated. In the event that the amount referred to in clause (B) exceeds the amount referred to in clause (A), the relevant Purchaser or Purchasers agree to pay to the Sellers the amount of such excess. All Broken Funding Costs shall be due and payable hereunder upon demand. "Business Day" means any day on which banks are not authorized or required to close in New York, New York or Chicago, Illinois or any other city specified in writing by a Purchaser to the Agent, each other Purchaser and the Administrative Seller, and The Depository Trust Company of New York is open for business, and, if the applicable Business Day relates to any computation or payment to be made with respect to the LIBO Rate, any day on which dealings in dollar deposits are carried on in the London interbank market. "Capital" of any Purchaser Interest means, at any time, (A) the Purchase Price of such Purchaser Interest, minus (B) the sum of the aggregate amount of Collections and other payments received by the Agent or the applicable Purchaser that in each case are applied to reduce such Capital in accordance with the terms and conditions of this Agreement; Exh. I-3 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT provided that such Capital shall be restored (in accordance with Section 2.5) in the amount of any Collections or other payments so received and applied if at any time the distribution of such Collections or payments are rescinded, returned or refunded for any reason. "Change of Control" means the acquisition by any Person, or two or more Persons acting in concert, of beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934) of 20% or more of the outstanding shares of voting stock or other equity interest of any Seller Party. "Charged-Off Receivable" means a Receivable: (i) as to which the Obligor thereof has taken any action, or suffered any event to occur, of the type described in Section 9.1(d) (as if references to Seller Party therein refer to such Obligor); (ii) as to which the Obligor thereof, if a natural person, is deceased, (iii) that has been written off a Seller's books as uncollectible, (iv) that, consistent with the applicable Originator's or Morningstar's Credit and Collection Policy, would be written off a Seller's books as uncollectible, (v) that has been identified by a Seller as uncollectible or (vi) as to which any payment, or part thereof, remains unpaid for 90 days or more from the original invoice date for such payment. "CL Company" means Atlantic Asset Securitization Corp., a Delaware corporation, together with its successors and assigns. "CLNY" means Credit Lyonnais, New York Branch, a French banking corporation duly licensed under the laws of the State of New York. "Collateral Agent" means Wachovia Bank, National Association (formerly known as First Union National Bank), in its capacity as administrative agent under the Dean Credit Agreement. "Collection Account" means each concentration account, depositary account, lock-box account or similar account in which any collections are collected or deposited and that is listed on Exhibit IV. "Collection Account Agreement" means each agreement substantially in the form of Exhibit VI, or such other form as may be acceptable to the Agent, among the applicable Originator, a Seller, Collection Bank and the Agent. "Collection Bank" means, at any time, any of the banks holding one or more Collection Accounts. Exh. I-4 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT "Collection Notice" means a notice, in substantially the form of Annex A to Exhibit VI, from the Agent to a Collection Bank or any similar or analogous notice from the Agent to a Collection Bank. "Collections" means, with respect to any Receivable, all cash collections and other cash proceeds in respect of such Receivable, including, without limitation, all yield, Finance Charges or other related amounts accruing in respect thereof and all cash proceeds of Related Security with respect to such Receivable. "Commercial Paper" means promissory notes of any Company issued by such Company in the commercial paper market. "Commitment" means, for each Financial Institution, the commitment of such Financial Institution to purchase Purchaser Interests from the Sellers to the extent that the Company in such Financial Institution's Purchaser Group declines to purchase such Purchaser Interest, in an amount not to exceed (i) in the aggregate, the amount set forth opposite such Financial Institution's name on Schedule A to this Agreement, as such amount may be modified in accordance with the terms hereof (including, without limitation, any termination of Commitments pursuant to Section 4.6 hereof) and (ii) with respect to any individual purchase hereunder, its Pro Rata Share of the Purchase Price therefor. "Company" has the meaning set forth in the preamble to this Agreement. "Company Costs" means: (i) for any Purchaser Interest purchased by the Bank One Company and funded substantially with Pooled Commercial Paper, for any day, the sum of (i) discount or yield accrued on Pooled Commercial Paper on such day, plus (ii) any and all accrued commissions in respect of placement agents and Commercial Paper dealers, and issuing and paying agent fees incurred, in respect of such Pooled Commercial Paper for such day, plus (iii) other costs associated with funding small or odd-lot amounts with respect to all receivable purchase facilities which are funded by Pooled Commercial Paper for such day, minus (iv) any accrual of income net of expenses received on such day from investment of collections received under all receivable purchase facilities funded substantially with Pooled Commercial Paper, minus (v) any payment received on such day net of expenses in respect of broken funding costs related to the prepayment of any purchaser interest of the Bank One Company pursuant to the terms of any receivable purchase facilities funded substantially with Pooled Commercial Paper. In addition to the foregoing costs, if the Administrative Seller shall request any Incremental Purchase during any period of time determined by the Bank One Company (or by the Bank One Company's agent on its behalf) in its sole discretion to result in incrementally higher Company Costs with respect to the Exh. I-5 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT Bank One Company applicable to such Incremental Purchase by the Bank One Company, the Capital associated with any such Incremental Purchase shall, during such period, be deemed to be funded by the Bank One Company in a special pool (which may include capital associated with other receivable purchase facilities) for purposes of determining such additional Company Costs applicable only to such special pool and charged each day during such period against such Capital. Each Purchaser Interest funded substantially with Pooled Commercial Paper will accrue Company Costs with respect to the Bank One Company each day on a pro rata basis, based upon the percentage share the Capital in respect of such Purchaser Interest represents in relation to all assets held by the Bank One Company and funded substantially with Pooled Commercial Paper. For each Settlement Period, the Bank One Company shall calculate its aggregate Company Costs for such Settlement Period and report such Company Costs to the Administrative Seller pursuant to Section 3.3 of this Agreement; (ii) for any Purchaser Interest purchased by any Pool Company other than any Purchaser Interest funded substantially with Pooled Commercial Paper, an amount equal to the Capital of such Purchaser Interest multiplied by a per annum rate equivalent to the "weighted average cost" (as defined below) related to the issuance of Commercial Paper of such Pool Company that is allocated, in whole or in part, to fund such Pool Company's Pro Rata Share of Aggregate Capital (and which may also be allocated in part to the funding of other assets of such Pool Company); provided, however, that if any component of such rate is a discount rate, in calculating such rate for such Pool Company's Pro Rata Share of the Aggregate Capital for such date, the rate used to calculate such component of such rate shall be a rate resulting from converting such discount rate to an interest bearing equivalent rate per annum. As used in this definition, the "weighted average cost" shall consist of (x) the actual interest rate paid to purchasers of Commercial Paper issued by such Pool Company, (y) the costs associated with the issuance of such Commercial Paper (including dealer fees and commissions to placement agents), and (z) interest on other borrowing or funding sources by such Pool Company, including to fund small or odd dollar amounts that are not easily accommodated in the commercial paper market; (iii) for any Purchaser Interest purchased by the CL Company, for any CP (Tranche) Accrual Period, an amount equal to the Capital of such Purchaser Interest multiplied by a rate per annum equal to the sum of (i) the rate or, if more than one rate, the weighted average of the rates, determined by converting to an interest-bearing equivalent rate per annum the discount rate (or rates) at which Commercial Paper of the CL Company having a term equal to such CP (Tranche) Accrual Period and to be issued to fund or to maintain such Purchaser Interest by the CL Company (including, without limitation, the related Capital and accrued and unpaid interest thereon) may be sold by any placement agent or commercial paper dealer selected by CLNY (or other agent of the CL Company) for the CL Company, as agreed between each such placement agent or dealer and CLNY (or Exh. I-6 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT such other agent); plus, (ii) the commissions and charges charged by such placement agent or dealer with respect to such Commercial Paper of the CL Company, expressed as a percentage of such face amount, converted to an interest-bearing equivalent rate per annum; (iv) for any Purchaser Interest purchased by the Rabo Company and funded substantially with Pooled Commercial Paper, for any day, an amount equal to the Capital of such Purchaser Interest multiplied by a rate per annum equal to the weighted average of the per annum rates paid or payable by the Rabo Company from time to time as interest on Commercial Paper (by means of interest rate hedges or otherwise and taking into consideration any incremental carrying costs associated with Commercial Paper issued by the Rabo Company maturing on dates other than those certain dates on which the Rabo Company is to receive funds) in respect of Commercial Paper issued by the Rabo Company that are allocated, in whole or in part, by Rabobank (or other agent of the Rabo Company) on behalf of the Rabo Company to fund or maintain the Capital of the Rabo Company during such period, as determined by Rabobank (or other agent of the Rabo Company) on behalf of the Rabo Company, which rates shall reflect and give effect to (i) the commissions of placement agents and dealers in respect of such Commercial Paper, to the extent such commissions are reasonably allocated, in whole or in part, to such Commercial Paper by Rabobank (or other agent of the Rabo Company) on behalf of the Rabo Company and (ii) other borrowings by the Rabo Company, including, without limitation, borrowings to fund small or odd dollar amounts that are not easily accommodated in the commercial paper market; provided that if any component of such rate is a discount rate, in calculating the Company Costs, Rabobank (or other agent of the Rabo Company) shall for such component use the rate resulting from converting such discount rate to an interest bearing equivalent rate per annum. In addition to the foregoing costs, if the Administrative Seller shall request any Purchaser Interest during any period of time determined by the Rabo Company in its sole discretion to result in incrementally higher Company Costs with respect to the Rabo Company applicable to such Purchaser Interest, the Capital associated with any such Purchaser Interest shall, during such period, be deemed to be funded by the Rabo Company in a special pool (which may include capital associated with other receivable purchase or financing facilities) for purposes of determining such additional Company Costs applicable only to such special pool and charged each day during such period against such Capital. Each Purchaser Interest funded substantially with Pooled Commercial Paper will accrue Company Costs with respect to the Rabo Company each day on a pro rata basis, based upon the percentage share the Capital in respect of such Purchaser Interest represents in relation to all assets held by the Rabo Company and funded substantially with Pooled Commercial Paper. For each Settlement Period, the Rabo Company shall calculate its aggregate Company Costs for such Settlement Period and report such Company Costs to the Administrative Seller pursuant to Section 3.3 of this Agreement; and Exh. I-7 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT (v) for any Purchaser Interest purchased by the Wachovia Company and funded substantially with Pooled Commercial Paper, for any day, the sum of (i) discount or yield accrued on Pooled Commercial Paper on such day, plus (ii) any and all accrued commissions in respect of placement agents and Commercial Paper dealers, and issuing and paying agent fees incurred, in respect of such Pooled Commercial Paper for such day, plus (iii) other costs associated with funding small or odd-lot amounts with respect to all receivable purchase facilities which are funded by Pooled Commercial Paper for such day, minus (iv) any accrual of income net of expenses received on such day from investment of collections received under all receivable purchase facilities funded substantially with Pooled Commercial Paper, minus (v) any payment received on such day net of expenses in respect of broken funding costs related to the prepayment of any purchaser interest of the Wachovia Company pursuant to the terms of any receivable purchase facilities funded substantially with Pooled Commercial Paper. In addition to the foregoing costs, if the Administrative Seller shall request any Incremental Purchase during any period of time determined by the Wachovia Company (or by the Wachovia Company's agent on its behalf) in its sole discretion to result in incrementally higher Company Costs with respect to the Wachovia Company applicable to such Incremental Purchase by the Wachovia Company, the Capital associated with any such Incremental Purchase shall, during such period, be deemed to be funded by the Wachovia Company in a special pool (which may include capital associated with other receivable purchase facilities) for purposes of determining such additional Company Costs applicable only to such special pool and charged each day during such period against such Capital. Each Purchaser Interest funded substantially with Pooled Commercial Paper will accrue Company Costs with respect to the Wachovia Company each day on a pro rata basis, based upon the percentage share the Capital in respect of such Purchaser Interest represents in relation to all assets held by the Wachovia Company and funded substantially with Pooled Commercial Paper. For each Settlement Period, the Wachovia Company shall calculate its aggregate Company Costs for such Settlement Period and report such Company Costs to the Administrative Seller pursuant to Section 3.3 of this Agreement. "Company Purchase Limit" means, for each Company, the purchase limit of such Company with respect to the purchase of Purchaser Interests from the Sellers, in an amount not to exceed (i) in the aggregate, the amount set forth opposite such Company's name on Schedule A to this Agreement, as such amount may be modified in accordance with the terms hereof (including Section 4.6(b)) and (ii) with respect to any individual purchase hereunder, its Pro Rata Share of the Purchase Price therefor. "Concentration Limit" means, at any time, (a) for any Obligor other than an Obligor for which a Special Concentration Limit has been designated, 3% of the aggregate Outstanding Balance of all Eligible Receivables, or (b) for Wal-Mart Stores, Inc., 15%, for Albertson's Inc., 7%, and for any other Obligor designated by Agent, such other percentage Exh. I-8 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT as Agent may designate (each of the foregoing, a "Special Concentration Limit"); provided, that in the case of an Obligor and any Affiliate of such Obligor, the Concentration Limit shall be calculated as if such Obligor and such Affiliate are one Obligor; and provided, further, that the Required Purchasers may, upon not less than five Business Days' notice to Seller, cancel any Special Concentration Limit. "Consent Notice" has the meaning set forth in Section 4.6(a). "Consent Period" has the meaning set forth in Section 4.6(a). "Contingent Obligation" of a Person means any agreement, undertaking or arrangement by which such Person assumes, guarantees, endorses, contingently agrees to purchase or provide funds for the payment of, or otherwise becomes or is contingently liable upon, the obligation or liability of any other Person, or agrees to maintain the net worth or working capital or other financial condition of any other Person, or otherwise assures any creditor of such other Person against loss, including, without limitation, any comfort letter, operating agreement, take-or-pay contract or application for a letter of credit. "Contract" means, with respect to any Receivable, any and all written or oral agreements pursuant to which such Receivable arises or that evidences such Receivable. "Country Fresh" means Country Fresh, LLC, a Michigan limited liability company. "CP (Pool) Accrual Period" means, with respect to any Purchaser Interest held by any Pool Company and funded substantially with Pooled Commercial Paper, each calendar month, provided that the initial CP (Pool) Accrual Period hereunder with respect to the Rabo Company and the Wachovia Company and funded substantially with Pooled Commercial Paper means the period from (and including) the date hereof to (and including) November 30, 2003. "CP (Tranche) Accrual Period" means (i) with respect to any Purchaser Interest held by any Pool Company other than any Purchaser Interest funded substantially with Pooled Commercial Paper, a period of at least 1 day and not to exceed 90 days as selected by Seller pursuant to Section 3.4 and approved by the Agent; and (ii) with respect to any Purchaser Interest held by the CL Company, a period commencing on, and including, the date selected by CLNY (as agent for the CL Company), or the last day of the immediately preceding CP (Tranche) Accrual Period for such Purchaser Interest (whichever is latest) and ending on, but excluding, the date that falls such number of days (of at least one day and not to exceed 90 days) thereafter as CLNY (as agent for the CL Company) shall select (provided that not more than 10 CP (Tranche) Accrual Periods with respect to Purchaser Interests of the CL Company shall be in effect at any one time); provided, however, that (i) Exh. I-9 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT any CP (Tranche) Accrual Period (other than of one day) that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day, (ii) in the case of CP (Tranche) Accrual Periods of one day, (A) the initial CP (Tranche) Accrual Period shall be the day of the related Incremental Purchase; and (B) any subsequently occurring CP (Tranche) Accrual Period that is one day shall, if the immediately preceding CP (Tranche) Accrual Period is more than one day, be the last day of such immediately preceding CP (Tranche) Accrual Period, and if the immediately preceding CP (Tranche) Accrual Period is one day, be the day next following such immediately preceding CP (Tranche) Accrual Period; and (iii) in the case of any CP (Tranche) Accrual Period that commences before the Amortization Date and would otherwise end on a date occurring after the Amortization Date, such CP (Tranche) Accrual Period shall end on the Amortization Date. The duration of each CP (Tranche) Accrual Period that commences after the Amortization Date shall be of such duration as selected by the applicable Company. "CP Costs" means, for each day, the aggregate discount or yield accrued with respect to the Purchaser Interests of each respective Company as determined in accordance with the definition of "Company Costs." "Credit Ag" means Credit Agricole Indosuez, a branch of a French banking corporation. "Credit and Collection Policy" means each Originator's and Morningstar's credit and collection policies and practices relating to Writings, Contracts and Receivables existing on the date hereof with respect to each New Entity and on the Original Closing Date with respect to Morningstar and each other Originator and summarized in Exhibit VIII hereto, as modified from time to time in accordance with this Agreement. "Dean Credit Agreement" means that certain Credit Agreement, dated as of July 31, 2001, by and among Provider, certain Subsidiaries of Provider, the financial institutions party thereto as lenders, Bank One, NA, as syndication agent, Fleet National Bank, Harris Trust and Savings Bank and Suntrust Bank, as co-documentation agents, and Wachovia Bank, National Association (formerly known as First Union National Bank), as administrative agent, as amended by the First Amendment to Credit Agreement, dated as of December 19, 2001, as further amended by the Second Amendment to Credit Agreement, dated as of April 30, 2002, as further amended by the Third Amendment to Credit Agreement, dated as of December 13, 2002, and as further amended by the Fourth Amendment to Credit Agreement, dated as of August 29, 2003, but without giving effect to any further amendment or other modification thereof. "Dean Entity" means each of the entities listed on Schedule C to this Agreement. Exh. I-10 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT "Dean Financial Covenants" means the financial covenants set forth in Section 5.9 of the Dean Credit Agreement. "Dean Receivables Sale Agreement" means the Dean Receivables Sale Agreement, dated as of May 15, 2002 and effective for all purposes as of March 31, 2002, by and among the Dean Entities and Dairy Group II, as amended by Amendment No. 1 thereto, dated as of November 20, 2003, and as the same may be further amended, restated, supplemented or otherwise modified from time to time. "Dean Specialty" means Dean Specialty Foods Group, LLC, a Delaware limited liability company. "Deemed Collections" means the aggregate of all amounts the Sellers shall have been deemed to have received as a Collection of a Receivable. The Sellers shall be deemed to have received a Collection of a Receivable at any time (i) to the extent that the Outstanding Balance of any such Receivable is either (x) reduced as a result of any defective or rejected goods or services, any discount, rebate or any adjustment or otherwise by any Seller (other than cash Collections on account of the Receivables and other than Receivables that, consistent with the applicable Originator's or Morningstar's Credit and Collection Policy, have been written off a Seller's books as uncollectible other than as a result of any of the other conditions or events set forth in this definition) or (y) reduced or canceled as a result of a setoff in respect of any claim by any Person (whether such claim arises out of the same or a related transaction or an unrelated transaction) or (ii) any of the representations or warranties in Article V are no longer true with respect to such Receivable or (iii) the failure of any Contract with respect to such Receivable to create a legal, valid and binding obligation of the related Obligor to pay the Outstanding Balance of the Receivable created thereunder and any accrued interest thereon or (iv) the failure of any Writing to give rise to a valid and enforceable Receivable in the amount of the Outstanding Balance thereof. "Default Fee" means with respect to any amount due and payable by any Seller in respect of any Aggregate Unpaids, an amount equal to interest on any such unpaid Aggregate Unpaids at a rate per annum equal to 2% above the Prime Rate. "Default Ratio" means, as at the end of any calendar month, a percentage equal to (a) the sum of (i) the Outstanding Balance of all Receivables as to which any payment, or part thereof, remains unpaid for 90 days or more from the original invoice date for such payment plus (ii) the Outstanding Balance of all Receivables that were written off each Seller's books as uncollectible during such calendar month, divided by (b) the aggregate Outstanding Balance of all Receivables. Exh. I-11 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT "Defaulted Receivable" means a Receivable as to which any payment, or part thereof, remains unpaid for 90 days or more from the original invoice date for such payment. "Delinquency Ratio" means, for a calendar month, a percentage equal to (a) the Outstanding Balance of all Delinquent Receivables as at the end of such calendar month divided by (b) the Outstanding Balance of all Receivables. "Delinquent Receivable" means a Receivable as to which any payment, or part thereof, remains unpaid for at least 60 days but not more than 90 days from the original invoice date for such payment. "Demand Notes" means each of (i) that certain promissory note, dated as of December 21, 2001, by Dean Foods Company (as successor-in-interest to Suiza Foods Corporation) in favor of Dairy Group, in the maximum principal sum of $21,325,653, as amended, renewed, supplemented or otherwise modified from time to time, (ii) that certain promissory note, dated as of May 15, 2002 and effective for all purposes as of March 31, 2002, by Dean Foods Company in favor of Dairy Group II, in the maximum principal sum of $13,181,876, as amended, renewed, supplemented or otherwise modified from time to time, and (iii) that certain promissory note, dated as of November 20, 2003, by Dean Foods Company in favor of Specialty Group, in the maximum principal sum of $3,000,000, as amended, renewed, supplemented or otherwise modified from time to time. "Dilution Ratio" means, as at the end of any calendar month, a percentage equal to (i) the aggregate amount of all Dilutions arising during such calendar month (other than Rebate/Billbacks) with respect to all Receivables divided by (ii) the aggregate amount of sales by all Originators for the calendar month ending two months prior to such calendar month. "Dilution Reserve" means an amount equal to the result of multiplying the Net Receivables Balance by the greater of (a) 0.10 and (b) the following: ((2 X ED + ((DS-ED) X (DS/ED))) X DHR) + MRA where: ED = the average of the Dilution Ratios for the twelve most recently-ended calendar months. Exh. I-12 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT DS = the highest of the average Dilution Ratios for any two-calendar-month period occurring during the twelve most recently-ended calendar months. DHR = the result of dividing the aggregate amount of all sales by all Originators during the prior one and a half calendar months by the aggregate Outstanding Balance of all Eligible Receivables. MRA = 0.03 until such time as the Servicers deliver a consolidating Monthly Report pursuant to Section 8.5 in form and substance satisfactory to the Agent, and thereafter, 0.00. "Dilutions" means, for each calendar month, the aggregate amount of reductions or cancellations described in clause (i) of the definition of "Deemed Collections" during such month (other than Rebate/Billbacks). "Discount Rate" means, the LIBO Rate or the Prime Rate, as applicable, with respect to each Purchaser Interest of the Financial Institutions. "Eligible Receivable" means, at any time, a Receivable: (i) the Obligor of which (a) if a natural person, is a resident of the United States or, if a corporation or other business organization, is organized under the laws of the United States or any political subdivision thereof and has its chief executive office in the United States; (b) is not an Affiliate of any of the parties hereto; and (c) is not a federal or state government or a federal or state governmental subdivision or agency, except as permitted by clause (xxi) of this definition, (ii) the Obligor of which is not a Top Twenty-Five Obligor or, in the case of any Receivable the Obligor of which is a Top Twenty-Five Obligor, is not the Obligor of Defaulted Receivables the aggregate Outstanding Balance of which constitutes more than 25% of the Outstanding Balance of all Receivables of such Obligor, (iii) that is not a Charged-Off Receivable or a Delinquent Receivable, (iv) that (a) by its terms is due and payable within 30 days of the original billing date therefor and has not had its payment terms extended or (b) that by its terms is due and payable within 90 days of the original billing date therefor and has not had its payment terms extended, the Outstanding Balance of which, when Exh. I-13 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT combined with all other Eligible Receivables that are due and payable within 90 days of the original billing date therefor, does not exceed an amount equal to 5% of the Outstanding Balance of all Receivables; provided, however, that in the case of the foregoing clauses (a) and (b), no such Receivable shall be considered an Eligible Receivable to the extent of the Outstanding Balance relating to any goods giving rise to such Receivable that are provided on a "bill and hold" basis (i.e., are billed but held or stored at a warehouse prior to shipment to the Obligor of such Receivable) for so long as such goods are so held are stored; (v) that is an "account" or "chattel paper" within the meaning of the UCC of all applicable jurisdictions, (vi) that is denominated and payable only in United States dollars in the United States, (vii) that arises either (A) under a Contract that, together with such Receivable, is in full force and effect and constitutes the legal, valid and binding obligation of the related Obligor enforceable against such Obligor in accordance with its terms or (B) under a Writing to the extent that such Receivable is the legal, valid and binding obligation of the related Obligor, (viii) that arises under a Writing or Contract that (A) does not require the Obligor under such Writing or Contract to consent to the transfer, sale or assignment of the rights and duties of the applicable Originator or Morningstar or any of its assignees under such Writing or Contract and (B) does not contain a confidentiality provision that purports to restrict the ability of any Purchaser to exercise its rights under this Agreement, including, without limitation, its right to review the Writing or Contract, (ix) that arises under a Contract that contains an obligation to pay a specified sum of money, contingent only upon the sale of goods or the provision of services by the applicable Originator or Morningstar or pursuant to a Writing that evidences the amount to be paid, (x) that, together with the Writing or Contract related thereto, does not contravene any law, rule or regulation applicable thereto (including, without limitation, any law, rule and regulation relating to truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy) and with respect to which no part of the Writing or Contract related thereto is in violation of any such law, rule or regulation, Exh. I-14 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT (xi) that satisfies all applicable requirements of the applicable Credit and Collection Policy, (xii) that was generated in the ordinary course of the applicable Originator's or Morningstar's business, (xiii) that arises solely from the sale of goods or the provision of services to the related Obligor by the applicable Originator or Morningstar, and not by any other Person (in whole or in part), (xiv) as to which the Agent has not notified the Administrative Seller that the Agent has determined that such Receivable or class of Receivables is not acceptable as an Eligible Receivable, including, without limitation, because such Receivable arises under a Writing or Contract that is not acceptable to the Agent, (xv) that is not subject to any right of rescission, set-off, counterclaim, any other defense (including defenses arising out of violations of usury laws) of the applicable Obligor against the applicable Originator or Morningstar or any other Adverse Claim, and the Obligor thereon holds no right as against such Originator or Morningstar to cause such Originator or Morningstar to repurchase the goods or merchandise the sale of which shall have given rise to such Receivable (except with respect to sale discounts effected pursuant to the Writing or Contract, or defective goods returned in accordance with the terms of the Writing or Contract); provided, however, that only that portion of such Receivable that is subject to any such right of rescission, set-off, counterclaim, other defense or Adverse Claim shall be considered to be ineligible pursuant to this clause (xv), (xvi) that is not the subject of a Rebate/Billback; provided, however, that only that portion of such Receivable that is subject to such Rebate/Billback shall be considered to be ineligible pursuant to this clause (xvi), (xvii) as to which the applicable Originators or Morningstar has satisfied and fully performed all obligations on its part with respect to such Receivable required to be fulfilled by it, and no further action is required to be performed by any Person with respect thereto other than payment thereon by the applicable Obligor, (xviii) all right, title and interest to and in which has been validly transferred by the applicable Originators or Morningstar directly to a Seller under and in accordance with a Receivables Sale Agreement, and such Seller has good and marketable title thereto free and clear of any Adverse Claim, Exh. I-15 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT (xix) that represents all or part of the sales price of merchandise, insurance and services within the meaning of Section 3(c)(5) of the Investment Company Act of 1940, as amended, (xx) the Obligor of which is a local municipality that, when the Outstanding Balance of which is aggregated with the Outstanding Balances of all other Eligible Receivables the Obligors of which are local municipalities, does not exceed 10% of the aggregate Outstanding Balance of all Eligible Receivables and (xxi) the Obligor of which is a federal or state government or a federal or state governmental subdivision or agency that, when the Outstanding Balance of which is aggregated with the Outstanding Balances of all other Eligible Receivables the Obligors of which are federal or state governments or a federal or state governmental subdivisions or agencies, does not exceed 3.0% of the aggregate Outstanding Balance of all Eligible Receivables. "Effective Date" means November 20, 2003. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time. "Extension Notice" has the meaning set forth in Section 4.6(a). "Facility Account" means Dairy Group's Account No. 2000013850892 at Wachovia Bank, National Association (formerly known as First Union National Bank), ABA No. 053000219. "Facility Termination Date" means the earliest of (i) the Liquidity Termination Date and (ii) the Amortization Date. "Federal Bankruptcy Code" means Title 11 of the United States Code entitled "Bankruptcy," as amended and any successor statute thereto. "Fee Letter" means each of (i) that certain letter agreement dated as of November 20, 2003 among each Seller, the Bank One Company and Bank One, as it may be amended, restated, supplemented or otherwise modified and in effect from time to time, (ii) that certain letter agreement dated as of September 2, 2003 among each Seller, the CL Company and CLNY, as it may be amended, restated, supplemented or otherwise modified and in effect from time to time, (iii) that certain letter agreement dated as of November 20, 2003 among each Seller, the Rabo Company and Rabobank, as it may be amended, restated, supplemented or otherwise modified and in effect from time to time and (iv) that certain Exh. I-16 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT letter agreement dated as of November 20, 2003 among each Seller, the Wachovia Company and Wachovia, as it may be amended, restated, supplemented or otherwise modified and in effect from time to time. "Finance Charges" means, with respect to a Writing or Contract, any finance, interest, late payment charges or similar charges owing by an Obligor pursuant to such Writing or Contract. "Financial Institutions" has the meaning set forth in the preamble in this Agreement. "Fleming Receivables" means a Receivable (i) the Obligor of which is Fleming Companies, Inc., an Oklahoma corporation, and (ii) which arose or was created prior to the date that Fleming Companies, Inc. took any action or suffered any event to occur, of the type described in Section 9.1(d) (as if references to Seller Party therein refer to Fleming Companies, Inc.). "Funding Agreement" means this Agreement and any agreement or instrument executed by any Funding Source with or for the benefit of a Company. "Funding Source" means with respect to any Company (i) such Company's Related Financial Institution(s) or (ii) any insurance company, bank or other funding entity providing liquidity, credit enhancement or back-up purchase support or facilities to such Company. "GAAP" means generally accepted accounting principles in effect in the United States of America as of the date of this Agreement. "GTL" means Dean Northeast, LLC (f/ka/ Suiza GTL, LLC), a Delaware limited liability company. "Immaterial Originator" means any Originator as to which the aggregate Outstanding Balance of all Receivables sold by such Originator to the applicable Seller under the applicable Receivables Sale Agreement as of any date of determination is less than 10% of the aggregate Outstanding Balance of all Receivables sold by all Originators party thereto to such Seller under such Receivables Sale Agreement as of such date. "Incremental Purchase" means a purchase of one or more Purchaser Interests that increases the total outstanding Aggregate Capital hereunder. "Initial Servicer" means each of Morningstar, Country Fresh, Land-O-Sun and Southern Foods. Exh. I-17 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT "Indebtedness" of a Person means such Person's (i) obligations for borrowed money, (ii) obligations representing the deferred purchase price of property or services (other than accounts payable arising in the ordinary course of such Person's business payable on terms customary in the trade), (iii) obligations, whether or not assumed, secured by liens or payable out of the proceeds or production from property now or hereafter owned or acquired by such Person, (iv) obligations that are evidenced by notes, acceptances, or other instruments, (v) capitalized lease obligations, (vi) net liabilities under interest rate swap, exchange or cap agreements, (vii) Contingent Obligations and (viii) liabilities in respect of unfunded vested benefits under plans covered by Title IV of ERISA. "Independent Manager" means a manager of the limited liability company that is the general partner of any Seller who is not at such time, and has not been at any time during the preceding five (5) years, (A) a director, officer, employee or affiliate of either Seller, any Originator or Morningstar, or any of their respective Subsidiaries or Affiliates (other than an independent manager of a special purpose bankruptcy remote entity organized for the purpose of providing financing to either Seller through the securitization or other similar transfer, pledge or conveyance of accounts receivable), or (B) the beneficial owner (at the time of such Person's appointment as an Independent Manager or at any time thereafter while serving as an Independent Manager) of any of any partnership interest of either Seller, any Originator or Morningstar, or any of their respective Subsidiaries or Affiliates, having general voting rights. "Intercreditor Agreement" means the Second Amended and Restated Intercreditor Agreement, dated as of the date hereof, by and among the Agent and Wachovia Bank, National Association (formerly known as First Union National Bank), as administrative agent under the Dean Credit Agreement, as amended, restated, supplemented or otherwise modified from time to time. "Land-O-Sun" means Land-O-Sun Dairies, LLC, a Delaware limited liability company. "LIBO Rate" means the rate per annum equal to the sum of (i) (a) the applicable British Bankers' Association Interest Settlement Rate for deposits in U.S. dollars appearing on Reuters Screen FRBD as of 11:00 a.m. (London time) two Business Days prior to the first day of the relevant Tranche Period, and having a maturity equal to such Tranche Period, provided that, (i) if Reuters Screen FRBD is not available to the Agent for any reason, the applicable LIBO Rate for the relevant Tranche Period shall instead be the applicable British Bankers' Association Interest Settlement Rate for deposits in U.S. dollars as reported by any other generally recognized financial information service as of 11:00 a.m. (London time) two Business Days prior to the first day of such Tranche Period, and having a maturity equal to such Tranche Period, and (ii) if no such British Bankers' Association Exh. I-18 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT Interest Settlement Rate is available to the Agent, the applicable LIBO Rate for the relevant Tranche Period shall instead be the rate determined by the Agent to be the rate at which Bank One offers to place deposits in U.S. dollars with first-class banks in the London interbank market at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Tranche Period, in the approximate amount to be funded at the LIBO Rate and having a maturity equal to such Tranche Period, divided by (b) one minus the maximum aggregate reserve requirement (including all basic, supplemental, marginal or other reserves) that is imposed against the Agent in respect of Eurocurrency liabilities, as defined in Regulation D of the Board of Governors of the Federal Reserve System as in effect from time to time (expressed as a decimal), applicable to such Tranche Period plus (ii) the Applicable Percentage. The LIBO Rate shall be rounded, if necessary, to the next higher 1/16 of 1%. "Liquidity Termination Date" means November 18, 2004. "Local Originator" means each of Liberty Dairy Company, Mayfield Dairy Farms, Inc., McArthur Dairy, Inc., Purity Dairies, Incorporated, Reiter Dairy of Akron, Inc., T.G. Lee Foods, Inc., and Verifine Dairy Products Corporation of Sheboygan, Inc. "Lock-Box" means each locked postal box with respect to which a bank who has executed a Collection Account Agreement has been granted exclusive access for the purpose of retrieving and processing payments made on the Receivables and that is listed on Exhibit IV. "Loss Reserve" means the product of (a) the Net Receivables Balance and (b) 0.09. "Loss Reserve Percentage" means, for any Purchaser Interest on any date, an amount equal to the greater of: (i) 2 times the Loss Ratio multiplied by the Loss Horizon Ratio and (ii) 0.09, where: Loss Ratio = As at the last day of any calendar month, the highest three month rolling average Aged Receivable Ratio in the most recent twelve months prior to such month. Aged Receivable Ratio = As at the last day of any calendar month, (x) the sum of the Outstanding Balance of all Delinquent Receivables as of such day, plus the Outstanding Balance of all Charged-Off Receivables (without Exh. I-19 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT giving effect to clause (vi) of the definition of "Charged-Off Receivable") as of such day, divided by (y) the aggregate sales for the calendar month occurring two months immediately prior to such month. Loss Horizon Ratio = As at the last day of any calendar month, (x) the aggregate amount of sales of all of the Originators for the two calendar months ending immediately prior to such month, divided by (y) the aggregate Outstanding Balance of all Eligible Receivables as of such day. "Material Adverse Effect" means a material adverse effect on (i) the financial condition or operations of any Seller Party and its Subsidiaries taken as a whole, (ii) the ability of any Seller Party to perform its obligations under this Agreement or Provider to perform its obligations under any Performance Undertaking, (iii) the legality, validity or enforceability of this Agreement or any other Transaction Document, (iv) any Purchaser's interest in the Receivables generally or in any significant portion of the Receivables, the Related Security or the Collections with respect thereto, or (v) the collectibility of the Receivables generally or of any material portion of the Receivables. "Monthly Report" means a report, in substantially the form of Exhibit X hereto (appropriately completed), furnished by the Servicers to the Agent pursuant to Section 8.5. "Morningstar" means Morningstar Foods Inc., a Delaware corporation. "MRC" means Morningstar Receivables Corp., a Delaware corporation. "Net Receivables Balance" means, at any time, the aggregate Outstanding Balance of all Eligible Receivables at such time reduced by the aggregate amount by which the Outstanding Balance of all Eligible Receivables of each Obligor and its Affiliates exceeds the Concentration Limit for such Obligor. "New Entity" means each of the entities listed on Schedule G to this Agreement. "Non-Renewing Financial Institution" has the meaning set forth in Section 4.6(a). "Obligations" shall have the meaning set forth in Section 2.1. Exh. I-20 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT "Obligor" means a Person obligated to make payments pursuant to a Writing or Contract. "Original Agreement" has the meaning set forth in the Preliminary Statements to this Agreement. "Original Closing Date" means December 21, 2001. "Originator" means each of the entities listed on Schedule D hereto, in their respective capacities as sellers under the Receivables Sale Agreements. "Outstanding Balance" of any Receivable at any time means the then outstanding principal balance thereof. "Participant" has the meaning set forth in Section 12.2. "Performance Undertaking" means each of (i) that certain Second Amended and Restated Performance Undertaking, dated as of November 20, 2003, by Provider in favor of Dairy Group, (ii) that certain Amended and Restated Dean Performance Undertaking, dated as of November 20, 2003, by Provider in favor of Dairy Group II, and (iii) that certain Specialty Performance Undertaking, dated as of November 20, 2003, by Provider in favor of Specialty, each substantially in the form of Exhibit XI and as each may be further amended, restated or otherwise modified from time to time. "Periodic Report" means each Monthly Report and Weekly Report. "Person" means an individual, partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof. "Pool Company" means the Bank One Company, the Rabo Company and the Wachovia Company. "Pooled Commercial Paper" means Commercial Paper notes of any Pool Company subject to any particular pooling arrangement by such Pool Company, but excluding Commercial Paper issued by such Pool Company for a tenor and in an amount specifically requested by any Person in connection with any agreement effected by such Pool Company. "Potential Amortization Event" means an event that, with the passage of time or the giving of notice, or both, would constitute an Amortization Event. Exh. I-21 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT "Prime Rate" means a rate per annum equal to the prime rate of interest announced from time to time by Bank One or its parent (which is not necessarily the lowest rate charged to any customer), changing when and as said prime rate changes. "Proposed Reduction Date" has the meaning set forth in Section 1.3. "Pro Rata Share" means, (a) for each Financial Institution, a percentage equal to (i) the Commitment of such Financial Institution, divided by (ii) the aggregate amount of all Commitments of all Financial Institutions in such Financial Institution's Purchaser Group, adjusted as necessary to give effect to the application of the terms of Section 4.6 and (b) for each Company, a percentage equal to (i) the Company Purchase Limit of such Company, divided by (ii) the aggregate amount of all Company Purchase Limits of all Companies hereunder. "Provider" means Dean Foods Company, a Delaware corporation, together with its successors and assigns. "Purchase Limit" means $500,000,000, as such amount may be modified in accordance with the terms of Section 4.6(b). "Purchase Notice" has the meaning set forth in Section 1.2. "Purchase Price" means, with respect to any Incremental Purchase of a Purchaser Interest, the amount paid to the applicable Seller for such Purchaser Interest that shall not exceed the least of (i) the amount requested by the Administrative Seller in the applicable Purchase Notice, (ii) the unused portion of the Purchase Limit on the applicable purchase date and (iii) the excess, if any, of the Net Receivables Balance (less the Aggregate Reserves) on the applicable purchase date over the aggregate outstanding amount of Aggregate Capital determined as of the date of the most recent Monthly Report, taking into account such proposed Incremental Purchase. "Purchaser Group" means with respect to (i) each Company, a group consisting of such Company and its Related Financial Institutions and (ii) each Financial Institution, a group consisting of such Financial Institution, the Company for which such Financial Institution is a Related Financial Institution and each other Financial Institution that is a Related Financial Institution for such Company. "Purchasers" means each Company and each Financial Institution. "Purchaser Interest" means, at any time, an undivided percentage ownership interest (computed as set forth below) associated with a designated amount of Capital, selected Exh. I-22 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT pursuant to the terms and conditions hereof in (i) each Receivable arising prior to the time of the most recent computation or recomputation of such undivided interest, (ii) all Related Security with respect to each such Receivable, and (iii) all Collections with respect to, and other proceeds of, each such Receivable. Each such undivided percentage interest shall equal: C --------------- NRB - AR where: C = the Capital of such Purchaser Interest. AR = the Aggregate Reserves. NRB = the Net Receivables Balance. Such undivided percentage ownership interest shall be initially computed on its date of purchase. Thereafter, until the Amortization Date, each Purchaser Interest shall be automatically recomputed (or deemed to be recomputed) on each day prior to the Amortization Date. The variable percentage represented by any Purchaser Interest as computed (or deemed recomputed) as of the close of the business day immediately preceding the Amortization Date shall remain constant at all times thereafter. "Purchasing Financial Institution" has the meaning set forth in Section 12.1(b). "Rabo Company" means Nieuw Amsterdam Receivables Corporation, a Delaware corporation, together with its successors and assigns. "Rabobank" means Cooperatieve Centrale Raiffeisen - Boerenleenbank B.A. "Rabobank International", New York Branch, a Netherlands banking cooperative duly licensed under the laws of the State of New York. "Rating Agency" means, collectively, the nationally recognized rating agency or agencies chosen by each of the Rabo Company the CL Company to rate its respective Commercial Paper notes at any time, including, as of the date hereof, Moody's Investors Service, Inc., Fitch Ratings and Standard and Poor's Ratings Group. Exh. I-23 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT "Rebate/Billback" means, with respect to any Receivable, any incentives provided to the Obligor thereof related to volume rebates or price incentives, the dollar amount of which is known at the time of invoice of such Receivable. "Receivable" means all indebtedness and other obligations owed to the applicable Originator or Morningstar (at the time it arises, and before giving effect to any transfer or conveyance under the Transfer Agreement, any Receivables Sale Agreement or hereunder) or owed to any Seller (after giving effect to any transfer or conveyance under the Transfer Agreement, any Receivables Sale Agreement or hereunder) or in which any Seller or such Originator or Morningstar has a security interest or other interest, including, without limitation, any indebtedness, obligation or interest constituting an account, chattel paper, instrument or general intangible, arising in connection with the sale of goods or the rendering of services by such Originator or Morningstar, as applicable, and further includes, without limitation, the obligation to pay any Finance Charges with respect thereto. Indebtedness and other rights and obligations arising from any one transaction, including, without limitation, indebtedness and other rights and obligations represented by an individual invoice, shall constitute a Receivable separate from a Receivable consisting of the indebtedness and other rights and obligations arising from any other transaction; provided that any indebtedness, rights or obligations referred to in the immediately preceding sentence shall be a Receivable regardless of whether the account debtor or any Seller treats such indebtedness, rights or obligations as a separate payment obligation. "Receivables Sale Agreement" means each of the Suiza Receivables Sale Agreement, the Dean Receivables Sale Agreement and the Specialty Receivables Sale Agreement. "Records" means, with respect to any Receivable, all Writings or Contracts and other documents, books, records and other information (including, without limitation, computer programs, tapes, disks, punch cards, data processing software and related property and rights) relating to such Receivable, any Related Security therefor and the related Obligor. "Reduction Notice" has the meaning set forth in Section 1.3. "Regulatory Change" has the meaning set forth in Section 10.2(a). "Reinvestment" has the meaning set forth in Section 2.2. "Related Financial Institution" means with respect to each Company, each Financial Institution set forth opposite such Company's name in Schedule A to this Agreement and/or, in the case of an assignment pursuant to Section 12.1, set forth in the applicable Assignment Agreement. Exh. I-24 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT "Related Security" means, with respect to any Receivable: (i) all security interests or liens and property subject thereto from time to time, if any, purporting to secure payment of such Receivable, whether pursuant to the Writing or Contract related to such Receivable or otherwise, together with all financing statements and security agreements describing any collateral securing such Receivable, (ii) all guaranties, letters of credit, insurance, "supporting obligations" (within the meaning of Section 9-102(a) of the UCC of all applicable jurisdictions) and other agreements or arrangements of whatever character from time to time supporting or securing payment of such Receivable whether pursuant to the Writing or Contract related to such Receivable or otherwise, (iii) all service contracts and other contracts and agreements associated with such Receivable, (iv) all Records related to such Receivable, (v) all of the applicable Seller's right, title and interest in, to and under the Receivables Sale Agreement to which it is a party and the Transfer Agreement in respect of such Receivable and all of the applicable Seller's right, title and interest in, to and under the applicable Performance Undertaking, (vi) all of the applicable Seller's right, title and interest in, to and under each Demand Note, and (vii) all proceeds of any of the foregoing. "Required Notice Period" means the number of days required notice set forth below applicable to the Aggregate Reduction indicated below:

Aggregate Reduction Required Notice Period ------------------- ---------------------- < or = $100,000,000 two Business Days > $100,000,000 to $250,000,000 five Business Days > or = $250,000,000 ten Business Days

"Required Purchasers" means, at any time, collectively, the Financial Institutions with Commitments in excess of 66-2/3% of the aggregate Commitments and the Companies Exh. I-25 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT with Company Purchase Limits in excess of 66-2/3% of the aggregate amount of all Company Purchase Limits of all Companies hereunder. "Restricted Junior Payment" means (i) any dividend or other distribution, direct or indirect, on account of any shares of any class of capital stock or other equity interest of any Seller now or hereafter outstanding, except a dividend or distribution payable solely in shares of that class of stock or equity interest or in any junior class of stock or other junior equity interest of such Seller, (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 or other equity interest of any Seller now or hereafter outstanding, (iii) any payment or prepayment of principal of, premium, if any, or interest, fees or other charges on or with respect to, and any redemption, purchase, retirement, defeasance, sinking fund or similar payment and any claim for rescission with respect to the Subordinated Loans (as defined in the Receivables Sale Agreements), (iv) any payment made to redeem, purchase, repurchase or retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of capital stock or other equity interest of any Seller now or hereafter outstanding, and (v) any payment of management fees by any Seller (except for reasonable management fees to the Originators or their respective Affiliates in reimbursement of actual management services performed). "Seller" has the meaning set forth in the preamble to this Agreement. "Seller Parties" has the meaning set forth in the preamble to this Agreement. "Servicer" means at any time any Person or Persons (which may be the Agent) then authorized pursuant to Article VIII to service, administer and collect Receivables. "Servicing Fee" has the meaning set forth in Section 8.6. "Settlement Date" means (A) the 5th Business Day of each month, (B) the last day of the relevant CP (Tranche) Accrual Period in respect of each Purchaser Interest held by the any Pool Company (other than any Purchaser Interest funded substantially with Pooled Commercial Paper) and in respect of each Purchaser Interest held by the CL Company and (C) the last day of the relevant Tranche Period in respect of each Purchaser Interest of the Financial Institutions. "Settlement Period" means (A) in respect of each Purchaser Interest of each Pool Company that is funded substantially with Pooled Commercial Paper, the immediately preceding CP (Pool) Accrual Period, (B) in respect of each other Purchaser Interest of any Pool Company and each Purchaser Interest of the CL Company, the entire CP (Tranche) Exh. I-26 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT Accrual Period of such Purchaser Interest and (C) in respect of each Purchaser Interest of the Financial Institutions, the entire Tranche Period of such Purchaser Interest. "Southern Foods" means Southern Foods Group, L.P., a Delaware limited partnership. "Specialty Receivables Sale Agreement" means the Specialty Receivables Sale Agreement, dated as of November 20, 2003, by and among Dean Specialty and Specialty Group, as the same may be amended, restated, supplemented or otherwise modified from time to time. "Subsidiary" of a Person means (i) any corporation more than 50% of the outstanding securities having ordinary voting power of which shall at the time be owned or controlled, directly or indirectly, by such Person or by one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries, or (ii) any partnership, association, limited liability company, joint venture or similar business organization more than 50% of the ownership interests having ordinary voting power of which shall at the time be so owned or controlled. "Suiza Originator" means each of MRC, Southern Foods, Country Fresh, GTL, Land-O-Sun and Tuscan Dairies. "Suiza Receivables Sale Agreement" means that certain Amended and Restated Receivables Sale Agreement, dated as of December 21, 2001, among the Suiza Originators and Dairy Group, as amended by Amendment No. 1 thereto, dated as of May 15, 2002 and effective for all purposes as of March 31, 2002, and by Amendment No. 2 thereto, dated as of November 20, 2003, as the same may be further amended, restated, supplemented or otherwise modified from time to time. "Terminating Commitment Amount" means, with respect to any Terminating Financial Institution, an amount equal to the Commitment (without giving effect to clause (iii) of the proviso to the penultimate sentence of Section 4.6(a)) of such Terminating Financial Institution, minus, an amount equal to 2% of such Commitment. "Terminating Commitment Availability" means, with respect to any Terminating Financial Institution, the positive difference (if any) between (a) an amount equal to the Commitment (without giving effect to clause (iii) of the proviso to the penultimate sentence of Section 4.6(a)) of such Terminating Financial Institution, minus, an amount equal to 2% of such Commitment minus (b) the Capital of the Purchaser Interests funded by such Terminating Financial Institution. Exh. I-27 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT "Termination Date" means, with respect to a Terminating Financial Institution and, if applicable, each Company in such Terminating Financial Institution's Purchaser Group, the date on which such Terminating Financial Institution became a Non-Renewing Financial Institution or, in the case of Section 9.2, the date such Financial Institution terminates its Commitment in accordance therewith. "Termination Percentage" has the meaning set forth in Section 2.2. "Terminating CP Tranche" has the meaning set forth in Section 3.4(b). "Terminating Financial Institution" has the meaning set forth in Section 4.6(a). "Terminating Tranche" has the meaning set forth in Section 4.3(b). "Top Twenty-Five Obligors" means, of all Obligors of Receivables, the twenty-five Obligors having the highest aggregate outstanding balances of all Receivables as of the immediately preceding November 20, provided that until the first occurrence of such date after the date hereof, the Top Twenty-Five Obligors shall be those Obligors listed on Schedule F. "Transfer Agreement" has the meaning set forth in the Suiza Receivables Sale Agreement. "Tranche Period" means, with respect to any Purchaser Interest held by a Financial Institution: (a) if Yield for such Purchaser Interest is calculated on the basis of the LIBO Rate, a period of one, two, three or six months, or such other period as may be mutually agreeable to the applicable Financial Institution and the Administrative Seller, commencing on a Business Day selected by the Administrative Seller or the applicable Financial Institution pursuant to this Agreement. Such Tranche Period shall end on the day in the applicable succeeding calendar month that corresponds numerically to the beginning day of such Tranche Period, provided, however, that if there is no such numerically corresponding day in such succeeding month, such Tranche Period shall end on the last Business Day of such succeeding month; or (b) if Yield for such Purchaser Interest is calculated on the basis of the Prime Rate, a period commencing on a Business Day selected by the Administrative Seller and agreed to by the applicable Financial Institution, provided no such period shall exceed one month. Exh. I-28 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT If any Tranche Period would end on a day that is not a Business Day, such Tranche Period shall end on the next succeeding Business Day, provided, however, that in the case of Tranche Periods corresponding to the LIBO Rate, if such next succeeding Business Day falls in a new month, such Tranche Period shall end on the immediately preceding Business Day. In the case of any Tranche Period for any Purchaser Interest that commences before the Amortization Date and would otherwise end on a date occurring after the Amortization Date, such Tranche Period shall end on the Amortization Date. The duration of each Tranche Period that commences after the Amortization Date shall be of such duration as selected by the applicable Financial Institution. "Transaction Documents" means, collectively, this Agreement, each Purchase Notice, each Receivables Sale Agreement, the Transfer Agreement, each Collection Account Agreement, each Performance Undertaking, the Intercreditor Agreement, the Fee Letters, the Agreement of General Partner, the Demand Notes, the Subordinated Notes (as defined in each Receivables Sale Agreement) and all other instruments, documents and agreements executed and delivered in connection herewith. "Tuscan Dairies" means Tuscan/Lehigh Dairies, Inc., a Delaware corporation. "UCC" means the Uniform Commercial Code as from time to time in effect in the specified jurisdiction. "Wachovia Company" means Blue Ridge Asset Funding Corporation, a Delaware corporation, together with its successors and assigns. "Wachovia" means Wachovia Bank, National Association, a national banking corporation. "Weekly Report" has the meaning set forth in Section 8.5. "White Wave" has the meaning set forth in Section 7.2(d). "Writing" means, with respect to any Receivable, any and all instruments, invoices, purchase orders or other writings (which may be electronic) (other than Contracts) pursuant to which such Receivable arises or that evidences such Receivable. "Yield" means for each respective Tranche Period relating to Purchaser Interests of the Financial Institutions, an amount equal to the product of the applicable Discount Rate for each Purchaser Interest multiplied by the Capital of such Purchaser Interest for each day elapsed during such Tranche Period, annualized on a 360 day basis. Exh. I-29 THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT "Yield and Servicer Reserve" means, on any date, an amount equal to 2.5% of the Net Receivables Balance as of the close of business of the Servicers on such date. All accounting terms not specifically defined herein shall be construed in accordance with GAAP. All terms used in Article 9 of the UCC in the State of Illinois, and not specifically defined herein, are used herein as defined in such Article 9. Exh. I-30 EX-10.12 9 d13098exv10w12.txt AMENDED/RESTATED RECEIVABLES PURCHASE AGREEMENT EXHIBIT 10.12 Amendment No. 1 to Third Amended and Restated Receivables Purchase Agreement and Reaffirmation of Performance Undertakings This Amendment No. 1 to Third Amended and Restated Receivables Purchase Agreement and Reaffirmation of Performance Undertakings (this "AMENDMENT") is entered into as of December 31, 2003, among Dairy Group Receivables, L.P. ("DAIRY I"), Dairy Group Receivables II, L.P. ("DAIRY II") and Specialty Group Receivables, L.P. ("SPECIALTY" and together with Dairy I and Dairy II, the "SELLERS" and each a "SELLER"), each entity signatory hereto as a Financial Institution (each a "FINANCIAL INSTITUTION" and collectively, the "FINANCIAL INSTITUTIONS"), each entity signatory hereto as a Company (each a "COMPANY" and collectively, the "COMPANIES"), Bank One, NA (Main Office Chicago), as Agent (the "AGENT"), and Dean Foods Company, as Provider ("PROVIDER"). Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Third Amended and Restated Receivables Purchase Agreement, dated as of November 20, 2003, among the Sellers, the Servicers party thereto, the Financial Institutions, the Companies, Credit Agricole Indosuez and the Agent (as amended or otherwise modified, as of the date hereof, the "RECEIVABLES PURCHASE AGREEMENT"). RECITALS: The Sellers, the Financial Institutions, the Companies, the Servicers and the Agent are parties to the Receivables Purchase Agreement. In connection with the Receivables Purchase Agreement, Provider entered into each of (i) that certain Second Amended and Restated Performance Undertaking, dated as of November 20, 2003, by Provider in favor of Dairy I, (ii) that certain Amended and Restated Performance Undertaking, dated as of November 20, 2003, by Provider in favor of Dairy II, and (iii) that certain Performance Undertaking, dated as of November 20, 2003, by Provider in favor of Specialty (collectively, the "PERFORMANCE UNDERTAKINGS"). The Sellers, the Companies, the Financial Institutions and the Agent desire to amend the Receivables Purchase Agreement, and Provider desires to reaffirm its obligations under the Performance Undertakings, all as more fully described herein. NOW, THEREFORE, in consideration of the premises, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: Section 1. Amendment. Immediately upon the satisfaction of each of the conditions precedent set forth in Section 3 of this Amendment, the Receivables Purchase Agreement is hereby amended as follows: AMENDMENT NO. 1 TO THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT AND REAFFIRMATION OF PERFORMANCE UNDERTAKINGS (a) Exhibit I to the Receivables Purchase Agreement is hereby amended by amending and restating, in its entirety, the definition of "Dean Credit Agreement" appearing in such exhibit to read as follows: "Dean Credit Agreement" means that certain Credit Agreement, dated as of July 31, 2001, by and among Provider, certain Subsidiaries of Provider, the financial institutions party thereto as lenders, Bank One, NA, as syndication agent, Fleet National Bank, Harris Trust and Savings Bank and Suntrust Bank, as co- documentation agents, and Wachovia Bank, National Association (formerly known as First Union National Bank), as administrative agent, as amended by the First Amendment to Credit Agreement, dated as of December 19, 2001, as further amended by the Second Amendment to Credit Agreement, dated as of April 30, 2002, as further amended by the Third Amendment to Credit Agreement, dated as of December 13, 2002, as further amended by the Fourth Amendment to Credit Agreement, dated as of August 29, 2003, and as further amended by the Fifth Amendment to Credit Agreement, dated as of December 31, 2003, but without giving effect to any further amendment or other modification thereof. Section 2. Reaffirmation of Performance Guaranty. Provider (a) acknowledges the amendment to the Receivables Purchase Agreement effected hereby and (b) reaffirms that its obligations under each of the Performance Undertakings and each other Transaction Document to which it is a party continue in full force and effect with respect to the Receivables Purchase Agreement. Section 3. Conditions to Effectiveness of Amendment. This Amendment shall become effective as of the date hereof upon the satisfaction of the following conditions precedent: (a) Amendment. This Amendment shall have been duly executed and delivered by each of the parties hereto. (b) Amendment to Credit Agreement. The Agent shall have received executed counterparts of that certain Fifth Amendment to Credit Agreement among Provider, certain subsidiaries of Provider party thereto, the lenders party thereto, Wachovia Bank, National Association, as administrative agent for the lenders, and Bank One, NA, as syndication agent for the lenders, duly executed by each of the parties thereto. 2 AMENDMENT NO. 1 TO THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT AND REAFFIRMATION OF PERFORMANCE UNDERTAKINGS (c) Representations and Warranties. As of the date hereof, both before and after giving effect to this Amendment, all of the representations and warranties contained in the Receivables Purchase Agreement and in each other Transaction Document shall be true and correct as though made on and as of the date hereof (and by its execution hereof, each Seller shall be deemed to have represented and warranted such). (d) No Amortization Event or Potential Amortization Event. As of the date hereof, both before and after giving effect to this Amendment, no Amortization Event or Potential Amortization Event shall have occurred and be continuing (and by its execution hereof, each Seller shall be deemed to have represented and warranted such). Section 4. Miscellaneous. (a) Effect; Ratification. The amendment set forth herein is effective solely for the purposes set forth herein and shall be limited precisely as written, and shall not be deemed to (i) be a consent to any amendment, waiver or modification of any other term or condition of the Receivables Purchase Agreement or of any other instrument or agreement referred to therein; or (ii) prejudice any right or remedy which the Companies, the Financial Institutions or the Agent may now have or may have in the future under or in connection with the Receivables Purchase Agreement or any other instrument or agreement referred to therein. Each reference in the Receivables Purchase Agreement to "this Agreement," "herein," "hereof" and words of like import and each reference in the other Transaction Documents to the "Receivables Purchase Agreement" or to the "Purchase Agreement" or to the Receivables Purchase Agreement shall mean the Receivables Purchase Agreement as amended hereby. This Amendment shall be construed in connection with and as part of the Receivables Purchase Agreement and all terms, conditions, representations, warranties, covenants and agreements set forth in the Receivables Purchase Agreement and each other instrument or agreement referred to therein, except as herein amended, are hereby ratified and confirmed and shall remain in full force and effect. (b) Transaction Documents. This Amendment is a Transaction Document executed pursuant to the Receivables Purchase Agreement and shall be construed, administered and applied in accordance with the terms and provisions thereof. (c) Costs, Fees and Expenses. Each Seller agrees to reimburse the Agent and the Purchasers upon demand for all costs, fees and expenses (including the 3 AMENDMENT NO. 1 TO THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT AND REAFFIRMATION OF PERFORMANCE UNDERTAKINGS reasonable fees and expenses of counsels to the Agent and the Purchasers) incurred in connection with the preparation, execution and delivery of this Amendment. (d) Counterparts. This Amendment may be executed in any number of counterparts, each such counterpart constituting an original and all of which when taken together shall constitute one and the same instrument. (e) Severability. Any provision contained in this Amendment which is held to be inoperative, unenforceable or invalid in any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable or invalid without affecting the remaining provisions of this Amendment in that jurisdiction or the operation, enforceability or validity of such provision in any other jurisdiction. (f) GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS. (g) Funding Agreement Consent. By its execution hereof, Bank One, NA (Main Office Chicago), in its capacity as a party to any applicable Funding Agreement with or for the benefit of Falcon Asset Securitization Corporation ("FALCON"), hereby consents to Falcon's execution of this Amendment and the transactions contemplated hereby. (Signature Pages Follow) 4 AMENDMENT NO. 1 TO THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT AND REAFFIRMATION OF PERFORMANCE UNDERTAKINGS IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first written above. DAIRY GROUP RECEIVABLES, L.P., as a Seller By: Dairy Group Receivables GP, LLC, Its: General Partner By: /s/ CORY M. OLSON --------------------------------- Name: Cory M. Olson Title: Authorized Signatory DAIRY GROUP RECEIVABLES II, L.P., as a Seller By: Dairy Group Receivables GP II, LLC, Its: General Partner By: /s/ CORY M. OLSON --------------------------------- Name: Cory M. Olson Title: Authorized Signatory SPECIALTY GROUP RECEIVABLES, L.P., as a Seller By: Specialty Group Receivables, LLC, Its: General Partner By: /s/ CORY M. OLSON --------------------------------- Name: Cory M. Olson Title: Authorized Signatory AMENDMENT NO. 1 TO THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT AND REAFFIRMATION OF PERFORMANCE UNDERTAKINGS FALCON ASSET SECURITIZATION CORPORATION, as a Company By: /s/ SHERRI GERNER ----------------------------------------- Name: Sherri Gerner Title: Authorized Signer BANK ONE, NA (MAIN OFFICE CHICAGO), as a Financial Institution and as Agent By: /s/ SHERRI GERNER ----------------------------------------- Name: Sherri Gerner Title: Director, Capital Markets AMENDMENT NO. 1 TO THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT AND REAFFIRMATION OF PERFORMANCE UNDERTAKINGS ATLANTIC ASSET SECURITIZATION CORP., as a Company By: Credit Lyonnais New York Branch Its: Attorney-In-Fact By: /s/ ANTHONY M. BROWN JR. ----------------------------------------- Name: Anthony M. Brown Jr. Title: Vice President CREDIT LYONNAIS NEW YORK BRANCH, as a Financial Institution By: /s/ ANTHONY M. BROWN JR. ----------------------------------------- Name: Anthony M. Brown Jr. Title: Vice President AMENDMENT NO. 1 TO THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT AND REAFFIRMATION OF PERFORMANCE UNDERTAKINGS NIEUW AMSTERDAM RECEIVABLES CORPORATION, as a Company By: /s/ BERNARD J. ANGELO ----------------------------------------- Name: Bernard J. Angelo Title: Vice President COOPERATIEVE CENTRALE RAIFFEISEN - BOERENLEENBANK B.A. "Rabobank International", New York Branch, as a Financial Institution By: ----------------------------------------- Name: Title: By: ----------------------------------------- Name: Title: AMENDMENT NO. 1 TO THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT AND REAFFIRMATION OF PERFORMANCE UNDERTAKINGS NIEUW AMSTERDAM RECEIVABLES CORPORATION, as a Company By: ----------------------------------------- Name: Title: COOPERATIEVE CENTRALE RAIFFEISEN - BOERENLEENBANK B.A. "Rabobank International", New York Branch, as a Financial Institution By: /s/ JAMES HAN ----------------------------------------- Name: James Han Title: Vice President By: /s/ BRETT DELFINO ----------------------------------------- Name: Brett Delfino Title: Executive Director AMENDMENT NO. 1 TO THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT AND REAFFIRMATION OF PERFORMANCE UNDERTAKINGS BLUE RIDGE ASSET FUNDING CORPORATION, as a Company By: Wachovia Capital Markets, LLC Its: Attorney-In-Fact By: /s/ DOUGLAS R. WILSON SR. ----------------------------------------- Name: Douglas R. Wilson Sr. Title: Vice President WACHOVIA BANK, NATIONAL ASSOCIATION, as a Financial Institution By: ----------------------------------------- Name: Title: AMENDMENT NO. 1 TO THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT AND REAFFIRMATION OF PERFORMANCE UNDERTAKINGS BLUE RIDGE ASSET FUNDING CORPORATION, as a Company By: Wachovia Capital Markets, LLC Its: Attorney-In-Fact By: ----------------------------------------- Name: Douglas R. Wilson Sr. Title: Vice President WACHOVIA BANK, NATIONAL ASSOCIATION, as a Financial Institution By: /s/ RODNEY SANDERS ----------------------------------------- Name: Rodney Sanders Title: Director AMENDMENT NO. 1 TO THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT AND REAFFIRMATION OF PERFORMANCE UNDERTAKINGS DEAN FOODS COMPANY, as Provider By: /s/ CORY M. OLSON ----------------------------------------- Name: Cory M. Olson Title: Authorized Signatory EX-21 10 d13098exv21.txt LIST OF SUBSIDIARIES . . . EXHIBIT 21

LEGAL NAME JURISDICTION OF ORGANIZATION OWNER 31 Logistics, Inc. DE Dean Southeast II, LLC Abastecimientos Lacteos Gallegos S.L. Spain Distribucion Lacteos Ganadeva, S.A. Agrolactur S.L. Spain Glicman - Producao e Comercializacao de Leite e Productos Lacteos, Lda. Alta-Dena Certified Dairy, Inc. DE Dean Southwest II, LLC Azuis Holdings, B.V. The Netherlands Dean International Holding Company Barber Ice Cream, LLC DE Mayfield Dairy Farms, Inc. Barber Milk, Inc. DE Dean Southeast II, LLC Berkeley Farms, Inc. CA Dean Southwest II, LLC Broughton Foods, LLC DE Dean Southeast, LLC Carnival Ice Cream, N.V. Netherlands Antilles Dean Holding Company Central Lechera Gallega, S.L. Spain Distribucion Lacteos Ganadeva, S.A. Centronor Produccion y Distribucion Spain Azuis Holdings, B.V. S.L. Colorado ES LLC DE Suiza Dairy Group, Inc. Comerlasa S.L. Spain Azuis Holdings, B.V. Country Delite Farms, LLC DE Dean Southeast, LLC Country Fresh, LLC MI Dean Midwest II, LLC Creamland Dairies, Inc. NM Dean Southwest II, LLC Gandy's Dairies, Inc. Curan, LLC DE Regan, LLC Dairy Fresh, LLC DE Dean Southeast, LLC Dairy Group Receivables GP II, LLC DE Dean Dairy Holdings, LLC Dairy Group Receivables GP, LLC DE Suiza Dairy Group, Inc. Dairy Group Receivables II, L.P. DE Dean Dairy Holdings, LLC Dairy Group Receivables GP II, LLC

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LEGAL NAME JURISDICTION OF ORGANIZATION OWNER Dairy Group Receivables, L.P. DE Suiza Dairy Group, Inc. Dairy Group Receivables GP, LLC Dean Dairy Holdings, LLC DE Dean Holding Company Dean Dairy Products Company PA Dean Northeast II, LLC Dean Foods Company of California, Inc. DE Dean Southwest II, LLC Dean Foods Company of Indiana, Inc. DE Dean Midwest, LLC Dean Foods Foundation IL Dean Holding Company Dean Foods Germany GmbH & Co. K.G. Germany Dixie Holding, Inc. Dean Foods North Central, Inc. DE Dean Midwest, LLC Dean Holding Company DE Dean Foods Company Dean Illinois Dairies, LLC DE Dean Midwest, LLC Dean Intellectual Property Services DE DIPS Limited Partner II II, L.P. DIPS GP II, Inc. Dean Intellectual Property Services, DE DIPS Limited Partner L.P. DIPS GP, Inc. Dean International Holding Company DE Dean Foods Company Dean Management Corporation DE Dean Foods Company Dean Midwest II, LLC DE Suiza Dairy Group, Inc. Dean Midwest, LLC DE Dean Dairy Holdings, LLC Dean Milk Company, Inc. KY Dean Southeast II, LLC Dean National Brand Group, Inc. DE Dean Foods Company Dean Netherlands B.V. The Netherlands Dean International Holding Company Dean Northeast II, LLC DE Dean Dairy Holdings, LLC Dean Northeast, LLC DE Suiza Dairy Group, Inc. Dean Pickle and Specialty Products WI Dean Specialty Foods Group, LLC Company

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LEGAL NAME JURISDICTION OF ORGANIZATION OWNER Dean Puerto Rico Holdings, LLC DE Dean Foods Company Dean SoCal, LLC DE Dean Southwest II, LLC Dean Southeast II, LLC DE Dean Dairy Holdings, LLC Dean Southeast, LLC DE Suiza Dairy Group, Inc. Dean Southwest II, LLC DE Dean Dairy Holdings, LLC Dean Southwest, LLC DE Suiza Dairy Group, Inc. Dean Specialty Foods Group, LLC DE Dean Holding Company Dean Specialty Intellectual Property DE DIPS Limited Partner II Services, L.P. DIPS GP II, Inc. Dean Transportation, Inc. OH Dean Dairy Holdings, LLC DIPS GP II, Inc. DE Dean Holding Company DIPS GP, Inc. DE Suiza Dairy Group Holdings, Inc. DIPS Limited Partner DE Suiza Dairy Group Holdings, Inc. DIPS Limited Partner II DE Dean Holding Company Distribucion Lacteos Ganadera, S.A. Spain Leche Celta, S.L. Dixie Holding, Inc. NY Franklin Holdings, Inc. Elgin Blenders, Incorporated IL Dean Specialty Foods Group, LLC Fairmont Dairy, LLC DE Dean Northeast II, LLC Franklin Holdings, Inc. DE Dean Foods Company Franklin Plastics, Inc. DE Franklin Holdings, Inc. Alan Bernon Peter Bernon Gandy's Dairies, Inc. TX Dean Southwest II, LLC Glicman - Producao e Comercializacao Portugal Azuis Holdings, B.V. de Leite e Productos Lacteos, Lda. Glicman Espana S.L. Spain Glicman - Producao e Comercializacao de Leite e Productos Lacteos, Lda.

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LEGAL NAME JURISDICTION OF ORGANIZATION OWNER Hilstad - Producao e Comercializacao Portugal Azuis Holdings, B.V. de Leite e Productos Lacteos, Lda. Horizon Organic Dairy, California DE Horizon Organic Holding Corporation Farm, Inc. Horizon Organic Dairy, Idaho Farm, CO Horizon Organic Holding Corporation Inc. Horizon Organic Dairy, Inc. CO Horizon Organic Holding Corporation Horizon Organic Dairy, Maryland Farm, CO Horizon Organic Holding Corporation Inc. Horizon Organic Holding Corporation DE Dean Foods Company Horizon Organic International, Inc. DE Horizon Organic Holding Corporation Horizon Organic Dairy, Limited England Horizon Organic International, Inc. Importadora y Distribuidora Dean Mexico Tenedora Dean Foods International, SA de CV Foods, S.A. de C.V. Creamland Dairies, Inc. International Dairy Holdings, Inc. DE Dean International Holding Company Kingsmil - Producao e Comercializacao Portugal Azuis Holdings, B.V. de Leite e Productos Lacteos, Lda. Kohler Mix Specialties of Minnesota, DE Morningstar Foods, LLC LLC Marathon Dairy Investment Corp. Kohler Mix Specialties, LLC, DE Morningstar Foods, LLC Marathon Dairy Investment Corp. Lacteos de Santander, S.A. Spain Leche Celta, S.L. Lacteos Marterra S.L. Spain Glicman - Producao e Comercializacao de Leite e Productos Lacteos, Lda. Land-O-Sun Dairies, LLC DE Dean Southeast, LLC Leche Celta, S.L. Spain Dean Netherlands B.V. Liberty Dairy Company MI Dean Midwest, LLC Louis Trauth Dairy, LLC DE Dean Southeast, LLC Marathon Dairy Investment Corp. MN Morningstar Foods Inc. Mayfield Dairy Farms, Inc. DE Dean Southeast II, LLC

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LEGAL NAME JURISDICTION OF ORGANIZATION OWNER McArthur Dairy, Inc. FL Dean Southeast II, LLC Meadow Brook Dairy Company PA Dean Northeast II, LLC Meadow Farms Limited England Horizon Organic Dairy, Limited Melody Farms, LLC DE Dean Midwest II, LLC Midwest Ice Cream Company DE Dean Midwest, LLC Model Dairy, LLC DE Dean Southwest, LLC Morningstar Foods, LLC DE Suiza Dairy Group, Inc. Morningstar Frederick, Inc. DE Morningstar Foods, LLC Morningstar Receivables Corp. DE Dean Foods Company Southern Foods Group, L.P. Morningstar Services Inc. DE Morningstar Foods Inc. New England Dairies, LLC DE Dean Northeast, LLC Neptune Colorado LLC DE Colorado ES LLC Old G & Co., Inc. Puerto Rico Dean Puerto Rico Holdings, LLC Organic Dairies, Ltd. England Meadow Farms Limited Pet O'Fallon, LLC DE Dean Midwest II, LLC Purity Dairies, Incorporated DE Dean Southwest II, LLC Rachel's Dairy, Ltd. England Horizon Organic Dairy, Limited Red Oak Milk, LLC DE Dean Southeast, LLC Reeves Street, LLC DE Dean Management Corporation Regan, LLC DE Suiza Dairy Group, Inc. Reiter Dairy of Akron, Inc. OH Dean Northeast II, LLC Reiter Dairy of Springfield, LLC DE Dean Midwest, LLC Renoldy Producao e Comercializacao de Portugal Dean Netherlands B.V. Leite e Productos Lacteos, Lda. Robinson Dairy, LLC DE Dean Southwest, LLC Schenkel's All-Star Dairy, LLC DE Dean Midwest II, LLC

Page 5 of 6

LEGAL NAME JURISDICTION OF ORGANIZATION OWNER Schenkel's All-Star Delivery, LLC DE Dean Midwest II, LLC SFG Management DE Dean Southwest, LLC Limited Liability Company Dean Management Corporation Shenandoah's Pride, LLC DE Dean Northeast II, LLC Southern Foods Group, L.P. DE Southern Foods Holdings SFG Management Limited Liability Company Southern Foods Holdings DE Dean Southwest, LLC Specialty Group Receivables GP, LLC DE Dean Specialty Foods Group, LLC Specialty Group Receivables, L.P. DE Dean Specialty Foods Group, LLC Specialty Group Receivables GP, LLC Suiza Dairy Group, Inc. DE Dean Management Corporation Suiza Dairy Group Holdings, Inc. DE Dean Foods Company Sulphur Springs Cultured Specialties, DE Dean Southwest, LLC LLC Swiss II, LLC DE Dean Southwest II, LLC T.G. Lee Foods, Inc. FL Dean Southwest II, LLC Tenedora Dean Foods Internacional, Mexico Dean Southwest II, LLC S.A. de C.V. Dean Holding Company Terrace Dairy, LLC DE New England Dairies, LLC Tuscan/Lehigh Dairies, Inc. DE Dean Northeast, LLC Verifine Dairy Products Corporation WI Dean Midwest, LLC of Sheboygan, Inc. Wengert's Dairy, Inc. DE Dean Northeast II, LLC White Wave, Inc. CO Dean Foods Company

Page 6 of 6 EX-23.1 11 d13098exv23w1.htm CONSENT OF DELOITTE & TOUCHE LLP

EXHIBIT 23

INDEPENDENT AUDITOR’S CONSENT

     We consent to the incorporation by reference in the Registration Statements of Dean Foods Company on Form S-4 (No. 333-29741) and on Form S-8 (Nos. 333-68319, 333-80641, 333-11185, 333-28019, 333-28021, 333-41353, 333-50013, 333-55969, 333-30160, 333-42828, 333-64936, 333-75820 and 333-103252) of our reports dated March 11, 2004, (which reports express an unqualified opinion and include an explanatory paragraph relating to the change in 2002 in the method of accounting for goodwill and other intangible assets to conform to Statement of Financial Accounting Standards No. 142) appearing in the Annual Report on Form 10-K of Dean Foods Company for the year ended December 31, 2003.

DELOITTE & TOUCHE LLP

Dallas, Texas
March 12, 2004

EX-10.1

                                                                    EXHIBIT 10.1


(DEAN FOODS LOGO)

                               DEAN FOODS COMPANY
                           SIXTH AMENDED AND RESTATED
                   1997 STOCK OPTION AND RESTRICTED STOCK PLAN

         1. Purpose of the Plan. This Plan shall be known as the Dean Foods
Company Sixth Amended and Restated 1997 Stock Option and Restricted Stock Plan.
The purpose of the Plan is to attract and retain the best available persons for
positions of substantial responsibility and to provide incentives to such
persons to promote the success of the business of Dean Foods Company and its
subsidiaries.

         Certain options granted under this Plan are intended to qualify as
"incentive stock options" pursuant to Section 422 of the Internal Revenue Code
of 1986, as amended from time to time.

         2. Definitions. As used herein, the following definitions shall apply:

                  "Authorized Officers" shall have the meaning set forth in
Section 19 hereof.

                  "Board" means the Board of Directors of the Company.

                  "Change in Control" means (1) any "person" (as such term is
used in Section 13(d) of the Exchange Act) becomes the "beneficial owner" (as
determined pursuant to Rule 13d-3 under the Exchange Act, but specifically
excluding the Company, any Subsidiary of the Company, and/or any employee
benefit plan maintained by the Company or any Subsidiary of the Company),
directly or indirectly, of securities of the Company representing thirty percent
(30%) or more of the combined voting power of the Company's then outstanding
securities; or (2) during any period of two (2) consecutive years (not including
any period prior to the effective date of this amendment and restatement),
individuals who at the beginning of such period constitute the members of the
Board and any new director, whose election to the Board or nomination for
election to the Board by the Company's stockholders was approved by a vote of at
least two-thirds (?) of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute a
majority of the Board; or (3) the Company or any Subsidiary shall merge with or
consolidate into any other company, other than a merger or consolidation which
would result in the holders of the voting securities of the Company outstanding
immediately prior thereto holding immediately thereafter securities representing
more than sixty percent (60%) of the combined voting power of the voting
securities of the Company or such surviving entity (or its ultimate parent, if
applicable) outstanding immediately after such merger or consolidation; or (4)
the stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets or such a plan is commenced.

                  "Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any successor statute.





                  "Committee" means the committee described in Section 19 that
administers the Plan or, if no such committee has been appointed, the full
Board.

                  "Common Stock" means the common stock, $.01 par value per
share, of the Company. Except as otherwise provided herein, all Common Stock
issued pursuant to this Plan shall have the same rights as all other issued and
outstanding shares of Common Stock, including but not limited to voting rights,
the right to dividends, if declared and paid, and the right to pro rata
distributions of the Company's assets in the event of liquidation.

                  "Company" means Dean Foods Company, a Delaware corporation,
formerly known as Suiza Foods Corporation.

                  "Consultant" means any consultant or advisor who renders bona
fide services to the Company or one of its Subsidiaries, which services are not
in connection with the offer or sale of securities in a capital-raising
transaction.

                  "Date of Grant" shall have the meaning set forth in Section 8
hereof.

                  "Divested Business Unit" shall have the meaning set forth in
Section 10 hereof.

                  "Employee" means any officer or other key employee of the
Company or one of its Subsidiaries (including any director who is also an
officer or key employee of the Company or one of its Subsidiaries).

                  "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

                  "Exercise Price" shall have the meaning set forth in Section 9
hereof.

                  "Fair Market Value" means the closing sale price (or average
of the quoted closing bid and asked prices if there is no closing sale price
reported) of the Common Stock on the date specified as reported by the principal
national exchange or trading system on which the Common Stock is then listed or
traded. If there is no reported price information for the Common Stock, the Fair
Market Value will be determined by the Board or the Committee, in its sole
discretion. In making such determination, the Board or the Committee may, but
shall not be obligated to, commission and rely upon an independent appraisal of
the Common Stock.

                  "Immediate Family Members" shall have the meaning set forth in
Section 15 hereof.

                  "Non-Employee Director" means an individual who is a
"non-employee director" as defined in Rule 16b-3 under the Exchange Act, an
"outside director" within the meaning of Treasury Regulation Section
1.162-27(e)(3) and an "independent director" within the meaning of the New York
Stock Exchange rules.

                  "Nonqualified Option" means any Option that is not a Qualified
Option.

                  "Option" means a stock option granted pursuant to Section 6 of
this Plan.




                                       2


                  "Optionee" means any Employee, Consultant or Non-Employee
Director who receives an Option.

                  "Participant" means any Employee, Consultant or Non-Employee
Director who receives an Option or Restricted Stock pursuant to this Plan.

                  "Qualified Option" means any Option that is intended to
qualify as an "incentive stock option" within the meaning of Section 422 of the
Code.

                  "Qualifying Retirement" means retirement by a Participant from
employment or other service to the Company or any Subsidiary after such
Participant reaches the age of 65.

                  "Restricted Stock" means Common Stock awarded to an Employee,
Consultant or Non-Employee Director pursuant to Section 7 of this Plan.

                  "Restricted Stock Cap" shall have the meaning set forth in
Section 7 hereof.

                  "Rule 16b-3" means Rule 16b-3 of the rules and regulations
under the Exchange Act, as Rule 16b-3 may be amended from time to time, and any
successor provisions to Rule 16b-3 under the Exchange Act.

                  "Subsidiary" means any now existing or hereinafter organized
or acquired company of which more than fifty percent (50%) of the issued and
outstanding voting interests are owned or controlled directly or indirectly by
the Company or through one or more Subsidiaries of the Company.

                  "10-Percent Stockholder" shall have the meaning set forth in
Section 9 hereof.

         3. Term of Plan. The Plan has been adopted by the Board effective as of
February 24, 1997 and approved by the stockholders of the Company. The Plan
shall continue in effect until terminated pursuant to Section 19.

         4. Shares Subject to the Plan. Except as otherwise provided in Section
18 hereof, the aggregate number of shares of Common Stock issuable upon the
exercise of Options or upon the grant of Restricted Stock pursuant to this Plan
shall be 37,500,000 shares. Such shares may either be authorized but unissued
shares or treasury shares. The Company shall, during the term of this Plan,
reserve and keep available a number of shares of Common Stock sufficient to
satisfy the requirements of the Plan. If an Option should expire or become
unexercisable for any reason without having been exercised in full, or
Restricted Stock should fail to vest and be forfeited in whole or in part for
any reason, then the shares that were subject thereto shall, unless the Plan has
terminated, be available for the grant of additional Options or Restricted Stock
under this Plan, subject to the limitations set forth above and in Section 19
hereof.

         5. Eligibility. Qualified Options may be granted under Section 6 of the
Plan to such Employees of the Company or its Subsidiaries as may be determined
by the Board or the Committee (or the Authorized Officers, to the extent
permitted by Section 19 of this Plan). Nonqualified Options may be granted under
Section 6 of the Plan to such Employees,




                                       3


Consultants and Non-Employee Directors of the Company or its Subsidiaries as may
be determined by the Board or the Committee (or the Authorized Officers, to the
extent permitted by Section 19 of this Plan). Restricted Stock may be granted
under Section 7 of the Plan to such Employees, Consultants and Non-Employee
Directors of the Company or its Subsidiaries as may be determined by the Board
or the Committee (or the Authorized Officers, to the extent permitted by Section
19 of this Plan).

         6. Grant of Options. (a) Except as limited by Section 4 hereof, the
Board or the Committee shall determine the number of shares of Common Stock to
be offered from time to time pursuant to Options granted hereunder and shall
grant Options under the Plan. In connection with the granting of Qualified
Options, the aggregate Fair Market Value (determined at the Date of Grant of a
Qualified Option) of the shares with respect to which Qualified Options are
exercisable for the first time by an Optionee during any calendar year (under
all such plans of the Optionee's employer company and its parent and subsidiary
corporations as defined in Section 424(e) and (f) of the Code, or a corporation
or a parent or subsidiary corporation of such corporation issuing or assuming an
Option in a transaction to which Section 424(a) of the Code applies) shall not
exceed $100,000 or such other amount as from time to time provided in Section
422(d) of the Code or any successor provision. The grant of Options shall be
evidenced by Option agreements containing such terms and provisions as are
approved by the Board or the Committee and executed on behalf of the Company by
an appropriate officer.

                  (b) Unless the Board or the Committee determines otherwise
with respect to a particular year, each Non-Employee Director will automatically
be granted a Nonqualified Option to purchase 7,500 shares of Common Stock
(subject to adjustment pursuant to Section 18 hereof), at an exercise price
equal to the Fair Market Value of the Common Stock on the Date of Grant, on June
30 of each year.

         7. Restricted Stock. The Board or the Committee shall from time to time
determine the number of shares of Common Stock to be granted as Restricted
Stock; provided that no more than an aggregate amount of 225,000 shares of
Restricted Stock may be issued under the Plan (such limit being herein referred
to as the "Restricted Stock Cap"). Any shares of Restricted Stock that fail to
vest and are forfeited shall not count against the Restricted Stock Cap set
forth in the preceding sentence. The grant of Restricted Stock shall be
evidenced by Restricted Stock agreements containing such terms and provisions as
are approved by the Board or the Committee and executed on behalf of the Company
by an appropriate officer.

         8. Date of Grant. The date of grant of an Option or Restricted Stock
under the Plan (the "Date of Grant") shall be the date on which the Board or the
Committee awards the Option or Restricted Stock or, if the Board or the
Committee so determines, the date specified by the Board or the Committee as the
date the award is to be effective. Notice of the grant shall be given to each
Participant to whom an Option or Restricted Stock is granted promptly after the
date of such grant.

         9. Price. The exercise price for each share of Common Stock subject to
an Option (the "Exercise Price") granted pursuant to Section 6 of the Plan shall
be determined by the Board or the Committee at the Date of Grant; provided,
however, that (a) the Exercise Price for any Option shall not be less than 100%
of the Fair Market Value of the Common Stock at the Date of Grant, and (b) if
the Optionee owns on the Date of Grant more than 10 percent of the total




                                       4


combined voting power of all classes of stock of the Company or its parent or
any of its subsidiaries, as more fully described in Section 422(b)(6) of the
Code or any successor provision (such stockholder is referred to herein as a
"10-Percent Stockholder"), the Exercise Price for any Qualified Option granted
to such Optionee shall not be less than 110% of the Fair Market Value of the
Common Stock at the Date of Grant. The Board or the Committee in its discretion
may award shares of Restricted Stock under Section 7 of the Plan to Participants
without requiring the payment of cash consideration for such shares.

         10. Vesting. (a) Subject to the provisions of this Plan, each Option
and Restricted Stock award under the Plan shall vest or be subject to forfeiture
in accordance with the provisions set forth in the applicable Option agreement
or Restricted Stock agreement.

                  (b) In addition to the vesting provisions contained in each
Option and Restricted Stock agreement, each Option and share of Restricted Stock
granted under the Plan shall also be subject to the following vesting
provisions:

                           (i) If the Company shall sell or otherwise divest of
all of its ownership interest in any Subsidiary or any business unit or
operation (a "Divested Business Unit") owned by the Company or any Subsidiary,
then the outstanding unvested Options and shares of Restricted Stock held by
each Employee of such Divested Business Unit shall automatically vest in full as
of the date of the consummation of such sale or divestiture;

                           (ii) Each unvested Option and share of Restricted
Stock shall immediately vest in full upon the death of the holder of such Option
or Restricted Stock;

                           (iii) Each unvested Option and share of Restricted
Stock shall immediately vest in full upon any Change in Control;

                           (iv) Each unvested Option and share of Restricted
Stock shall immediately vest in full upon the permanent and total disability (as
defined within the meaning of Section 22(e)(3) of the Code) of the holder of
such Option or Restricted Stock; and

                           (iv) In the event of the Qualifying Retirement of a
Participant, all unvested Options and shares of Restricted Stock held by such
Participant shall automatically vest in full as of the effective date of such
Participant's Qualifying Retirement.

         11. Exercise. (a) An Option will not be deemed to be exercised and
shares will not be issued, until the applicable Exercise Price is received by
the Company. A Participant may pay the Exercise Price of an Option by the
delivery of cash, check or wire transfer.

                  (b) If the shares to be purchased are covered by an effective
registration statement under the Securities Act of 1933, as amended, any Option
may be exercised by a broker-dealer acting on behalf of an Optionee if (i) the
broker-dealer has received from the Company confirmation of the existence and
validity of the Option to be exercised, together with instructions from the
Optionee requesting the Company to deliver the shares of Common Stock subject to
such Option to the broker-dealer on behalf of the Optionee and specifying the
account into which such shares should be deposited, (ii) adequate provision has
been made with respect to the payment of any withholding taxes due upon such
exercise, and (iii) the broker-dealer and





                                       5


the Optionee have otherwise complied with Section 220.3(e)(4) of Regulation T,
12 CFR Part 220, or any successor provision, and any other applicable
regulations.

         12. Expiration of Options. (a) No Option shall be exercisable at any
time after the expiration of ten (10) years from the Date of Grant; provided,
however, that if the Optionee with respect to a Qualified Option is a 10-Percent
Stockholder on the Date of Grant of such Qualified Option, then such Option
shall not be exercisable after the expiration of five (5) years from its Date of
Grant.

                  (b) In addition, if an Optionee ceases to be an Employee or
Non-Employee Director of the Company or any Subsidiary for any reason (including
because such Optionee is an Employee of a Divested Business Unit), such
Optionee's vested Options shall expire on the earlier of the expiration date
contained in the corresponding Option Agreement or (a) 60 days following the
date such Optionee ceases to be an Employee or Non-Employee Director of the
Company or any Subsidiary, if such cessation of service is not due to the death,
Qualifying Retirement or permanent and total disability (within the meaning of
Section 22(e)(3) of the Code) of the Optionee, or (b) 12 months following the
date such Optionee ceases to be an Employee or Non-Employee Director of the
Company or any Subsidiary, if such cessation of service is due to the death or
permanent and total disability (as defined above) of the Optionee. Options held
by an Optionee who has retired pursuant to a Qualifying Retirement will remain
exercisable until the earlier of (i) the tenth anniversary of the date the
Option was granted, and (ii) the first anniversary of the Optionee's death. Upon
the death of an Optionee, any vested Option exercisable on the date of death may
be exercised by the Optionee's estate or by a person who acquires the right to
exercise such Option by bequest or inheritance or by reason of the death of the
Optionee, provided that such exercise occurs within the shorter of the remaining
option term of the Option and 12 months after the date of the Optionee's death.

                  (c) Notwithstanding any provision of this Plan or any Option
Agreement to the contrary, no Optionee may, under any circumstances, exercise a
vested Option following termination of employment if the Optionee is discharged
due to the Optionee's willful or intentional fraud, embezzlement or other
conduct seriously detrimental to the Company or any Subsidiary. The
determination of whether or not an Optionee has been discharged for any of the
reasons specified in the preceding sentence will be made by the Committee or the
Board.

         13. Option Financing. Upon the exercise of any Option granted under the
Plan, the Company may, but shall not be required to, make financing available to
the Participant for the purchase of shares of Common Stock pursuant to such
Option on such terms as the Board or the Committee may specify.

         14. Withholding of Taxes. The Board or the Committee shall make such
provisions and take such steps as it may deem necessary or appropriate for the
withholding of any taxes that the Company is required by any law or regulation
of any governmental authority to withhold in connection with any Option or
Restricted Stock including, but not limited to, withholding the issuance of all
or any portion of the shares of Common Stock subject to such Option or
Restricted Stock until the Participant reimburses the Company for the amount it
is required to withhold with respect to such taxes, canceling any portion of
such issuance in an amount sufficient to reimburse the Company for the amount it
is required to withhold or taking any other action reasonably required to
satisfy the Company's withholding obligation.




                                       6


         15. Conditions Upon Issuance of Shares. (a) The Company shall not be
obligated to sell or issue any shares upon the exercise of any Option granted
under the Plan or to deliver Restricted Stock unless the issuance and delivery
of shares complies with all provisions of applicable federal and state
securities laws and the requirements of any national exchange or trading system
on which the Common Stock is then listed or traded.

                  (b) As a condition to the exercise of an Option or the grant
of Restricted Stock, the Company may require the person exercising the Option or
receiving the grant of Restricted Stock to make such representations and
warranties as may be necessary to assure the availability of an exemption from
the registration requirements of applicable federal and state securities laws.

                  (c) The Company shall not be liable for refusing to sell or
issue any shares covered by any Option or for refusing to issue Restricted Stock
if the Company cannot obtain authority from the appropriate regulatory bodies
deemed by the Company to be necessary to sell or issue such shares in compliance
with all applicable federal and state securities laws and the requirements of
any national exchange or trading system on which the Common Stock is then listed
or traded. In addition, the Company shall have no obligation to any Participant,
express or implied, to list, register or otherwise qualify the shares of Common
Stock covered by any Option or Restricted Stock.

                  (d) No Participant will be, or will be deemed to be, a holder
of any Common Stock subject to an Option unless and until the Option is vested,
and the Participant has exercised the Option and paid the purchase price for the
subject shares of Common Stock. Options and shares of Restricted Stock that have
not fully vested shall be transferable only by will or the laws of descent and
distribution and Options shall be exercisable during the Participant's lifetime
only by such Participant; provided, however, that the Participant may transfer
his or her Options and/or unvested Restricted Stock without consideration, to
(i) the spouse, children or grandchildren of the Participant ("Immediate Family
Members"), (ii) a trust or trusts, or to a guardian under the Uniform Gift to
Minors Act, for the exclusive benefit of such Immediate Family Members, or (iii)
a partnership or other entity in which such Immediate Family Members are the
only partners, provided that subsequent transfers of transferred Options or
unvested shares of Restricted Stock shall be prohibited except by will or the
laws of descent and distribution. Following transfer, any such Options shall
continue to be subject to the same terms and conditions as were applicable
immediately prior to transfer, provided that, for purposes of each award
agreement and the vesting and expiration provisions hereof, the terms
"Participant" and "Optionee" shall be deemed to refer to the transferee
(however, the events of termination of employment, if any, set forth in the
agreement and the obligation to pay withholding taxes shall continue to apply to
the transferor). Qualified Options shall be nontransferable except by will or
the laws of descent and distribution, and may only be exercisable during the
Participant's lifetime, by the Participant.

         16. Restrictions on Shares. Shares of Common Stock issued pursuant to
the Plan may be subject to restrictions on transfer under applicable federal and
state securities laws. The Board may impose such additional restrictions on the
ownership and transfer of shares of Common Stock issued pursuant to the Plan as
it deems desirable; any such restrictions shall be set forth in any award
agreement entered into hereunder.




                                       7


         17. Modification of Awards. At any time and from time to time, the
Board or the Committee may execute an instrument providing for modification,
extension or renewal of any outstanding award, provided that no such
modification, extension or renewal shall (a) impair any award without the
consent of the holder of the award, or (b) decrease the exercise price of any
Option without the consent of the stockholders of the Company. Notwithstanding
the foregoing, in the event of a modification, extension or renewal of a
Qualified Option, the Board or the Committee may increase the exercise price of
such Option if necessary to retain the qualified status of such Option. Any
amendment to the Plan shall apply to all Options and shares of Restricted Stock
outstanding at the time of such amendment in addition to all awards granted
thereafter, subject to the limitations of clause (a) of the first sentence of
this Section 17.

         18. Effect of Change in Stock Subject to the Plan. In the event that
each of the outstanding shares of Common Stock (other than shares held by
dissenting stockholders) shall be changed into or exchanged for a different
number or kind of shares of stock of the Company or of another company (whether
by reason of merger, consolidation, recapitalization, reclassification,
split-up, combination of shares or otherwise), or in the event a stock split or
stock dividend occurs, then there shall be substituted for each share of Common
Stock then subject to Options or Restricted Stock awards or available for
Options or Restricted Stock awards the number and kind of shares of stock into
which each outstanding share of Common Stock (other than shares held by
dissenting stockholders) shall be so changed or exchanged, or the number of
shares of Common Stock as is equitably required in the event of a stock split or
stock dividend, together with an appropriate adjustment of the Exercise Price.
The Board may, but shall not be required to, provide additional anti-dilution
protection to a Participant under the terms of the Participant's Option or
Restricted Stock agreement.

         19. Administration. (a) The Plan shall be administered by the Board or
by a committee of the Board comprised solely of two or more Non-Employee
Directors appointed by the Board (the "Committee"). Options and Restricted Stock
may be granted under Sections 6 and 7, respectively, (i) by the Board as a
whole, or (ii) by majority agreement of the members of the Committee. Subject to
the limitations and qualifications set forth in this Plan, the Board or the
Committee shall determine the number of Options or shares of Restricted Stock to
be granted, the number of shares subject to each Option or Restricted Stock
grant, the exercise price or prices of each Option, the vesting and exercise
period of each Option and the vesting and/or forfeiture provisions relating to
Restricted Stock, whether an Option may be exercised as to less than all of the
Common Stock subject thereto, and such other terms and conditions of each Option
or grant of Restricted Stock, if any, as are consistent with the provisions of
this Plan. To the extent permitted by applicable law (including the Exchange Act
and the Code), the Board or the Committee may at any given time authorize an
aggregate number of Options or shares of Restricted Stock to be granted to
eligible Employees, and then authorize one or more officers of the Company (the
"Authorized Officers") to allocate such awards among eligible Employees;
provided that the Authorized Officers may not allocate awards to themselves or
other executive officers, and the terms of the awards, including the Exercise
Price (if any) must be established by the Board or the Committee. Option
agreements and Restricted Stock agreements, in the forms as approved by the
Board or the Committee, and containing such terms and conditions consistent with
the provisions of this Plan as are determined by the Board or the Committee, may
be executed on behalf of the Company by the Chairman of the Board, the President
or any Vice President of the Company. The Board or the Committee shall have
complete authority to






                                       8


construe, interpret and administer the provisions of this Plan and the
provisions of the Option agreements and Restricted Stock agreements granted
hereunder; to prescribe, amend and rescind rules and regulations pertaining to
this Plan; to suspend or discontinue this Plan; and to make all other
determinations necessary or deemed advisable in the administration of the Plan.
The determinations, interpretations and constructions made by the Board or the
Committee shall be final and conclusive. No member of the Board or the Committee
shall be liable for any action taken, or failed to be taken, made in good faith
relating to the Plan or any award thereunder, and the members of the Board or
the Committee shall be entitled to indemnification and reimbursement by the
Company in respect of any claim, loss, damage or expense (including attorneys'
fees) arising therefrom to the fullest extent permitted by law.

                  (b) Although the Board or the Committee may suspend or
discontinue the Plan at any time, all Qualified Options must be granted before
February 24, 2007.

                  (c) Subject to any applicable requirements of Rule 16b-3 or of
any national exchange or trading system on which the Common Stock is then listed
or traded, and subject to the stockholder approval requirements of Sections 422
and 162(m)(4)(C) of the Code, the Board may amend any provision of this Plan in
any respect in its discretion.

         20. Continued Employment Not Presumed. Nothing in this Plan or any
document describing it nor the grant of any Option or Restricted Stock shall
give any Participant the right to continue in the employment of the Company or
affect the right of the Company to terminate the employment of any such person
with or without cause.

         21. Liability of the Company. Neither the Company, its directors,
officers or employees or the Committee, nor any Subsidiary which is in existence
or hereafter comes into existence, shall be liable to any Participant or other
person if it is determined for any reason by the Internal Revenue Service or any
court having jurisdiction that any Qualified Option granted hereunder does not
qualify for tax treatment as an incentive stock option under Section 422 of the
Code.

         22. GOVERNING LAW. THE PLAN SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF STATE OF DELAWARE AND THE UNITED STATES, AS
APPLICABLE, WITHOUT REFERENCE TO THE CONFLICT OF LAWS PROVISIONS THEREOF.

         23. Severability of Provisions. If any provision of this Plan is
determined to be invalid, illegal or unenforceable, such invalidity, illegality
or unenforceability shall not affect the remaining provisions of the Plan, but
such invalid, illegal or unenforceable provision shall be fully severable, and
the Plan shall be construed and enforced as if such provision had never been
inserted herein.

Last Amended and Restated July 2003




                                       9

EX-10.2

                                                                    EXHIBIT 10.2

(DEAN FOODS LOGO)


                               DEAN FOODS COMPANY
                           SECOND AMENDED AND RESTATED
                             1989 STOCK AWARDS PLAN


         1. Purpose of the Plan. This Plan shall be known as the Dean Foods
Company Second Amended and Restated 1989 Stock Awards Plan. The purpose of the
Plan is to attract and retain the best available persons for positions of
substantial responsibility and to provide incentives to such persons to promote
the success of the business of Dean Foods Company and its subsidiaries.

         Certain options granted under this Plan are intended to qualify as
"incentive stock options" pursuant to Section 422 of the Internal Revenue Code
of 1986, as amended from time to time.

         2. Definitions. The following definitions are applicable to the Plan:

         "Authorized Officers" shall have the meaning set forth in Section 18
hereof.

         "Award" shall have the meaning set forth in Section 6 hereof.

         "Board" means the Board of Directors of the Company.

         "Change in Control" means (1) any "person" (as such term is used in
Section 13(d) of the Exchange Act but specifically excluding the Company, any
Subsidiary of the Company and/or any employee benefit plan maintained by the
Company or any Subsidiary of the Company) becomes the "beneficial owner" (as
determined pursuant to Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing thirty percent (30%) or
more of the combined voting power of the Company's then outstanding securities;
or (2) during any period of two (2) consecutive years (not including any period
prior to the effective date of this amendment and restatement), individuals who
at the beginning of such period constitute the members of the Board and any new
director, whose election to the Board or nomination for election to the Board by
the Company's stockholders was approved by a vote of at least two-thirds (2/3)
of the directors then still in office who either were directors at the beginning
of the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority of the Board; or (3) the
Company or any Subsidiary shall merge with or consolidate into any other
company, other than a merger or consolidation which would result in the holders
of the voting securities of the Company outstanding immediately prior thereto
holding immediately



thereafter securities representing more than sixty percent (60%) of the combined
voting power of the voting securities of the Company or such surviving entity
(or its ultimate parent, if applicable) outstanding immediately after such
merger or consolidation; or (4) the stockholders of the Company approve a plan
of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's assets
or such a plan is commenced.

         "Code" means the Internal Revenue Code of 1986, as amended from time to
time, and any successor statute.

         "Committee" means the committee described in Section 18 that
administers the Plan or, if no such committee has been appointed, the full
Board.

         "Common Stock" means the common stock, $0.01 par value per share, of
the Company. Except as otherwise provided herein, all Common Stock issued
pursuant to this Plan shall have the same rights as all other issued and
outstanding shares of Common Stock, including but not limited to voting rights,
the right to dividends, if declared and paid, and the right to pro rata
distributions of the Company's assets in the event of liquidation.

         "Company" means Dean Foods Company, a Delaware corporation formerly
known as Suiza Foods Corporation.

         "Consultant" means any consultant or advisor who renders bona fide
services to the Company or one of its Subsidiaries, which services are not in
connection with the offer or sale of securities in a capital-raising
transaction.

         "Date of Grant" shall have the meaning set forth in Section 7 hereof.

         "Divested Business Unit" shall have the meaning set forth in Section 9
hereof.

         "Employee" means any officer or other key employee of the Company or
one of its Subsidiaries (including any director who is also an officer or key
employee of the Company or one of its Subsidiaries).

         "Exchange Act" means the Securities Exchange Act of 1934, as amended.

         "Exercise Price" shall have the meaning set forth in Section 8 hereof.

         "Fair Market Value" means the closing sale price (or average of the
quoted closing bid and asked prices if there is no closing sale price reported)
of the Common Stock on the date specified as reported by the principal national
exchange or trading system on which the Common Stock is then listed or traded.
If there is no reported price information for the Common Stock, the Fair Market
Value will be determined by the Board or the Committee, in its sole discretion.
In making such determination, the Board

                                       2



or the Committee may, but shall not be obligated to, commission and rely upon an
independent appraisal of the Common Stock.

         "Immediate Family Members" shall have the meaning set forth in Section
14(d) hereof.

         "Non-Employee Director" means an individual who is a "non-employee
director" as defined in Rule 16b-3 under the Exchange Act, an "outside director"
within the meaning of Treasury Regulation Section 1.162-27(e)(3) and
"independent" within the meaning of the New York Stock Exchange rules.

         "Nonqualified Option" means any Option that is not a Qualified Option.

         "Option" means a stock option granted pursuant to Section 6 of this
Plan.

         "Optionee" means any Employee, Consultant or Non-Employee Director who
receives an Option.

         "Original Sponsor" shall have the meaning set forth in Section 3
hereof.

         "Participant" means any Employee, Consultant or Non-Employee Director
who receives an Award pursuant to this Plan.

         "Qualified Option" means any Option that is intended to qualify as an
"incentive stock option" within the meaning of Section 422 of the Code.

         "Qualifying Retirement" means retirement by a Participant from
employment or other service to the Company or any Subsidiary after such
Participant reaches the age of 65.

         "Restricted Stock" means Common Stock awarded to an Employee,
Consultant or Non-Employee Director pursuant to Section 6(c) of this Plan.

         "Rule 16b-3" means Rule 16b-3 of the rules and regulations under the
Exchange Act, as Rule 16b-3 may be amended from time to time, and any successor
provisions to Rule 16b-3 under the Exchange Act.

         "Subsidiary" means any now existing or hereinafter organized or
acquired company of which more than fifty percent (50%) of the issued and
outstanding voting interests are owned or controlled directly or indirectly by
the Company or through one or more Subsidiaries of the Company.

         "10-Percent Stockholder" shall have the meaning set forth in Section 8
hereof.

         3. Term of Plan. This Plan was adopted by the Company in December 2001
in connection with the Company's acquisition of the former Dean Foods Company



                                       3



(which company was merged into a Subsidiary of the Company now known as Dean
Holding Company) (such predecessor being herein referred to as the "Original
Sponsor"). Such adoption was approved by the shareholders of the Company at a
special meeting of shareholders held September 21, 2001. This Plan was first
adopted by the Board of Directors of the Original Sponsor on August 2, 1989. The
Plan shall continue in effect until terminated pursuant to Section 18 hereof.

         4. Shares Subject to the Plan. Upon completion of the acquisition of
the Original Sponsor by the Company on December 21, 2001, all outstanding Awards
under this Plan were automatically converted pursuant to the terms of the
Agreement and Plan of Merger dated April 4, 2001 by and among the Company (then
known as Suiza Foods Corporation), a Delaware corporation, Blackhawk Acquisition
Corp., a Delaware corporation and Dean Foods Company, a Delaware corporation
(now known as Dean Holding Company). From and after the effective date of such
acquisition, the number of shares of Common Stock which may be issued pursuant
to Awards granted under the Plan shall not exceed, in the aggregate, 3,789,728
shares (subject to adjustment as provided in Section 17 hereof) PLUS the number
of shares that would have been issuable under any Awards that, after December
21, 2001, expire unexercised or are cancelled, terminated, surrendered or
forfeited in any manner without the issuance of shares of Common Stock
thereunder, which shares shall again be available for the grant of additional
Awards under the Plan. Shares of Common Stock issuable hereunder may be either
authorized but unissued shares, treasury shares, or a combination thereof, as
the Committee shall determine.

         5. Eligibility. Qualified Options may be granted under Section 6 of
this Plan to such Employees of the Company or its Subsidiaries as may be
determined by the Board or the Committee; other Awards may be granted under
Section 6 of the Plan to such Employees, Consultants and Non-Employee Directors
of the Company or its Subsidiaries as may be determined by the Board or the
Committee

         6. Grant of Options, SARs, Restricted Stock, Performance Shares and
Other Awards. The Board or Committee may from time to time grant to eligible
Employees, in accordance with this paragraph 6 and the other provisions of this
Plan, Options, stock appreciation rights ("SARs"), Restricted Stock, performance
share awards and other awards (any award granted under this Plan being herein
referred to as an "Award"). Subject to the limitations and qualifications set
forth below or elsewhere in this Plan, the Board or the Committee (or the
Authorized Officers, to the extent permitted by Section 18 of this Plan) shall
determine the number of Options, shares of Restricted Stock or other Awards to
be granted, the number of shares subject to each Award, the Exercise Price of
each Option, the vesting and exercise period of each Award and such other terms
and conditions of each Award, if any, as are consistent with the provisions of
this Plan. All Awards must be evidenced by a written Award agreement, signed by
an authorized officer of the Company.

                  (a) Options. Options granted under this Plan may be Qualified
Options within the meaning of Section 422A of the Code or any successor
provision, or


                                       4



Non-Qualified Options; except that Qualified Options may only be granted to
eligible Employees, and no Qualified Option may be granted under this Plan after
July 24, 2007. In connection with the granting of Qualified Options, the
aggregate Fair Market Value (determined at the Date of Grant of a Qualified
Option) of the shares with respect to which Qualified Options are exercisable
for the first time by an Optionee during any calendar year (under all such plans
of the Optionee's employer company and its parent and subsidiary corporations as
defined in Section 424(e) and (f) of the Code, or a corporation or a parent or
subsidiary corporation of such corporation issuing or assuming an Option in a
transaction to which Section 424(a) of the Code applies (collectively, such
companies described in this sentence are hereinafter referred to as "Related
Companies")) shall not exceed $100,000 or such other amount as from time to time
provided in Section 422(d) of the Code or any successor provision.

                  (b) SARs.

                           (i) Subject to the limitations set forth herein, an
SAR shall entitle its holder to receive from the Company, at the time of
exercise of such right, an amount equal to the excess of the fair market value
(at the date of exercise) of a share of Common Stock over a specified price
fixed by the Board or the Committee multiplied by the number of shares as to
which the holder is exercising the SAR. SARs may be in tandem with any
previously or contemporaneously granted Option or independent of any Option. The
specified price of a tandem SAR shall be the Option price of the related Option.
The amount payable may be paid by the Company in Common Stock (valued at its
Fair Market Value on the date of exercise), cash or a combination thereof, as
the Board or the Committee may determine, which determination may take into
consideration any preference expressed by the holder.

                           (ii) To the extent a tandem SAR is exercised, the
related Option will be cancelled and, to the extent the related Option is
exercised, the tandem SAR will be cancelled.

                  (c) Restricted Stock.

                           (i) The Board or the Committee may award to any
eligible Employee, Non-Employee Director or Consultant shares of Common Stock,
subject to this paragraph 6(c) and such other terms and conditions as the Board
or the Committee may prescribe (such shares being called "Restricted Stock").

                           (ii) There shall be established for each Restricted
Stock Award a restriction period (the "restriction period"), of such length as
shall be determined by the Board or the Committee. Shares of Restricted Stock
may not be sold, assigned, transferred, pledged or otherwise encumbered, except
as hereinafter provided, during the restriction period. Except for such
restrictions on transfer and such other restrictions as the Committee may
impose, the Participant shall have all the rights of a holder of Common Stock as
to such Restricted Stock. The Board or the Committee, in its sole discretion,
may permit or require the payment of any cash dividends to be deferred and, if



                                       5



the Board or the Committee so determines, reinvested in additional Restricted
Stock or otherwise invested or accruing a yield.

                  (d) Performance Share Awards. A performance share Award shall
entitle its holder to receive from the Company, following the expiration of a
period of at least one fiscal year specified by the Committee or the Board (the
"performance measurement period"), cash or Common Stock or a combination thereof
as determined by the Committee or the Board (either at the time of grant or
thereafter) in an aggregate amount based on the level of achievement during the
performance measurement period of one or more Company financial performance
criteria (such criteria to be determined by the Board or the Committee in its
sole discretion). The aggregate amount received by a Participant shall be
determined by a formula for such Participant established by the Committee or the
Board not later than the ninetieth day of the performance measurement period.
The formula shall establish a range between a minimum level of achievement
before any amount will be received and a level of achievement at or above which
the maximum potential amount will be received.

                  (e) Other Awards.

                           (i) Other Awards may be granted under this Plan,
including, without limitation, convertible debentures, other convertible
securities and other forms of Award measured in whole or in part by the value of
shares of Common Stock, the performance of the Participant, or the performance
of the Company, any Subsidiary or any operating unit thereof. Such Awards may be
payable in Common Stock, cash or a combination thereof, and shall be subject to
such restrictions and conditions as the Board or the Committee shall determine.
At the time of such an Award, the Board or Committee shall, if applicable,
determine a performance period and performance goals to be achieved during the
performance period, subject to such later revisions as the Board or Committee
shall deem appropriate to reflect significant unforeseen events such as changes
in laws, regulations or accounting practices, unusual or nonrecurring items or
occurrences. Following the conclusion of each performance period, the Board or
Committee shall determine the extent to which performance goals have been
attained or a degree of achievement between maximum and minimum levels during
the performance period in order to evaluate the level of payment to be made, if
any.

                           (ii) The purchase price per share of Common Stock
under other Awards involving the right to purchase Common Stock (including for
this purpose the right to purchase Common Stock upon the conversion of
convertible securities) shall be fixed by the Board or Committee at not less
than 85% of the Fair Market Value of a share of Common Stock on the date of
Award and not less than the par value of a share of Common Stock.

                           (iii) A Participant may elect to defer all or a
portion of any such Award in accordance with procedures established by the Board
or Committee. Deferred amounts will be subject to such terms and conditions and
shall accrue such yield thereon (which may be measured by the Fair Market Value
of the Common Stock and dividends


                                       6



thereon) as the Board or Committee may determine. Payment of deferred amounts
may be in cash, Common Stock or a combination thereof, as the Board or Committee
may determine. Deferred amounts shall be considered an Award under the Plan. The
Board or Committee may establish a trust or trusts to hold deferred amounts or
any portion thereof for the benefit of Participants.

                  (f) Cash Payments. SARs and Nonqualified Options may, in the
Board's or Committee's discretion, provide that in connection with exercises
thereof the holders will receive cash payments based on formulas designed to
reimburse holders for their income tax liability resulting from such exercise
and the payment made pursuant to this paragraph 6(f).

                  (g) Surrender. If so provided by the Board or Committee at or
subsequent to the time of grant, an Award may be surrendered to the Company on
such terms and conditions, and for such consideration, as the Board or Committee
shall determine.

                  (h) Foreign Alternatives. Without amending and notwithstanding
the other provisions of this Plan, in the case of any Award to be held by any
Participant who is employed outside the United States or who is a foreign
national, the Committee or the Board may specify that such Award shall be made
on such terms and conditions different from those specified in the Plan as may,
in the judgment of the Committee or the Board, be necessary or desirable to
further the purposes of the Plan.

         7. Date of Grant. The date of grant of an Award granted under this Plan
(the "Date of Grant") shall be the date on which the Board or the Committee
grants the Award or, if the Board or the Committee so determines, the date
specified by the Board or the Committee as the date the Award is to be
effective. Notice of the grant shall be given to each Participant to whom an
Award is granted promptly after the date of such grant.

         8. Price. The exercise price for each Option (the "Exercise Price")
granted pursuant to Section 6 of this Plan shall be determined by the Board or
the Committee at the Date of Grant; provided, however, that the Exercise Price
(a) for any Qualified Option shall not be less than 100% of the Fair Market
Value of the Common Stock at the Date of Grant, and (b) for any Nonqualified
Option, not less than 85% of the Fair Market Value of the Common Stock on the
Date of Grant. If the Optionee owns on the Date of Grant more than 10 percent of
the total combined voting power of all classes of stock of the Company or its
parent or any of its Subsidiaries, as more fully described in Section 422(b)(6)
of the Code or any successor provision (such stockholder is referred to herein
as a "10-Percent Stockholder"), the Exercise Price for any Qualified Option
granted to such Optionee shall not be less than 110% of the Fair Market Value of
the Common Stock at the Date of Grant. The Board or the Committee in its
discretion may award shares of Restricted Stock, Performance Share Awards and
other Awards not involving the right to purchase Common Stock under Section 6 of
this Plan to Participants without requiring the payment of cash consideration
for such shares.


                                       7



         9. Vesting. (a) Subject to the provisions of this Plan, each Award
granted under this Plan shall vest or be subject to forfeiture in accordance
with the provisions set forth in the applicable Award agreement.

                  (b) In addition to the vesting provisions contained in each
Option agreement, each Option granted under the Plan shall also be subject to
the following additional vesting provisions:

                           (i) If the Company shall sell or otherwise divest all
of its ownership interest in any Subsidiary or any business unit or operation (a
"Divested Business Unit") owned by the Company or any Subsidiary, then the
outstanding unvested Options held by each Employee of such Divested Business
Unit shall automatically vest in full as of the date of the consummation of such
sale or divestiture;

                           (ii) Each unvested Option shall immediately vest in
full upon the death of the holder of such Option;

                           (iii) Each unvested Option shall immediately vest in
full upon any Change in Control;

                           (iv) Each unvested Option shall immediately vest in
full upon the permanent and total disability (as defined within the meaning of
Section 22(e)(3) of the Code) of the holder of such Option; and

                           (iv) In the event of the Qualifying Retirement of an
Optionee, all unvested Options held by such Optionee shall automatically vest in
full as of the effective date of such Optionee's Qualifying Retirement.

         10. Exercise. (a) An Award will not be deemed to be validly exercised,
and shares will not be issued, until payment of any applicable Exercise Price is
received by the Company. A Participant may pay the exercise price of an Award by
the delivery of cash, check or wire transfer.

                  (b) If the shares to be issued upon the exercise of an Award
are covered by an effective registration statement under the Securities Act of
1933, as amended, any Award may be exercised by a broker-dealer acting on behalf
of a Participant if (i) the broker-dealer has received from the Participant or
the Company a fully- and duly-endorsed agreement evidencing such Award, together
with instructions signed by the Participant requesting the Company to deliver
the shares of Common Stock subject to such Award to the broker-dealer on behalf
of the Participant and specifying the account into which such shares should be
deposited, (ii) adequate provision has been made with respect to the payment of
any withholding taxes due upon such exercise, and (iii) the broker-dealer and
the Participant have otherwise complied with Section 220.3(e)(4) of Regulation
T, 12 CFR Part 220, or any successor provision.


                                       8



         11. Expiration of Awards. If a Participant ceases to be an Employee or
Non-Employee Director of the Company or any Subsidiary for any reason (including
because such Participant is an Employee of a Divested Business Unit), unless the
Award agreement provides otherwise, such Participant's unexercised Awards
(whether vested or not) shall expire on the earlier of the expiration date
contained in the corresponding Award agreement, or (a) 60 days following the
date such Participant ceases to be an Employee or Non-Employee Director of the
Company or any Subsidiary, if such cessation of service is not due to the death,
Qualifying Retirement or permanent and total disability (within the meaning of
Section 22(e)(3) of the Code) of the Participant, or (b) 12 months following the
date such Participant ceases to be an Employee or Non-Employee Director of the
Company or any Subsidiary, if such cessation of service is due to the death or
permanent and total disability (as defined above) of the Participant. Awards
held by a Participant who has retired pursuant to a Qualifying Retirement will
remain exercisable until the earlier of (i) the date indicated in the applicable
Award agreement, and (ii) the first anniversary of the Participant's death. Upon
the death of a Participant, any vested and unexercised Award may be exercised by
the Participant's estate or by a person who acquires the right to exercise such
Award by bequest or inheritance or by reason of the death of the Participant,
provided that such exercise occurs within both the remaining term of the Award
and 12 months after the date of the Participant's death.

         Notwithstanding any provision of this Plan or any Award agreement to
the contrary, no Participant may, under any circumstances, exercise a vested
Award following termination of employment if the Participant is discharged due
to the Participant's willful or intentional fraud, embezzlement or other conduct
seriously detrimental to the Company or any Subsidiary. The determination of
whether or not a Participant has been discharged for any of the reasons
specified in the preceding sentence will be made by the Committee or the Board.

         12. Option Financing. Upon the exercise of any Option granted under
this Plan, the Company may, but shall not be required to, make financing
available to the Participant for the purchase of shares of Common Stock pursuant
to such Option on such terms as the Board or the Committee may specify.

         13. Withholding of Taxes. The Board or the Committee shall make such
provisions and take such steps as it may deem necessary or appropriate for the
withholding of any taxes that the Company is required by any law or regulation
of any governmental authority to withhold in connection with any Award
including, but not limited to, withholding the issuance of all or any portion of
the shares of Common Stock subject to such Award until the Participant
reimburses the Company for the amount it is required to withhold with respect to
such taxes, canceling any portion of such issuance in an amount sufficient to
reimburse the Company for the amount it is required to withhold or taking any
other action reasonably required to satisfy the Company's withholding
obligation.


                                       9


         14. Conditions Upon Issuance of Shares. (a) The Company shall not be
obligated to sell or issue any shares upon the exercise or vesting of any Award
granted under the Plan unless the issuance and delivery of shares complies with
all provisions of applicable federal and state securities laws and the
requirements of any national exchange or trading system on which the Common
Stock is then listed or traded.

                  (b) As a condition to the issuance of Common Stock pursuant to
any Award, the Company may require the recipient of such Award to make such
representations and warranties as may be necessary to assure the availability of
an exemption from the registration requirements of applicable federal and state
securities laws.

                  (c) The Company shall not be liable for refusing to sell or
issue any shares pursuant to any Award if the Company cannot obtain authority
from the appropriate regulatory bodies deemed by the Company to be necessary to
sell or issue such shares in compliance with all applicable federal and state
securities laws and the requirements of any national exchange or trading system
on which the Common Stock is then listed or traded. In addition, the Company
shall have no obligation to any Participant, express or implied, to list,
register or otherwise qualify the shares of Common Stock covered by any Award.

                  (d) No Participant will be, or will be deemed to be, a holder
of any Common Stock subject to an Award unless and until the Award is vested,
the Participant has exercised the Award, if applicable, paid any applicable
Exercise Price for the subject shares of Common Stock and received the shares.
Unless an award agreement provides otherwise, each unexercised Award (whether
vested or not) shall be transferable only by will or the laws of descent and
distribution; provided, however, that the Participant may transfer his or her
unexercised Award (other than Qualified Options) without consideration to (i)
the spouse, children or grandchildren of the Participant ("Immediate Family
Members"), (ii) a trust or trusts, or to a guardian under the Uniform Gift to
Minors Act, for the exclusive benefit of such Immediate Family Members, or (iii)
a partnership or other entity in which such Immediate Family Members are the
only partners, provided that subsequent transfers of transferred Awards shall be
prohibited except by will or the laws of descent and distribution. Following
transfer, any such Awards shall continue to be subject to the same terms and
conditions as were applicable immediately prior to transfer, provided that, for
purposes of each Award agreement and Section 10 hereof, the terms "Optionee" or
"Participant" shall be deemed to refer to the transferee (however, the events of
termination of employment, if any, set forth in the agreement and the obligation
to pay withholding taxes shall continue to apply to the transferor).
Notwithstanding the foregoing, Qualified Options shall be nontransferable except
by will or the laws of descent and distribution, and may only be exercisable
during the Participant's lifetime, by the Participant.

         15. Restrictions on Shares. Shares of Common Stock issued pursuant to
this Plan may be subject to restrictions on transfer under applicable federal
and state securities laws. The Board may impose such additional restrictions on
the ownership and


                                       10



transfer of shares of Common Stock issued pursuant to the Plan as it deems
desirable; any such restrictions shall be set forth in any Award agreement
entered into hereunder.

         16. Modification of Awards. At any time and from time to time, the
Board or the Committee may execute an instrument providing for modification,
extension or renewal of any outstanding Award, provided that no such
modification, extension or renewal shall impair any Award without the consent of
the holder of the Award. Notwithstanding the foregoing, in the event of a
modification, extension or renewal of a Qualified Option, the Board or the
Committee may increase the exercise price of such Option if necessary to retain
the qualified status of such Option. Any amendment to the Plan shall apply to
all Awards outstanding at the time of such amendment in addition to all Awards
granted thereafter, subject to the limitations of the first sentence in this
Section 16.

         17. Effect of Change in Stock Subject to the Plan. In the event that
each of the outstanding shares of Common Stock (other than shares held by
dissenting stockholders) shall be changed into or exchanged for a different
number or kind of shares of stock of the Company or of another company (whether
by reason of merger, consolidation, recapitalization, reclassification,
split-up, combination of shares or otherwise), or in the event a stock split or
stock dividend occurs, then there shall be substituted for each share of Common
Stock then subject to Awards or available for Awards the number and kind of
shares of stock into which each outstanding share of Common Stock (other than
shares held by dissenting stockholders) shall be so changed or exchanged, or the
number of shares of Common Stock as is equitably required in the event of a
stock split or stock dividend, together with an appropriate adjustment of the
Exercise Price. The Board may, but shall not be required to, provide additional
anti-dilution protection to a Participant under the terms of the Participant's
Award agreement.

         18. Administration. (a) The Plan shall be administered by the Board or
by a committee of the Board comprised solely of two or more Non-Employee
Directors appointed by the Board (the "Committee"). Awards may be granted under
Section 6 (i) by the Board as a whole, or (ii) by majority agreement of the
members of the Committee. In addition, to the extent permitted by applicable law
(including the Exchange Act and the Code), the Board or the Committee may at any
given time authorize an aggregate number of Awards to be granted to eligible
Employees, and then authorize one or more officers of the Company (the
"Authorized Officers") to allocate such Awards among eligible Employees;
provided that the Authorized Officers may not allocate Awards to themselves or
other executive officers, and the terms of the Awards, including the Exercise
Price (if any) must be established by the Board or the Committee. Award
agreements, in the forms as approved by the Board or the Committee, and
containing such terms and conditions consistent with the provisions of this Plan
as are determined by the Board or the Committee, may be executed on behalf of
the Company by the Chairman of the Board, the President or any Vice President of
the Company. The Board or the Committee shall have complete authority to
construe, interpret and administer the provisions of this Plan and the
provisions of the Award agreements


                                       11



granted hereunder; to prescribe, amend and rescind rules and regulations
pertaining to this Plan; to suspend or discontinue this Plan; and to make all
other determinations necessary or deemed advisable in the administration of this
Plan. The determinations, interpretations and constructions made by the Board or
the Committee shall be final and conclusive. No member of the Board or the
Committee shall be liable for any action taken, or failed to be taken, made in
good faith relating to this Plan or any Award thereunder, and the members of the
Board or the Committee shall be entitled to indemnification and reimbursement by
the Company in respect of any claim, loss, damage or expense (including
attorneys' fees) arising therefrom to the fullest extent permitted by law.

                  (b) Subject to any applicable requirements of Rule 16b-3 or of
any national exchange or trading system on which the Common Stock is then listed
or traded, and subject to the stockholder approval requirements of Sections 422
and 162(m)(4)(C) of the Code, the Board may amend any provision of this Plan in
any respect in its discretion.

         19. Continued Employment Not Presumed. Nothing in this Plan or any
document describing it nor the grant of any Award shall give any Participant the
right to continue in the employment of the Company or affect the right of the
Company to terminate the employment of any such person with or without cause. No
Employee shall have a right to be selected as a Participant, or, having been so
selected, to be selected again as a Participant.

         20. Liability of the Company. Neither the Company, its directors,
officers or Employees or the Committee, nor any Subsidiary which is in existence
or hereafter comes into existence, shall be liable to any Participant or other
person if it is determined for any reason by the Internal Revenue Service or any
court having jurisdiction that any Qualified Option granted hereunder does not
qualify for tax treatment as an incentive stock option under Section 422 of the
Code.

         21. GOVERNING LAW. THIS PLAN SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF STATE OF DELAWARE AND THE UNITED STATES, AS
APPLICABLE, WITHOUT REFERENCE TO THE CONFLICT OF LAWS PROVISIONS THEREOF.

         22. Severability of Provisions. If any provision of this Plan is
determined to be invalid, illegal or unenforceable, such invalidity, illegality
or unenforceability shall not affect the remaining provisions of the Plan, but
such invalid, illegal or unenforceable provision shall be fully severable, and
the Plan shall be construed and enforced as if such provision had never been
inserted herein.


                       Last Amended and Restated July 2003


                                       12

EX-10.3

                                                                    EXHIBIT 10.3



                               DEAN FOODS COMPANY

                      EXECUTIVE DEFERRED COMPENSATION PLAN






                   (As Restated to Incorporate Amendments 1-6)




                               DEAN FOODS COMPANY

                      EXECUTIVE DEFERRED COMPENSATION PLAN


                                Table of Contents



                                                                        Page
                                                                        ----
                                                                     
ARTICLE I        DEFINITIONS..............................................1

ARTICLE II       ELIGIBILITY..............................................3

ARTICLE III      CREDITS TO ACCOUNT.......................................3

ARTICLE IV       BENEFITS.................................................5

ARTICLE V        PAYMENT OF BENEFITS AT TERMINATION.......................6

ARTICLE VI       IN-SERVICE WITHDRAWALS...................................7

ARTICLE VII      ADMINISTRATION OF THE PLAN...............................9

ARTICLE VIII     CLAIMS REVIEW PROCEDURE.................................10

ARTICLE IX       LIMITATION OF RIGHTS....................................11

ARTICLE X        LIMITATION OF ASSIGNMENT AND PAYMENTS TO
                 LEGALLY INCOMPETENT DISTRIBUTEE.........................11

ARTICLE XI       AMENDMENT TO OR TERMINATION OF THE PLAN.................11

ARTICLE XII      GENERAL AND MISCELLANEOUS...............................12





                               DEAN FOODS COMPANY
                      EXECUTIVE DEFERRED COMPENSATION PLAN

                                    PREAMBLE

         WHEREAS, Dean Foods Company (the "Company"), a corporation formed under
the laws of the State of Delaware, established the Suiza Foods Corporation
Executive Deferred Compensation Plan (the "Plan") effective July 1, 1999, for
the exclusive benefit of a select group of management and highly compensated
employees of the Company and its affiliates to provide an additional means by
which such employees may defer funds for their retirement;

         WHEREAS the name of the Plan was later changed to Dean Foods Company
Executive Deferred Compensation Plan to reflect the new name of the Company;

         WHEREAS, the Plan was subsequently amended by Amendments 1-6;

         WHEREAS, the Company desires to restate the plan to incorporate all
such amendments;

         NOW, THEREFORE, the Company hereby restates the Plan to read as
follows:

                                   ARTICLE I

                                   DEFINITIONS

         1.1 "Account" shall mean the individual bookkeeping record established
by the Committee showing the monetary value of the interest in the Plan of each
Participant or Beneficiary.

         1.2 "Affiliate" shall mean a member of a controlled group of
corporations (as defined in Section 414(b) of the Code), a group of trades or
businesses (whether or not incorporated) which are under common control (as
defined in Section 414(c) of the Code), or an affiliated service group (as
defined in Section 414(m) of the Code) of which the Company is a member; and any
entity otherwise required to be aggregated with the Company pursuant to Section
414(o) of the Code or the regulations issued thereunder; and any other entity in
which the Company has an ownership interest and to which the Company elects to
make participation in the Plan available.

         1.3 "Annual Compensation" shall mean the total amounts paid or accrued
by the Company or an Affiliate to an employee as remuneration for personal
services rendered during each Plan Year, including bonuses and commissions, as
reported on the employee's federal income tax withholding statement or
statements (IRS Form W-2 or its subsequent equivalent), together with any
amounts not includable in such employee's gross income pursuant to Sections 125
or 402(g) of the Code, and any amounts deferred by such employee pursuant to
Section 3.1 hereof. The term "Annual Compensation" shall also include any
amounts paid as director's fees to members of the Board or members of the board
of directors of an Affiliate.


                                      -1-


         1.4 "Beneficiary" shall mean the Beneficiary designated by each
Participant under the 401(k) Plan; provided, however, that a Participant may
designate a different Beneficiary hereunder by delivering to the Committee a
written beneficiary designation, in the form provided by the Committee, and
executed specifically with respect to this Plan.

         1.5 "Board" shall mean the Board of Directors of the Company.

         1.6 "Code" shall mean the Internal Revenue Code of 1986, as it may be
amended from time to time, and the rules and regulations promulgated thereunder.

         1.7 "Committee" shall mean the Compensation Committee of the Board.

         1.8 "Company" shall mean Dean Foods Company or its successor or
successors.

         1.9 "Company Contribution Account" shall mean the subaccount of each
Participant's Account showing the monetary value of the Participant's interest
in the Plan which is attributable to matching or profit sharing contributions
credited pursuant to Sections 3.2 and 3.3.

         1.10 "Company Stock" shall mean the common stock of the Company.

         1.11 "Disability" shall mean a physical or mental condition which, in
the opinion of the Committee, prevents a Participant from being able to perform
the substantial duties of his employment with the Company and is expected to be
of long duration or to result in death.

         1.12 "Effective Date" shall mean July 1, 1999.

         1.13 "401(k) Plan" shall mean the Dean Foods 401(k) Plan.

         1.14 "Participant" shall mean an individual who has been designated by
the Committee as being eligible to participate in the Plan.

         1.15 "Plan" shall mean the Dean Foods Company Executive Deferred
Compensation Plan set forth in this document, as it may be amended from time to
time.

         1.16 "Plan Year" shall mean the twelve month period beginning each
January 1 and ending each December 31, except that the first Plan Year shall
commence July 1, 1999 and end December 31, 1999.

         1.17 "Profit Sharing Credit" shall mean the amount contributed to the
Participant's Account as a profit sharing credit pursuant to Section 3.3 hereof.

         1.18 "Trust" shall mean the Dean Foods Company Executive Deferred
Compensation Plan Trust.

         1.19 "Valuation Date" shall mean each business day on which the
financial markets are open for trading activity or such other dates as may be
established by the Committee.


                                      -2-



                                   ARTICLE II

                                   ELIGIBILITY

         Participation in the Plan shall be made available to a select group of
individuals, as determined by the Committee, who are providing services to the
Company or an Affiliate in key positions of management and responsibility.
Participation in the Plan shall also be made available to members of the Board
and any outside directors of subsidiaries of the Company. Such individuals may
elect to participate hereunder by executing a participation agreement in such
form and at such time as the Committee shall require, provided that each
participation agreement shall be executed no later than the day immediately
preceding the Plan Year for which an individual elects to make contributions to
the Plan in accordance with the provisions of Section 3.1 hereof.
Notwithstanding the foregoing, in the first year in which an individual becomes
eligible to participate in the Plan, he may elect to participate in the Plan by
executing a participation agreement, in such form as the Committee shall
require, within thirty (30) days of the date on which he is notified by the
Committee of his eligibility to participate in the Plan. In such event, his
election to participate in the Plan shall become effective as of the first full
payroll period beginning on or after the Committee's receipt of his
participation agreement. The determination as to the eligibility of any
individual to participate in the Plan shall be in the sole and absolute
discretion of the Committee, whose decision in that regard shall be conclusive
and binding for all purposes hereunder.

                                  ARTICLE III

                               CREDITS TO ACCOUNT

         3.1 For any Plan Year, a Participant may, in the manner prescribed by
the Committee, irrevocably elect to defer a portion of the Annual Compensation
otherwise payable to such Participant with respect to such Plan Year, not to
exceed the maximum amount established by the Committee. Any amount deferred,
pursuant to this Article III, from the Annual Compensation otherwise payable to
a Participant shall be transferred to the Trust and credited to the Account of
such Participant as soon as practicable after the date on which such amounts
would otherwise have been paid to the Participant.

         3.2 The Committee shall credit a matching contribution, calculated as
provided in this Section 3.2, to the Company Contribution Account of each
Participant who has deferred amounts under the Plan during any Plan Year
pursuant to Section 3.1 above. The matching contribution, if any, shall be
computed as follows: (i) the Committee shall first compute a maximum matching
contribution for each Participant for a Plan Year, on the salary deferrals made
by the Participant under the 401(k) plan in which the Participant participates,
using the formula applied by such 401(k) plan with respect to percentage of
salary deferrals matched and the maximum percentage of compensation which is
subject to the match, but using the Participant's Annual Compensation as defined
in this Plan up to the maximum compensation that may be considered on behalf of
a participant under such 401(k) plan (unless otherwise approved by the Board of
Directors of the Company); (ii) the Committee shall then determine the amount of
matching contributions made for the Participant under such 401(k) plan; and
(iii) the difference between (i) and (ii), if any, is the matching contribution
to be credited to the Participant's Company Contribution Account


                                      -3-



under the Plan. The Committee shall credit a matching contribution, if any, to
the Participant's Company Contribution Account as soon as administratively
practicable following the end of the Plan Year in which the 401(k) plan year
ends, and the Company shall transfer a similar amount to the Trust as soon as
administratively practicable following such date. A member of the Board or an
outside director of a subsidiary who participates in the Plan is not eligible
for matching contributions.

         3.3 For each Plan Year, the Committee shall credit each Participant's
Company Contribution Account with an amount that represents a Profit Sharing
Credit. The Profit Sharing Credit shall be equal in amount to the additional
contribution, if any, which would have been allocated as a non-matching
contribution to the Participant's account in the 401(k) plan in which the
Participant is eligible to participate, if the Participant had not elected to
defer, pursuant to this Plan, Annual Compensation that otherwise would have been
paid during the plan year of the 401(k) plan which ends in the Plan Year. The
Committee shall credit the Profit Sharing Credit to the Company Contribution
Account of each Participant entitled thereto as soon as administratively
practicable following the end of the Plan Year. A member of the Board or an
outside director of a subsidiary who participates in the Plan is not eligible
for a Profit Sharing Credit.

         3.4 At the time of making the deferrals elections described in Section
3.1 and at such other times as is allowed by the Committee, the Participant
shall designate, on a form provided by the Committee, the types of investments,
including life insurance policies, in which the Participant's Account will be
deemed to be invested for purposes of determining the amount of earnings to be
credited to that Account. On a quarterly or other basis selected by the
Committee, the Committee shall credit to each Participant's Account an amount
equal to the interest, earnings or losses that would have resulted to the
Account if the amounts credited to the Account were invested as elected by the
Participant. If the Participant designates a deemed investment in a life
insurance policy, the rate of earnings to be credited to such Participant's
Account shall be as set forth in a split-dollar life insurance agreement or
other agreement concerning such a policy.

         3.5 In addition to the other investments which the Participant may
designate in which such Participant's Account shall be deemed to be invested for
the purpose of determining the amount of earnings to be credited to that
Account, a Participant may designate that all or a portion of such Participant's
bonus be deemed to be invested in Company stock. If a Participant makes such an
election, the Committee shall credit to the Participant's Account the number of
shares that could have been purchased on the open market on a date and at a time
selected by the Company which is not more than two business days after the bonus
is determined by the Company, but applying a 15% discount to the purchase price.
If the Participant makes such a designation with respect to a bonus, such
designation shall remain in force throughout the Participant's participation in
the Plan and the Participant shall not be entitled to change such designation. A
Participant who makes such a designation with respect to bonuses paid in one
year can make another investment designation for bonuses paid in other years.

         3.6 At any time, the Company may, in its sole discretion, credit an
amount on behalf of a particular Participant to his or her account. The
crediting of such an amount shall be evidenced by providing the Participant a
notice or statement specifying the amount of the credit.


                                      -4-



Thereafter, the amount credited to the Participant's Account shall be subject to
all of the same terms and provisions as amounts credited to the Account under
Sections 3.1 through 3.4 of the Plan.

                                   ARTICLE IV

                                    BENEFITS

         4.1 After the death of a Participant, the Beneficiary of such
Participant shall be entitled to the entire value of all amounts credited to
such Participant's Account, determined as of the Valuation Date coincident with
or preceding the date of distribution, including any additional amount credited
to such Participant's Account as a result of life insurance proceeds payable on
the Participant's death.

         4.2 After the Disability of a Participant, such Participant shall be
entitled to the entire value of all amounts credited to such Participant's
Account, determined as of the Valuation Date coincident with or preceding the
date of Disability. Such amount shall be payable to the Participant at the time
and in the manner determined by the Committee.

         4.3 After a Participant's employment terminates or such Participant
ceases to be a member of the Board or a board of directors of a subsidiary for
any reason other than death or Disability, such Participant shall be entitled to
the entire value of all amounts credited to the Account of such Participant,
determined as of the Valuation Date coincident with or preceding the date of
distribution, except that the Participant shall only be entitled to the vested
portion, if any, of his Company Contribution Account. The vested portion of a
Participant's Company Contribution Account shall be determined by applying the
Participant's vesting percentage calculated pursuant to the terms of the 401(k)
Plan. In addition to crediting service with Related Employers, as that term is
defined in the 401(k) Plan, the Company will credit service with organizations
and their predecessors in which the Company owns an interest but which do not
qualify as Related Employers.

         4.4 If a Participant has designated that all or a portion of a bonus
that otherwise would be paid to such Participant shall be deferred pursuant to
the Plan and deemed to be invested in Company Stock, then the following rules
shall apply to that portion of the Participant's Account:

         (a)      If the Participant becomes entitled to a distribution from the
                  Plan and such distribution is as a result of the Participant's
                  termination of employment because of death, Disability, or
                  retirement on or after age 65, then such Participant shall be
                  entitled to a distribution of the portion of his Account which
                  is deemed to be invested in Company Stock either in shares of
                  Company Stock or in a cash payment equal to the value of such
                  Company Stock, determined as of the Valuation Date coincident
                  with or preceding the date of distribution.

         (b)      If a Participant is entitled to a distribution for a reason
                  other than death, Disability, or retirement on or after age
                  65, or if a Participant elects to take an in-service
                  withdrawal as authorized in Article VI, the Participant shall
                  be entitled to


                                      -5-



                  receive Company Stock that has been credited to the
                  Participant's account for the number of years in the schedule
                  below, calculated as of the date of the termination or request
                  for withdrawal, as the case may be (or a cash payment equal to
                  the value of such shares), in the percentage set forth below:



                    Vested Percentage      Number of Years
                    -----------------      ---------------
                                        
                    85%                    less than one year
                    92.5%                  at least one but less than two years
                    100%                   two or more years


In the case of an in-service withdrawal, the reductions and limitations of
Article VI shall apply to the amount determined pursuant to this Section 4.4(b).

                                   ARTICLE V

                       PAYMENT OF BENEFITS AT TERMINATION

         5.1 In the case of a Participant who terminates employment with the
Company or ceases to be a member of the Board or an outside director of a
subsidiary of the Company, the amount credited to the Participant's Account
(provided it is more than $25,000) shall be paid in cash (except as otherwise
provided in Section 4.4), to the Participant, at the time the distribution of
the Account is to commence, from among the following optional forms of benefit
as elected by the Participant on the form provided by the Company upon his or
her initial participation in the Plan:

         (1)      a lump sum distribution;

         (2)      substantially equal annual installments over five (5) years;

         (3)      substantially equal annual installments over ten (10) years;
                  or

         (4)      substantially equal annual installments over fifteen (15)
                  years.

         If a portion of the Participant's Account is invested in Company Stock,
and an installment form of payment is elected, then the distribution shall be
deemed to be made on a pro rata basis out of the other investment options in
which amounts credited to a Participant's Account are deemed to be invested
first, and then, after all such other amounts are distributed, from the portion
of the Participant's Account which is deemed to be invested in Company Stock.
Notwithstanding the Participant's distribution election, if the amount credited
to a Participant's Account is $25,000 or less, at the time distribution of the
Account is to commence, payment will be made in a lump sum, and even if
installment payments have commenced under this Section 5.1, at such time as the
value of such remaining amounts is $25,000 or less, all remaining amounts
credited to a Participant's Account shall be distributed in a lump sum.

         Payment shall commence as soon as practicable following the
Participant's termination of employment with the Company or termination as a
member of the Board or a director of a subsidiary of the Company, or, if so
elected by the Participant in the Participant's deferral election form provided
by the Committee, as soon as practicable during the calendar year following the
year in which such event occurs. If installment payments are made, the unpaid



                                      -6-



balance of the Participant's Account shall continue to share in the income and
losses attributable thereto, in accordance with the provisions of the Trust,
during the period for which installment payments are made. A Participant may
modify the optional form of benefit that he or she has previously elected, as
long as he or she provides the Committee with written notice at least one (1)
year in advance of the effective date of the change.

         5.2 Payment of a Participant's benefit on account of death shall be
made in a lump sum in cash or, to the extent that Section 4.4 applies, in shares
of Company Stock. Payment of a Participant's death benefit shall be made to the
Beneficiary of such Participant as soon as practicable following the Committee's
receipt of proper notice of such Participant's death.

         5.3 Notwithstanding the provisions of Sections 5.1 or 5.2, the benefits
payable hereunder may be paid before they would otherwise be payable if, based
on a change in the federal or applicable state tax or revenue laws, a published
ruling or similar announcement issued by the Internal Revenue Service, a
regulation issued by the Secretary of the Treasury, a decision by a court of
competent jurisdiction involving a Participant or a Beneficiary, or a closing
agreement made under Section 7121 of the Code that is approved by the Internal
Revenue Service and involves a Participant, the Committee determines that a
Participant has or will recognize income for federal or state income tax
purposes with respect to amounts that are or will be payable under the Plan
before they otherwise would be paid. The amount of any payments pursuant to this
Section 5.3 shall not exceed the lesser of: (a) the amount in the Participant's
Account or (b) the amount of taxable income with respect to which the tax
liability is assessed or determined.

         5.4 The payment of benefits under the Plan shall begin at the date
specified in accordance with the provisions of Sections 5.1 and 5.2 hereof;
provided that, in case of administrative necessity, the starting date of payment
of benefits may be delayed up to thirty (30) days as long as such delay does not
result in the Participant or Beneficiary receiving the distribution in a
different taxable year than if no such delay had occurred.

                                   ARTICLE VI

                             IN-SERVICE WITHDRAWALS

         6.1 (HARDSHIP WITHDRAWALS): In the event of an unforeseeable emergency,
a Participant may make a request to the Committee for a withdrawal from the
Account of such Participant. For purposes of this Section, the term
"unforeseeable emergency" shall mean a severe financial hardship to the
Participant resulting from a sudden and unexpected illness or accident of the
Participant or of a dependent (as defined in Section 152(a) of the Code) of the
Participant, loss of the Participant's property due to casualty, or other
similar extraordinary and unforeseeable circumstances arising as a result of
events beyond the control of the Participant. Any determination of the existence
of an unforeseeable emergency and the amount to be withdrawn on account thereof
shall be made by the Committee, in its sole and absolute discretion. However,
notwithstanding the foregoing, a withdrawal will not be permitted to the extent
that the financial hardship is or may be relieved: (i) through reimbursement or
compensation by insurance or otherwise; (ii) by liquidation of the Participant's
assets, to the extent that liquidation of such assets would not itself cause
severe financial hardship; or (iii) by


                                      -7-



cessation of deferrals under this Plan. In no event shall the need to send a
Participant's child to college or the desire to purchase a home be deemed to
constitute an unforeseeable emergency. No member of the Committee shall vote or
decide upon any matter relating to the determination of the existence of such
member's own financial hardship or the amount to be withdrawn on account
thereof. A request for a hardship withdrawal must be made in the manner
prescribed by the Committee, and must be expressed as a specific dollar amount.
The amount of a hardship withdrawal may not exceed the amount required to meet
the severe financial hardship. All hardship withdrawals shall be paid in a lump
sum in cash or, to the extent Section 4.4 applies, in shares of Company Stock.

         6.2 (SCHEDULED IN-SERVICE WITHDRAWALS): On a form prescribed by the
Committee, a Participant, prior to the beginning of any Plan Year, can elect to
receive that Plan Year's deferrals made pursuant to Section 3.1, matching
contributions credited pursuant to Section 3.2, any additional credits made that
Plan Year pursuant to Sections 3.3, 3.5 or 3.6, and earnings thereon, at a date
specified by the Participant. Such date shall be no earlier than two (2) years
from the last day of the Plan Year for which the deferrals and matching and
other credits are made. A Participant may extend the scheduled in-service
withdrawal date for any Plan Year, as long as the Participant provides advance
written notice to the Committee at least one year before the scheduled payment
date, and such extension is for a period of not less than one year from the
previous, scheduled in-service withdrawal date. Any withdrawal under this
Section 6.2 shall be made in a single lump sum, in cash, or to the extent
Section 4.4 applies, in shares of Company Stock.

         6.3 (UNSCHEDULED IN-SERVICE WITHDRAWALS): Notwithstanding any other
provision herein to the contrary, a Participant who is actively employed or has
started receiving installment payments, (as provided in Section 5.1 above) may
elect to accelerate the date on which payment of his benefit hereunder would
otherwise be made, using a form provided by and filed with the Committee. Upon
such election, the amount to which such Participant is entitled shall be any
whole percentage, from ten percent (10%) to ninety percent (90%) of the benefit
otherwise payable hereunder, which shall be distributed in one lump sum, in cash
(or in shares of Company Stock to the extent that Section 4.4 applies), as soon
as administratively practicable after the early distribution election is made.
Ten percent (10%) of any amounts withdrawn from such Participant's Account shall
be forfeited as of the date of such distribution.

         If, at the time of such election, the Participant is employed by the
Company or an Affiliate, such Participant shall be prohibited from participating
in the Plan for the balance of the Plan Year and no amounts shall be credited to
his or her Account pursuant to Section 3.1 hereunder during this period. The
Participant may again elect to participate in the Plan as of the first full
payroll period after the last day of that Plan Year by executing a new
participation agreement within the time prior to such date established by the
Committee.

         6.4 Withdrawals shall be charged pro rata to the investment options in
which amounts credited to a Participant's Account are deemed to be invested
pursuant to Section 3.4 hereof. If a withdrawal exceeds the amount of a
Participant's Account which is deemed to be invested pursuant to Section 3.4
hereof, then such withdrawals shall be charged to the portion of the
Participant's Account which is deemed to be invested in Company Stock as
provided in Section 3.5 hereof.


                                      -8-



                                  ARTICLE VII

                           ADMINISTRATION OF THE PLAN

         7.1 The Plan shall be administered by the Committee. The members of the
Committee shall not receive compensation with respect to their services for the
Committee. The members of the Committee shall serve without bond or security for
the performance of their duties hereunder unless applicable law makes the
furnishing of such bond or security mandatory or unless required by the Company.
Any member of the Committee may resign by delivering a written resignation to
the Company and to the other members of the Committee.

         7.2 The Committee shall perform any act which the Plan authorizes
expressed by a vote at a meeting or in a writing signed by a majority of its
members without a meeting. The Committee may, by a writing signed by a majority
of its members, appoint any member of the Committee to act on behalf of the
Committee. Any person who is a member of the Committee shall not vote or decide
upon any matter relating solely to such member or vote in any case in which the
individual right or claim of such member to any benefit under the Plan is
particularly involved. If, in any matter or case in which a person is so
disqualified to act, the remaining persons constituting the Committee cannot
resolve such matter or case, the Board will appoint a temporary substitute to
exercise all the powers of the disqualified person concerning the matter or case
in which such person is disqualified.

         7.3 The Committee may designate in writing other persons to carry out
its responsibilities under the Plan, and may remove any person designated to
carry out its responsibilities under the Plan by notice in writing to that
person. The Committee may employ persons to render advice with regard to any of
its responsibilities. All usual and reasonable expenses of the Committee shall
be paid by the Company. The Company shall indemnify and hold harmless each
member of the Committee from and against any and all claims and expenses
(including, without limitation, attorneys' fees and related costs), in
connection with the performance by such member of duties in that capacity, other
than any of the foregoing arising in connection with the willful neglect or
willful misconduct of the person so acting.

         7.4 The Committee shall establish rules and procedures, not contrary to
the provisions of the Plan, for the administration of the Plan and the
transaction of its business. The Committee shall determine the eligibility of
any individual to participate in the Plan, shall interpret the Plan in its sole
and absolute discretion, and shall determine all questions arising in the
administration, interpretation and application of the Plan. All determinations
of the Committee shall be conclusive and binding on all employees, Participants
and Beneficiaries.

         7.5 Any action to be taken hereunder by the Company shall be taken by
resolution adopted by the Board or by a committee thereof; provided, however,
that by resolution, the Board or a committee thereof may delegate to any officer
of the Company the authority to take any such actions hereunder.


                                      -9-



                                  ARTICLE VIII

                             CLAIMS REVIEW PROCEDURE

         8.1 In the event that a Participant or Beneficiary is denied a claim
for benefits under this Plan (the "Claimant"), the Committee shall provide to
the Claimant written notice of the denial which shall set forth:

         (a)      the specific reason or reasons for the denial;

         (b)      specific references to pertinent Plan provisions on which the
                  Committee based its denial;

         (c)      a description of any additional material or information needed
                  for the Claimant to perfect the claim and an explanation of
                  why the material or information is needed;

         (d)      a statement that the Claimant may:

                  (i)      request a review upon written application to the
                           Committee;

                  (ii)     review pertinent Plan documents; and

                  (iii)    submit issues and comments in writing; and

         (e)      that any appeal the Claimant wishes to make of the adverse
                  determination must be in writing and received by the Committee
                  within sixty (60) days after receipt of the Committee's notice
                  of denial of benefits. The Committee's notice must further
                  advise the Claimant that failure to appeal the action to the
                  Committee in writing within the sixty (60) day period will
                  render the Committee's determination final, binding, and
                  conclusive.

         8.2 If the Claimant should appeal to the Committee, the Claimant, or
the duly authorized representative of such Claimant, may submit, in writing,
whatever issues and comments such Claimant, or the duly authorized
representative of such Claimant, feels are pertinent. The Committee shall
re-examine all facts related to the appeal and make a final determination as to
whether the denial of benefits is justified under the circumstances. The
Committee shall advise the Claimant in writing of its decision on the appeal,
the specific reasons for the decision, and the specific Plan provisions on which
the decision is based. The notice of the decision shall be given within sixty
(60) days of the Claimant's written request for review, unless special
circumstances (such as a hearing) would make the rendering of a decision within
the sixty (60) day period infeasible, but in no event shall the Committee render
a decision regarding the denial of a claim for benefits later than 120 days
after its receipt of a request for review. If an extension of time for review is
required because of special circumstances, written notice of the extension shall
be furnished to the Claimant prior to the date the extension period commences.
The Committee's notice of denial of benefits shall identify the address to which
the Claimant may forward an appeal.


                                      -10-



                                   ARTICLE IX

                              LIMITATION OF RIGHTS

         The establishment of this Plan shall not be construed as giving to any
Participant, employee of the Company or any person whomsoever, any legal,
equitable or other rights against the Company, or its officers, directors,
agents or shareholders, or as giving to any Participant or Beneficiary any
equity or other interest in the assets or business of the Company or shares of
Company stock or as giving any employee the right to be retained in the
employment of the Company. All employees of the Company and Participants shall
be subject to discharge to the same extent they would have been if this Plan had
never been adopted.

                                   ARTICLE X

                      LIMITATION OF ASSIGNMENT AND PAYMENTS
                       TO LEGALLY INCOMPETENT DISTRIBUTEE

         10.1 No benefits which shall be payable under the Plan to any person
shall be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance or charge, and any attempt to anticipate,
alienate, sell, transfer, assign, pledge, encumber, charge or otherwise dispose
of the same shall be void. No benefit shall in any manner be subject to the
debts, contracts, liabilities, engagements or torts of any person, nor shall it
be subject to attachment or legal process for or against any person, except to
the extent required by law.

         10.2 Whenever any benefit which shall be payable under the Plan is to
be paid to or for the benefit of any person who is then a minor or determined by
the Committee, on the basis of qualified medical advice, to be incompetent, the
Committee need not require the appointment of a guardian or custodian, but shall
be authorized to cause the same to be paid over to the person having custody of
the minor or incompetent, or to cause the same to be paid to the minor or
incompetent without the intervention of a guardian or custodian, or to cause the
same to be paid to a legal guardian or custodian of the minor or incompetent, if
one has been appointed, or to cause the same to be used for the benefit of the
minor or incompetent.

                                   ARTICLE XI

                     AMENDMENT TO OR TERMINATION OF THE PLAN

         The Committee reserves the right at any time to amend or terminate the
Plan in whole or in part. No amendment shall have the effect of retroactively
depriving Participants or Beneficiaries of rights already accrued under the
Plan. Upon termination of the Plan, the Committee may, in its sole and absolute
discretion, and notwithstanding any other provision hereunder to the contrary,
direct that all benefits hereunder will be paid as soon as administratively
practicable thereafter.


                                      -11-



                                  ARTICLE XII

                            GENERAL AND MISCELLANEOUS

         12.1 Severability. In the event that any provision of this Plan shall
be declared illegal or invalid for any reason, said illegality or invalidity
shall not affect the remaining provisions of this Plan but shall be fully
severable and this Plan shall be construed and enforced as if said illegal or
invalid provision had never been inserted herein.

         12.2 Construction. The Section headings and numbers are included only
for convenience of reference and are not to be taken as limiting or extending
the meaning of any of the terms and provisions of this Plan. Whenever
appropriate, words used in the singular shall include the plural or the plural
may be read as the singular.

         12.3 Governing Law. The validity and effect of this Plan and the rights
and obligations of all persons affected hereby shall be construed and determined
in accordance with the laws of the State of Texas unless superseded by federal
law.

         12.4 No Requirement to Fund. The Company is not required to set aside
any assets for payment of the benefits provided under this Plan. A Participant
shall have no security interest in any amounts credited hereunder on such
Participant's behalf. It is the Company's intention that this Plan be construed
as a plan which is unfunded and maintained primarily for the purpose of
providing deferred compensation for a select group of highly compensated
employees.

         12.5 Taxes. All amounts payable hereunder shall be reduced by any and
all federal, state and local taxes imposed upon the Participant or a Beneficiary
which are required to be paid or withheld by the Company.

         IN WITNESS WHEREOF, Dean Foods Company, the Company, has caused its
corporate seal to be affixed hereto and these presents to be duly executed in
its name and behalf by its proper officers thereunto duly authorized this 25th
day of November, 2002.

                                             COMPANY:

                                             DEAN FOODS COMPANY



                                             By: /s/ Michelle P. Goolsby
                                                 ----------------------------
                                                 Executive Vice President and
                                                 General Counsel


                                      -12-

EX-10.4

                                                                    EXHIBIT 10.4


                           FOURTH AMENDED AND RESTATED
                      1997 EMPLOYEE STOCK PURCHASE PLAN OF
                               DEAN FOODS COMPANY


                                 I. INTRODUCTION

         The purpose of the Fourth Amended and Restated 1997 Employee Stock
Purchase Plan (the "Plan") is to make available to eligible employees of Dean
Foods Company (the "Company"), and certain related companies a means of
purchasing shares of Dean Common Stock through voluntary, regular payroll
deductions. The Plan is not subject to the provisions of the Employee Retirement
Income Security Act of 1974, but is intended to qualify as an "Employee Stock
Purchase Plan" under Section 423 of the Internal Revenue Code of 1986, as
amended (the "Code"). The Plan shall be administered, interpreted and construed
in accordance with Section 423 of the Code.

         Participation in the Plan is entirely voluntary, and the Company makes
no recommendations to employees as to whether they should or should not
participate.


                                 II. DEFINITIONS

         2.1. DEFINITIONS. The following words and phrases shall have the
following meanings:

         "ADMINISTRATOR" means the entity or person designated to act as
Administrator of the Plan pursuant to Section 6.1.

         "BASE COMPENSATION" means gross compensation for the relevant pay
period, including overtime pay, but excluding all bonuses, severance pay, any
extraordinary pay, expense allowances/reimbursements, moving expenses and income
from restricted stock or stock option awards. For these purposes, gross
compensation includes any amount that would be included in taxable income but
for the fact that it was contributed to a qualified plan pursuant to an elective
deferral under Section 401(k) of the Code or contributed under a salary
reduction agreement pursuant to Section 125 of the Code.

         "BOARD" means the Board of Directors of the Company.

         "BROKER" means a duly licensed securities dealer, broker or agent
designated to act as Broker of the Plan pursuant to Section 6.2.

         "COMMITTEE" means the Compensation Committee of the Board, which, to
the extent required by Rule 16b-3, shall consist entirely of non-employee
directors (as defined in Rule 16b-3).



                                                                     Page 1 of 9


         "COMPANY" means Dean Foods Company (formerly known as Suiza Foods
Corporation).

         "COMMON STOCK" means Dean's Common Stock, par value $.01 per share.

         "CODE" has the meaning set forth in Article I.

         "DEAN COMPANY" means the Company or any Related Corporation.

         "ELIGIBLE EMPLOYEE" means any employee of any Dean Company, excluding
any employee (a) who has been employed by a Dean Company for less than 60 days,
(b) whose customary employment with the employee's Employer is 20 hours or less
per week, (c) whose customary employment with the employee's Employer is not for
more than five months in any calendar year, or (d) who immediately after the
grant of an option under this Plan to the employee would (in accordance with the
provisions of Sections 423 and 424(d) of the Code) own stock possessing 5% or
more of the total combined voting power or value of all classes of stock of the
"employer corporation" or of its "Parent Corporations" or "Subsidiary
Corporations," as defined in Section 424 of the Code.

         "EMPLOYER" means, with respect to any Participant, the Dean Company of
which the Participant is an Eligible Employee.

         "FAIR MARKET VALUE" means, with respect to a share of Common Stock, the
last sales price (or average of the quoted closing bid and asked prices if there
is no closing sales price reported) of a share of Common Stock as reported by
the New York Stock Exchange (or by the principal national stock exchange on
which the Common Stock is then listed) on the date of valuation, if such date is
a business day, or the immediately preceding business day, if such date is not a
business day.

         "INDEMNIFIED PERSON" has the meaning set forth in SECTION 9.2.

         "INITIAL OPTION PERIOD" means the Option Period commencing on the Plan
Start Date and ending on July 31, 1997.

         "1933 ACT" means the Securities Act of 1933, as amended.

         "OPTION" means an option granted pursuant to this Plan at the beginning
of each Option Period to acquire Common Stock.

         "OPTION EXERCISE DATE" means the last day of each Option Period.

         "OPTION PERIOD" means each calendar month during the period beginning
on the Plan Start Date and ending on June 30, 2007, unless the Plan is
terminated earlier.



                                                                     Page 2 of 9


         "PAYROLL DEDUCTION ACCOUNT" means, with respect to each Participant,
the amounts credited to the Participant's account from the payroll deductions
made by the Participant under this Plan, less any amounts withdrawn from such
account (for payment of Common Stock, payment to the Participant, payment of
withholding and other taxes or amounts or payment of other obligations or
amounts).

         "PARTICIPANT" has the meaning set forth in SECTION 3.2.

         "PLAN" means the Third Amended and Restated 1997 Employee Stock
Purchase Plan of Dean Foods Company as the same may be amended from time to
time.

         "PLAN START DATE" means July 1, 1997.

         "RELATED CORPORATION" means any present or future corporation which
would be a "subsidiary corporation" or "parent corporation" of the Company as
such terms are defined in Section 424 of the Code.

         "RULE 16B-3" means Rule 16b-3 under the 1933 Act.

         "STOCK ACCOUNT" means, with respect to each Participant, the number of
shares of Common Stock credited under this Plan to the Participant's account.
Dividends with respect to shares of Common Stock credited to a Participant's
Stock Account shall be paid to the Participant and shall not be held in either
the Participant's Stock Account or Payroll Deduction Account.


                               III. PARTICIPATION

         3.1. ELIGIBLE EMPLOYEES. Subject to ARTICLE VIII, all Eligible
Employees as of the beginning of each Option Period may participate in the Plan
for such Option Period at their election.

         3.2. PARTICIPATION PROCEDURES. If an Eligible Employee does not
otherwise have an election to become a Participant in effect, each Eligible
Employee choosing to participate in the Plan (herein called a "Participant")
during an Option Period shall enroll as a Participant in the Plan by filing with
the Participant's Employer a completed enrollment form (authorized by the
Administrator) no later than 15 days prior to the beginning of any Option Period
(including the Initial Option Period).

         3.3. EMPLOYEE CONTRIBUTIONS. Subject to other limitations provided in
this Plan, a Participant may contribute under the Plan a minimum of one percent
(1%) and a maximum of fifteen percent (15%) of the Participant's Base
Compensation. Contributions may be made only through regular payroll deductions,
net of any tax or other withholdings.

         An enrollment form and payroll deduction authorization will remain
effective for each Option Period until terminated in writing by a Participant or
until the Participant is no longer




                                                                     Page 3 of 9


eligible to participate in the Plan. The payroll deduction authorization may be
reduced or terminated at any time by the Participant's written request submitted
to the Participant's Employer; provided, however, that a Participant may not
recommence or increase payroll deductions until the beginning of the next Option
Period, nor may a Participant make more than one revision of the Participant's
payroll deduction authorization in any Option Period. Termination of deductions
shall constitute withdrawal from the Plan as set forth in Section 3.5 and
cancellation of any outstanding Options of the Participant. Reduction or
termination of deductions will become effective as soon as practicable after a
Participant's written request is received by the Participant's Employer.

         3.4. PARTICIPANT RESTRICTION. Notwithstanding any provisions of this
Plan to the contrary, no Participant will be granted an option under this Plan
which would permit the Participant's rights to purchase shares of stock under
all employee stock purchase plans of the Company and "parent corporations" and
"subsidiary corporations" (within the meaning of Section 424 of the Code) to
accrue at a rate which exceeds $25,000 of the Fair Market Value of such stock
(determined at the time each Option is "Granted" (within the meaning of Code
Section 423(b)(8)) for each calendar year during which any Option granted to
such Participant is outstanding at any time, as provided in Sections 423 and
424(d) of the Code.

         3.5. WITHDRAWAL FROM PLAN. A Participant may withdraw from the Plan
(thereby canceling all Options then in existence) at any time by giving written
notice to the Participant's Employer and to the Administrator. The Administrator
shall, as soon as practicable after receiving written notice of a Participant's
withdrawal from the Plan, cause to be delivered to the Participant a check
representing any funds held to the credit of the Participant's Payroll Deduction
Account. A Participant who has withdrawn from the Plan may thereafter reenter
the Plan by following the procedure described under Section 3.2, but not sooner
than the beginning of the next Option Period after the Participant has withdrawn
from participation.

         3.6. TERMINATION OF PARTICIPANT'S EMPLOYMENT. Upon termination of a
Participant's employment from the Dean Companies for any reason, including death
or disability, the Participant's Payroll Deduction Account in the Plan shall be
closed, and all existing Options held by the Participant shall be canceled. The
Administrator shall, as soon as practicable after termination of a Participant's
employment, cause to be delivered to the Participant or the Participant's estate
or the Participant's designated beneficiary as provided below, as applicable, a
check representing any funds held to the credit of the Participant's Payroll
Deduction Account. In the event of a Participant's death, the Participant's
Payroll Deduction Account shall be delivered and paid to the estate of such
Participant or to a beneficiary designated by the Participant in writing on a
form approved by the Administrator.

             IV. OPTIONS TO PURCHASE STOCK; MAXIMUM SHARES AVAILABLE

         4.1. MAXIMUM SHARES. The maximum number of shares which shall be issued
under the Plan, subject to adjustment upon changes in Common Stock under Article
VII, shall be 1,500,000 shares.




                                                                     Page 4 of 9


         4.2. OFFERINGS. Subject to Article XIII, the Company shall make
consecutive offerings on the beginning of each Option Period to Participants to
purchase Common Stock as long as shares authorized remain available for
issuance. Each offering as of the beginning of each Option Period shall be the
total number of shares authorized under Section 4.1, less the number of shares
issued by purchases of Common Stock under Section 5.5 in prior Option Periods.

                    V. PURCHASE OF STOCK PURSUANT TO OPTIONS

         5.1. PAYROLL DEDUCTION ACCOUNTS. Each Dean Company will deduct from its
Participants' paychecks such amounts as have been authorized by the Participants
and, promptly after the end of each month, remit to the Administrator all
amounts so deducted during the month, together with a report showing each
Participant and the amounts allocable to the Payroll Deduction Account of each
Participant. The Administrator shall credit each Participant's Payroll Deduction
Account with the amount of such deposits, and shall reduce the Participant's
Payroll Deduction Account by the purchase price of all Common Stock purchased by
the Participant under this Plan and by any other withdrawals from the
Participant's Payroll Deduction Account. The Plan, through its Administrator,
shall purchase for the Stock Accounts of the Participants shares of Common Stock
with funds received under the Plan.

         5.2. STOCK ACCOUNTS. The Broker will open and maintain a Stock Account
in the name of each Participant to which will be credited all shares of Common
Stock purchased for the Participant's benefit. All shares held under the Plan
will be registered in the name of the Plan or the Broker, and will remain so
registered until the shares are delivered to the Participant. The Participant
shall have the right to sell all or any part of the shares held in the
Participant's Stock Account, pursuant to procedures established by the Broker.

         5.3. GRANT OF OPTIONS AND PURCHASE. Subject to ARTICLE VIII, each
person who is a Participant on the first day of an Option Period will as of the
first day of such Option Period be granted an Option for such period. Such
Option will be for the number of shares of Common Stock to be determined by
dividing (a) the balance in the Participant's Payroll Deduction Account on the
Option Exercise Date, by (b) the purchase price per share of Common Stock
determined under Section 5.4 below. The number of shares of Common Stock
receivable by each Participant upon exercise of an Option for an Option Period
shall be reduced, on a substantially proportionate basis, in the event that the
number of shares then available under the Plan is otherwise insufficient.

         5.4. PURCHASE PRICE. On Option Exercise Dates occurring prior to
January 1, 2001, the purchase price of each share of Common Stock purchased
pursuant to the exercise of an Option shall be .90 multiplied by the Fair Market
Value of the Common Stock on the last day of the Option Period. On Option
Exercise Dates occurring after January 1, 2001, the purchase price of each share
of Common Stock purchased pursuant to the exercise of an Option shall be 0.85
multiplied by the Fair Market Value of the Common Stock on the last day of the
Option Period.



                                                                     Page 5 of 9


         5.5. EXERCISE OF OPTIONS. Each person who is a Participant in the Plan
on each Option Exercise Date will be deemed to have exercised on that Option
Exercise Date the Option granted to the Participant for that Option Period. Upon
such exercise, the balance of the Participant's Payroll Deduction Account shall
be applied to the purchase of the number of shares of Common Stock determined
under Section 5.3, and the amount of shares of Common Stock purchased shall be
credited to the Participant's Stock Account. In the event that the balance of
the Participant's Payroll Deduction Account following an Option Period is in
excess of the total purchase price of the shares of Common Stock so purchased,
the balance of the Payroll Deduction Account shall be returned to the
Participant.

         Notwithstanding anything herein to the contrary, the Company's
obligation to sell and deliver shares of Common Stock under the Plan is subject
to the approval required of any governmental authority in connection with the
authorization, issuance, sale or transfer of such shares, to any requirements of
the New York Stock Exchange or any national securities exchange applicable
thereto, and to compliance by the Company with other applicable legal
requirements in effect from time to time, including without limitation any
applicable tax withholding requirements.

         5.6. NO ASSIGNMENT OF PARTICIPANT'S INTEREST IN PLAN. A Participant may
not assign, sell, transfer, pledge, hypothecate or alienate any Options or other
interests in or rights under the Plan. Options under the Plan are exercisable by
a Participant during the Participant's lifetime only by the Participant. All
employees shall have the same rights and privileges under the Plan.

         5.7. VESTING. Each Participant will immediately acquire full ownership
of all shares of Common Stock at the time such shares are credited to the
Participant's Stock Account.

         5.8. DIVIDENDS, SPLITS AND DISTRIBUTIONS. Any stock dividends or stock
splits in respect of shares held in the Participant's Stock Account will be
credited to the Participant's account automatically. Any distributions to
holders of Common Stock or other securities or rights to subscribe for
additional shares of Common Stock will be handled in the same manner as a cash
dividend, unless the Participant instructs the Administrator to the contrary.

         5.9. VOTING RIGHTS. The Broker will deliver to each Participant as
promptly as practicable, by mail or otherwise, all notices of meetings, proxy
statements and other material distributed by the Company to its stockholders.
The full shares of Common Stock in each Participant's Stock Account will be
voted in accordance with the Participant's signed proxy instructions duly
delivered to the Broker or pursuant to any other method of voting available to
holders of Common Stock. There will be no charge to the Participant for the
Administrator's retention or delivery of stock certificates, or in connection
with notices, proxies or other such material.

         5.10. NO INTEREST TO BE PAID. No interest will be paid to or credited
to the Payroll Deduction Accounts or Stock Accounts of the Participants.



                                                                     Page 6 of 9



                           VI. ADMINISTRATION OF PLAN

         6.1. THE ADMINISTRATOR AND THE COMMITTEE. To carry out the purposes of
the Plan, the Committee shall appoint an Administrator. The Administrator may be
any company or individual that the Committee deems qualified, including the
Company. The Administrator shall be responsible for the implementation of the
Plan, including allocation of funds to the Payroll Deduction Accounts and
distribution of purchased Common Stock to the Stock Accounts, and keeping
adequate and accurate records of such activities for the Participants.

         The Committee shall be entitled to adopt and apply guidelines and
procedures consistent with the purposes of the Plan. In order to effectuate the
purposes of the Plan, the Committee shall have the discretionary authority to
construe and interpret the Plan, to supply any omissions therein, to reconcile
and correct any errors or inconsistencies, to decide any questions in the
administration and application of the Plan, and to make equitable adjustments
for any mistakes or errors made in the administration of the Plan, and all such
actions or determinations made by the Committee, and the application of rules
and regulations to a particular case or issue by the Committee, in good faith,
shall not be subject to review by anyone, but shall be final, binding and
conclusive on all persons ever interested hereunder.

         6.2. BROKER. The Administrator may, in its discretion, with the consent
and approval of the Committee, appoint a Broker. The Broker may be any company
or individual that the Committee deems qualified; provided, however, that the
Broker shall be a licensed security dealer, broker, or agent authorized to make
purchases and sales of Common Stock.

         6.3. REPORTING TO PARTICIPANTS. The Broker will make available to each
Participant an accounting of the Participant's Stock Account.


                  VII. ADJUSTMENT UPON CHANGES IN COMMON STOCK

         7.1. CHANGES IN COMMON STOCK. If any change is made in the Common Stock
(through merger, consolidation, reorganization, recapitalization, stock
dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares, change in corporate
structure or otherwise), the Administrator will make appropriate adjustments in
the number of shares and price per share of Common Stock subject to the Plan or
to any Option granted under the Plan.

         7.2. DISSOLUTION; MERGER; CAPITAL REORGANIZATION; ETC. In the event of
(i) a dissolution or liquidation of the Company; (ii) a merger or consolidation
in which the Company is not the surviving corporation, or a reverse merger in
which the Company is the surviving corporation but the shares of Common Stock by
virtue of the merger are converted into other property, whether in the form of
securities, cash or otherwise; or (iii) any other capital reorganization in
which more than 50 percent of the shares of Common Stock entitled to vote are
exchanged, the Plan shall terminate, unless another corporation assumes the
responsibility of





                                                                     Page 7 of 9


continuing the operation of the Plan or the Committee determines in its
discretion that the Plan shall nevertheless continue in full force and effect.
If the Committee elects to terminate the Plan, the Administrator shall send to
each Participant cash in an amount equal to the funds held to the credit of such
Participant's Payroll Deduction Account.

         7.3. COMPANY'S RIGHT TO RESTRUCTURE, ETC. The grant of any right to a
Participant pursuant to the Plan shall not affect in any way the right or power
of the Company to make adjustments, reclassifications, reorganizations or
changes of its capital or business structure or to merge or to consolidate or to
dissolve, liquidate or sell, or transfer all or any part of its business or
assets.


                      VIII. AMENDMENT; TERMINATION OF PLAN

         8.1. AMENDMENT. The Company, acting through the Committee, reserves the
right to amend or terminate the Plan at any time or times; provided, however,
any amendment that would require the consent of stockholders under applicable
law, rule or regulation (including, without limitation, the Code, the Exchange
Act or any self regulatory organization such as a national securities exchange),
will not be made unless such stockholders' consent is obtained.

         8.2. TERMINATION. In addition, the Plan shall terminate automatically
on the tenth anniversary of the Plan Start Date, or on any Option Exercise Date
when Participants become entitled to purchase a number of shares greater than
the number of reserved shares remaining available for purchase, subject to the
allocation of remaining shares pursuant to the last sentence of Section 5.3.
Upon termination of the Plan, all amounts held in the Payroll Deduction Accounts
shall, to the extent not used to purchase shares of Common Stock, be refunded to
the Participants entitled thereto.


                                IX. MISCELLANEOUS

         9.1. EXPENSES OF PLAN. No fees or commissions will be charged for the
purchase of Common Stock by Participants under the Plan. The Broker's brokerage
commissions incurred in connection with sales of Common Stock by Participants or
other transactions in Participants' Stock Accounts will be paid by the
Participants. If the Company is acting as Administrator, no expenses of
administration will be charged to the Participants.

         9.2. INDEMNIFICATION. In the event and to the extent not insured
against under any contract of insurance with an insurance company, the Company
shall indemnify and hold harmless each "Indemnified Person," as defined below,
against any and all claims, demands, suits, proceedings, losses, damages,
interest, penalties, expenses (specifically including, but not limited to,
counsel fees to the extent approved by the Board or otherwise provided by law,
court costs and other reasonable expenses of litigation), and liability of every
kind, including amounts paid in settlement, with the approval of the Board,
arising from any action or cause of action related to the Indemnified Person's
act or acts or failure to act. Such indemnity shall apply regardless of whether
such claims, demands, suits, proceedings, losses, damages, interest,





                                                                     Page 8 of 9


penalties, expenses and liability arise in whole or in part from (a) the
negligence or other fault of the Indemnified Person, or (b) from the imposition
on such Indemnified Person of any civil penalties or excise taxes pursuant to
the Code or any other applicable laws; except when the same is judicially
determined to be due to gross negligence, fraud, recklessness, or willful or
intentional misconduct of such Indemnified Person. "Indemnified Person" shall
mean each member of the Board, the Administrator, each member of the Committee
and each other employee of any Dean Company who is allocated fiduciary
responsibility hereunder.

         9.3. NO CONTRACT OF EMPLOYMENT INTENDED. The granting of any rights to
an Eligible Employee under this Plan shall not constitute an agreement or
understanding, express or implied, on the part of any Dean Company, to employ
such Eligible Employee for any specified period.

         9.4. GOVERNING LAW. The construction, validity and operation of this
Plan shall be governed by the laws of the State of Delaware.

         9.5. SEVERABILITY OF PROVISIONS. If any provision of this Plan is
determined to be invalid, illegal or unenforceable, such invalidity, illegality
or unenforcability shall not affect the remaining provisions of this Plan, but
such invalid, illegal or unenforceable provisions shall be fully severable, and
the Plan shall be construed and enforced as if such provision had never been
inserted herein.

         9.6. NO LIABILITY OF THE COMPANY. Neither the Company, its directors,
officers or employees of the Committee, nor any Related Corporation which is in
existence or hereafter comes into existence, shall be liable to any Participant
or other person if it is determined for any reason by the Internal Revenue
Service or any court having jurisdiction that the Plan does not qualify under
Section 423 of the Code.

         The Company has caused this Plan to be adopted effective as of the Plan
Start Date.



Last Amended and
Restated:  August 2003




                                                                     Page 9 of 9

EX-10.10

                                                                   EXHIBIT 10.10


                         FOR INFORMATIONAL PURPOSES ONLY
                                                                  CONFORMED COPY
                                         (through and including Fifth Amendment)

- --------------------------------------------------------------------------------

                                CREDIT AGREEMENT

                                      Among

                               DEAN FOODS COMPANY
                  (formerly known as SUIZA FOODS CORPORATION),
                                  as Borrower,

                   CERTAIN OF THE DOMESTIC SUBSIDIARIES OF THE
                   BORROWER FROM TIME TO TIME PARTIES HERETO,
                                 as Guarantors,

                           THE LENDERS PARTIES HERETO,

                       WACHOVIA BANK, NATIONAL ASSOCIATION
                 (formerly known as FIRST UNION NATIONAL BANK),
                            as Administrative Agent,

                                       and

                                  BANK ONE, NA,
                              as Syndication Agent

                                       and

                            WACHOVIA SECURITIES, LLC
                (formerly known as FIRST UNION SECURITIES, INC.)
                                       and
                         BANC ONE CAPITAL MARKETS, INC.,
                   as Co-Lead Arrangers and Joint Book Runners

                                       and

                              FLEET NATIONAL BANK,
                          HARRIS TRUST AND SAVINGS BANK
                                       and
                                 SUNTRUST BANK,
                           as Co-Documentation Agents

                            Dated as of July 31, 2001
                      (as amended as of December 31, 2003)

- --------------------------------------------------------------------------------






                                TABLE OF CONTENTS



                                                                                                               Page
                                                                                                               ----

                                                                                                            
ARTICLE I DEFINITIONS.............................................................................................2
         Section 1.1  Defined Terms...............................................................................2
         Section 1.2  Other Definitional Provisions..............................................................34
         Section 1.3  Accounting Terms...........................................................................35

ARTICLE II  THE LOANS; AMOUNT AND TERMS..........................................................................35
         Section 2.1 Revolving-1 Loans...........................................................................35
         Section 2.2 Swingline Loan Subfacility..................................................................38
         Section 2.4  Tranche A-1 Term Loan Facility.............................................................46
         Section 2.5  Tranche B-1 Term Loan Facility.............................................................47
         Section 2.7  Reduction of the Revolving-1 Commitments...................................................50
         Section 2.8  Prepayments................................................................................51
         Section 2.9  Minimum Borrowing Amounts and Principal Amounts of Tranches................................54
         Section 2.10  Interest; Interest Payment Dates..........................................................54
         Section 2.11  Conversion Options........................................................................55
         Section 2.12  Computation of Interest and Fees..........................................................55
         Section 2.13  Pro Rata Treatment and Payments...........................................................56
         Section 2.14  Non-Receipt of Funds by the Administrative Agent..........................................58
         Section 2.15  Inability to Determine Interest Rate......................................................59
         Section 2.16  Illegality................................................................................59
         Section 2.17  Requirements of Law.......................................................................60
         Section 2.18  Indemnity.................................................................................61
         Section 2.19  Taxes.....................................................................................62
         Section 2.20  Indemnification; Nature of Issuing Lender's Duties........................................64
         Section 2.21  Defaulting Lenders; Limitation on Claims..................................................65
         Section 2.22  Replacement of Lenders....................................................................66

ARTICLE III  REPRESENTATIONS AND WARRANTIES......................................................................69
         Section 3.1 Financial Condition.........................................................................70
         Section 3.2 No Change...................................................................................70
         Section 3.3 Corporate Existence; Compliance with Law....................................................70
         Section 3.4 Corporate Power; Authorization; Enforceable Obligations.....................................71
         Section 3.5 No Legal Bar; No Default....................................................................71
         Section 3.6 No Material Litigation......................................................................71
         Section 3.7 Government Acts.............................................................................71
         Section 3.8 Margin Regulations..........................................................................72
         Section 3.9 ERISA.......................................................................................72
         Section 3.10 Environmental Matters......................................................................72
         Section 3.11 Purpose of Loans...........................................................................73
         Section 3.12 Subsidiaries...............................................................................74
         Section 3.13 Ownership..................................................................................74
         Section 3.14 Indebtedness...............................................................................74
         Section 3.15 Taxes......................................................................................74
         Section 3.16 Intellectual Property......................................................................74



                                        i




                                                                                                            
         Section 3.17 Solvency...................................................................................75
         Section 3.18 Investments................................................................................75
         Section 3.19 Location of Collateral.....................................................................75
         Section 3.20 No Burdensome Restrictions.................................................................75
         Section 3.21 Brokers' Fees..............................................................................76
         Section 3.22 Labor Matters..............................................................................76
         Section 3.23 Security Documents.........................................................................76
         Section 3.24 Consummation of Acquisition................................................................76
         Section 3.25 Material Contracts.........................................................................76
         Section 3.26 Accuracy and Completeness of Information...................................................77
         Section 3.27 Interest Rate Protection...................................................................77

ARTICLE IV  CONDITIONS PRECEDENT.................................................................................77
         Section 4.1 Conditions to Closing Date..................................................................77
         Section 4.2 Conditions to Initial Extensions of Credit..................................................78
         Section 4.3 Conditions to All Extensions of Credit......................................................85

ARTICLE V AFFIRMATIVE COVENANTS..................................................................................86
         Section 5.1 Financial Statements........................................................................86
         Section 5.2 Certificates; Other Information.............................................................88
         Section 5.3 Payment of Obligations......................................................................89
         Section 5.4 Conduct of Business and Maintenance of Existence............................................89
         Section 5.5 Maintenance of Property, Insurance..........................................................89
         Section 5.6 Inspection of Property; Books and Records; Discussions......................................90
         Section 5.7 Notices.....................................................................................90
         Section 5.8 Environmental Laws..........................................................................92
         Section 5.9  Financial Covenants........................................................................93
         Section 5.10  Obligations Regarding Subsidiaries; Additional Subsidiary Guarantors......................94
         Section 5.11  Compliance with Law.......................................................................94
         Section 5.12  Pledged Assets............................................................................94
         Section 5.13  Additional Credit Parties.................................................................95
         Section 5.14  Amendments, Modifications.................................................................96
         Section 5.15  Further Assurances........................................................................96

ARTICLE VI NEGATIVE COVENANTS....................................................................................96
         Section 6.1 Indebtedness................................................................................96
         Section 6.2 Liens.......................................................................................98
         Section 6.3 Nature of Business..........................................................................98
         Section 6.4 Consolidation, Merger, Sale or Purchase of Assets, etc......................................98
         Section 6.5 Advances, Investments and Loans.............................................................99
         Section 6.6 Transactions with Affiliates...............................................................100
         Section 6.7 Ownership of Subsidiaries; Restrictions....................................................100
         Section 6.8 Fiscal Year; Organizational Documents; Material Contracts..................................100
         Section 6.9 Limitation on Actions......................................................................101
         Section 6.10 Restricted Payments.......................................................................102
         Section 6.11 Payments of Subordinated Debt, etc........................................................102
         Section 6.12 Sale Leasebacks...........................................................................103
         Section 6.13 Use of Proceeds...........................................................................103
         Section 6.14 Senior Notes..............................................................................103





                                       ii



                                                                                                            
ARTICLE VII EVENTS OF DEFAULT...................................................................................103
         Section 7.1 Events of Default..........................................................................103
         Section 7.2 Acceleration; Remedies.....................................................................106

ARTICLE VIII THE AGENT..........................................................................................107
         Section 8.1 Appointment................................................................................107
         Section 8.2 Delegation of Duties.......................................................................107
         Section 8.3 Exculpatory Provisions.....................................................................108
         Section 8.4 Reliance by Administrative Agent...........................................................108
         Section 8.5 Notice of Default..........................................................................108
         Section 8.6 Non-Reliance on Administrative Agent and Other Lenders.....................................109
         Section 8.7 Indemnification............................................................................109
         Section 8.8 Administrative Agent in Its Individual Capacity............................................110
         Section 8.9 Successor Administrative Agent.............................................................110
         Section 8.10 Responsibility of other Agents............................................................110

ARTICLE IX MISCELLANEOUS........................................................................................110
         Section 9.1 Amendments, Waivers and Release of Collateral..............................................110
         Section 9.2 Notices....................................................................................113
         Section 9.3 No Waiver; Cumulative Remedies.............................................................113
         Section 9.4 Survival of Representations and Warranties.................................................114
         Section 9.5 Payment of Expenses and Taxes..............................................................114
         Section 9.6 Successors and Assigns; Participations; Purchasing Lenders.................................114
         Section 9.7 Adjustments; Set-off.......................................................................118
         Section 9.8 Table of Contents and Section Headings.....................................................119
         Section 9.9 Counterparts...............................................................................119
         Section 9.10 Effectiveness.............................................................................119
         Section 9.11 Severability..............................................................................120
         Section 9.12 Integration...............................................................................120
         Section 9.13 Governing Law.............................................................................120
         Section 9.14 Consent to Jurisdiction and Service of Process............................................120
         Section 9.15 Confidentiality...........................................................................121
         Section 9.16 Acknowledgments...........................................................................121
         Section 9.17 Waivers of Jury Trial.....................................................................121

ARTICLE X GUARANTY..............................................................................................122
         Section 10.1 The Guaranty..............................................................................122
         Section 10.2 Bankruptcy................................................................................123
         Section 10.3 Nature of Liability.......................................................................123
         Section 10.4 Independent Obligation....................................................................124
         Section 10.5 Authorization.............................................................................124
         Section 10.6 Reliance..................................................................................124
         Section 10.7 Waiver....................................................................................124
         Section 10.8 Limitation on Enforcement.................................................................125
         Section 10.9 Confirmation of Payment...................................................................126




                                       iii





SCHEDULES

                                 
Schedule 1.1(a)                     Account Designation Letter
Schedule 1.1(b)                     Investments
Schedule 1.1(c)                     Liens
Schedule 1.1(d)                     Mandatory Cost Formulae
Schedule 2.1(a)                     Lenders and Commitments
Schedule 2.1(b)(i)                  Form of Notice of Borrowing
Schedule 2.1(d)                     Form of Revolving-1 Note
Schedule 2.2(d)                     Form of Swingline Note
Schedule 2.4(c)                     Form of Tranche A-1 Term Note
Schedule 2.5(c)                     Form of Tranche B-1 Term  Note
Schedule 2.11                       Form of Notice of Conversion/Extension
Schedule 2.19                       2.19 Certificate
Schedule 3.1                        Material Contingencies Not Otherwise Shown on Financial Statements
Schedule 3.6                        Litigation
Schedule 3.12                       Subsidiaries
Schedule 3.16                       Intellectual Property
Schedule 3.19(a)                    Real Property Owned by Borrower and its Restricted Subsidiaries
Schedule 3.19(b)                    Locations of Tangible Personal Property
Schedule 3.19(c)                    Chief Executive Offices
Schedule 3.22                       Labor Matters
Schedule 3.25                       Material Contracts
Schedule 4.1(b)                     Form of Secretary's Certificate
Schedule 4.2(f)(ii)                 Significant Mortgaged Properties
Schedule 4.2(j)                     Form of Solvency Certificate
Schedule 5.5(b)                     Insurance
Schedule 5.13                       Form of Joinder Agreement
Schedule 6.1(b)                     Indebtedness
Schedule 9.2                        Lenders' Lending Offices
Schedule 9.6(c)                     Form of Commitment Transfer Supplement



                                       iv




                         FOR INFORMATIONAL PURPOSES ONLY


         CREDIT AGREEMENT, dated as of July 31, 2001, among DEAN FOODS COMPANY
(formerly known as Suiza Foods Corporation), a Delaware corporation (the
"Borrower"), those Domestic Subsidiaries of the Borrower identified as a
"Guarantor" on the signature pages hereto and such other Domestic Subsidiaries
of the Borrower as may from time to time become a party hereto (collectively,
the "Guarantors" and individually, a "Guarantor"), the several banks and other
financial institutions as may from time to time become parties to this Agreement
(collectively, the "Lenders"; and individually, a "Lender"), WACHOVIA BANK,
NATIONAL ASSOCIATION (formerly known as First Union National Bank), a national
banking association, as administrative agent for the Lenders hereunder (in such
capacity, the "Administrative Agent"), BANK ONE, NA, a national banking
association, as syndication agent for the Lenders hereunder (in such capacity,
the "Syndication Agent") and FLEET NATIONAL BANK, HARRIS TRUST AND SAVINGS BANK
and SUNTRUST BANK, as co-documentation agents for the Lenders hereunder. *


                                   WITNESSETH:

         WHEREAS, the Borrower proposes: (a) to acquire Dean Foods Company, a
Delaware corporation (the "Acquired Company") and its Subsidiaries pursuant to a
series of transactions in which the Acquired Company will be merged (the
"Merger") with and into a wholly-owned Subsidiary of the Borrower and the former
shareholders of the Acquired Company will receive a combination of both stock
and cash; (b) to acquire all partnership and other ownership interests currently
held by Dairy Farmers of America, Inc. ("DFA") in Suiza Dairy Group, L.P.,
pursuant to a series of transactions in which DFA will receive cash, operating
assets, and certain contingent obligations of the Borrower; (c) to refinance
certain existing funded debt of the Acquired Company, the Borrower and their
respective Subsidiaries (excluding outstanding senior unsecured notes and
certain other indebtedness); (d) to obtain senior bank credit facilities in
connection therewith which will also be used to (i) provide for working capital
and other general corporate purposes of the Borrower and its Subsidiaries; (ii)
to pay accrued quarterly dividends to the shareholders of the Acquired Company
as agreed between the Borrower and the Acquired Company; and (iii) to pay fees,
costs and expenses incurred in connection with the foregoing transactions;

         WHEREAS, in connection with the foregoing, the Borrower has requested
that the Lenders make loans and other financial accommodations to the Borrower
as more particularly described herein; and

         WHEREAS, the Lenders have agreed to make such loans and other financial
accommodations to the Borrower on the terms and conditions contained herein.

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto hereby agree as follows:


- --------
* This Credit Agreement draft has been conformed to incorporate the provisions
of the First, Second, Third, Fourth and Fifth Amendments thereto, as well as
certain other purely historical changes (e.g., the name change of Suiza Foods
Corporation to Dean Foods Company).


                                       1



                                    ARTICLE I
                                   DEFINITIONS

         SECTION 1.1  DEFINED TERMS.

         As used in this Agreement, terms defined in the preamble and recitals
to this Agreement have the meanings therein indicated, and the following terms
have the following meanings:

         "Account Designation Letter" shall mean the Notice of Account
Designation Letter dated the Funding Date from the Borrower to the
Administrative Agent substantially in the form attached hereto as Schedule
1.1(a).

         "Acquired Company" shall have the meaning set forth in the first
recital above.

         "Acquisition" shall mean the acquisition of the Acquired Company and
its Subsidiaries by the Borrower and/or one of its wholly-owned Subsidiaries
pursuant to the terms of the Acquisition Documents.

         "Acquisition Documents" shall mean the Merger Agreement, the DFA
Agreement, and each other document executed and delivered in connection with the
consummation of the Acquisition as amended, modified or supplemented from time
to time.

         "Additional Credit Party" shall mean each Person that becomes a
Guarantor by execution of a Joinder Agreement in accordance with Section 5.10.

         "Administrative Agent" shall have the meaning set forth in the preamble
to this Agreement and any successors in such capacity.

         "Administrative Agent's Correspondent" shall mean Wachovia Bank,
National Association, London Branch, or any other financial institution
designated by the Administrative Agent to act as its correspondent hereunder
with respect to the distribution and payment of Alternative Currency Loans.

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




                                       2


her being a director, officer or employee of the Borrower or any of its
Subsidiaries, and (b) none of the Restricted Subsidiaries of the Borrower shall
be considered Affiliates. For purposes hereof, all Unrestricted Subsidiaries
shall be considered Affiliates.

         "Agents" shall mean a collective reference to the Administrative Agent
and the Syndication Agent.

         "Agreement" shall mean this Credit Agreement, as amended, modified,
supplemented or restated from time to time in accordance with its terms.

         "Alternate Base Rate" shall mean, for any day, a rate per annum equal
to the greater of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. For purposes hereof:
"Prime Rate" shall mean, at any time, the rate of interest per annum publicly
announced from time to time by First Union at its principal office as its prime
rate. Each change in the Prime Rate shall be effective as of the opening of
business on the day such change in the Prime Rate occurs. The parties hereto
acknowledge that the rate announced publicly by First Union as its Prime Rate is
an index or base rate and shall not necessarily be its lowest or best rate
charged to its customers or other banks; and "Federal Funds Effective Rate"
shall mean, for any day, the weighted average of the rates on overnight federal
funds transactions with members of the Federal Reserve System arranged by
federal funds brokers, as published on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so published on the
next succeeding Business Day, the average of the quotations for the day of such
transactions received by the Administrative Agent from three federal funds
brokers of recognized standing selected by it. If for any reason the
Administrative Agent shall have determined (which determination shall be
conclusive in the absence of manifest error) that it is unable to ascertain the
Federal Funds Effective Rate, for any reason, including the inability or failure
of the Administrative Agent to obtain sufficient quotations in accordance with
the terms thereof, the Alternate Base Rate shall be determined without regard to
clause (b) of the first sentence of this definition, as appropriate, until the
circumstances giving rise to such inability no longer exist. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective on the opening of business on the date of such
change.

         "Alternate Base Rate Loans" shall mean Loans that bear interest at an
interest rate based on the Alternate Base Rate.

         "Alternative Currency" shall mean (a) euro and (b) with the prior
written consent of each Lender with a Multi-currency Revolving-1 Subcommitment,
any other lawful currency (other than Dollars); provided that such currency is
freely transferable and convertible into Dollars and freely available to each
Lender with a Multi-currency Revolving-1 Subcommitment in the London interbank
deposit market.

         "Alternative Currency Amount" shall mean, with respect to each
Alternative Currency Loan, the amount of such Alternative Currency which is
equivalent to the principal amount in Dollars of such Loan at the most favorable
spot exchange rate determined by the Administrative Agent to be available to it
at approximately 11:00 a.m. (Charlotte time) two (2) Business Days





                                       3


before such Loan is issued or extended (or to be issued or extended). When used
with respect to any other sum expressed in Dollars, "Alternative Currency
Amount" shall mean the amount of such Alternative Currency which is equivalent
to the amount so expressed in Dollars at the most favorable spot exchange rate
determined by the Administrative Agent to be available to it at the relevant
time.

         "Alternative Currency Loan" shall mean any Multi-currency Revolving-1
Loan denominated in an Alternative Currency.

         "Applicable Percentage" shall mean, for any day, the rate per annum set
forth below opposite the applicable level (the "Level") then in effect, it being
understood that the Applicable Percentage for (a) Revolving-1 Loans and Tranche
A-1 Term Loans which are Alternate Base Rate Loans shall be the percentage set
forth under the column "Alternate Base Rate Margin for Revolving-1 Loans and
Tranche A-1 Term Loans", (b) Revolving-1 Loans and Tranche A-1 Term Loans which
are LIBOR Rate Loans shall be the percentage set forth under the column "LIBOR
Rate Margin for Revolving-1 Loans, Tranche A-1 Term Loans and the Letter of
Credit Fee", (c) Tranche B-1 Term Loans which are Alternate Base Rate Loans
shall be the percentage set forth under the column "Alternate Base Rate Margin
for Tranche B-1 Term Loans," (d) Tranche B-1 Term Loans which are LIBOR Rate
Loans shall be the percentage set forth under the column "LIBOR Rate Margin for
Tranche B-1 Term Loans", (e) the Letter of Credit Fee shall be the percentage
set forth under the column "LIBOR Rate Margin for Revolving-1 Loans, Tranche A-1
Term Loans and Letter of Credit Fee" and (f) the Commitment Fee shall be the
percentage set forth under the column "Commitment Fee":



                                                LIBOR Rate
                                                Margin for
                                 Alternate     Revolving-1
                                 Base Rate        Loans,
                                 Margin for      Tranche       Alternate
                                Revolving-1      A-1 Term      Base Rate      LIBOR Rate
                                 Loans and      Loans and      Margin for     Margin for
                   Leverage       Tranche       Letter of       Tranche        Tranche      Commitment
     Level          Ratio      A-1 Term Loans   Credit Fee  B-1 Term Loans  B-1 Term Loans      Fee
     -----         --------    --------------   ----------  --------------  --------------  ----------
                                                                          

       I        > or = 3.50 to     0.750%         2.000%         0.750%         2.000%         0.375%
                     1.00

                  < 3.50 to
                   1.00 but
      II        > or = 3.00 to     0.500%         1.750%         0.750%         2.000%         0.375%
                     1.00

                  < 3.00 to
                   1.00 but
      III      > or = 2.50 to      0.250%         1.500%         0.750%         2.000%         0.300%
                     1.00

      IV          < 2.50 to
                     1.00          0.000%         1.250%         0.750%         2.000%         0.250%





                                       4



The Applicable Percentage shall, in each case, be determined and adjusted
quarterly on the date (each an "Interest Determination Date") three (3) Business
Days after the earlier of the date on which the Borrower provides or is required
to provide to the Administrative Agent the annual or quarterly financial
information and certifications in accordance with the provisions of Sections
5.1(a), 5.1(b) and 5.2(c). Such Applicable Percentage shall be effective from
such Interest Determination Date until the next such Interest Determination
Date. If the Borrower shall fail to provide the annual or quarterly financial
information and certifications in accordance with the provisions of Sections
5.1(a), 5.1(b) and 5.2(c), the Applicable Percentage from such Interest
Determination Date shall, on the date five (5) Business Days after the date by
which the Borrower was so required to provide such financial information and
certifications to the Administrative Agent and the Lenders, be based on Level I
until such time as the date which is three (3) Business Days after the date such
information and certifications are provided, whereupon the Level shall be
determined by the then current Leverage Ratio; provided, that with respect to
each LIBOR Rate Loan denominated in an Alternative Currency, the Applicable
Percentage shall be increased by an amount equal to the applicable Mandatory
Cost, as determined pursuant to the relevant formula set forth on Schedule
1.1(d) hereto.

         "Approved Fund" means with respect to any Lender under the Tranche A-1
Term Loan or the Tranche B-1 Term Loan that is a fund that invests in bank
loans, any other fund that invests in commercial loans and is managed or advised
by the same investment advisor as such Lender or by an Affiliate of such
investment advisor.

         "Arrangers" shall mean a collective reference to FUSI and BOCM and
"Arranger" shall mean either of them.

         "Asset Disposition" shall mean the disposition of any or all of the
assets (including, without limitation, the Capital Stock of a Subsidiary or any
ownership interest in a joint venture) of any Credit Party or any Restricted
Subsidiary whether by sale, lease, transfer or otherwise; provided, however, the
term "Asset Disposition" shall not include (i) Specified Sales, (ii) the sale,
lease or transfer of assets permitted by Section 6.4(c)(iii) or (iv) hereof, or
(iii) any Equity Issuance.

         "Attributed Principal Amount" means, on any day, with respect to any
Permitted Receivables Financing entered into by any Credit Party, the aggregate
amount (with respect to any such transaction, the "Invested Amount") paid to, or
borrowed by, such Person as of such date under such Permitted Receivables
Financing, minus the aggregate amount received by the applicable Receivables
Financier and applied to the reduction of the Invested Amount under such
Permitted Receivables Financing.

         "Bank One" shall mean Bank One, NA and its successors and assigns.




                                       5


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

         "BOCM" shall mean Banc One Capital Markets, Inc.

         "Borrower" shall have the meaning set forth in the first paragraph of
this Agreement. "Borrowing Date" shall mean, in respect of any Loan, the date
such Loan is made. "Business" shall have the meaning set forth in Section 3.10.

         "Business Day" shall mean a day

                  (a) 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;

                  (b) if such day relates to any interest rate settings as to a
         LIBOR Rate Loan denominated in Dollars, any fundings, disbursements,
         settlements and payments in Dollars in respect of any such LIBOR Rate
         Loan, or any other dealings in Dollars to be carried out pursuant to
         this Agreement in respect of any such LIBOR Rate Loan, on which
         dealings in deposits in Dollars are conducted by and between banks in
         the London interbank eurodollar market;

                  (c) if such day relates to any interest rate settings as to a
         LIBOR Rate Loan denominated in euros, any fundings, disbursements,
         settlements and payments in euros in respect of any such LIBOR Rate
         Loan, or any other dealings in euro to be carried out pursuant to this
         Agreement in respect of any such LIBOR Rate Loan, which is a TARGET
         Day;

                  (d) if such day relates to any interest rate settings as to a
         LIBOR Rate Loan denominated in a currency other than Dollars or euros,
         on which dealings in deposits in the relevant currency are conducted by
         and between banks in the London or other applicable offshore interbank
         market for such currency; and

                  (e) if such day relates to any fundings, disbursements,
         settlements and payments in a currency other than Dollars or euro in
         respect of a LIBOR Rate Loan denominated in a currency other than
         Dollars or euro, or any other dealings in any currency other than
         Dollars or euro to be carried out pursuant to this Agreement in respect
         of any such LIBOR Rate Loan (other than any interest rate settings), on
         which banks are open for foreign exchange business in the principal
         financial center of the country of such currency.

         "Capital Lease" shall mean any lease of property, real or personal, the
obligations with respect to which are required to be capitalized on a balance
sheet of the lessee in accordance with GAAP.




                                       6


         "Capital Lease Obligations" shall mean the aggregate principal
component of capitalized lease obligations relating to a Capital Lease
determined in accordance with GAAP.

         "Capital Stock" shall mean (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), (iv) in the case of a limited liability
company, membership interests and (v) 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.

         "Captive Insurance Company" shall mean any Subsidiary of the Borrower
that is organized and subject to regulation as an insurance company, or the
principal purpose of which is to procure insurance for the benefit of the
Borrower and/or its Restricted Subsidiaries.

         "Cash Equivalents" shall mean (i) securities issued directly or fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than twelve months from the date of acquisition ("Government Obligations"), (ii)
U.S. dollar denominated (or foreign currency fully hedged) time deposits,
certificates of deposit, Eurodollar time deposits and Eurodollar certificates of
deposit of (y) any domestic commercial bank of recognized standing having
capital and surplus in excess of $250,000,000 or (z) 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 Bank"), in each case with maturities of not more than one year from
the date of acquisition, (iii) commercial paper and variable or fixed rate notes
issued by any Approved Bank (or by the parent company thereof) or any commercial
paper or 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 nine months of
the date of acquisition, (iv) repurchase agreements with a bank or trust company
(including a Lender) or a 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 of America, (v) obligations of any state of the
United States or any political subdivision thereof rated A-1 (or the equivalent
thereof) or better by S&P or P-1 (or the equivalent thereof) or better by
Moody's having maturities of not more than one year from the date of acquisition
thereof, and (vi) auction preferred stock rated in the highest short-term credit
rating category by S&P or Moody's.

         "Change of Control" shall mean (a) any Person or two or more Persons
acting in concert (other than Mr. Gregg L. Engles or any other director or
officer of the Borrower as of the Funding Date), shall have acquired "beneficial
ownership," directly or indirectly, of, or shall have acquired by contract or
otherwise, or shall have entered into a contract or arrangement that, upon
consummation, will result in its or their acquisition of, control over, Voting
Stock of the Borrower (or other securities convertible into such Voting Stock)
representing 20% or more of the combined voting power of all Voting Stock of the
Borrower, or (b) during any period of up to 25 consecutive months, commencing
after the Funding Date, individuals who at the beginning of such 25 month period
were directors of the Borrower (together with any new director whose election by
the Borrower's Board of Directors or whose nomination for election by the




                                       7


Borrower's shareholders was approved by 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
Borrower then in office. As used herein, "beneficial ownership" shall have the
meaning provided in Rule 13d-3 of the Securities and Exchange Commission under
the Securities Act of 1934.

         "Closing Date" shall mean the date of this Agreement.

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

         "Collateral" shall mean a collective reference to the collateral which
is identified in, and at any time will be covered by, the Security Documents.

         "Commitment" shall mean the Revolving-1 Commitment, the LOC Commitment,
the Swingline Commitment, the Tranche A-1 Term Loan Commitment and the Tranche
B-1 Term Loan Commitment, individually or collectively, as appropriate.

         "Commitment Fee" shall have the meaning set forth in Section 2.6(a).

         "Commitment Percentage" shall mean the Dollar Revolving-1 Commitment
Percentage, the Multi-currency Revolving-1 Commitment Percentage, the Tranche
A-1 Term Loan Commitment Percentage and/or the Tranche B-1 Term Loan Commitment
Percentage, as appropriate.

         "Commitment Period" shall mean the period from and including the
Funding Date to but not including the Revolving-1 Commitment Termination Date.

         "Commitment Transfer Supplement" shall mean a Commitment Transfer
Supplement, substantially in the form of Schedule 9.6(c).

         "Commonly Controlled Entity" shall mean an entity, whether or not
incorporated, which is under common control with the Borrower within the meaning
of Section 4001 of ERISA or is part of a group which includes the Borrower and
which is treated as a single employer under Section 414 of the Code.

         "Compliance Certificate" shall mean the officer's certificate delivered
pursuant to Section 5.2(c).

         "Consolidated Capital Expenditures" shall mean for any period, all
expenditures of the Borrower and its Restricted Subsidiaries on a consolidated
basis for such period which in accordance with GAAP would be classified as
capital expenditures, including without limitation, Capital Lease Obligations.

         "Consolidated EBITDA" shall mean, for any period, the sum of (i)
Consolidated Net Income for such period, plus (ii) an amount which, in the
determination of Consolidated Net





                                       8


Income for such period, has been deducted for (A) Consolidated Interest Expense,
(B) total federal, state, local and foreign income, value added and similar
taxes, (C) depreciation, amortization expense and other noncash charges, (D) pro
forma cost savings add-backs resulting from non-recurring charges related to the
Acquisition and other acquisitions to the extent permitted hereunder, as
permitted pursuant to Regulation S-X of the Securities Exchange Act of 1934 or
as approved by the Agents, and (E) other adjustments to Consolidated EBITDA
reasonably acceptable to the Agents. Except as otherwise provided herein, the
applicable period shall be for the four consecutive quarters ending as of the
date of computation.

         "Consolidated Interest Expense" shall mean, for any period, all
interest expense of the Borrower and its Restricted Subsidiaries, including the
interest component under Capital Leases and the implied interest component under
Permitted Receivables Financings, plus net amounts payable (or minus net amounts
receivable) under Hedging Agreements, minus interest income for such period, in
each case as determined in accordance with GAAP. Except as otherwise provided
herein, the applicable period shall be for the four consecutive quarters ending
as of the date of computation.

         "Consolidated Net Income" shall mean, for any period, net income
(excluding extraordinary items) after taxes for such period of the Borrower and
its Restricted Subsidiaries on a consolidated basis, as determined in accordance
with GAAP, including net income attributable to Permitted Acquisitions after
giving effect to such Permitted Acquisitions on a Pro Forma Basis. Except as
otherwise provided herein, the applicable period shall be for the four
consecutive quarters ending as of the date of computation.

         "Consolidated Net Worth" shall mean, as at any date, the sum for the
Borrower and its Subsidiaries (including minority interests in any Person owned
by the Borrower or any of its Subsidiaries), determined on a consolidated basis
without duplication in accordance with GAAP, of (a) the amount of Capital Stock
plus (b) the amount of additional paid in capital plus (c) the amount of
retained earnings (or, in the case of any retained earnings deficit, minus the
amount of such deficit).

         "Contractual Obligation" shall mean, as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.

         "Credit Documents" shall mean this Agreement, each of the Notes, any
Joinder Agreement, the Letters of Credit, the LOC Documents and the Security
Documents.

         "Credit Party" shall mean any of the Borrower or the Guarantors.

         "Credit Party Obligations" shall mean, without duplication, (i) all of
the obligations of the Credit Parties to the Lenders (including the Issuing
Lender) and the Administrative Agent, whenever arising, under this Agreement,
the Notes or any of the other Credit Documents (including, but not limited to,
any interest accruing after the occurrence of a filing of a petition of
bankruptcy under the Bankruptcy Code with respect to any Credit Party,
regardless of whether such interest is an allowed claim under the Bankruptcy
Code) and (ii) all liabilities and





                                       9


obligations, whenever arising, owing from the Borrower or any of its Restricted
Subsidiaries under any Hedging Agreement (which such Hedging Agreement is
permitted hereunder) with any Person that is a Lender (or an Affiliate of any
such Lender) hereunder at the time such Hedging Agreement is executed or becomes
a Lender (or an Affiliate of a Person that becomes a Lender) at any time after
such Hedging Agreement was executed (all such obligations with respect to any
such Hedging Agreement, "Hedging Obligations").

         "Debt Issuance" shall mean the issuance of any Indebtedness for
borrowed money by any Credit Party or any of its Restricted Subsidiaries
(excluding, for purposes hereof, any Equity Issuance or any Indebtedness of the
Borrower and its Restricted Subsidiaries permitted to be incurred pursuant to
Section 6.1 hereof (other than Indebtedness permitted to be incurred pursuant to
Section 6.1(j))).

         "Default" shall mean the occurrence of any of the events specified in
Section 7.1, whether or not any requirement for the giving of notice or the
lapse of time, or both, or any other condition, has been satisfied.

         "Defaulting Lender" shall mean, at any time, any Lender that, at such
time (a) has failed to make a Loan required pursuant to the terms of this Credit
Agreement, including the funding of a Participation Interest in accordance with
the terms hereof, (b) has failed to pay to the Administrative Agent or any other
Lender an amount owed by such Lender pursuant to the terms of this Credit
Agreement, or (c) has been deemed insolvent by its principal regulator or has
become subject to a bankruptcy or insolvency proceeding or to a receiver,
trustee or similar official.

         "DFA Agreement" shall mean that certain Securities Purchase Agreement,
dated as of April 4, 2001, among Dean Foods Company (formerly known as Suiza
Foods Corporation), Suiza Dairy Group Holdings, Inc., Suiza Dairy Group, L.P.,
Suiza Southeast, LLC, Dairy Farmers of America, Inc., and, for certain limited
purposes, Mid-Am Capital, L.L.C., as the same may be amended or modified from
time to time.

         "Dollar Amount" shall mean (a) with respect to each Loan made or
continued in Dollars, the principal amount thereof and (b) with respect to each
Loan made or continued in an Alternative Currency, the amount of Dollars which
is equivalent to the principal amount of such Loan, at the most favorable spot
exchange rate determined by the Administrative Agent at approximately 11:00 a.m.
(the time of the Administrative Agent's Correspondent) two (2) Business Days
before such Loan is made or continued (or to be made or continued). When used
with respect to any other sum expressed in an Alternative Currency, "Dollar
Amount" shall mean the amount of Dollars which is equivalent to the amount so
expressed in such Alternative Currency at the most favorable spot exchange rate
determined by the Administrative Agent to be available to it at the relevant
time.

         "Dollar Letter of Credit" shall mean each Letter of Credit issued under
the Dollar Revolving-1 Committed Amount pursuant to Section 2.3(a).




                                       10


         "Dollar LOC Obligations" shall mean, at any time, the sum of (i) the
maximum amount which is, or at any time thereafter may become, available to be
drawn under Dollar Letters of Credit then outstanding, assuming compliance with
all requirements for drawings referred to in such Dollar Letters of Credit plus
(ii) the aggregate amount of all drawings under Dollar Letters of Credit honored
by the Issuing Lender but not theretofore reimbursed.

         "Dollar Revolving-1 Commitment Percentage" shall mean, for each Lender,
the percentage identified as its Dollar Revolving-1 Commitment Percentage on the
Register, as such percentage may be modified in connection with any assignment
made in accordance with the provisions of Section 9.6(c).

         "Dollar Revolving-1 Committed Amount" shall mean the sum of the Dollar
Revolving-1 Subcommitments. As of the Fifth Amendment Effective Date, the Dollar
Revolving-1 Committed Amount shall be $800,000,000, as such amount may be
modified from time in accordance with the provisions hereof.

         "Dollar Revolving-1 Loans" shall have the meaning set forth in Section
2.1(a)(i).

         "Dollar Revolving-1 Subcommitment" shall mean, with respect to each
Lender, the amount of such Lender's Revolving-1 Commitment available for Dollar
Revolving-1 Loans in an aggregate principal amount at any time outstanding up to
such Lender's Dollar Revolving-1 Subcommitment as specified in the Register, as
such amount may be reduced from time to time in accordance with the provisions
hereof or in connection with any assignment made in accordance with the
provisions of Section 9.6(c).

         "Dollars" and "$" shall mean dollars in lawful currency of the United
States of America.

         "Domestic Lending Office" shall mean, initially, the office of each
Lender designated as such Lender's Domestic Lending Office shown on Schedule
9.2; and thereafter, such other office of such Lender as such Lender may from
time to time specify to the Administrative Agent and the Borrower as the office
of such Lender at which Alternate Base Rate Loans of such Lender are to be made.

         "Domestic Subsidiary" shall mean any Subsidiary that is organized and
existing under the laws of the United States or any state or commonwealth
thereof or under the laws of the District of Columbia.

         "EMU" shall mean economic and monetary union as contemplated in the
Treaty on European Union.

         "EMU Legislation" shall mean legislative measures of the Council of
European Union for the introduction of, change over to or operation of the euro.

         "Environmental Claim" shall mean, with respect to any Person, any
written notice, claim, demand or other communication (collectively, a "claim")
by any other Person alleging or asserting such Person's liability for
investigatory costs, cleanup costs, governmental response





                                       11


costs, damages to natural resources or other Property, personal injuries, fines
or penalties arising out of, based on or resulting from (a) the presence, or
release into the environment, of any Hazardous Material at any location, whether
or not owned by such Person, or (b) circumstances forming the basis of any
violation, or alleged violation, of any Environmental Law. The term
"Environmental Claim" shall include, without limitation, any claim by any
Governmental Authority for enforcement, cleanup, removal, response, remedial or
other actions or damages pursuant to any applicable Environmental Law, and any
claim by any third party seeking damages, contribution, indemnification, cost
recovery, compensation or injunctive relief resulting from the presence of
Hazardous Materials or arising from alleged injury or threat of injury to
health, safety or the environment.

         "Environmental Laws" shall mean any and all applicable foreign,
Federal, state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Authority or other
Requirement of Law (including common law) regulating, relating to or imposing
liability or standards of conduct concerning protection of human health or the
environment, as now or may at any time be in effect during the term of this
Agreement.

         "Equity Issuance" shall mean any issuance by the Borrower or any of its
Restricted Subsidiaries to any Person which is not a Credit Party of (a) shares
of its Capital Stock, (b) any shares of its Capital Stock pursuant to the
exercise of options (excluding for purposes hereof the issuance of Capital Stock
pursuant to the exercise of stock options held by directors, officers or other
employees or former employees of the Credit Parties or personal representatives
or heirs or beneficiaries of any oil them) or warrants or (C) any shares of its
Capital Stock pursuant to the conversion of any debt securities to equity.

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

         "ERISA Affiliate" shall mean any corporation or trade or business that
is a member of any group of organizations (i) described in Section 414(b) or (c)
of the Code of which any Credit Party or any of its Subsidiaries is a member,
(ii) solely for purposes of potential liability under Section 302(c)(11) of
ERISA and Section 412(c)(11) of the Code and the lien created under Section
302(f) of ERISA and Section 412(n) of the Code, described in Section 414(m) or
(o) of the Code of which any Credit Party or any of its Subsidiaries is a member
and (iii) which are under common control with any Credit Party or any of its
Subsidiaries within the meaning of Section 4001(a)(14) of ERISA.

         "euro" shall mean the single currency to which the Participating Member
States of the European Union have converted.

         "Eurodollar Reserve Percentage" shall mean for any day, the percentage
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) which is in effect for such day as prescribed by the Federal
Reserve Board (or any successor) for determining the maximum reserve requirement
(including without limitation any basic, supplemental or emergency reserves) in
respect of Eurocurrency liabilities, as defined in Regulation D of such




                                       12


Board as in effect from time to time, or any similar category of liabilities for
a member bank of the Federal Reserve System in New York City.

         "Event of Default" shall mean any of the events specified in Section
7.1; provided, however, that any requirement for the giving of notice or the
lapse of time, or both, or any other condition, has been satisfied.

         "Excess Cash Flow" shall mean, with respect to any fiscal year period
of the Borrower and its Restricted Subsidiaries on a consolidated basis, an
amount equal to (a) Consolidated EBITDA for such period minus (b) Consolidated
Capital Expenditures for such period minus (c) Scheduled Funded Debt Payments
made during such period minus (d) Consolidated Interest Expense minus (e)
amounts paid in respect of federal, state, local and foreign income, value added
and similar taxes with respect to such period minus (f) voluntary principal
prepayments of Term Loans made during such period.

         "Excluded Disposition" shall mean the sale, transfer, or other
disposition of (a) any motor vehicles or other equipment no longer used or
useful in the business of the Borrower or any of its Restricted Subsidiaries,
(b) any inventory, materials and other assets in the ordinary course of business
and on ordinary business terms, (c) Permitted Investments described in clause
(a) of the definition thereof and (d) an Investment Tax Credit.

         "Existing Letters of Credit" means the letters of credit outstanding on
the Funding Date and identified on Schedule 1.1(d) hereto.

         "Existing Tranche A-1 Term Loan" shall have the meaning set forth in
Section 2.4 hereof.

         "Existing Tranche B-1 Term Loan" shall have the meaning set forth in
Section 2.5 hereof.

         "Extension of Credit" shall mean, as to any Lender, the making of a
Loan by such Lender or the issuance of, or participation in, a Letter of Credit
by such Lender.

         "Federal Funds Effective Rate" shall have the meaning set forth in the
definition of "Alternate Base Rate".

         "Fee Letter" shall mean the letter agreement dated April 4, 2001
addressed to the Borrower from the Administrative Agent, the Syndication Agent,
First Union Securities, Inc. and Banc One Capital Markets, Inc., as amended,
modified or otherwise supplemented.

         "Fifth Amendment" shall mean that certain Fifth Amendment to Credit
Agreement among the Borrower, the Administrative Agent and the Required Lenders
dated as of December 31, 2003.

         "Fifth Amendment Effective Date" shall mean the date upon which all of
the conditions precedent set forth in the Fifth Amendment shall have been
satisfied.




                                       13


         "First Tier Foreign Subsidiary" shall mean any direct Foreign
Subsidiary of a Credit Party.

         "First Union" shall mean Wachovia Bank, National Association (formerly
known as First Union National Bank), a national banking association and its
successors and assigns.

         "Foreign Subsidiary" shall mean any Subsidiary that is not a Domestic
Subsidiary.

         "Fourth Amendment" shall mean that certain Fourth Amendment to Credit
Agreement among the Borrower, the Administrative Agent and the Lenders dated as
of August 29, 2003.

         "Fourth Amendment Effective Date" shall mean the date upon which all of
the conditions precedent set forth in the Fourth Amendment shall have been
satisfied.

         "Funded Debt" shall mean, with respect to any Person, without
duplication, (a) all Indebtedness of such Person other than Indebtedness of the
types referred to in clause (e), (g), (i) and (m) of the definition of
"Indebtedness" set forth in this Section 1.1, (b) all Funded Debt of others of
the type referred to in clause (a) above secured by (or for which the holder of
such Funded Debt 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, (c) all Guaranty Obligations of such Person with respect to
Funded Debt of the type referred to in clause (a) above of another Person and
(d) Funded Debt of the type referred to in clause (a) above of any partnership
or unincorporated joint venture in which such Person is legally obligated or has
a reasonable expectation of being liable with respect thereto.

         "Funding Date" shall mean the date upon which all the conditions
precedent to funding under Section 4.2 shall have been satisfied, and the
initial Extensions of Credit are made hereunder, which in any event, shall occur
no later than December 31, 2001.

         "FUSI" shall mean Wachovia Securities, LLC (formerly known as First
Union Securities, Inc.).

         "GAAP" shall mean generally accepted accounting principles in effect in
the United States of America applied on a consistent basis, subject, however, in
the case of determination of compliance with the financial covenants set out in
Section 5.9 to the provisions of Section 1.3.

         "Government Acts" shall have the meaning set forth in Section 2.18.

         "Governmental Authority" shall mean any nation or government, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.




                                       14


         "Guarantor" shall mean any of the Domestic Subsidiaries identified as a
"Guarantor" on the signature pages hereto and the Additional Credit Parties
which execute a Joinder Agreement, together with their successors and permitted
assigns.

         "Guaranty" shall mean the guaranty of the Guarantors set forth in
Article X.

         "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 or similar agreements or arrangements) for the benefit of any holder
of Indebtedness of such other Person, (iii) to lease or purchase assets,
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.

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

         "Hedging Agreements" shall mean, with respect to any Person, any
agreement entered into to protect such Person against fluctuations in interest
rates, or currency values, including, without limitation, any interest rate
swap, cap or collar agreement or similar arrangement between such Person and one
or more counterparties, any foreign currency exchange agreement, currency
protection agreements, or other interest or exchange rate hedging agreements.

         "Hedging Obligation" shall have the meaning set forth in the definition
of Credit Party Obligations.

         "Indebtedness" shall mean, 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, or upon which interest payments are customarily made, (c) all
obligations of such Person under conditional sale or other title retention
agreements





                                       15


relating to assets 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 assets or services purchased by such
Person (other than 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 obligations of such
Person under take-or-pay or similar arrangements, (f) 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, assets owned or acquired by such Person, whether or
not the obligations secured thereby have been assumed, (g) all Guaranty
Obligations of such Person with respect to Indebtedness of another Person, (h)
the principal portion of all obligations of such Person under Capital Leases,
(i) all obligations of such Person under Hedging Agreements, (j) 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), (k) 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, (l) the principal balance
outstanding under any synthetic lease, tax retention operating lease, accounts
receivable securitization program, off-balance sheet loan or similar off-balance
sheet financing product, including without limitation, the outstanding
Attributed Principal Amount under any Permitted Receivables Financing, and (m)
the Indebtedness of any partnership or unincorporated joint venture in which
such Person is a general partner or a joint venturer.

         "Insolvency" shall mean, with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of such term as used in
Section 4245 of ERISA.

         "Insolvent" shall mean being in a condition of Insolvency.

         "Intellectual Property" has the meaning set forth in Section 3.16.

         "Intercreditor Agreement" means the Intercreditor Agreement dated as of
the Funding Date by and between the Administrative Agent and Bank One, NA (Main
Office Chicago) (the "Receivables Agent"), as agent under the Amended and
Restated Receivables Purchase Agreement, dated as of the Funding Date by and
among the Borrower, the Subsidiaries of the Borrower party thereto, the
Receivables Agent and the financial institutions parties thereto, as amended,
modified or supplemented from time to time in accordance with its terms.

         "Interest Coverage Ratio" means, with respect to the Borrower and its
Restricted Subsidiaries on a consolidated basis for the twelve month period
ending on the last day of any fiscal quarter of the Borrower, the ratio of (a)
Consolidated EBITDA to (b) Consolidated Interest Expense. Notwithstanding the
foregoing, for purposes of calculating the Interest Coverage Ratio of the
Borrower and its Restricted Subsidiaries for the first three complete fiscal
quarters to occur after the Funding Date, the interest component thereof shall
be determined by annualizing such component such that for the first complete
fiscal quarter to occur after the Funding Date such component would be
multiplied by four (4), the first two complete fiscal quarters would be




                                       16


multiplied by two (2) and the first three complete fiscal quarters would be
multiplied by one and one-third (1-1/3).

         "Interest Payment Date" shall mean (a) as to any Alternate Base Rate
Loan or Swingline Loan, the last day of each March, June, September and December
and on the applicable Maturity Date, (b) as to any LIBOR Rate Loan having an
Interest Period of three months or less, the last day of such Interest Period,
and (c) as to any LIBOR Rate Loan having an Interest Period longer than three
months, the day which is three months after the first day of such Interest
Period and the last day of such Interest Period.

         "Interest Period" shall mean, with respect to any LIBOR Rate Loan,

                  (i) during the Syndication Period, the period commencing on
         the Borrowing Date or conversion date, as the case may be, with respect
         to such LIBOR Rate Loan and ending seven (7) days thereafter; and

                  (ii) initially after the Syndication Period, the period
         commencing on the Borrowing Date or conversion date, as the case may
         be, with respect to such LIBOR Rate Loan and ending one, two, three or
         six months thereafter, as selected by the Borrower in the Notice of
         Borrowing or Notice of Conversion given with respect thereto; and

                  (iii) thereafter, each period commencing on the last day of
         the immediately preceding Interest Period applicable to such LIBOR Rate
         Loan and ending one, two, three or six months thereafter, as selected
         by the Borrower by irrevocable notice to the Administrative Agent not
         less than three Business Days prior to the last day of the then current
         Interest Period with respect thereto;

                  provided that the foregoing provisions are subject to the
         following:

                           (A) if any Interest Period pertaining to a LIBOR Rate
                  Loan would otherwise end on a day that is not a Business Day,
                  such Interest Period shall be extended to the next succeeding
                  Business Day unless the result of such extension would be to
                  carry such Interest Period into another calendar month in
                  which event such Interest Period shall end on the immediately
                  preceding Business Day;

                           (B) any Interest Period pertaining to a LIBOR Rate
                  Loan that begins on the last Business Day of a calendar month
                  (or on a day for which there is no numerically corresponding
                  day in the calendar month at the end of such Interest Period)
                  shall end on the last Business Day of the relevant calendar
                  month;

                           (C) if the Borrower shall fail to give notice as
                  provided above, the Borrower shall be deemed to have selected
                  an Alternate Base Rate Loan to replace the affected LIBOR Rate
                  Loan;

                           (D) no Interest Period in respect of any Loan shall
                  otherwise extend beyond the applicable Maturity Date for such
                  Loan and, further with regard to the





                                       17


                  Tranche A-1 Term Loans and the Tranche B-1 Term Loans, no
                  Interest Period shall extend beyond any principal amortization
                  payment date unless the portion of such Tranche A-1 Term Loan
                  or Tranche B-1 Term Loan consisting of Alternate Base Rate
                  Loans together with the portion of such Tranche A-1 Term Loan
                  and Tranche B-1 Term Loan consisting of LIBOR Rate Loans with
                  Interest Periods expiring prior to or concurrently with the
                  date such principal amortization payment date is due, is at
                  least equal to the amount of such principal amortization
                  payment due on such date; and

                           (E) no more than sixteen (16) LIBOR Rate Loans may be
                  in effect at any time. For purposes hereof, LIBOR Rate Loans
                  with different Interest Periods shall be considered as
                  separate LIBOR Rate Loans, even if they shall begin on the
                  same date and have the same duration, 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 LIBOR Rate Loan with a single
                  Interest Period.

         "Investment" shall mean an investment, in cash or by delivery of assets
made, directly or indirectly in, to or from any Person, whether by acquisition
of shares of Capital Stock, property, assets, indebtedness or other obligations
or securities or by loan, advance, capital contribution or otherwise.

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

         "Issuing Lender" means (a) with respect to any Existing Letter of
Credit, the financial institutions shown on Schedule 1.1(d) as the issuer of
such Letter of Credit and (b) with respect to any other Letter of Credit, (i)
First Union or (ii) Bank One, as applicable.

         "Joinder Agreement" shall mean a Joinder Agreement substantially in the
form of Schedule 5.10, executed and delivered by an Additional Credit Party in
accordance with the provisions of Section 5.10.

         "Lender" shall have the meaning set forth in the first paragraph of
this Agreement.

         "Letter of Credit" means any Existing Letter of Credit and any letter
of credit issued by an Issuing Lender pursuant to the terms hereof, as such
Letters of Credit may be amended, modified, extended, renewed or replaced from
time to time.

         "Letter of Credit Fee" shall have the meaning set forth in Section
2.6(b).

         "Leverage Ratio" shall mean, with respect to the Borrower and its
Restricted Subsidiaries on a consolidated basis for the twelve month period
ending on the last day of any fiscal quarter, the ratio of (a) Funded Debt of
the Borrower and its Restricted Subsidiaries on a consolidated





                                       18


basis on the last day of such period, minus cash held on a consolidated basis on
such day, to (b) Consolidated EBITDA for such period.

         "LIBOR" shall mean, for any LIBOR Rate Loan for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in the Permitted Currency in which
the applicable Loan is denominated 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 "LIBOR" shall mean, for any LIBOR Rate 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 the Permitted Currency in which the
applicable Loan is denominated 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, for any reason, neither of such rates is available, then
"LIBOR" shall mean the rate per annum at which, as determined by the
Administrative Agent, the Permitted Currency in which the applicable Loan is
denominated in an amount comparable to such LIBOR Rate Loan are being offered to
leading banks at approximately 11:00 A.M. London time, two (2) Business Days
prior to the commencement of the applicable Interest Period for settlement in
immediately available funds by leading banks in the London interbank market for
a period equal to the Interest Period selected.

         "LIBOR Lending Office" shall mean, initially, the office of each Lender
designated as such Lender's LIBOR Lending Office shown on Schedule 9.2; and
thereafter, such other office of such Lender as such Lender may from time to
time specify to the Administrative Agent and the Borrower as the office of such
Lender at which the LIBOR Rate Loans of such Lender are to be made.

         "LIBOR Rate" shall mean:

         (a) with respect to any LIBOR Rate Loan denominated in Dollars, a rate
per annum (rounded upwards, if necessary, to the next higher 1/100th of 1%)
determined by the Administrative Agent pursuant to the following formula:

                    LIBOR Rate =                           LIBOR
                                             -----------------------------
                                      1.00 - Eurodollar Reserve Percentage

         and

         (b) with respect to any LIBOR Rate Loan denominated in an Alternative
Currency, a rate per annum (rounded upwards, if necessary, to the next higher
1/100th of 1%) equal to LIBOR.




                                       19


         "LIBOR Rate Loan" shall mean Loans the rate of interest applicable to
which is based on the LIBOR Rate.

         "Lien" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement and any
Capital Lease having substantially the same economic effect as any of the
foregoing).

         "Loan" shall mean a Revolving-1 Loan, a Swingline Loan, the Tranche A-1
Term Loan and/or the Tranche B-1 Term Loan, as appropriate.

         "LOC Commitment" shall mean the commitment of the Issuing Lenders to
issue Letters of Credit and with respect to each Lender, the commitment of such
Lender to purchase participation interests in the Letters of Credit as provided
in Section 2.3(c), as such amounts may be reduced from time to time in
accordance with the provisions hereof.

         "LOC Committed Amount" shall have the meaning set forth in Section
2.3(a).

         "LOC Obligations" shall mean, collectively, the Dollar LOC Obligations
and the Multi-currency LOC Obligations.

         "LOC Obligations" shall mean, at any time, the sum 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.

         "Mandatory Borrowing" shall have the meaning set forth in Section
2.2(b)(ii).

         "Mandatory Cost" shall mean the percentage rate per annum calculated by
the Administrative Agent in accordance with Schedule 1.1(d) hereto.

         "Mandatory Dollar Borrowing" shall have the meaning set forth in
Section 2.3(e)(i).

         "Mandatory Multi-currency Borrowing" shall have the meaning set forth
in Section 2.3(e)(ii).

         "Material Adverse Effect" shall mean a material adverse effect on (a)
the business, operations, property, prospects or financial condition of the
Borrower and its Restricted Subsidiaries (including the Acquired Company and its
Subsidiaries) taken as a whole, (b) the ability of the Borrower and Guarantors,
taken as a whole, to perform their obligations, when such obligations are
required to be performed, under this Agreement, any of the Notes or any other
Credit Document or (c) the validity or enforceability of this Agreement, any of
the Notes or any of the other Credit Documents or the rights or remedies of the
Administrative Agent or the Lenders hereunder or thereunder.




                                       20


         "Material Contract" shall mean any contract or other arrangement,
whether written or oral, to which the Borrower or any of its Restricted
Subsidiaries is a party as to which the breach, nonperformance, cancellation or
failure to renew by any party thereto could reasonably be expected to have a
Material Adverse Effect.

         "Material Subsidiary" shall mean any Restricted Subsidiary (other than
a Receivables Financing SPC) of a Credit Party with assets of $100,000 or more;
provided, however, if the aggregate assets of Restricted Subsidiaries (other
than Receivables Financing SPCs) that are not Material Subsidiaries at any time
exceeds $1,000,000, the Borrower shall designate one or more of such Restricted
Subsidiaries as Material Subsidiaries such that, after giving effect to such
designations, the aggregate assets of Restricted Subsidiaries (other than
Receivables Financing SPCs) that are not Material Subsidiaries shall be less
than $1,000,000.

         "Maturity Date" shall mean (i) with respect to the Tranche A-1 Term
Loan, the Tranche A-1 Term Loan Maturity Date, (ii) with respect to the Tranche
B-1 Term Loan, the Tranche B-1 Term Loan Maturity Date and (iii) with respect to
the Revolving-1 Loans and Swingline Loans, the Revolving-1 Commitment
Termination Date.

         "Merger Agreement" shall mean that certain Agreement and Plan of Merger
dated as of April 4, 2001 by and among the Borrower, Blackhawk Acquisition Corp.
and the Acquired Company, as the same may be amended or modified from time to
time.

         "Moody's" shall mean Moody's Investors Service, Inc.

         "Mortgage Instrument" shall have the meaning set forth in Section
4.2(f). "Mortgage Policies" shall have the meaning set forth in Section 4.2(f).
"Mortgaged Property" shall have the meaning set forth in Section 4.2(f).

         "Multi-currency Letter of Credit" shall mean each Letter of Credit
issued under the Multi-currency Revolving-1 Committed Amount pursuant to Section
2.3(a).

         "Multi-currency LOC Obligations" shall mean, at any time, the sum of
(i) the maximum amount which is, or at any time thereafter may become, available
to be drawn under Multi-currency Letters of Credit then outstanding, assuming
compliance with all requirements for drawings referred to in such Multi-currency
Letters of Credit plus (ii) the aggregate amount of all drawings under
Multi-currency Letters of Credit honored by the Issuing Lender but not
theretofore reimbursed.

         "Multi-currency Revolving-1 Commitment Percentage" shall mean, for each
Lender, the percentage identified as its Multi-currency Revolving-1 Commitment
Percentage on the Register, as such percentage may be modified in connection
with any assignment made in accordance with the provisions of Section 9.6(c).

         "Multi-currency Revolving-1 Committed Amount" shall mean the sum of the
Multi-currency Revolving-1 Subcommitments. As of the Fifth Amendment Effective
Date, the Multi-




                                       21


currency Revolving-1 Committed Amount shall be $200,000,000, as such amount may
be modified from time in accordance with the provisions hereof.

         "Multi-currency Revolving-1 Loans" shall have the meaning set forth in
Section 2.1(a)(ii).

         "Multi-currency Revolving-1 Subcommitment" shall mean, with respect to
each Lender, the amount of such Lender's Revolving-1 Commitment available for
Multi-currency Revolving-1 Loans in an aggregate principal amount at any time
outstanding up to such Lender's Multi-currency Revolving-1 Subcommitment as
specified in the Register, as such amount may be reduced from time to time in
accordance with the provisions hereof or in connection with any assignment made
in accordance with the provisions of Section 9.6(c).

         "Multiemployer Plan" shall mean a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.

         "Net Cash Proceeds" shall mean the aggregate cash proceeds received by
any Credit Party or any Restricted Subsidiary in respect of any Asset
Disposition, Equity Issuance or Debt Issuance, net of (a) direct costs
(including, without limitation, legal, accounting and investment banking fees,
and sales commissions) and (b) taxes paid or payable as a result thereof; it
being understood that "Net Cash Proceeds" shall include, without limitation, any
cash received upon the sale or other disposition of any non-cash consideration
received by the Borrower or any Restricted Subsidiary in any Asset Disposition,
Equity Issuance or Debt Issuance.

         "Note" or "Notes" shall mean the Revolving-1 Notes, the Swingline Note,
the Tranche A-1 Term Notes and/or the Tranche B-1 Term Notes, collectively,
separately or individually, as appropriate. From and after the Fourth Amendment
Effective Date, some or all of the Loans may not be evidenced by Notes, and
consequently, with respect to any Lender that has made Loans not evidenced by
Notes, any reference to a Revolving-1 Note, Tranche A-1 Term Note, Tranche B-1
Term Note, or Note, shall, as applicable, be deemed to be a reference to the
related Credit Party Obligations that would be represented by such a Revolving-1
Note, Tranche A-1 Term Note, Tranche B-1 Term Note or Note had such Lender
elected to have its Loans represented by Notes.

         "Notice of Borrowing" shall mean the written notice of borrowing as
referenced and defined in Section 2.1(b)(i).

         "Notice of Conversion/Extension" shall mean the written notice of
extension or conversion as referenced and defined in Section 2.11.

         "Obligations" shall mean, collectively, Loans and LOC Obligations.
"Participant" shall have the meaning set forth in Section 9.6(b).

         "Original Tranche A-1 Term Loan" shall have the meaning set forth in
Section 2.4 hereof.





                                       22

         "Original Tranche B-1 Term Loan" shall have the meaning set forth in
Section 2.5 hereof.

         "Participation Interest" shall mean the purchase by a Lender of a
participation interest in Swingline Loans as provided in Section 2.2(b)(ii) or
in Letters of Credit as provided in Section 2.3.

         "Participating Member State" shall mean each state so described in any
EMU Legislation.

         "Patent License" shall mean all agreements, whether written or oral,
providing for the grant by or to a Credit Party of any right to manufacture, use
or sell any invention covered by a Patent, including, without limitation, any
thereof referred to in Schedule 3.16.

         "Patents" shall mean (a) all letters patent of the United States or any
other country and all reissues and extensions thereof, including, without
limitation, any thereof referred to in Schedule 3.16, and (b) all applications
for letters patent of the United States or any other country and all divisions,
continuations and continuations-in-part thereof, including, without limitation,
any thereof referred to in Schedule 3.16.

         "PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.

         "Permitted Acquisition" shall mean an acquisition by the Borrower or
any of its Restricted Subsidiaries which (i) is an acquisition of a Person or
assets of a Person in a line of business permitted by Section 6.3 hereof, (ii)
is in an amount not greater than $300,000,000 in total cash consideration (after
deducting cash on the balance sheet of the Person acquired or included in the
assets being acquired) for any single acquisition; provided, however, the total
cash consideration (after deducting cash on the balance sheet of the Person
acquired or included in the assets being acquired) for any single acquisition
may exceed $300,000,000 with the consent of the Required Lenders, (iii) is
approved by the Board of Directors or the requisite shareholders of the Person
being acquired or Person transferring the assets being acquired, (iv) if an
acquisition of Capital Stock of a Person, at least 51% of all issued and
outstanding Capital Stock of such Person is acquired, and (v) after giving
effect to such acquisition on a Pro Forma Basis, the Borrower and its Restricted
Subsidiaries are in compliance with each of the financial covenants set forth in
Section 5.9.

         "Permitted Currency" shall mean Dollars or any Alternative Currency, or
each such currency, as the context requires.

         "Permitted Investments" shall mean:

                  (a) cash or Cash Equivalents;

                  (b) Investments outstanding as of the Funding Date and
         identified in Schedule 1.1(b) or other investments outstanding as of
         the Funding Date not exceeding in acquisition cost $20,000,000 in the
         aggregate;




                                       23


                  (c) Investments by any Subsidiary of the Borrower in the
         Borrower and Investments by any Credit Party or any Restricted
         Subsidiary in any Credit Party or any Restricted Subsidiary (including,
         but not limited to, loans from a Restricted Subsidiary to another
         Restricted Subsidiary).

                  (d) Permitted Acquisitions;

                  (e) operating deposit accounts with depository institutions;

                  (f) Hedging Agreements;

                  (g) (i) Investments permitted under Section 6.4(b) hereof,
         (ii) investments received in connection with a disposition permitted by
         Section 6.4(c) hereof and (iii) indemnities executed in connection with
         the sale of Investment Tax Credits;

                  (h) Investments by the Borrower and its Subsidiaries in the
         Capital Stock of their Subsidiaries to the extent outstanding as of the
         Funding Date;

                  (i) loans and advances to employees in the ordinary course of
         business not exceeding $10,000,000 in the aggregate;

                  (j) deposits to secure bids, tenders, utilities, vendors,
         leases, licenses, statutory obligations, surety and appeal bonds and
         other deposits of like nature arising in the ordinary course of
         business;

                  (k) Investments by any Credit Party in a Receivables Financing
         SPC made in connection with a Permitted Receivables Financing;

                  (l) Investments by the Borrower and its Subsidiaries in a
         Captive Insurance Company in a cumulative amount from the Funding Date
         not to exceed $75,000,000;

                  (m) additional Investments up to but not exceeding $80,000,000
         in the aggregate during each fiscal year, including investments in
         Unrestricted Subsidiaries; provided, however, that notwithstanding the
         foregoing, the Borrower shall be permitted to make additional
         investments in Unrestricted Subsidiaries during any fiscal year in an
         amount equal to the aggregate amount of dividends and other
         distributions received by the Borrower or its Restricted Subsidiaries
         from Unrestricted Subsidiaries and payments of Indebtedness by an
         Unrestricted Subsidiary to the Borrower or a Restricted Subsidiary
         during such fiscal year; and

                  (n) Investments by the Borrower or any of its Restricted
         Subsidiaries, each of which (i) existed before the time of acquisition
         of the Person or assets of the Person who made such investment and (ii)
         was not made in anticipation of such acquisition.




                                       24


         "Permitted Liens" shall mean:

                  (a) Liens created by or otherwise existing, under or in
         connection with this Agreement or the other Credit Documents in favor
         of the Lenders;

                  (b) Liens in connection with Hedging Agreements, but only (i)
         to the extent such Liens secure Hedging Obligations, (ii) to the extent
         such Liens are on the same collateral as to which the Administrative
         Agent on behalf of the Lenders also has a Lien and (iii) if the
         provider of any such Hedging Agreement and the Lenders shall share pari
         passu in the collateral subject to such Liens;

                  (c) Liens in existence on the Funding Date and listed on
         Schedule 1.1(c);

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

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

                  (f) Liens securing judgments but only to the extent for an
         amount and for a period not resulting in an Event of Default under
         Section 7.1(f) hereof;

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

                  (h) deposits or pledges to secure the performance of bids,
         trade contracts (other than for Indebtedness), leases, licenses,
         statutory obligations, surety and appeal bonds, performance bonds and
         other obligations of a like nature incurred in the ordinary course of
         business;

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

                  (j) Liens upon personal Property acquired after the date
         hereof (by purchase, construction or otherwise), or upon other assets
         acquired after the date hereof as a capital expenditure, by the
         Borrower or any of its Subsidiaries, each of which Liens either (i)
         existed on such assets before the time of its acquisition and was not
         created in




                                       25


         anticipation thereof or (ii) was created solely for the purpose of
         securing Indebtedness representing, or incurred to finance, refinance
         or refund, the cost of such assets; provided that (A) no such Lien
         shall extend to or cover any assets of the Borrower or such Subsidiary
         other than the assets so acquired, (B) the principal amount of
         Indebtedness secured by any such Lien shall at no time exceed the fair
         market value (as determined in good faith by a Responsible Officer of
         the Borrower) of such assets at the time they were acquired, and (C)
         the principal amount of all Indebtedness (other than Indebtedness
         permitted by Section 6.1(c) hereof) secured by such Liens shall not
         exceed $30,000,000 in the aggregate;

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

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

                  (m) protective Uniform Commercial Code filings with respect to
         personal Property leased by, or consigned to, any of the Borrower or
         its Subsidiaries;

                  (n) Liens upon assets of Unrestricted Subsidiaries;

                  (o) Liens in favor of a Receivables Financing SPC or
         Receivables Financier created or deemed to exist in connection with a
         Permitted Receivables Financing (including any related filings of any
         financing statements), but only to the extent that any such Lien
         relates to the applicable Transferred Assets actually sold,
         contributed, financed or otherwise conveyed or pledged pursuant to such
         transaction;

                  (p) any extension, renewal or replacement of the foregoing;
         provided, however, that the Liens permitted under this clause (q) shall
         not be spread to cover any additional Indebtedness or assets and the
         principal amount of such Indebtedness shall not be increased;

                  (q) Liens securing Indebtedness to the extent such
         Indebtedness is permitted pursuant to Section 6.1(g) and Section
         6.1(k); and

                  (r) Liens upon personal Property or fixtures granted in
         connection with the energy saving program with Enron Energy Services
         Operations Inc. ("Enron"); provided that (A) no such Lien shall extend
         to or cover any assets of the Borrower or any Subsidiary other than
         assets purchased by Enron and transferred to the Borrower or any




                                       26


         Subsidiary in connection with that program, and (B) the aggregate value
         of the assets covered by such Liens shall not exceed $50,000,000 in the
         aggregate at any time.

         "Permitted Receivables Financing" shall mean any one or more
receivables financings in which (a) any Credit Party or any Restricted
Subsidiary (i) sells (as determined in accordance with GAAP) any accounts
receivable, notes receivable, rights to future lease payments or residuals
(collectively, together with certain property relating thereto and the right to
collections thereon, being the "Transferred Assets") to any Person that is not a
Subsidiary or Affiliate of the Borrower (with respect to any such transaction,
the "Receivables Financier"), (ii) borrows from such Receivables Financier and
secures such borrowings by a pledge of such Transferred Assets and/or (iii)
otherwise finances its acquisition of such Transferred Assets and, in connection
therewith, conveys an interest in such Transferred Assets to the Receivables
Financier or (b) any Credit Party or any Restricted Subsidiary sells, conveys or
otherwise contributes any Transferred Assets to a Receivables Financing SPC,
which Receivables Financing SPC then (i) sells (as determined in accordance with
GAAP) any such receivables (or an interest therein) to any Receivables
Financier, (ii) borrows from such Receivables Financier and secures such
borrowings by a pledge of such receivables or (iii) otherwise finances its
acquisition of such receivables and, in connection therewith, conveys an
interest in such receivables to the Receivables Financier, provided that (A) the
aggregate Attributed Principal Amount for all such receivables financings shall
not at any time exceed $500,000,000, (B) such receivables financing shall not
involve any recourse to any Credit Party or any Restricted Subsidiary for any
reason other than (x) repurchases of non-eligible receivables or (y)
indemnifications for losses other than credit losses related to the receivables
sold in such financing, (C) the Administrative Agent shall be reasonably
satisfied with the structure of and documentation for any such transaction and
that the terms of such transaction, including the discount at which receivables
are sold, the term of the commitment of the Receivables Financier thereunder and
any termination events, shall be (in the good faith understanding of the
Administrative Agent) consistent with those prevailing in the market for similar
transactions involving a receivables originator/servicer of similar credit
quality and a receivables pool of similar characteristics and (D) the
documentation for such transaction shall not be amended or modified in any
material manner without the prior written approval of the Administrative Agent.

         "Person" shall mean an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.

         "Plan" shall mean, at any particular time, any employee benefit plan
which is covered by Title IV of ERISA and in respect of which the Borrower or a
Commonly Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.

         "Pledge Agreement" shall mean the Pledge Agreement dated as of the
Funding Date given by the Borrower and certain of the other Credit Parties to
the Administrative Agent, as amended, modified or supplemented from time to time
in accordance with its terms.

         "Prime Rate" shall have the meaning set forth in the definition of
Alternate Base Rate.




                                       27


         "Pro Forma Basis" shall mean, with respect to any Permitted Acquisition
or any dividend made pursuant to Section 6.10(f), that such Permitted
Acquisition or dividend shall be deemed to have occurred or made, as applicable,
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 Permitted Acquisition or
dividend.

         "Pro Forma Opening Statements" shall have the meaning set forth in
Section 4.2(s).

         "Property" shall mean any tangible property or assets, whether real or
personal.

         "Puerto Rico Disposition" shall mean the disposition by the Credit
Parties of substantially all the assets or Capital Stock, or both, of Suiza
Dairy Corporation, Neva Plastics Manufacturing Corp., Suiza Fruit Corporation,
Garrido y Compania, LLC, and Garrido Alto Grande Corp.

         "Purchasing Lenders" shall have the meaning set forth in Section
9.6(c).

         "Real Properties" shall have the meaning set forth in Section 3.10(a).

         "Receivables Financier" shall have the meaning set forth in the
definition of Permitted Receivables Financing.

         "Receivables Financing SPC" shall mean, in respect of any Permitted
Receivables Financing, any Subsidiary or Affiliate of the Borrower to which any
Credit Party sells, contributes or otherwise conveys Transferred Assets in
connection with such Permitted Receivables Financing and each general partner of
any such Subsidiary or Affiliate.

         "Recovery Event" shall mean the receipt by the Borrower or any of its
Restricted Subsidiaries of any cash insurance proceeds or condemnation award
payable by reason of theft, loss, physical destruction or damage, taking or
similar event with respect to any of their respective property or assets.

         "Register" shall have the meaning set forth in Section 9.6(d).

         "Reimbursement Agreement" means any agreement set forth on Schedule
1.1(e) hereto.

         "Reorganization" shall mean, with respect to any Multiemployer Plan,
the condition that such Plan is in reorganization within the meaning of such
term as used in Section 4241 of ERISA.

         "Reportable Event" shall mean any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty-day notice
period is waived under PBGC Reg. Section 4043.




                                       28


         "Required Lenders" shall mean Lenders holding in the aggregate greater
than 50% of (i) the outstanding Loans plus the aggregate unused Revolving-1
Commitments at such time (and Participation Interests therein) (treating for
purposes hereof in the case of Swingline Loans and LOC Obligations, in the case
of the Swingline Lender and the Issuing Lender, only the portion of the
Swingline Loans and the LOC Obligations of the Swingline Lender and the Issuing
Lender, respectively, which is not subject to the Participation Interests of the
other Lenders and, in the case of the Lenders other than the Swingline Lender
and the Issuing Lender, the Participation Interests of such Lenders in Swingline
Loans and LOC Obligations hereunder as direct Obligations of such Lenders) or
(ii) if the Commitments have been terminated, the outstanding Loans and
Participation Interests (including the Participation Interests of the Swingline
Lender in Swingline Loans and the Participation Interests of the Issuing Lender
in any Letters of Credit); provided, however, that if any Lender shall be a
Defaulting Lender at such time, then there shall be excluded from the
determination of Required Lenders, Obligations (including Participation
Interests) owing to such Defaulting Lender and such Defaulting Lender's
Commitments or, after termination of the Commitments, the principal balance of
the Obligations owing to such Defaulting Lender.

         "Requirement of Law" shall mean, as to any Person, the Certificate of
Incorporation and By-laws or other organizational or governing documents of such
Person, and each 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 any of its property or to which such Person or
any of its property is subject.

         "Responsible Officer" of any Person shall mean the President, the Chief
Executive Officer, the Chief Financial Officer or the Vice President/Treasurer
of such Person.

         "Restricted Payment" shall mean (a) any dividend or other distribution,
direct or indirect, on account of any shares of any class of Capital Stock of
the Borrower or any of its Restricted Subsidiaries, now or hereafter
outstanding, (b) 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 the Borrower or any of its Restricted
Subsidiaries, now or hereafter outstanding, (c) 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 the Borrower or any of its
Restricted Subsidiaries, now or hereafter outstanding, or (d) any payment or
prepayment of principal or premium, if any, or interest on, redemption,
purchase, retirement defeasance, sinking fund or similar payment with respect
to, any Subordinated Indebtedness.

         "Restricted Subsidiaries" shall mean the Subsidiaries of the Borrower
other than the Unrestricted Subsidiaries.

         "Revaluation Date" shall mean (a) with respect to any Alternative
Currency Loan, each of the following: (i) each date of a borrowing of such
Alternative Currency Loan, (ii) each date of a continuation of such Alternative
Currency Loan, and (iii) following the occurrence and during the continuance of
an Event of Default, such additional dates as the Administrative Agent shall
determine or the Required Lenders shall require; and (b) with respect to any
Multi-currency Letter of Credit denominated in an Alternative Currency, each of
the following: (i) each date of





                                       29


issuance of such Multi-currency Letter of Credit, (ii) each date of an amendment
of such Multi-currency Letter of Credit having the effect of increasing the
amount thereof (solely with respect to the increased amount), (iii) each date of
any payment by the Issuing Lender of any drawing under any Multi-currency Letter
of Credit denominated in an Alternative Currency, and (iv) following the
occurrence and during the continuance of an Event of Default, such additional
dates as the Administrative Agent or the L/C Issuer shall determine or the
Required Lenders shall require.

         "Revolving-1 Commitment" shall mean, with respect to each Lender, the
commitment of such Lender to (a) make Dollar Revolving-1 Loans in an aggregate
principal amount at any time outstanding up to such Lender's Dollar Revolving-1
Subcommitment as specified in the Register, and (b) make Multi-currency
Revolving-1 Loans in an aggregate principal amount at any time outstanding up to
such Lender's Multi-currency Revolving-1 Subcommitment as specified in the
Register, in each case, as such amounts may be reduced from time to time in
accordance with the provisions hereof or in connection with any assignment made
in accordance with the provisions of Section 9.6(c).

         "Revolving-1 Commitment Termination Date" shall mean the earlier to
occur of (a) July 15, 2007 or (b) the sixth anniversary of the Closing Date.

         "Revolving-1 Committed Amount" shall mean, collectively, the Dollar
Revolving-1 Committed Amount and the Multi-currency Revolving-1 Committed
Amount.

         "Revolving-1 Loans" shall mean, collectively, the Dollar Revolving-1
Loans and the Multi-currency Revolving-1 Loans.

         "Revolving-1 Note" or "Revolving-1 Notes" shall mean the promissory
notes of the Borrower in favor of each of the Lenders evidencing the Revolving-1
Loans provided pursuant to Section 2.1(d), individually or collectively, as
appropriate, as such promissory notes may be amended, modified, supplemented,
extended, renewed or replaced from time to time.

         "S&P" shall mean Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc.

         "Scheduled Funded Debt Payments" shall mean, as of any date of
determination for the Borrower and its Restricted Subsidiaries, the sum of all
scheduled payments of principal on Funded Debt for the applicable period ending
on the date of determination (including the principal component of payments due
on Capital Leases during the applicable period ending on the date of
determination).

         "SEC" shall mean the Securities and Exchange Commission or any
successor thereto.

         "Security Agreement" shall mean the Security Agreement dated as of the
Funding Date given by the Borrower and the other Credit Parties to the
Administrative Agent, as amended, modified or supplemented from time to time in
accordance with its terms.




                                       30


         "Security Documents" shall mean the Security Agreement, the Pledge
Agreement, the Mortgage Instruments, the Intercreditor Agreement and such other
documents executed in connection with the attachment and perfection of the
Administrative Agent's security interests and liens arising thereunder,
including, without limitation, UCC financing statements.

         "Senior Notes" shall mean those certain Senior Debt Securities issued
pursuant to the terms of the Indenture dated as of January 15, 1998 by and
between Dean Foods Company and The Bank of New York, as trustee, and issued
pursuant to the Indenture dated as of January 15, 1995 by and between Dean Foods
Company and Bank of America Illinois, as trustee, in an aggregate principal
amount of $700,000,000.

         "Single Employer Plan" shall mean any Plan which is not a Multiemployer
Plan.

         "Specified Sales" shall mean (a) the sale, transfer, lease or other
disposition of inventory and materials in the ordinary course of business, (b)
the sale, transfer, lease or other disposition of obsolete or worn-out property
or assets in the ordinary course of business, (c) the sale, transfer or other
disposition of Permitted Investments described in clause (a) of the definition
thereof, (d) the sale, transfer or other disposition of Capital Stock of
Unrestricted Subsidiaries, and (e) the Puerto Rico Disposition.

         "Subordinated Indebtedness" shall mean any publicly issued Indebtedness
specifically subordinated in right of payment and priority to the Credit Party
Obligations, with customary payment blockage and other provisions, having a
maturity no earlier than the date which is one year after the Tranche B-1 Term
Loan Maturity Date and which shall otherwise be on terms and conditions
reasonably satisfactory to the Agents.

         "Subsidiary" shall mean, as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Borrower.

         "Swingline Commitment" shall mean the commitment of the Swingline
Lender to make Swingline Loans in an aggregate principal amount at any time
outstanding up to the Swingline Committed Amount, and the commitment of the
Lenders to purchase participation interests in the Swingline Loans as provided
in Section 2.2(b)(ii), as such amounts may be reduced from time to time in
accordance with the provisions hereof.

         "Swingline Committed Amount" shall mean the amount of the Swingline
Lender's Swingline Commitment as specified in Section 2.2(a).

         "Swingline Lender" shall mean First Union, in its capacity as such.




                                       31


         "Swingline Loan" or "Swingline Loans" shall have the meaning set forth
in Section 2.2(a).

         "Swingline Note" shall mean the promissory note of the Borrower in
favor of the Swingline Lender evidencing the Swingline Loans provided pursuant
to Section 2.2(d), as such promissory note may be amended, modified,
supplemented, extended, renewed or replaced from time to time.

         "Syndication Period" shall mean the period from the Funding Date
through the earlier of (i) the date that is 90 days following the Funding Date
or (ii) the date on which the Arrangers determine in their sole discretion that
syndication is complete.

         "TARGET Day" shall mean any day on which the Trans-European Automated
Real-time Gross Settlement Express Transfer (TARGET) payment system (or, if such
payment system ceases to be operative, such other payment system (if any)
determined by the Administrative Agent to be a suitable replacement) is open for
the settlement of payments in euro.

         "Taxes" shall have the meaning set forth in Section 2.19.

         "Term Loans" shall mean collectively, the Tranche A-1 Term Loans and
the Tranche B-1 Term Loans.

         "Trademark License" shall mean any agreement, written or oral,
providing for the grant by or to a Credit Party of any right to use any
Trademark, including, without limitation, any thereof referred to in Schedule
3.16.

         "Trademarks" shall mean (a) all trademarks, trade names, corporate
names, company names, business names, fictitious business names, trade dress and
service marks, logos and other source or business identifiers, and the goodwill
associated therewith, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all applications in connection
therewith, whether in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof or any other
country or any political subdivision thereof, or otherwise, including, without
limitation, any thereof referred to in Schedule 3.16, and (b) all renewals
thereof, including, without limitation, any thereof referred to in Schedule
3.16.

         "Tranche" shall mean the collective reference to LIBOR Rate Loans whose
Interest Periods begin and end on the same day. A Tranche may sometimes be
referred to as a "LIBOR Tranche".

         "Tranche A-1 Term Loan" shall have the meaning set forth in Section
2.4(a).

         "Tranche A-1 Term Loan Commitment" shall mean, with respect to each
Lender, the commitment of such Lender to make its portion of the Tranche A-1
Term Loan in a principal amount equal to such Lender's Tranche A-1 Term Loan
Commitment Percentage of the Tranche A-1 Term Loan Committed Amount (and for
purposes of making determinations of Required






                                       32


Lenders hereunder after the Closing Date, the principal amount outstanding on
the Tranche A-1 Term Loan).

         "Tranche A-1 Term Loan Commitment Percentage" shall mean, for any
Lender, the percentage identified as its Tranche A-1 Term Loan Commitment
Percentage on the Register, as such percentage may be modified in connection
with any assignment made in accordance with the provisions of Section 9.6.

         "Tranche A-1 Term Loan Committed Amount" shall have the meaning set
forth in Section 2.4(a).

         "Tranche A-1 Term Loan Maturity Date" shall mean the earlier to occur
of (a) July 15, 2007 and (b) the sixth anniversary of the Closing Date.

         "Tranche A-1 Term Note" or "Tranche A-1 Term Notes" shall mean the
promissory notes of the Borrower in favor of each of the Lenders evidencing the
portion of the Tranche A-1 Term Loan provided pursuant to Section 2.4(c),
individually or collectively, as appropriate, as such promissory notes may be
amended, modified, restated, supplemented, extended, renewed or replaced from
time to time.

         "Tranche B-1 Term Loan" shall have the meaning set forth in Section
2.5(a).

         "Tranche B-1 Term Loan Commitment" shall mean, with respect to each
Lender, the commitment of such Lender to make its portion of the Tranche B-1
Term Loan in a principal amount equal to such Lender's Tranche B-1 Term Loan
Commitment Percentage of the Tranche B-1 Term Loan Committed Amount (and for
purposes of making determinations of Required Lenders hereunder after the
Closing Date, the principal amount outstanding on the Tranche B-1 Term Loan).

         "Tranche B-1 Term Loan Commitment Percentage" shall mean, for any
Lender, the percentage identified as its Tranche B-1 Term Loan Commitment
Percentage on the Register, as such percentage may be modified in connection
with any assignment made in accordance with the provisions of Section 9.6.

         "Tranche B-1 Term Loan Committed Amount" shall have the meaning set
forth in Section 2.5(a).

         "Tranche B-1 Term Loan Maturity Date" shall mean the earlier to occur
of (a) July 15, 2008 and (b) the seventh anniversary of the Closing Date.

         "Tranche B-1 Term Note" or "Tranche B-1 Term Notes" shall mean the
promissory notes of the Borrower in favor of each of the Lenders evidencing the
portion of the Tranche B-1 Term Loan provided pursuant to Section 2.5(c),
individually or collectively, as appropriate, as such promissory notes may be
amended, modified, restated, supplemented, extended, renewed or replaced from
time to time.




                                       33


         "Transfer Effective Date" shall have the meaning set forth in each
Commitment Transfer Supplement.

         "Transferred Assets" shall have the meaning set forth in the definition
of Permitted Receivables Financing.

         "2.19 Certificate" shall have the meaning set forth in Section 2.19.

         "Treaty on European Union" shall mean the Treaty of Rome of March 25,
1957, as amended by the Single European Act of 1986 and the Maastricht Treaty
(signed February 7, 1992), as amended from time to time.

         "Type" shall mean, as to any Loan, its nature as an Alternate Base Rate
Loan, LIBOR Rate Loan or Swingline Loan, as the case may be.

         "Unrestricted Subsidiaries" shall mean (a) Suiza International Holding
Company and its Subsidiaries (including Suiza Netherlands, B.V., Leche Celta,
S.L., and Lacteos de Santander, S.A.), (b) Continental Can Company, Inc., and
its Subsidiaries (including Dixie Holding, Inc., and Franklin Plastics, Inc.),
(c) on and after the Funding Date, E.B.I Foods, Ltd. and its Subsidiaries, (d)
each Captive Insurance Company and (e) any other Subsidiary of the Borrower
designated as such in writing, with the reasonable consent of the Agents. [NOTE:
PURSUANT TO THE TERMS OF THE FIFTH AMENDMENT, DEAN INTERNATIONAL HOLDING COMPANY
(FORMERLY KNOWN AS SUIZA INTERNATIONAL HOLDING COMPANY) AND ITS SUBSIDIARIES
WERE DESIGNATED AS "RESTRICTED SUBSIDIARIES".]

         "Updated Projections" shall have the meaning set forth in Section
4.2(q).

         "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.

         SECTION 1.2 OTHER DEFINITIONAL PROVISIONS.

                  (a) Unless otherwise specified therein, all terms defined in
         this Agreement shall have such defined meanings when used in the Notes
         or other Credit Documents or any certificate or other document made or
         delivered pursuant hereto.

                  (b) The words "hereof", "herein" and "hereunder" and words of
         similar import when used in this Agreement shall refer to this
         Agreement as a whole and not to any particular provision of this
         Agreement, and Section, subsection, Schedule and Exhibit references are
         to this Agreement unless otherwise specified.

                  (c) The word "including" is by way of example and not
         limitation.




                                       34


                  (d) The meanings given to terms defined herein shall be
         equally applicable to both the singular and plural forms of such terms.

         SECTION 1.3 ACCOUNTING TERMS.

         Unless otherwise specified herein, all accounting terms used herein
shall be interpreted, all accounting determinations hereunder shall be made, and
all financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP applied on a basis consistent with the most recent audited
consolidated financial statements of the Borrower delivered to the Lenders;
provided that, if the Borrower notifies the Administrative Agent that it wishes
to amend any covenant in Section 5.9 to eliminate the effect of any change in
GAAP on the operation of such covenant (or if the Administrative Agent notifies
the Borrower that the Required Lenders wish to amend Section 5.9 for such
purpose), then the Credit Parties' compliance with such covenant shall be
determined on the basis of GAAP in effect immediately before the relevant change
in GAAP became effective, until either such notice is withdrawn or such covenant
is amended in a manner satisfactory to the Borrower and the Required Lenders.

         The Borrower shall deliver to the Administrative Agent and each Lender
at the same time as the delivery of any annual or quarterly financial statements
given in accordance with the provisions of Section 5.1, (i) a description in
reasonable detail of any material change in the application of accounting
principles employed in the preparation of such financial statements from those
applied in the most recently preceding quarterly or annual financial statements
as to which no objection shall have been made in accordance with the provisions
above and (ii) a reasonable estimate of the effect on the financial statements
on account of such changes in application.


                                   ARTICLE II

                           THE LOANS; AMOUNT AND TERMS

         SECTION 2.1 REVOLVING-1 LOANS

         (a)      Revolving-1 Commitment.

                           (i) Dollar Revolving-1 Loans. During the Commitment
                  Period, subject to the terms and conditions hereof, each
                  Lender with a Dollar Revolving-1 Subcommitment severally
                  agrees to make revolving credit loans in Dollars ("Dollar
                  Revolving-1 Loans") to the Borrower from time to time for the
                  purposes hereinafter set forth; provided, however, that (i)
                  with regard to each Lender individually, the sum of such
                  Lender's share of outstanding Dollar Revolving-1 Loans plus
                  such Lender's Dollar Revolving-1 Commitment Percentage of
                  Swingline Loans plus such Lender's Dollar Revolving-1
                  Commitment Percentage of Dollar LOC Obligations shall not
                  exceed such Lender's Dollar Revolving-1 Subcommitment and (ii)
                  with regard to the Lenders collectively, the sum of the
                  aggregate amount of outstanding Dollar Revolving-1 Loans plus
                  Swingline Loans





                                       35


                  plus Dollar LOC Obligations shall not exceed the Dollar
                  Revolving-1 Committed Amount. Dollar Revolving-1 Loans may
                  consist of Alternate Base Rate Loans or LIBOR Rate Loans, or a
                  combination thereof, as the Borrower may request, and may be
                  repaid and reborrowed in accordance with the provisions
                  hereof. LIBOR Rate Loans shall be made by each Lender at its
                  LIBOR Lending Office and Alternate Base Rate Loans at its
                  Domestic Lending Office.

                           (ii) Multi-currency Revolving-1 Loans. During the
                  Commitment Period, subject to the terms and conditions hereof,
                  each Lender with a Multi-currency Revolving-1 Subcommitment
                  severally agrees to make revolving credit loans in a Permitted
                  Currency ("Multi-currency Revolving-1 Loans") to the Borrower
                  from time to time for the purposes hereinafter set forth;
                  provided, however, that (i) with regard to each Lender
                  individually, the sum of the Dollar Amount of such Lender's
                  share of outstanding Multi-currency Revolving-1 Loans plus
                  such Lender's Multi-currency Revolving-1 Commitment Percentage
                  of the Dollar Amount of Multi-currency LOC Obligations shall
                  not exceed such Lender's Multi-currency Revolving-1
                  Subcommitment and (ii) with regard to the Lenders
                  collectively, the sum of the aggregate Dollar Amount of
                  outstanding Multi-currency Revolving-1 Loans plus the Dollar
                  Amount of Multi-currency LOC Obligations shall not exceed the
                  Multi-currency Revolving-1 Committed Amount. Multi-currency
                  Revolving-1 Loans denominated in Dollars may consist of
                  Alternate Base Rate Loans or LIBOR Rate Loans, or a
                  combination thereof, as the Borrower may request, and may be
                  repaid and reborrowed in accordance with the provisions
                  hereof. Alternative Currency Loans must be LIBOR Rate Loans,
                  shall be funded in an amount equal to the Alternative Currency
                  Amount of such Alternative Currency Loan and may be repaid and
                  reborrowed in accordance with the provisions hereof. LIBOR
                  Rate Loans shall be made by each Lender at its LIBOR Lending
                  Office and Alternate Base Rate Loans at its Domestic Lending
                  Office.

         (b)      Revolving-1 Loan Borrowings.

                           (i) Notice of Borrowing. The Borrower shall request
                  Revolving-1 Loans by written notice (or telephone notice
                  promptly confirmed in writing which confirmation may be by
                  fax) to the Administrative Agent not later than 1:30 P.M.
                  (Charlotte, North Carolina time) (A) on the date of the
                  requested borrowing in the case of Alternate Base Rate Loans,
                  (B) on the third Business Day prior to the date of the
                  requested borrowing in the case of LIBOR Rate Loans
                  denominated in Dollars and (C) on the fourth Business Day
                  prior to the date of the requested borrowing in the case of
                  Alternative Currency Loans. Each such request for borrowing
                  shall be irrevocable and shall specify (1) that a Revolving-1
                  Loan is requested, (2) the date of the requested borrowing
                  (which shall be a Business Day), (3) the aggregate principal
                  amount to be borrowed, (4) whether the borrowing is to be made
                  under the Dollar Revolving-1 Subcommitment or the
                  Multi-currency Revolving-1 Subcommitment, (5) if such
                  borrowing is to be made under the Multi-currency Revolving-1
                  Subcommitment, whether the borrowing





                                       36


                  shall be denominated in Dollars or an Alternative Currency,
                  (6) if such borrowing is denominated in Dollars, whether the
                  borrowing shall be comprised of Alternate Base Rate Loans,
                  LIBOR Rate Loans or a combination thereof, and (7) if LIBOR
                  Rate Loans are requested, the Interest Period(s) therefor. A
                  form of Notice of Borrowing (a "Notice of Borrowing") is
                  attached hereto as Schedule 2.1(b)(i). If the Borrower shall
                  fail to specify in any such Notice of Borrowing (I) an
                  applicable Interest Period in the case of a LIBOR Rate Loan,
                  then such notice shall be deemed to be a request for an
                  Interest Period of one month, (II) the Type of Revolving-1
                  Loan requested, then such notice shall be deemed to be a
                  request for an Alternate Base Rate Loan, or (III) the
                  applicable portion for the Revolving-1 Loan requested, then
                  such notice shall be deemed to be a request for first, a
                  Dollar Revolving-1 Loan (up to the Dollar Revolving-1
                  Committed Amount), and then a Multi-currency Revolving-1 Loan
                  denominated in Dollars (up to the Multi-currency Revolving-1
                  Committed Amount). The Administrative Agent shall give notice
                  to each Lender promptly upon receipt of each Notice of
                  Borrowing, the contents thereof and each such Lender's share
                  thereof.

                           (ii) Advances of Revolving-1 Loans Denominated in
                  Dollars. Each Lender will make its Dollar Revolving-1
                  Commitment Percentage of each Dollar Revolving-1 Loan
                  borrowing, or its Multi-currency Revolving-1 Commitment
                  Percentage of each Multi-currency Revolving-1 Loan borrowing
                  denominated in Dollars, as applicable, available to the
                  Administrative Agent for the account of the Borrower at the
                  office of the Administrative Agent specified in Section 9.2,
                  or at such other office as the Administrative Agent may
                  designate in writing, by 4:00 P.M. (Charlotte, North Carolina
                  time) on the date specified in the applicable Notice of
                  Borrowing in Dollars and in funds immediately available to the
                  Administrative Agent. Such borrowing will then be made
                  available to the Borrower by the Administrative Agent by
                  crediting the account of the Borrower on the books of such
                  office with the aggregate of the amounts made available to the
                  Administrative Agent by the Lenders and in like funds as
                  received by the Administrative Agent.

                           (iii) Advances of Alternative Currency Loans. Each
                  Lender will make its Multi-currency Revolving-1 Commitment
                  Percentage of the Alternative Currency Amount of each
                  Alternative Currency Loan borrowing available to the
                  Administrative Agent for the account of the Borrower at the
                  office of the Administrative Agent's Correspondent specified
                  in Section 9.2, or at such other office as the Administrative
                  Agent may designate in writing, by 11:00 A.M. (the time of the
                  Administrative Agent's Correspondent) on the date specified in
                  the applicable Notice of Borrowing in the Alternative Currency
                  of the Alternative Currency Loan to be made and in funds
                  immediately available to the Administrative Agent. Such
                  borrowing will then be made available to the Borrower by the
                  Administrative Agent by crediting the account of the Borrower
                  on the books of such office with the aggregate of the amounts
                  made available to the Administrative Agent by the Lenders and
                  in like funds as received by the Administrative Agent.





                                       37


                  (c) Repayment. The principal amount of all Revolving-1 Loans
         shall be due and payable in full, in the currency in which each
         Revolving-1 Loan was initially funded, on the Revolving-1 Commitment
         Termination Date.

                  (d) Revolving-1 Notes. Each Lender's Revolving-1 Loans may, at
         the election of such Lender, of the Borrower to such Lender in the
         original amount of such Lender's Revolving-1 Commitment and in
         substantially the form of Schedule 2.1(d).

         SECTION 2.2 SWINGLINE LOAN SUBFACILITY

                  (a) Swingline Commitment. During the Commitment Period,
         subject to the terms and conditions hereof, the Swingline Lender, in
         its individual capacity, agrees to make certain revolving credit loans
         to the Borrower (each a "Swingline Loan" and, collectively, the
         "Swingline Loans") for the purposes hereinafter set forth; provided,
         however, (i) the aggregate amount of Swingline Loans outstanding at any
         time shall not exceed ONE HUNDRED MILLION DOLLARS ($100,000,000) (the
         "Swingline Committed Amount"), and (ii) the sum of the aggregate amount
         of outstanding Dollar Revolving-1 Loans plus Swingline Loans plus
         Dollar LOC Obligations shall not exceed the Dollar Revolving-1
         Committed Amount. Swingline Loans hereunder may be repaid and
         reborrowed in accordance with the provisions hereof.

                  (b) Swingline Loan Borrowings.

                           (i) Notice of Borrowing and Disbursement. The
                  Swingline Lender will make Swingline Loans available to the
                  Borrower on any Business Day upon request made by the Borrower
                  not later than 4:00 P.M. (Charlotte, North Carolina time) on
                  such Business Day. A request for a Swingline Loan borrowing
                  shall be made in the form of a Notice of Borrowing with
                  appropriate modifications. Swingline Loan borrowings hereunder
                  shall be made in minimum amounts of $100,000 and integral
                  multiples of $100,000 in excess thereof.

                           (ii) Repayment of Swingline Loans. Each Swingline
                  Loan borrowing shall be due and payable on or before the fifth
                  Business Day after the date on which such Swingline Loan
                  borrowing is made or such later date to which the Swingline
                  Lender and Borrower agree and, in any event, on the Maturity
                  Date. The Swingline Lender may, at any time, in its sole
                  discretion, by written notice to the Borrower and the
                  Administrative Agent, demand repayment of its Swingline Loans
                  by way of a Dollar Revolving-1 Loan borrowing, in which case
                  the Borrower shall be deemed to have requested a Dollar
                  Revolving-1 Loan borrowing comprised entirely of Alternate
                  Base Rate Loans in the amount of such Swingline Loans;
                  provided, however, that, in the following circumstances, any
                  such demand shall also be deemed to have been given one
                  Business Day prior to each of (i) the Maturity Date, (ii) the
                  occurrence of any Event of Default described in Section
                  7.1(e), (iii) upon acceleration of the Credit Party
                  Obligations hereunder, whether on account of an Event of
                  Default described in Section 7.1(e)





                                       38


                  or any other Event of Default, and (iv) the exercise of
                  remedies in accordance with the provisions of Section 7.2
                  hereof (each such Dollar Revolving-1 Loan borrowing made on
                  account of any such deemed request therefor as provided herein
                  being hereinafter referred to as a "Mandatory Borrowing").
                  Each Lender with a Dollar Revolving-1 Subcommitment hereby
                  irrevocably agrees to make such Dollar Revolving-1 Loans
                  promptly upon any such request or deemed request on account of
                  each Mandatory Borrowing in the amount and in the manner
                  specified in the preceding sentence and on the same such date
                  notwithstanding (I) the amount of Mandatory Borrowing may not
                  comply with the minimum amount for borrowings of Dollar
                  Revolving-1 Loans otherwise required hereunder, (II) whether
                  any conditions specified in Section 4.2 are then satisfied,
                  (III) whether a Default or an Event of Default then exists,
                  (IV) failure of any such request or deemed request for Dollar
                  Revolving-1 Loans to be made by the time otherwise required in
                  Section 2.1(b)(i), (V) the date of such Mandatory Borrowing,
                  or (VI) any reduction in the Dollar Revolving-1 Committed
                  Amount or termination of the Dollar Revolving-1 Subcommitments
                  immediately prior to such Mandatory Borrowing or
                  contemporaneously therewith. In the event that any Mandatory
                  Borrowing 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), then each Lender with a Dollar
                  Revolving-1 Subcommitment hereby agrees that it shall
                  forthwith purchase (as of the date the Mandatory 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 participations
                  in the outstanding Swingline Loans as shall be necessary to
                  cause each such Lender to share in such Swingline Loans
                  ratably based upon its respective Dollar Revolving-1
                  Commitment Percentage (determined before giving effect to any
                  termination of the Commitments pursuant to Section 7.2),
                  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 is purchased,
                  and (B) at the time any purchase of participations pursuant to
                  this sentence is actually made, the purchasing Lender shall be
                  required to pay to the Swingline Lender interest on the
                  principal amount of such participation purchased for each day
                  from and including the day upon which the Mandatory Borrowing
                  would otherwise have occurred to but excluding the date of
                  payment for such participation, at the rate equal to, if paid
                  within two (2) Business Days of the date of the Mandatory
                  Borrowing, the Federal Funds Effective Rate, and thereafter at
                  a rate equal to the Alternate Base Rate.

                  (c) Interest on Swingline Loans. Subject to the provisions of
         Section 2.10(b), Swingline Loans shall bear interest at a per annum
         rate equal to the lesser of (i) the Alternate Base Rate plus the
         Applicable Percentage for Dollar Revolving-1 Loans that are Alternate
         Base Rate Loans or (ii) a rate agreed upon by the Swingline Lender and
         the Borrower. Interest on Swingline Loans shall be payable in arrears
         on each Interest Payment Date.




                                       39


                  (d) Swingline Note. The Swingline Loans may, at the election
         of such Lender, of the Borrower to the Swingline Lender in the original
         amount of the Swingline Committed Amount and substantially in the form
         of Schedule 2.2(d).

         SECTION 2.3  LETTER OF CREDIT SUBFACILITY.

                  (a) Issuance. The Existing Letters of Credit have been
         previously issued by the applicable Issuing Lender and subject to the
         terms and conditions hereof and of the LOC Documents, if any, and any
         other terms and conditions which the applicable Issuing Lender may
         reasonably require, during the Commitment Period the applicable Issuing
         Lender shall issue, and the Lenders having a Revolving-1 Commitment
         shall participate in, Letters of Credit for the account of the Borrower
         from time to time upon request in a form acceptable to the applicable
         Issuing Lender; provided, however, that (i) the aggregate Dollar Amount
         of all LOC Obligations shall not at any time exceed TWO HUNDRED FIFTY
         MILLION DOLLARS ($250,000,000) (the "LOC Committed Amount"), (ii) the
         sum of the aggregate amount of Dollar Revolving-1 Loans plus Swingline
         Loans plus Dollar LOC Obligations shall not at any time exceed the
         Dollar Revolving-1 Committed Amount, (iii) the sum of the aggregate
         Dollar Amount of Multi-currency Revolving-1 Loans plus the Dollar
         Amount of Multi-currency LOC Obligations shall not at any time exceed
         the Multi-currency Revolving-1 Committed Amount, (iv) all Dollar
         Letters of Credit shall be denominated in Dollars, (v) all
         Multi-currency Letters of Credit shall be denominated in a Permitted
         Currency, and (vi) all Letters of Credit shall be issued for lawful
         corporate purposes and may be issued as standby letters of credit,
         including in connection with workers' compensation and other insurance
         programs, and trade letters of credit. Except as otherwise expressly
         agreed upon by the applicable Issuing Lender and the Administrative
         Agent, no Letter of Credit shall have an original expiry date more than
         twelve (12) months from the date of issuance; provided, however, (i) so
         long as no Default or Event of Default has occurred and is continuing
         and subject to the other terms and conditions to the issuance of
         Letters of Credit hereunder, the expiry dates of Letters of Credit may
         be extended annually or periodically from time to time on the request
         of the Borrower or by operation of the terms of the applicable Letter
         of Credit to a date not more than twelve (12) months from the date of
         extension; and (ii) a Letter of Credit may have an expiration date more
         than one year from the date of issuance if required under related
         industrial revenue bond documents and agreed to by the applicable
         Issuing Lender; provided, further, that no Letter of Credit, as
         originally issued or as extended, shall have an expiry date extending
         beyond the date which is five (5) Business Days prior to the
         Revolving-1 Commitment Termination Date. Each Letter of Credit shall
         comply with the related LOC Documents. The issuance and expiry date of
         each Letter of Credit shall be a Business Day. All Existing Letters of
         Credit shall, as of the Funding Date, be deemed to have been issued
         pursuant hereto as "Letters of Credit" hereunder and subject to and
         governed by the terms and conditions of this Credit Agreement. It is
         hereby further agreed that any Existing Letter of Credit which is
         issued by an Issuing







                                       40


         Lender other than First Union or Bank One shall not be renewed and will
         be replaced upon its expiration with a Letter of Credit issued by First
         Union or Bank One, as the case may be, in its capacity as an Issuing
         Lender hereunder. All Letters of Credit issued and outstanding as of
         the Fifth Amendment Effective Date shall be deemed to be Dollar Letters
         of Credit.

                  (b) Notice and Reports. The request for the issuance of a
         Letter of Credit shall be submitted to the applicable Issuing Lender
         and the Administrative Agent (i) at least three (3) Business Days prior
         to the requested date of issuance of a Letter of Credit denominated in
         Dollars and (ii) at least four (4) Business Days prior to the requested
         date of issuance of a Letter of Credit denominated in an Alternative
         Currency, and shall specify (A) whether the Letter of Credit is to be
         issued as a Dollar Letter of Credit or a Multi-currency Letter of
         Credit and (B) if such Letter of Credit is to be issued as a
         Multi-currency Letter of Credit, whether the Letter of Credit shall be
         denominated in Dollars or an Alternative Currency. Each Issuing Lender
         will promptly upon request provide to the Administrative Agent for
         dissemination to the Lenders a detailed report specifying the Dollar
         Letters of Credit and Multi-currency Letters of Credit which are then
         issued and outstanding by such Issuing Lender and any activity with
         respect thereto which may have occurred since the date of any prior
         report, and including therein, among other things, the account party,
         the beneficiary, the face amount, expiry date as well as any payments
         or expirations which may have occurred. Each Issuing Lender will
         further provide to the Administrative Agent promptly upon request
         copies of the Letters of Credit issued by such Issuing Lender. Each
         Issuing Lender will provide to the Administrative Agent promptly upon
         request a summary report of the nature and extent of LOC Obligations
         then outstanding related to the Letters of Credit issued by such
         Issuing Lender.

                  (c) Participations.

                           (i) Dollar Letters of Credit. Each Lender with a
         Dollar Revolving-1 Subcommitment, upon issuance of a Dollar Letter of
         Credit (other than a Dollar Letter of Credit in an original face amount
         of less than $1,000,000), shall be deemed to have purchased without
         recourse a risk participation from the applicable Issuing Lender in
         such Dollar Letter of Credit (including each Existing Letter of Credit)
         and the obligations arising thereunder and any collateral relating
         thereto, in each case in an amount equal to its Dollar Revolving-1
         Commitment Percentage of the obligations under such Dollar Letter of
         Credit (including each Existing Letter of Credit) and shall absolutely,
         unconditionally and irrevocably assume, as primary obligor and not as
         surety, and be obligated to pay to the applicable Issuing Lender
         therefor and discharge when due, its Dollar Revolving-1 Commitment
         Percentage of the obligations arising under such Dollar Letter of
         Credit, unless the applicable Issuing Lender acted with gross
         negligence or willful misconduct in issuing such Dollar Letter of
         Credit.




                                       41


                           (ii) Multi-currency Letters of Credit. Each Lender
         with a Multi-currency Revolving-1 Subcommitment, upon issuance of a
         Multi-currency Letter of Credit (other than a Multi-currency Letter of
         Credit in an original face amount of less than $1,000,000), shall be
         deemed to have purchased without recourse a risk participation from the
         applicable Issuing Lender in such Multi-currency Letter of Credit and
         the obligations arising thereunder and any collateral relating thereto,
         in each case in an amount equal to its Multi-currency Revolving-1
         Commitment Percentage of the obligations under such Multi-currency
         Letter of Credit and shall absolutely, unconditionally and irrevocably
         assume, as primary obligor and not as surety, and be obligated to pay
         to the applicable Issuing Lender therefor and discharge when due, its
         Multi-currency Revolving-1 Commitment Percentage of the obligations
         arising under such Multi-currency Letter of Credit, unless the
         applicable Issuing Lender acted with gross negligence or willful
         misconduct in issuing such Multi-currency Letter of Credit.

                           (iii) Without limiting the scope and nature of each
         Lender's participation in any Letter of Credit, to the extent that an
         Issuing Lender has not been reimbursed as required hereunder or under
         any LOC Document, each such Lender shall pay to such Issuing Lender its
         Dollar Revolving-1 Commitment Percentage or Multi-currency Revolving-1
         Commitment Percentage, as applicable, of such unreimbursed drawing in
         same day funds on the day of notification by such Issuing Lender of an
         unreimbursed drawing pursuant to the provisions of subsection (d) below
         if such notice is received at or before 2:00 P.M. (Charlotte, North
         Carolina time), 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. The obligation of each
         Lender to so reimburse the Issuing Lenders 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 applicable 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 applicable Issuing Lender will promptly notify
         the Borrower and the Administrative Agent. The Borrower shall reimburse
         the applicable Issuing Lender on the day of drawing under any Letter of
         Credit (either with the proceeds of a Swingline Loan or Revolving-1
         Loan obtained hereunder or otherwise) in same day funds in the
         applicable Permitted Currency in which such Letter of Credit was
         denominated, as provided herein or in the LOC Documents. If the
         Borrower shall fail to reimburse such Issuing Lender as provided
         herein, the unreimbursed Dollar Amount of such drawing shall bear
         interest at a per annum rate equal to the Alternate Base Rate plus the
         Applicable Percentage. Unless the Borrower shall immediately notify the
         applicable Issuing Lender and the Administrative Agent of its intent to
         otherwise reimburse such Issuing Lender, the Borrower shall be deemed
         to have requested a Swingline Loan or Dollar Revolving-1 Loan (in the
         case of a Dollar Letter of Credit) or Multi-currency





                                       42


         Revolving-1 Loan (in the case of a Multi-currency Letter of Credit), in
         the Dollar Amount of the drawing as provided in subsection (e) below,
         the proceeds of which will be used to satisfy the reimbursement
         obligations. The Borrower's reimbursement obligations hereunder shall
         be absolute and unconditional under all circumstances irrespective of
         any rights of set-off, counterclaim or defense to payment the Borrower
         may claim or have against any Issuing Lender, the Administrative 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 to receive consideration or the legality,
         validity, regularity or unenforceability of the Letter of Credit. The
         applicable Issuing Lender will promptly notify the applicable Lenders
         of the Dollar Amount of any unreimbursed drawing and each applicable
         Lender shall promptly pay to the Administrative Agent for the account
         of such Issuing Lender in Dollars and in immediately available funds,
         the amount of such Lender's Dollar Revolving-1 Commitment Percentage or
         Multi-currency Revolving-1 Commitment Percentage, as applicable, of
         such unreimbursed drawing, unless such Issuing Lender acted with gross
         negligence or willful misconduct in issuing such Letter of Credit. Such
         payment shall be made on the day such notice is received by such Lender
         from the Administrative Agent for the applicable Issuing Lender if such
         notice is received at or before 2:00 P.M. (Charlotte, North Carolina
         time), 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 Administrative Agent for the account of the applicable
         Issuing Lender in full upon such request, such Lender shall, on demand,
         pay to the Administrative Agent for the account of the applicable
         Issuing Lender interest on the unpaid amount during the period from the
         date of such drawing until such Lender pays such amount to the
         Administrative, Agent for the account of the applicable Issuing Lender
         in full at a rate per annum equal to, if paid within two (2) Business
         Days of the date of drawing, the Federal Funds Effective Rate and
         thereafter at a rate equal to the Alternate Base Rate. Each Lender's
         obligation to make such payment to the Administrative Agent for the
         account of the applicable Issuing Lender, and the right of such 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 Agreement or the Commitments hereunder, the
         existence of a Default or Event of Default or the acceleration of the
         Credit Party Obligations hereunder and shall be made without any
         offset, abatement, withholding or reduction whatsoever.

                  (e) Repayment with Revolving-1 Loans.

                           (i) Mandatory Dollar Borrowings. On any day on which
         the Borrower shall have requested, or been deemed to have requested,
         (A) a Swingline Loan borrowing to reimburse a drawing under a Dollar
         Letter of Credit, the Swingline Lender shall make the Swingline Loan
         advance pursuant to the terms of the request or deemed request in
         accordance with the provisions for Swingline Loan advances hereunder,
         or (B) a Dollar Revolving-1 Loan to





                                       43


         reimburse a drawing under a Dollar Letter of Credit, the Administrative
         Agent shall give notice to the Lenders that a Dollar Revolving-1 Loan
         has been requested or deemed requested in connection with a drawing
         under a Dollar Letter of Credit, in which case a Dollar Revolving-1
         Loan borrowing comprised entirely of Alternate Base Rate Loans (each
         such borrowing, a "Mandatory Dollar Borrowing") shall be immediately
         made (without giving effect to any termination of the Commitments
         pursuant to Section 7.2) pro rata based on each Lender's respective
         Dollar Revolving-1 Commitment Percentage (determined before giving
         effect to any termination of the Commitments pursuant to Section 7.2)
         and in the case of both clauses (A) and (B) the proceeds thereof shall
         be paid directly to the Administrative Agent for the account of the
         applicable Issuing Lender for application to the respective Dollar LOC
         Obligations.

                           (ii) Mandatory Multi-currency Borrowings. On any day
         on which the Borrower shall have requested, or been deemed to have
         requested, a Multi-currency Revolving-1 Loan to reimburse a drawing
         under a Multi-currency Letter of Credit, the Administrative Agent shall
         give notice to the Lenders that a Multi-currency Revolving-1 Loan has
         been requested or deemed requested in connection with a drawing under a
         Multi-currency Letter of Credit, in which case a Multi-currency
         Revolving-1 Loan borrowing comprised entirely of Alternate Base Rate
         Loans in Dollars equal to the Dollar Amount of such drawing (each such
         borrowing, a "Mandatory Multi-currency Borrowing") shall be immediately
         made (without giving effect to any termination of the Commitments
         pursuant to Section 7.2) pro rata based on each Lender's respective
         Multi-currency Revolving-1 Commitment Percentage (determined before
         giving effect to any termination of the Commitments pursuant to Section
         7.2) and the proceeds thereof shall be paid directly to the
         Administrative Agent for the account of the applicable Issuing Lender
         for application to the respective Multi-currency LOC Obligations.

                           (iii) Obligation Irrevocable. Each Lender hereby
         irrevocably agrees to make such Dollar Revolving-1 Loans or
         Multi-currency Revolving-1 Loans, as applicable, pursuant to clauses
         (i) and (ii) above, immediately upon any such request or deemed request
         on account of each Mandatory Dollar Borrowing or Mandatory
         Multi-currency Borrowing, as applicable, in the amount and in the
         manner specified in the preceding sentence and on the same such date
         notwithstanding (i) the amount of such Mandatory Dollar Borrowing or
         Mandatory Multi-currency Borrowing, as applicable, may not comply with
         the minimum amount for borrowings of Dollar Revolving-1 Loans or
         Multi-currency Revolving-1 Loans, as applicable, otherwise required
         hereunder, (ii) whether any conditions specified in Section 4.2 are
         then satisfied, (iii) whether a Default or an Event of Default then
         exists, (iv) failure for any such request or deemed request for such
         Dollar Revolving-1 Loan or Multi-currency Revolving-1 Loan, as
         applicable, to be made by the time otherwise required in Section
         2.1(b), (v) the date of such Dollar Revolving-1 Loan or Mandatory
         Multi-currency Borrowing, as applicable, or (vi) any reduction in the
         Dollar Revolving-1 Committed Amount or Multi-currency Revolving-1
         Committed Amount, as applicable, after any such





                                       44


         Dollar Revolving-1 Letter of Credit or Multi-currency Letter of Credit,
         as applicable, may have been drawn upon. In the event that any
         Mandatory Dollar Borrowing or Mandatory Multi-currency Borrowing 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), then each
         applicable Lender hereby agrees that it shall forthwith fund (as of the
         date the Mandatory Dollar Borrowing or Mandatory Multi-currency
         Borrowing, as applicable, would otherwise have occurred, but adjusted
         for any payments received from the Borrower on or after such date and
         prior to such purchase) its Participation Interests in the outstanding
         Dollar LOC Obligations or Multi-currency LOC Obligations, as
         applicable; provided, further, that in the event any Lender shall fail
         to fund its Participation Interest on the day the Mandatory Dollar
         Borrowing or Mandatory Multi-currency Borrowing, as applicable, would
         otherwise have occurred, then the amount of such Lender's unfunded
         Participation Interest therein shall bear interest payable to
         Administrative Agent for the account of the applicable Issuing Lender
         upon demand, at the rate equal to, if paid within two (2) Business Days
         of such date, the Federal Funds Effective Rate, and thereafter at a
         rate equal to the Alternate Base Rate.

                  (f) Designation of Subsidiaries as Account Parties.
         Notwithstanding anything to the contrary set forth in this Agreement,
         including, without limitation, Section 2.3(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 a Subsidiary of the Borrower;
         provided that notwithstanding such statement, the Borrower shall be the
         actual account party for all purposes of this 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) Modification, Extension. The issuance of any supplement,
         modification, amendment, renewal, or extension to 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. Unless otherwise agreed to
         by the applicable Issuing Lender and the Borrower when a Letter of
         Credit is issued, the applicable Issuing Lender shall have the Letters
         of Credit be subject to The Uniform Customs and Practice for
         Documentary Credits (the "UCP"), or the International Standby Practices
         1998 ("ISP"), in each case as published as of the date of issue by the
         International Chamber of Commerce, in which case the UCP or ISP, as
         applicable, may be incorporated therein and deemed in all respects to
         be a part thereof.

                  (i) Conflict with LOC Documents. In the event of any conflict
         between this Agreement and any LOC Document (including any letter of
         credit application), this Agreement shall control. Each of the
         Reimbursement





                                       45


         Agreements is and shall be deemed amended such that the representations
         and warranties covenants and events of default (and definitions related
         thereto) set out in each respective Reimbursement Agreement (the
         "Existing Provisions"), except to the extent they relate specifically
         to the relevant bonds or relevant remarketing program, conform with the
         representations and warranties, covenants and events of default (and
         definitions related thereto) set out in this Agreement (the
         "Incorporated Provisions"). So long as any obligations remain
         outstanding under the underlying revenue bonds related to any Letter of
         Credit or any documentation related thereto, such Incorporated
         Provisions shall survive (i) the payment in full of all obligations due
         the Lenders by the Borrower under this Agreement, (ii) the termination
         (for any reason) of this Agreement (iii) the sale or participation (in
         whole or in part) of a Lender's interest in this Agreement, or (iv) any
         other event which has an effect to terminate the obligations of the
         Borrower to the Lenders under this Agreement. Upon the happening of one
         of the events set forth in the immediately preceding sentence, the
         Borrower agrees to promptly execute a modification of the relevant
         Reimbursement Agreements to confirm such amendment. Notwithstanding the
         preceding sentence or the failure of any such modification to be
         executed the Credit Parties to the extent applicable, must remain in
         compliance with the Incorporated Provisions as if set forth in each of
         the Reimbursement Agreement. Any future modification of or amendment to
         the Incorporated Provisions shall be a modification of or amendment to
         the relevant Reimbursement Agreements for purposes of compliance with
         such Reimbursement Agreements. Likewise, if the Required Lenders grant
         a waiver of compliance of the Incorporated Provisions for any period,
         such waiver shall be deemed to be a waiver of compliance of the
         relevant Reimbursement Agreements for the limited period of time for
         which the waiver was granted.

         SECTION 2.4 TRANCHE A-1 TERM LOAN FACILITY

         (a) On the Funding Date the Lenders made available to the Borrower a
         term loan in Dollars in an aggregate principal amount of NINE HUNDRED
         MILLION DOLLARS ($900,000,000) (the "Original Tranche A-1 Term Loan").
         After giving effect to scheduled amortization from the Funding Date to
         the Fourth Amendment Effective Date, the Original Tranche A-1 Term Loan
         has been reduced to SEVEN HUNDRED SIXTY FIVE MILLION DOLLARS
         ($765,000,000) as of the Fourth Amendment Effective Date (the "Existing
         Tranche A-1 Term Loans"). After giving effect to the conversion and
         reallocation of Existing Tranche A-1 Term Loans and advancing of
         additional Tranche A-1 Term Loans described in Section 1 of the Fourth
         Amendment and evidenced in the Register, the outstanding amount of all
         term loans made under this Section 2.4(a) shall be equal to ONE BILLION
         DOLLARS ($1,000,000,000), (the "Tranche A-1 Term Loan Committed
         Amount"); and the Tranche A-1 Term Loan may consist of Alternate Base
         Rate Loans or LIBOR Rate Loans, or a combination thereof, as the
         Borrower may request. LIBOR Rate Loans shall be made by each Lender at
         its LIBOR Lending Office and Alternate Base Rate Loans at its Domestic
         Lending Office. Amounts repaid on the Tranche A-1 Term Loan may not be
         reborrowed.




                                       46


         (b) Repayment of Tranche A-1 Term Loan. The principal amount of the
         Tranche A-1 Term Loan shall be repaid, unless accelerated sooner
         pursuant to Section 7.2, in accordance with the following schedule:



Principal Amortization Payment               Tranche A-1 Term Loan
             Date                        Principal Amortization Payment
- --------------------------------   -------------------------------------------
                                
      September 30, 2003                          $37,500,000
       December 31, 2003                          $37,500,000
        March 31, 2004                            $37,500,000
         June 30, 2004                            $37,500,000
      September 30, 2004                          $37,500,000
       December 31, 2004                          $37,500,000
        March 31, 2005                            $43,750,000
         June 30, 2005                            $43,750,000
      September 30, 2005                          $43,750,000
       December 31, 2005                          $43,750,000
        March 31, 2006                            $50,000,000
         June 30, 2006                            $50,000,000
      September 30, 2006                          $50,000,000
       December 31, 2006                          $50,000,000
        March 31, 2007                            $62,500,000
         June 30, 2007                            $62,500,000
Tranche A-1 Term Loan Maturity                    $275,000,000
             Date



         (c) Tranche A-1 Term Notes. Each Lender's Tranche A-1 Term Loan
         Commitment Percentage of the Tranche A-1 Term Loan Committed Amount
         may, at the election of such Lender, of the Borrower to such Lender in
         substantially the form of Schedule 2.4(c).

         SECTION 2.5 TRANCHE B-1 TERM LOAN FACILITY

         (a) On the Funding Date, the Lenders made available to the Borrower a
         term loan in Dollars in an aggregate principal amount of ONE BILLION
         DOLLARS ($1,000,000,000) (the "Original Tranche B-1 Term Loan"). After
         giving effect to scheduled amortization from the Funding Date to the
         Fourth Amendment Effective Date,





                                       47


         the Original Tranche B-1 Term Loan has been reduced to NINE HUNDRED
         NINETY MILLION DOLLARS ($990,000,000) (the "Existing Tranche B-1 Term
         Loan"). After giving effect to the repayment, conversion and
         reallocation of the Existing Tranche B-1 Term Loan set forth in Section
         1 of the Fourth Amendment, the outstanding amount of all term loans
         made under this Section 2.5(a) shall be equal to SEVEN HUNDRED FIFTY
         MILLION DOLLARS ($750,000,000) (the "Tranche B-1 Term Loan Committed
         Amount"); and The Tranche B-1 Term Loan may consist of Alternate Base
         Rate Loans or LIBOR Rate Loans, or a combination thereof, as the
         Borrower may request. LIBOR Rate Loans shall be made by each Lender at
         its LIBOR Lending Office and Alternate Base Rate Loans at its Domestic
         Lending Office. Amounts repaid on the Tranche B-1 Term Loan may not be
         reborrowed.

         (b) Repayment of Tranche B-1 Term Loan. The principal amount of the
         Tranche B-1 Term Loan shall be repaid, unless accelerated sooner
         pursuant to Section 7.2, in accordance with the following schedule:



Principal Amortization Payment              Tranche B-1 Term Loan
             Date                      Principal Amortization Payment
- --------------------------------   ---------------------------------------
                                
      September 30, 2003                         $1,875,000
       December 31, 2003                         $1,875,000
        March 31, 2004                           $1,875,000
         June 30, 2004                           $1,875,000
      September 30, 2004                         $1,875,000
       December 31, 2004                         $1,875,000
        March 31, 2005                           $1,875,000
         June 30, 2005                           $1,875,000
      September 30, 2005                         $1,875,000
       December 31, 2005                         $1,875,000
        March 31, 2006                           $1,875,000
         June 30, 2006                           $1,875,000
      September 30, 2006                         $1,875,000
       December 31, 2006                         $1,875,000
        March 31, 2007                           $1,875,000
         June 30, 2007                           $1,875,000
      September 30, 2007                         $1,875,000
       December 31, 2007                         $1,875,000
        March 31, 2008                          $358,125,000
Tranche B-1 Term Loan Maturity                  $358,125,000
             Date





                                       48


                  (c) Tranche B-1 Term Notes. Each Lender's Tranche B-1 Term
         Loan Commitment Percentage of the Tranche B-1 Term Loan Committed
         Amount may, at the election of such Lender, of the Borrower to such
         Lender in substantially the form of Schedule 2.5(c).

         SECTION 2.6 FEES.

                  (a) Commitment Fee. In consideration of the Commitments, the
         Borrower agrees to pay to the Administrative Agent for the ratable
         benefit of the Lenders a commitment fee (the "Commitment Fee") in an
         amount equal to (1) with respect to the Tranche B-1 Term Loan Committed
         Amount, one-half percent (0.5%) per annum from the Closing Date until
         the Funding Date, and (2) with respect to the Tranche A-1 Term Loan
         Committed Amount and the Revolving-1 Committed Amount, from and after
         (A) the Closing Date until October 31, 2001, one-eighth percent (.125%)
         per annum on the Tranche A-1 Term Loan Committed Amount and the
         Revolving-1 Committed Amount and (B) November 1, 2001 until the Funding
         Date, one-quarter percent (.25%) per annum. After the Funding Date the
         Borrower agrees to pay to the Administrative Agent (i) for the ratable
         benefit of the Lenders holding a Dollar Revolving-1 Subcommitment, a
         Commitment Fee equal to the Applicable Percentage per annum on the
         average daily unused amount of the Dollar Revolving-1 Committed Amount
         and (ii) for the ratable benefit of the Lenders holding a
         Multi-currency Revolving-1 Subcommitment, a Commitment Fee equal to the
         Applicable Percentage per annum on the average daily unused amount of
         the Multi-currency Revolving-1 Committed Amount. For purposes of
         computing the Commitment Fee hereunder, (i) Dollar LOC Obligations
         shall be considered usage under the aggregate Dollar Revolving-1
         Committed Amount, (ii) Multi-currency LOC Obligations shall be
         considered usage under the aggregate Multi-currency Revolving-1
         Committed Amount and (iii) Swingline Loans shall not be considered
         usage under the aggregate Dollar Revolving-1 Committed Amount unless
         and until other Lenders having Dollar Revolving-1 Subcommitments
         purchase Participation Interests in such Swingline Loans pursuant to
         Section 2.2(b)(ii). The Commitment Fee shall be payable quarterly in
         arrears on the 15th day following the last day of each calendar quarter
         for the prior calendar quarter and upon termination of the Revolving-1
         Commitments and the funding of the Term Loans.

                  (b) Letter of Credit Fees. In consideration of the LOC
         Commitments, the Borrower agrees to pay to the Issuing Lender a fee
         (the "Letter of Credit Fee") equal to the Applicable Percentage per
         annum on the average daily maximum amount available to be drawn under
         each Letter of Credit (as such amount may be increased subject to the
         provisions of Section 2.10(b)) from the date of issuance (or in the
         case of Letters of





                                       49


         Credit outstanding on the Closing Date, from the Closing Date) to the
         date of expiration. In addition to such Letter of Credit Fee, the
         Issuing Lender may charge, and retain for its own account without
         sharing by the other Lenders, an additional facing fee of one-eighth of
         one percent (0.125%) per annum on the average daily maximum amount
         available to be drawn under each such Letter of Credit issued by it.
         The Issuing Lender shall promptly pay over to the Administrative Agent
         the Letter of Credit Fee (i) for the ratable benefit of the Lenders
         (including the Issuing Lender, as applicable) holding Dollar
         Revolving-1 Subcommitments, with respect to Letter of Credit Fees paid
         on Dollar Letters of Credit, and (ii) for the ratable benefit of the
         Lenders (including the Issuing Lender, as applicable) holding
         Multi-currency Revolving-1 Subcommitments, with respect to Letter of
         Credit Fees paid on Multi-currency Letters of Credit. The Letter of
         Credit Fee shall be payable quarterly in arrears on the 15th day
         following the last day of each calendar quarter for the prior calendar
         quarter.

                  (c) Issuing Lender Fees. In addition to the Letter of Credit
         Fees payable pursuant to subsection (b) above, the Borrower shall pay
         to the Issuing Lender for its own account without sharing by the other
         Lenders the reasonable and customary charges from time to time of the
         Issuing Lender with respect to the amendment, transfer, administration,
         cancellation and conversion of, and drawings under, such Letters of
         Credit (collectively, the "Issuing Lender Fees").

                  (d) Administrative Fee. The Borrower agrees to pay to the
         Agents the annual administrative fee as described in the Fee Letter.

                  (e) The commissions, fees, charges, costs and expenses payable
         pursuant to this Section 2.6 shall be payable in the Permitted Currency
         in which the applicable Letter of Credit is denominated.

         SECTION 2.7 REDUCTION OF THE REVOLVING-1 COMMITMENTS

                  (a) Voluntary Reductions. The Borrower shall have the right to
         terminate or permanently reduce the unused portion of the Dollar
         Revolving-1 Committed Amount or the Multi-currency Revolving-1
         Committed Amount at any time or from time to time upon not less than
         one Business Day prior notice to the Administrative Agent (which shall
         notify the Lenders thereof as soon as practicable) of each such
         termination or reduction, which notice shall specify the effective date
         thereof and the amount of any such reduction which shall be in a
         minimum amount of $5,000,000 or a whole multiple of $1,000,000 in
         excess thereof and shall be irrevocable and effective upon receipt by
         the Administrative Agent; provided that no such reduction or
         termination shall be permitted if after giving effect thereto, and to
         any prepayments of Revolving-1 Loans made on the effective date
         thereof, (i) the sum of the then outstanding aggregate principal amount
         of Dollar Revolving-1 Loans plus Swingline Loans plus Dollar LOC
         Obligations would exceed the Dollar Revolving-1 Committed Amount or
         (ii) the then outstanding aggregate principal Dollar Amount of
         Multi-currency Revolving-1 Loans plus the Dollar Amount of
         Multi-currency LOC Obligations would exceed the Multi-currency
         Revolving-1 Committed Amount. If the Borrower shall fail to specify in
         any such notice the





                                       50


         applicable portion of the Revolving-1 Committed Amount to be reduced,
         then such reduction shall be applied pro rata to the Dollar Revolving-1
         Committed Amount and the Multi-currency Revolving-1 Committed Amount.

                  (b) Maturity Date. The Revolving-1 Commitments, the LOC
         Commitments and the Swingline Commitments shall automatically terminate
         on the Revolving-1 Commitment Termination Date.

         SECTION 2.8 PREPAYMENTS

                  (a) Optional Prepayments. The Borrower shall have the right to
         prepay Loans in whole or in part from time to time; provided, however,
         that (i) each partial prepayment of Loans (other than Swingline Loans)
         shall be in a minimum principal amount of $5,000,000 and integral
         multiples of $1,000,000 (or the Alternative Currency Amount thereof, as
         applicable) in excess thereof and (ii) each prepayment of Swingline
         Loans shall be in a minimum principal amount of $100,000 and integral
         multiples of $100,000 in excess thereof. The Borrower shall give
         irrevocable written notice (or telephone notice promptly confirmed in
         writing which confirmation may be by fax) of any such voluntary
         prepayment to the Administrative Agent (which shall notify the Lenders
         thereof as soon as practicable) not later than 1:30 P.M. (Charlotte,
         North Carolina time) on the Business Day prior to the date of the
         requested prepayment in the case of Alternate Base Rate Loans, on the
         third Business Day prior to the date of the requested prepayment in the
         case of LIBOR Rate Loans denominated in Dollars and on the fourth
         Business Day prior to the date of the requested prepayment in the case
         of Alternative Currency Loans. Each such notice of prepayment shall
         specify (A) the date of repayment, (B) the amount of repayment, (C)
         whether the repayment is of Dollar Revolving-1 Loans, Multi-currency
         Revolving-1 Loans (including the applicable Permitted Currency),
         Swingline Loans, Tranche A-1 Term Loans, Tranche B-1 Term Loans, or a
         combination thereof, and, if of a combination thereof, the amount
         allocable to each and (D) whether the repayment is of LIBOR Rate Loans
         or Alternate Base Rate Loans, or a combination thereof, and, if of a
         combination thereof, the amount allocable to each. Prepayments of the
         Tranche A-1 Term Loan or the Tranche B-1 Term Loan under this Section
         2.8(a) shall be applied ratably to the remaining principal installments
         thereof (provided, however, promptly upon notification thereof, one or
         more holders of the Tranche B-1 Term Loan may decline to accept such
         prepayment to the extent there are sufficient amounts under the Tranche
         A-1 Term Loan outstanding to be paid with such prepayment, in which
         case, such declined prepayments shall be allocated pro rata among the
         Tranche A-1 Term Loan and the Tranche B-1 Term Loan held by Lenders
         accepting such payments). Subject to the foregoing terms, amounts
         prepaid under this Section 2.8(a) shall be applied first to Alternate
         Base Rate Loans and then to LIBOR Rate Loans in direct order of
         Interest Period maturities. All prepayments under this Section 2.8(a)
         shall be without premium or penalty except that (i) any prepayments of
         the Tranche B-1 Term Loan made during the period commencing on the
         Fourth Amendment Effective Date and ending on May 29, 2004 will require
         payment of a premium of 0.50% of the principal amount being prepaid on
         such date and (ii) all prepayments shall be subject to Section 2.18.
         Interest on the principal amount prepaid shall be payable on the date
         of such prepayment. Amounts






                                       51


         prepaid on the Swingline Loans and the Revolving-1 Loans may be
         reborrowed in accordance with the terms hereof. Amounts prepaid on the
         Tranche A-1 Term Loan and the Tranche B-1 Term Loan may not be
         reborrowed.

                  (b) Mandatory Prepayments.

                           (i) Revolving-1 Committed Amount.

                                    (A) Dollar Revolving-1 Subcommitment. If at
                  any time after the Funding Date, the sum of the aggregate
                  principal amount of outstanding Dollar Revolving-1 Loans plus
                  Swingline Loans plus Dollar LOC Obligations shall exceed the
                  Dollar Revolving-1 Committed Amount, the Borrower immediately
                  shall prepay Dollar Revolving-1 Loans and (after all Dollar
                  Revolving-1 Loans have been repaid) cash collateralize the
                  Dollar LOC Obligations, in an amount sufficient to eliminate
                  such excess (such prepayment to be applied as set forth in
                  clause (vi) below).

                                    (B) Multi-currency Revolving-1
                  Subcommitment. If at any time after the Funding Date, for any
                  reason, the sum of the aggregate principal Dollar Amount of
                  outstanding Multi-currency Revolving-1 Loans plus the Dollar
                  Amount of Multi-currency LOC Obligations shall exceed the
                  Multi-currency Revolving-1 Committed Amount, the Borrower
                  immediately shall prepay Multi-currency Revolving-1 Loans and
                  (after all Multi-currency Revolving-1 Loans have been repaid)
                  cash collateralize the Multi-currency LOC Obligations, in an
                  amount sufficient to eliminate such excess and in the
                  Permitted Currency in which each of the applicable
                  Multi-currency Letters of Credit are denominated (such
                  prepayment to be applied as set forth in clause (vi) below).

                           (ii) Asset Dispositions. Promptly following any Asset
                  Disposition in excess of $100,000,000 in any fiscal year, the
                  Borrower shall prepay the Loans in an aggregate amount equal
                  to 100% of the Net Cash Proceeds derived from all such Asset
                  Dispositions (such prepayment to be applied as set forth in
                  clause (vi) below); provided, however, that such Net Cash
                  Proceeds shall not be required to be so applied to the extent
                  (1) the Borrower delivers to the Administrative Agent a
                  certificate stating that it intends to use such Net Cash
                  Proceeds to acquire fixed or capital assets in replacement of
                  the disposed assets, (2) such acquisition is committed to
                  within 180 days of receipt of the Net Cash Proceeds and (3)
                  such acquisition is consummated within 270 days of receipt of
                  such Net Cash Proceeds, it being expressly agreed that any Net
                  Cash Proceeds not so reinvested shall be applied to repay the
                  Loans immediately thereafter.

                           (iii) [Reserved].



                                       52



                           (iv) Recovery Event. To the extent of cash proceeds
                  received in connection with a Recovery Event which are in
                  excess of $10,000,000 in the aggregate and which are not
                  applied to repair, replace or relocate damaged property or to
                  purchase or acquire fixed or capital assets in replacement of
                  the assets lost or destroyed within 270 days (or 360 days, in
                  the case of improvements to real property) of the receipt of
                  such cash proceeds, the Borrower shall prepay the Loans in an
                  aggregate amount equal to one hundred percent (100%) of such
                  cash proceeds (such prepayment to be applied as set forth in
                  clause (vi) below).

                           (v) [Reserved].

                           (vi) Application of Mandatory Prepayments. All
                  amounts required to be paid pursuant to this Section 2.8(b)
                  shall be applied as follows: (A) with respect to all amounts
                  prepaid pursuant to Section 2.8(b)(i)(A), to the Dollar
                  Revolving-1 Loans and then (after all Dollar Revolving-1 Loans
                  have been repaid) to a cash collateral account in respect of
                  Dollar LOC Obligations, (B) with respect to all amounts
                  prepaid pursuant to Section 2.8(b)(i)(B), to the
                  Multi-currency Revolving-1 Loans and then (after all
                  Multi-currency Revolving-1 Loans have been repaid) to a cash
                  collateral account in respect of Multi-currency LOC
                  Obligations, and (C) with respect to all amounts prepaid
                  pursuant to Sections 2.8(b)(ii) through (v), (1) first, pro
                  rata to the Tranche A-1 Term Loan and the Tranche B-1 Term
                  Loan (ratably to the remaining principal installments
                  thereof); provided, however, promptly upon notification
                  thereof, one or more holders of the Tranche B-1 Term Loan may
                  decline to accept a mandatory prepayment to the extent there
                  are sufficient amounts under the Tranche A-1 Term Loan
                  outstanding to be paid with such prepayment, in which case,
                  such declined payments shall be allocated pro rata among the
                  Tranche A-1 Term Loan and the Tranche B-1 Term Loan held by
                  Lenders accepting such prepayments, and (2) second, pro rata
                  to the Dollar Revolving-1 Loans and the Multi-currency
                  Revolving-1 Loans with corresponding permanent pro rata
                  reductions of the Dollar Revolving-1 Committed Amount and the
                  Multi-currency Revolving-1 Committed Amount and (after all
                  Revolving-1 Loans have been repaid) to a cash collateral
                  account in respect of Dollar LOC Obligations and
                  Multi-currency LOC Obligations, pro rata. Within the
                  parameters of the applications set forth above, prepayments
                  shall be applied first to Alternate Base Rate Loans and then
                  to LIBOR Rate Loans in direct order of Interest Period
                  maturities. All prepayments under this Section 2.8(b) shall be
                  subject to Section 2.18 and be accompanied by interest on the
                  principal amount prepaid through the date of prepayment. Any
                  prepayments of the Tranche B-1 Term Loan made during the
                  period commencing on the Fourth Amendment Effective Date and
                  ending on May 29, 2004 pursuant to Section 2.8(b)(ii) will
                  require payment of a premium of 0.50% of the principal amount
                  being prepaid on such date.

                  (c) Notwithstanding anything contained in this Agreement to
         the contrary, any prepayment of Alternative Currency Loans denominated
         in an Alternative Currency shall





                                       53


         be made in such Alternative Currency not later than 11:00 A.M. (the
         time of the Administrative Agent's Correspondent) on the date specified
         for payment under this Agreement to the Administrative Agent's account
         with the Administrative Agent's Correspondent for the account of the
         Lenders.

         SECTION 2.9 MINIMUM BORROWING AMOUNTS AND PRINCIPAL AMOUNTS OF
TRANCHES.

         (a) Each Alternate Base Rate Loan (other than Swingline Loans)
borrowing shall be in a minimum amount of $5,000,000 and whole multiples of
$1,000,000 in excess thereof.

         (b) Each LIBOR Rate Loan borrowing shall be in a minimum amount of
$10,000,000 and whole multiples of $1,000,000 in excess thereof.

         (c) All borrowings, payments and prepayments in respect of Revolving-1
Loans shall be in such amounts and be made pursuant to such elections so that
after giving effect thereto the aggregate principal amount of the Revolving-1
Loans comprising any Tranche shall either be zero or shall not be less than
$10,000,000 or a whole multiple of $1,000,000 in excess thereof.

         SECTION 2.10 INTEREST; INTEREST PAYMENT DATES.

         (a) Subject to the provisions of Section 2.10(b), all Loans (other than
Swingline Loans) shall bear interest as follows:

                  (i) Alternate Base Rate Loans. During such periods as Loans
         shall be comprised of Alternate Base Rate Loans, each such Alternate
         Base Rate Loan shall bear interest at a per annum rate equal to the sum
         of the Alternate Base Rate plus the Applicable Percentage; and

                  (ii) LIBOR Rate Loans. During such periods as Loans shall be
         comprised of LIBOR Rate Loans, each such LIBOR Rate Loan shall bear
         interest at a per annum rate equal to the sum of the applicable LIBOR
         Rate plus the Applicable Percentage.

         (b) Upon the occurrence, and during the continuance, of an Event of
Default, the principal of and, to the extent permitted by law, interest on the
Loans, and any other amounts owing hereunder or under the other Credit Documents
shall bear interest, payable on demand, at a per annum rate 2% greater than the
applicable rate (including the Applicable Percentage) then in effect or, if no
rate is then in effect, at a per annum rate 2% greater than the Alternate Base
Rate plus the Applicable Percentage and the Letter of Credit Fees shall be
increased by 2% per annum.

         (c) Interest on Loans shall be payable in arrears on each Interest
Payment Date, subject to Section 2.13; provided that (i) interest owing under
Section 2.10(b) shall be payable on demand, (ii) interest owing in connection
with any amounts repaid or prepaid shall be payable on the date of such
repayment or prepayment and (iii) interest owing on LIBOR Loans which are
converted pursuant to Section 2.11, shall be payable on the date of such
conversion.




                                       54


         SECTION 2.11 CONVERSION OPTIONS.

         (a) The Borrower may elect from time to time to convert Alternate Base
Rate Loans to LIBOR Rate Loans by giving irrevocable written notice (or
telephone notice promptly confirmed in writing which confirmation may be by fax)
to the Administrative Agent not later than 1:30 P.M. (Charlotte, North Carolina
time) on the third Business Day prior to the date of the requested conversion (a
"Notice of Conversion/Extension"). A form of Notice of Conversion/Extension is
attached as Schedule 2.11. If the date upon which an Alternate Base Rate Loan is
to be converted to a LIBOR Rate Loan is not a Business Day, then such conversion
shall be made on the next succeeding Business Day and during the period from
such last day of an Interest Period to such succeeding Business Day such Loan
shall bear interest as if it were an Alternate Base Rate Loan. All or any part
of outstanding Alternate Base Rate Loans may be converted as provided herein,
provided that (i) no Loan may be converted into a LIBOR Rate Loan when any
Default or Event of Default has occurred and is continuing and (ii) partial
conversions shall be in an aggregate principal amount of $5,000,000 or a whole
multiple of $1,000,000 in excess thereof.

         (b) Any LIBOR Rate Loans may be continued as such upon the expiration
of an Interest Period with respect thereto by compliance by the Borrower with
the notice provisions contained in Section 2.11(a); provided, that no LIBOR Rate
Loan may be continued as such when any Default or Event of Default has occurred
and is continuing, in which case such Loan shall be automatically converted to
an Alternate Base Rate Loan at the end of the applicable Interest Period with
respect thereto. If the Borrower shall fail to give timely notice of an election
to continue a LIBOR Rate Loan, or the continuation of LIBOR Rate Loans is not
permitted hereunder, such LIBOR Rate Loans shall be automatically converted to
Alternate Base Rate Loans at the end of the applicable Interest Period with
respect thereto.

         SECTION 2.12 COMPUTATION OF INTEREST AND FEES.

         (a) Interest payable hereunder with respect to Alternate Base Rate
Loans based on the Prime Rate shall be calculated on the basis of a year of 365
days (or 366 days, as applicable) for the actual days elapsed. All other fees,
interest and all other amounts payable hereunder shall be calculated on the
basis of a 360 day year for the actual days elapsed. The Administrative Agent
shall as soon as practicable notify the Borrower and the Lenders of each
determination of a LIBOR Rate on the Business Day of the determination thereof.
Any change in the interest rate on a Loan resulting from a change in the
Alternate Base Rate shall become effective as of the opening of business on the
day on which such change in the Alternate Base Rate shall become effective. The
Administrative Agent shall as soon as practicable notify the Borrower and the
Lenders of the effective date and the amount of each such change.

         (b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the computations used by the Administrative Agent
in determining any interest :rate.




                                       55


         (c) It is the intent of the Lenders and the Credit Parties to conform
to and contract in strict compliance with applicable usury law from time to time
in effect. All agreements between the Lenders and the Credit Parties are hereby
limited by the provisions of this paragraph which shall override and control all
such agreements, whether now existing or hereafter arising and whether written
or oral. In no way, nor in any event or contingency (including but not limited
to prepayment or acceleration of the maturity of any obligation), shall the
interest taken, reserved, contracted for, charged, or received under this Credit
Agreement, under the Notes or otherwise, exceed the maximum nonusurious amount
permissible under applicable law. If, from any possible construction of any of
the Credit Documents or any other document, interest would otherwise be payable
in excess of the maximum nonusurious amount, any such construction shall be
subject to the provisions of this paragraph and such interest shall be
automatically reduced to the maximum nonusurious amount permitted under
applicable law, without the necessity of execution of any amendment or new
document. If any Lender shall ever receive anything of value which is
characterized as interest on the Loans under applicable law and which would,
apart from this provision, be in excess of the maximum nonusurious amount, an
amount equal to the amount which would have been excessive interest shall,
without penalty, be applied to the reduction of the principal amount owing on
the Loans and not to the payment of interest, or refunded to the Borrower or the
other payor thereof if and to the extent such amount which would have been
excessive exceeds such unpaid principal amount of the Loans. The right to demand
payment of the Loans or any other Indebtedness evidenced by any of the Credit
Documents does not include the right to receive any interest which has not
otherwise accrued on the date of such demand, and the Lenders do not intend to
charge or receive any unearned interest in the event of such demand. All
interest paid or agreed to be paid to the Lenders with respect to the Loans
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the full stated term (including any renewal or
extension) of the Loans so that the amount of interest on account of such
indebtedness does not exceed the maximum nonusurious amount permitted by
applicable law.

         SECTION 2.13 PRO RATA TREATMENT AND PAYMENTS.

         (a) Each borrowing of Revolving-1 Loans and any reduction of the
Revolving-1 Commitments shall be made pro rata according to the respective
Commitment Percentages of the Lenders. Each payment under this Agreement or any
Note shall be applied, first, to any fees then due and owing by the Borrower
pursuant to Section 2.6, second, to interest then due and owing in respect of
the Notes of the Borrower and, third, to principal then due and owing hereunder
and under the Notes of the Borrower. Each payment on account of any fees
pursuant to Section 2.6 shall be made pro rata in accordance with the respective
amounts due and owing (except as to the portion of the Letter of Credit retained
by the Issuing Lender, the Issuing Lender Fees and fees payable to the Agents).
Each payment (other than prepayments) by the Borrower on account of principal of
and interest on the Revolving-1 Loans, the Tranche A-1 Term Loan and/or the
Tranche B-1 Term Loan shall be made pro rata according to the respective amounts
due and owing first to Alternate Base Rate Loans and then to LIBOR Rate Loans in
the direct order of Interest Period maturities. Each optional prepayment on
account of principal of the Loans shall be applied as set forth in Section
2.8(a); provided, that prepayments made pursuant to Section 2.16 shall be
applied in accordance with such section. Each mandatory prepayment on account of
principal of the Loans shall be applied in accordance with Section 2.8(b). All
payments





                                       56


(including prepayments) to be made by the Borrower on account of principal,
interest and fees shall be made without defense, set-off or counterclaim (except
as provided in Section 2.19(b)) and shall be made to the Administrative Agent
for the account of the Lenders at the Administrative Agent's office specified on
Schedule 9.2 in Dollars and in immediately available funds not later than 2:00
P.M. (Charlotte, North Carolina time) on the date when due. The Administrative
Agent shall distribute such payments to the Lenders entitled thereto promptly
upon receipt in like funds as received. If any payment hereunder (other than
payments on the LIBOR Rate Loans) becomes due and payable on a day other than a
Business Day, such payment shall be extended to the next succeeding Business
Day, and, with respect to payments of principal, interest thereon shall be
payable at the then applicable rate during such extension. If any payment on a
LIBOR Rate Loan becomes due and payable on a day other than a Business Day, the
maturity thereof shall be extended to the next succeeding Business Day unless
the result of such extension would be to extend such payment into another
calendar month, in which event such payment shall be made on the immediately
preceding Business Day.

         (b) Allocation of Payments After Event of Default. Notwithstanding any
other provisions of this Credit Agreement to the contrary, after the occurrence
and during the continuance of an Event of Default, all amounts collected or
received by the Administrative Agent or any Lender on account of the Credit
Party Obligations or any other amounts outstanding under any of the Credit
Documents 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 Administrative Agent in connection with enforcing the rights of
         the Lenders under the Credit Documents and any protective advances made
         by the Administrative Agent with respect to the Collateral under or
         pursuant to the terms of the Security Documents;

                  SECOND, to payment of any fees owed to the Administrative
         Agent;

                  THIRD, 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;

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

                  FIFTH, to the payment of the outstanding principal amount of
         the Credit Party Obligations (including the payment or cash
         collateralization of the outstanding LOC Obligations) and any Hedging
         Obligations (including any termination payments and any accrued and
         unpaid interest thereon) (pro rata in accordance with all such amounts
         due);

                  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




                                       57


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

         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 Administrative 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 2.13(b).

         SECTION 2.14 NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT.

         (a) Unless the Administrative Agent shall have been notified in writing
by a Lender prior to the date a Loan is to be made by such Lender (which notice
shall be effective upon receipt) that such Lender does not intend to make the
proceeds of such Loan available to the Administrative Agent, the Administrative
Agent may assume that such Lender has made such proceeds available to the
Administrative Agent on such date, and the Administrative Agent may in reliance
upon such assumption (but shall not be required to) make available to the
Borrower a corresponding amount. If such corresponding amount is not in fact
made available to the Administrative Agent, the Administrative Agent shall be
able to recover such corresponding amount from such Lender. If such Lender does
not pay such corresponding amount forthwith upon the Administrative Agent's
demand therefor, the Administrative Agent will promptly notify the Borrower and
the Borrower shall immediately pay such corresponding amount to the
Administrative Agent. The Administrative 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 Administrative Agent to the Borrower to the
date such corresponding amount is recovered by the Administrative 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 Effective Rate.

         (b) Unless the Administrative Agent shall have been notified in writing
by the Borrower, prior to the date on which any payment is due from it hereunder
(which notice shall be effective upon receipt) that the Borrower does not intend
to make such payment, the Administrative Agent may assume that the Borrower has
made such payment when due, and the Administrative Agent may in reliance upon
such assumption (but shall not be required to) make available to each Lender on
such payment date an amount equal to the portion of such assumed payment to
which such Lender is entitled hereunder, and if the Borrower has not in fact
made





                                       58


such payment to the Administrative Agent, such Lender shall, on demand, repay to
the Administrative Agent the amount made available to such Lender. If such
amount is repaid to the Administrative Agent on a date after the date such
amount was made available to such Lender, such Lender shall pay to the
Administrative Agent on demand interest on such amount in respect of each day
from the date such amount was made available by the Administrative Agent to such
Lender to the date such amount is recovered by the Administrative Agent at a per
annum rate equal to the Federal Funds Effective Rate.

         (c) A certificate of the Administrative Agent submitted to the Borrower
or any Lender with respect to any amount owing under this Section 2.14 shall be
conclusive in the absence of manifest error.

         SECTION 2.15 INABILITY TO DETERMINE INTEREST RATE.

Notwithstanding any other provision of this Agreement, if (i) the Administrative
Agent shall reasonably determine (which determination shall be conclusive and
binding absent manifest error) that, (A) by reason of circumstances affecting
the relevant market, reasonable and adequate means do not exist for ascertaining
LIBOR for an Interest Period or for an Alternative Currency, (B) a fundamental
change has occurred in the foreign exchange or interbank markets with respect to
any Alternative Currency (including, without limitation, changes in national or
international financial, political or economic conditions or currency exchange
rates or exchange controls) or (C) it has become otherwise materially
impractical for the Administrative Agent or the Lenders to make any Loan in an
Alternative Currency, or (ii) the Required Lenders shall reasonably determine
(which determination shall be conclusive and binding absent manifest error) that
the LIBOR Rate does not adequately and fairly reflect the cost to such Lenders
of funding LIBOR Rate Loans that the Borrower has requested be outstanding as a
LIBOR Tranche during an Interest Period, the Administrative Agent shall
forthwith give telephone notice of such determination, confirmed in writing, to
the Borrower and the Lenders. Unless the Borrower shall have notified the
Administrative Agent upon receipt of such telephone notice that it wishes to
rescind or modify its request regarding such LIBOR Rate Loans or Alternative
Currency Loans, as applicable, any Loans that were requested to be made as LIBOR
Rate Loans or Alternative Currency Loans, as applicable, shall be made as
Alternate Base Rate Loans in Dollars and any Loans that were requested to be
converted into or continued as LIBOR Rate Loans or Alternative Currency Loans,
as applicable, shall be converted into Alternate Base Rate Loans in Dollars.
Until any such notice has been withdrawn by the Administrative Agent, no further
Loans shall be made as, continued as, or converted into, LIBOR Rate Loans or
Alternative Currency Loans, as applicable, for the Interest Periods or
Alternative Currencies so affected.

         SECTION 2.16 ILLEGALITY.

Notwithstanding any other provision of this Agreement, if the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof
by the relevant Governmental Authority to any Lender shall make it unlawful for
such Lender or its LIBOR Lending Office to make or maintain LIBOR Rate Loans or
Alternative Currency Loans, as applicable, as contemplated by this Agreement or
to obtain in the interbank eurodollar market through its LIBOR Lending Office
the funds with which to make such Loans, (a) such Lender shall






                                       59


promptly notify the Administrative Agent and the Borrower thereof, (b) the
commitment of such Lender hereunder to make LIBOR Rate Loans or Alternative
Currency Loans, as applicable, or continue LIBOR Rate Loans or Alternative
Currency Loans, as applicable, as such shall forthwith be suspended until the
Administrative Agent shall give notice that the condition or situation which
gave rise to the suspension shall no longer exist, and (c) such Lender's Loans
then outstanding as LIBOR Rate Loans or Alternative Currency Loans, as
applicable, if any, shall be converted on the last day of the Interest Period
for such Loans or within such earlier period as required by law as Alternate
Base Rate Loans in Dollars. The Borrower hereby agrees promptly to pay any
Lender, upon its demand, any additional amounts necessary to compensate such
Lender for actual and direct costs (but not including anticipated profits)
reasonably incurred by such Lender in making any repayment in accordance with
this Section including, but not limited to, any currency exchange loss and any
interest or fees payable by such Lender to lenders of funds obtained by it in
order to make or maintain its LIBOR Rate Loans or Alternative Currency Loans, as
applicable, hereunder. A certificate as to any additional amounts payable
pursuant to this Section submitted by such Lender, through the Administrative
Agent, to the Borrower shall be conclusive in the absence of manifest error.
Each Lender agrees to use reasonable efforts (including reasonable efforts to
change its LIBOR Lending Office) to avoid or to minimize any amounts which may
otherwise be payable pursuant to this Section; provided, however, that such
efforts shall not cause the imposition on such Lender of any additional costs or
legal or regulatory burdens deemed by such Lender in its sole discretion to be
material.

         SECTION 2.17 REQUIREMENTS OF LAW.

                  (a) If the adoption of or any change in any Requirement of Law
         or in the interpretation or application thereof or compliance by any
         Lender with any request or directive (whether or not having the force
         of law) from any central bank or other Governmental Authority made
         subsequent to the date hereof:

                           (i) shall subject such Lender to any tax of any kind
         whatsoever with respect to any Letter of Credit or any application
         relating thereto, any LIBOR Rate Loan made by it, any Alternative
         Currency Loan made by it, or change the basis of taxation of payments
         to such Lender in respect thereof (except for changes in the rate of
         tax on the overall net income of such Lender);

                           (ii) shall impose, modify or hold applicable any
         reserve, special deposit, compulsory loan or similar requirement
         against assets held by, deposits or other liabilities in or for the
         account of, advances, loans or other extensions of credit by, or any
         other acquisition of funds by, any office of such Lender which is not
         otherwise included in the determination of the LIBOR Rate hereunder; or

                           (iii) shall impose on such Lender any other
         condition;

         and the result of any of the foregoing is to increase the cost to such
         Lender of making or maintaining LIBOR Rate Loans, Alternative Currency
         Loans, or the Letters of Credit or to reduce any amount receivable
         hereunder or under any Note and such Lender's costs have increased with
         respect to other customers under similar circumstances, then, in any
         such case, the Borrower shall promptly pay






                                       60


         such Lender, upon its demand, any additional amounts necessary to
         compensate such Lender for such additional cost or reduced amount
         receivable which such Lender reasonably deems to be material as
         determined by such Lender with respect to its LIBOR Rate Loans,
         Alternative Currency Loans, or Letters of Credit. A certificate as to
         any additional amounts payable pursuant to this Section submitted by
         such Lender, through the Administrative Agent, to the Borrower shall be
         conclusive in the absence of manifest error. Each Lender agrees to use
         reasonable efforts (including reasonable efforts to change its Domestic
         Lending Office or LIBOR Lending Office, as the case may be) to avoid or
         to minimize any amounts which might otherwise be payable pursuant to
         this paragraph of this Section; provided, however, that such efforts
         shall riot cause the imposition on such Lender of any additional costs
         or legal or regulatory burdens deemed by such Lender to be material.

         (b) If any Lender shall have reasonably determined that the adoption of
or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any central bank
or Governmental Authority made subsequent to the date hereof does or shall have
the effect of reducing the rate of return on such Lender's or such corporation's
capital as a consequence of its obligations hereunder to a level below that
which such Lender or such corporation could have achieved but for such adoption,
change or compliance (taking into consideration such Lender's or such
corporation's policies with respect to capital adequacy) by an amount reasonably
deemed by such Lender to be material, and such Lender has experienced such
effect with respect to other customers under similar circumstances, then from
time to time, within fifteen (15) days after demand by such Lender, the Borrower
shall pay to such Lender such additional amount as shall be certified by such
Lender as being required to compensate it for such reduction. Such a certificate
as to any additional amounts payable under this Section submitted by a Lender
(which certificate shall include a description of the basis for the
computation), through the Administrative Agent, to the Borrower shall be
conclusive absent manifest error.

         (c) The agreements in this Section 2.17 shall survive the termination
of this Agreement and payment of the Notes and all other amounts payable
hereunder.

         SECTION 2.18 INDEMNITY.

         The Borrower hereby agrees to indemnify each Lender and to hold such
Lender harmless from any funding loss or expense which such Lender may sustain
or incur as a consequence of (a) default by the Borrower in payment of the
principal amount of or interest on any Loan by such Lender in accordance with
the terms hereof, (b) default by the Borrower in accepting a borrowing after the
Borrower has given a notice in accordance with the terms hereof, (c) default by
the Borrower in making any prepayment after the Borrower has given a notice in
accordance with the terms hereof, and/or (d) the making by the Borrower of a
prepayment of a Loan, or the conversion thereof, on a day which is not the last
day of the Interest Period with respect thereto, or in a currency other than as
required hereunder, in each case including, but not limited to, any foreign
exchange cost and any such loss or expense arising from interest or fees payable
by such





                                       61


Lender to lenders of funds obtained by it in order to maintain its Loans
hereunder. A certificate as to any additional amounts payable pursuant to this
Section submitted by any Lender, through the Administrative Agent, to the
Borrower (which certificate must be delivered to the Administrative Agent within
thirty days following such default, prepayment or conversion) shall be
conclusive in the absence of manifest error. The agreements in this Section
shall survive termination of this Agreement and payment of the Notes and all
other amounts payable hereunder.

         SECTION 2.19 TAXES.

                  (a) All payments made by the Borrower hereunder or under any
         Note will be, except as provided in Section 2.19(b), made free and
         clear of, and without: deduction or withholding for, any present or
         future taxes, levies, imposts, duties, fees, assessments or other
         charges of whatever nature now or hereafter imposed by any Governmental
         Authority or by any political subdivision or taxing authority thereof
         or therein with respect to such payments (but excluding any tax imposed
         on or measured by the net income or profits of a Lender) and all
         interest, penalties or similar liabilities with respect thereto (all
         such non-excluded taxes, levies, imposts, duties, fees, assessments or
         other charges being referred to collectively as "Taxes"). If any Taxes
         are so levied or imposed, the Borrower agrees to pay the full amount of
         such Taxes, and such additional amounts as may be necessary so that
         every payment of all amounts due under this Agreement or under any
         Note, after withholding or deduction for or on account of any Taxes,
         will not be less than the amount provided for herein or in such Note.
         The Borrower will furnish to the Administrative Agent as soon as
         practicable after the date the payment of any Taxes is due pursuant to
         applicable law certified copies (to the extent reasonably available and
         required by law) of tax receipts evidencing such payment by the
         Borrower. The Borrower agrees to indemnify and hold harmless each
         Lender, and reimburse such Lender upon its written request, for the
         amount of any Taxes so levied or imposed and paid by such Lender but
         excluding any interest or penalties caused by such Lender's failure to
         pay any such taxes when due.

                  (b) Each Lender that is not a United States person (as such
         term is defined in Section 7701(a)(30) of the Code) agrees to deliver
         to the Borrower and the Administrative Agent on or prior to the Closing
         Date, or in the case of a Lender that is an assignee or transferee of
         an interest under this Agreement pursuant to Section 9.6(d) (unless the
         respective Lender was already a Lender hereunder immediately prior to
         such assignment or transfer), on the date of such assignment or
         transfer to such Lender, (i) if the Lender is a "bank" within the
         meaning of Section 881(c)(3)(A) of the Code, two accurate and complete
         original signed copies of Internal Revenue Service Form W-8BEN or
         W-8ECI (or successor forms) certifying such Lender's entitlement to a
         complete exemption from United States withholding tax with respect to
         payments to be made under this Agreement and under any Note, or (ii) if
         the Lender is not a "bank" within the meaning of Section 881(c)(3)(A)
         of the Code, either Internal Revenue Service Form W8BEN or W-8ECI as
         set forth in clause (i) above, or (x) a certificate substantially in
         the form of Schedule 2.19 (any such certificate, a "2.19 Certificate")
         and (y) two accurate and complete original signed copies of Internal
         Revenue Service Form W-8 (or successor





                                       62


         form) certifying such Lender's entitlement to an exemption from United
         States withholding tax with respect to payments of interest to be made
         under this Agreement and under any Note. In addition, each Lender
         agrees that it will deliver upon the Borrower's request updated
         versions of the foregoing, as applicable, whenever the previous
         certification has become obsolete or inaccurate in any material
         respect, together with such other forms as may be required in order to
         confirm or establish the entitlement of such Lender to a continued
         exemption from or reduction in United States withholding tax with
         respect to payments under this Agreement and any Note. Notwithstanding
         anything to the contrary contained in Section 2.19(a), but subject to
         the immediately succeeding sentence, (x) each Borrower shall be
         entitled, to the extent it is required to do so by law, to deduct or
         withhold Taxes imposed by the United States (or any political
         subdivision or taxing authority thereof or therein) from interest, fees
         or other amounts payable hereunder for the account of any Lender which
         is not a United States person (as such term is defined in Section
         7701(a)(30) of the Code) for U.S. Federal income tax purposes to the
         extent that such Lender has not provided to the Borrower U.S. Internal
         Revenue Service Forms that establish a complete exemption from such
         deduction or withholding and (y) the Borrower shall not be obligated
         pursuant to Section 2.19(a) hereof to gross-up payments to be made to a
         Lender in respect of Taxes imposed by the United States if (I) such
         Lender has not provided to the Borrower the Internal Revenue Service
         Forms required to be provided to the Borrower pursuant to this Section
         2.19(b) or (II) in the case of a payment, other than interest, to a
         Lender described in clause (ii) above, to the extent that such Forms do
         not establish a complete exemption from withholding of such Taxes.
         Notwithstanding anything to the contrary contained in the preceding
         sentence or elsewhere in this Section 2.19, the Borrower agrees to pay
         additional amounts and to indemnify each Lender in the manner set forth
         in Section 2.19(a) (without regard to the identity of the jurisdiction
         requiring the deduction or withholding) in respect of any amounts
         deducted or withheld by it as described in the immediately preceding
         sentence as a result of any changes after the Closing Date in any
         applicable law, treaty, governmental rule, regulation, guideline or
         order, or in the interpretation thereof, relating to the deducting or
         withholding of Taxes.

                  (c) Each Lender agrees to use reasonable efforts (including
         reasonable efforts to change its Domestic Lending Office or LIBOR
         Lending Office, as the case may be) to avoid or to minimize any amounts
         which might otherwise be payable pursuant to this Section; provided,
         however, that such efforts shall not cause the imposition on such
         Lender of any additional costs or legal or regulatory burdens deemed by
         such Lender in its sole discretion to be material.

                  (d) If the Borrower pays any additional amount pursuant to
         this Section 2.19 with respect to a Lender, such Lender shall use
         reasonable efforts to obtain a refund of tax or credit against its tax
         liabilities on account of such payment; provided that such Lender shall
         have no obligation to use such reasonable efforts if either (i) it is
         in an excess foreign tax credit position or (ii) it believes in good
         faith, in its sole discretion, that claiming a refund or credit would
         cause adverse tax consequences to it. In the event that such Lender
         receives such a refund or credit, such Lender shall pay to the Borrower
         an amount that such Lender reasonably determines is equal to the net
         tax benefit obtained by





                                       63


         such Lender as a result of such payment by the Borrower. In the event
         that no refund or credit is obtained with respect to the Borrower's
         payments to such Lender pursuant to this Section 2.19(d), then such
         Lender shall upon request provide a certification that such Lender has
         not received a refund or credit for such payments. Nothing contained in
         this Section 2.19(d) shall require a Lender to disclose or detail the
         basis of its calculation of the amount of any tax benefit or any other
         amount or the basis of its determination referred to in the proviso to
         the first sentence of this Section 2.19(d) to the Borrower or any other
         party.

                  (e) The agreements in this Section 2.19 shall survive the
         termination of this Agreement and the payment of the Notes and all
         other amounts payable hereunder.

         SECTION 2.20 INDEMNIFICATION; NATURE OF ISSUING LENDER'S DUTIES.

                  (a) In addition to its other obligations under Section 2.3,
         the Borrower hereby agrees to protect, indemnify, pay and save the
         Issuing Lender harmless from and against any and all claims, demands,
         liabilities, damages, losses, costs, charges and expenses (including
         reasonable attorneys' fees) that the Issuing Lender may incur or be
         subject to as a consequence, direct or indirect, of (i) the issuance of
         any Letter of Credit or (ii) the failure of the Issuing 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").

                  (b) As between the Borrower and the Issuing Lender, the
         Borrower shall assume all risks of the acts, omissions or misuse of any
         Letter of Credit by the beneficiary thereof. The Issuing Lender shall
         not be responsible: (i) 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; (ii) 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; (iii) for failure of
         the beneficiary of a Letter of Credit to comply fully with conditions
         required in order to draw upon a Letter of Credit; (iv) 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; (v) for errors in interpretation of technical terms;
         (vi) 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 (vii) for any consequences arising from
         causes beyond the control of the Issuing 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.

                  (c) In furtherance and extension and not in limitation of the
         specific provisions hereinabove set forth, any action taken or omitted
         by the Issuing Lender,





                                       64


         under or in connection with any Letter of Credit or the related
         certificates, if taken or omitted in good faith, shall not put such
         Issuing Lender under any resulting liability to the Borrower. It is the
         intention of the parties that this Agreement shall be construed and
         applied to protect and indemnify 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, including, without
         limitation, any and all risks of the acts or omissions, whether
         rightful or wrongful, of any Governmental Authority. The Issuing Lender
         shall not, in any way, be liable for any failure by the Issuing 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
         the Issuing Lender.

                  (d) Nothing in this Section 2.20 is intended to limit the
         reimbursement obligation of the Borrower contained in Section 2.3(d)
         hereof. The obligations of the Borrower under this Section 2.20 shall
         survive the termination of this Agreement. No act or omissions of any
         current or prior beneficiary of a Letter of Credit shall in any way
         affect or impair the rights of the Issuing Lender to enforce any right,
         power or benefit under this Agreement.

                  (e) Notwithstanding anything to the contrary contained in this
         Section 2.20, the Borrower shall have no obligation to indemnify any
         Issuing Lender in respect of any liability incurred by such Issuing
         Lender arising out of the gross negligence or willful misconduct of the
         Issuing Lender (including action not taken by an Issuing Lender), as
         determined by a court of competent jurisdiction.

         SECTION 2.21 DEFAULTING LENDERS; LIMITATION ON CLAIMS.

                  (a) Generally. In addition to the rights and remedies that may
         be available to the Administrative Agent or the Borrower under this
         Agreement or applicable law, if at any time a Lender is a Defaulting
         Lender such Defaulting Lender's right to participate in the
         administration of the Loans, this Agreement and the other Credit
         Documents (excluding for purposes hereof, those matters requiring the
         unanimous consent or approval of the Lenders, or requiring the approval
         of each Lender directly affected thereby, pursuant to Section 9.1(i)
         through 9.1(vii) hereof or Section 9.6(a)), including without
         limitation, any right to vote in respect of, to consent to or to direct
         any action or inaction of the Administrative Agent or to be taken into
         account in the calculation of the Required Lenders, shall be suspended
         during the pendency of such failure or refusal. If a Lender is a
         Defaulting Lender because it has failed to make timely payment to the
         Administrative Agent of any amount required to be paid to the
         Administrative Agent hereunder (without giving effect to any notice or
         cure periods), in addition to other rights and remedies which the
         Administrative Agent or the Borrower may have under the immediately
         preceding provisions or otherwise, the Administrative Agent shall be
         entitled (i) to collect interest from such Defaulting Lender on such
         delinquent payment for the period from the date on which the payment
         was due until the date on which the payment is made at the Federal
         Funds Effective Rate, (ii) to withhold or setoff and to apply in
         satisfaction of the defaulted payment and any related interest, any
         amounts otherwise payable to such Defaulting Lender under this
         Agreement or any other Credit





                                       65


         Document until such defaulted payment and related interest has been
         paid in full and such default no longer exists and (iii) to bring an
         action or suit against such Defaulting Lender in a court of competent
         jurisdiction to recover the defaulted amount and any related interest.
         Any amounts received by the Administrative Agent in respect of a
         Defaulting Lender's Loans shall not be paid to such Defaulting Lender
         and shall be held uninvested by the Administrative Agent and either
         applied against the purchase price of such Loans under the following
         subsection (b) or paid to such Defaulting Lender upon the default of
         such Defaulting Lender being cured.

                  (b) Purchase of Defaulting Lender's Commitment. Any Lender who
         is not a Defaulting Lender shall have the right, but not the
         obligation, in its sole discretion, to acquire all of a Defaulting
         Lender's Commitment. If more than one Lender exercises such right, each
         such Lender shall have the right to acquire such proportion of such
         Defaulting Lender's Commitment on a pro rata basis. Upon any such
         purchase, the Defaulting Lender's interest in the Loans and its rights
         hereunder (but not its liability in respect thereof or under the Credit
         Documents or this Agreement to the extent the same relate to the period
         prior to the effective date of the purchase) shall terminate on the
         date of purchase, and the Defaulting Lender shall promptly execute all
         documents reasonably requested to surrender and transfer such interest
         to the purchaser thereof subject to and in accordance with the
         requirements set forth in Section 9.6, including an appropriate
         Commitment Transfer Supplement. The purchase price for the Commitment
         of a Defaulting Lender shall be equal to the sum of the amount of the
         principal balance of the Loans outstanding and owed by the Borrower to
         the Defaulting Lender, plus any accrued interest with respect thereto,
         plus any fees or other amounts owed by the Borrower to the Defaulting
         Lender. Prior to payment of such purchase price to a Defaulting Lender,
         the Administrative Agent shall apply against such purchase price any
         amounts retained by the Administrative Agent pursuant to the last
         sentence of the immediately preceding subsection (a). The Defaulting
         Lender shall be entitled to receive amounts owed to it by the Borrower
         on account of principal of and interest on the Loans and the Notes, and
         fees and other amounts due under the Credit Documents which accrued
         prior to the date of the default by the Defaulting Lender, to the
         extent the same are received by the Administrative Agent from or on
         behalf of the Borrower. There shall be no recourse against any Lender
         or the Administrative Agent for the payment of such sums by the
         Borrower except to the extent of the receipt of payments from any other
         party or in respect of the Loans.

         SECTION 2.22 REPLACEMENT OF LENDERS.

         If any Lender shall become affected by any of the changes or events
described in Sections 2.15, 2.16, 2.17 or 2.19 (any such Lender being
hereinafter referred to as a "Replaced Lender") and shall petition the Borrower
for any increased cost or amounts thereunder, then in such case, the Borrower
may, upon at least five (5) Business Days' notice to the Administrative Agent
and such Replaced Lender, designate a replacement lender (a "Replacement
Lender") acceptable to the Administrative Agent in its reasonable discretion, to
which such Replaced Lender shall, subject to its receipt (unless a later date
for the remittance thereof shall be agreed upon by the Borrower and the Replaced
Lender) of all amounts owed to such Replaced Lender





                                       66


under Sections 2.15, 2.16, 2.17 or 2.19 assign all (but not less than all) of
its rights, obligations, Loans and Commitments hereunder; provided, that all
amounts owed to such Replaced Lender by the Borrower (except liabilities which
by the terms hereof survive the payment in full of the Loans and termination of
this Agreement) shall be paid in full as of the date of such assignment. Upon
any assignment by any Lender pursuant to this Section 2.22 becoming effective,
the Replacement Lender shall thereupon be deemed to be a "Lender" for all
purposes of this Agreement and such Replaced Lender shall thereupon cease to be
a "Lender" for all purposes of this Agreement and shall have no further rights
or obligations hereunder (other than pursuant to Sections 2.15, 2.16, 2.17 or
2.19 and 9.5 while such Replaced Lender was a Lender;).

         Notwithstanding any Replaced Lender's failure or refusal to assign its
rights, obligations, Loans and Commitments under this Section 2.22, the Replaced
Lender shall cease to be a "Lender" for all purposes of this Agreement and the
Replacement Lender substituted therefor upon payment to the Replaced Lender by
the Replacement Lender of all amounts set forth in this Section 2.22 without any
further action of the Replaced Lender.

         SECTION 2.23 ALTERNATIVE CURRENCY MATTERS.

                  (a) Effectiveness of euro Provisions. With respect to any
         state (or the currency of such state) that is not a Participating
         Member State on the date of this Agreement, the provisions of this
         Section 2.23 shall become effective in relation to such state (and the
         currency of such state) at and from the date on which such state
         becomes a Participating Member State.

                  (b) Basis of Accrual. Subject to clause (a) above, with
         respect to the currency of any state that becomes a Participating
         Member State, the accrual of interest or fees expressed in this
         Agreement with respect to such currency shall be based upon the
         applicable convention or practice in the London Interbank Market for
         the basis of accrual of interest or fees in respect of the euro, which
         such convention or practice shall replace such expressed basis
         effective as of and from the date on which such state becomes a
         Participating Member State; provided that if any Loan in the currency
         of such state is outstanding immediately prior to such date, such
         replacement shall take effect, with respect to such Loan, at the end of
         the then current Interest Period.

                  (c) Redenomination of Alternative Currency Loans.

                           (i) Conversion to the Alternate Base Rate. If any
                  Alternative Currency Loan is required to bear interest based
                  on the Alternate Base Rate rather than the LIBOR Rate pursuant
                  to Section 2.15, Section 2.16 or any other applicable
                  provision hereof, such Loan shall be funded in Dollars in an
                  amount equal to the Dollar Amount of such Loan, all subject to
                  the provisions of Section 2.8(b). The Borrower shall reimburse
                  the Lenders upon any such conversion for any amounts required
                  to be paid under Section 2.18.




                                       67


                           (ii) Redenomination of Loans. Subject to clause (a)
                  above, any Loan to be denominated in the currency of the
                  applicable Participating Member State shall be made in the
                  euro.

                           (iii) Redenomination of Obligations. Subject to
                  clause (a) above hereof, any obligation of any party under
                  this Agreement or any other Credit Document which has been
                  denominated in the currency of a Participating Member State
                  shall be redenominated into the euro.

                           (iv) Further Assurances. The terms and provisions of
                  this Agreement will be subject to such reasonable changes of
                  construction as determined by the Administrative Agent to
                  reflect the implementation of the EMU in any Participating
                  Member State or any market conventions relating to the fixing
                  and/or calculation of interest being changed or replaced and
                  to reflect market practice at that time, and subject thereto,
                  to put the Administrative Agent, the Lenders and the Borrower
                  in the same position, so far as possible, that they would have
                  been if such implementation had not occurred. In connection
                  therewith, the Borrower agrees, at the request of the
                  Administrative Agent, at the time of or at any time following
                  the implementation of the EMU in any Participating Member
                  State or any market conventions relating to the fixing and/or
                  calculation of interest being changed or replaced, to enter
                  into an agreement amending this Agreement in such manner as
                  the Administrative Agent shall reasonably request.

                  (d) Regulatory Limitation. In the event, as a result of
         increases in the value of Alternative Currencies against the Dollar or
         for any other reason, the obligation of any of the Lenders to make
         Multi-currency Revolving-1 Loans (taking into account the Dollar Amount
         of the Credit Party Obligations and all other indebtedness required to
         be aggregated under 12 U.S.C.A. Section 84, as amended, the regulations
         promulgated thereunder and any other Requirement of Law) is determined
         by such Lender to exceed its then applicable legal lending limit under
         12 U.S.C.A. Section 84, as amended, and the regulations promulgated
         thereunder, or any other Requirement of Law, the amount of additional
         Multi-currency Revolving-1 Loans such Lender shall be obligated to make
         or issue or participate in hereunder shall immediately be reduced to
         the maximum amount which such Lender may legally advance (as determined
         by such Lender), the obligation of each of the remaining Lenders
         hereunder shall be proportionately reduced, based on their applicable
         Multi-currency Revolving-1 Commitment Percentages and, to the extent
         necessary under such laws and regulations (as determined by each of the
         Lenders, with respect to the applicability of such laws and regulations
         to itself), and the Borrower shall reduce, or cause to be reduced,
         complying to the extent practicable with the remaining provisions
         hereof, the Multi-currency Revolving-1 Loans outstanding hereunder by
         an amount sufficient to comply with such maximum amounts.

                  (e) Exchange Indemnification and Increased Costs. The Borrower
         shall, upon demand from the Administrative Agent, pay to the
         Administrative Agent, any Issuing






                                       68


         Lender or any applicable Lender, the amount of (i) any loss or cost or
         increased cost incurred by the Administrative Agent, any Issuing Lender
         or any applicable Lender, (ii) any reduction in any amount payable to
         or in the effective return on the capital to the Administrative Agent,
         any Issuing Lender or any applicable Lender, (iii) any interest or any
         other return, including principal, foregone by the Administrative Agent
         or any applicable Lender as a result of the introduction of, change
         over to or operation of the euro, or (iv) any currency exchange loss,
         that Administrative Agent, any Issuing Lender or any Lender sustains as
         a result of any payment being made by the Borrower in a currency other
         than that originally extended to the Borrower or as a result of any
         other currency exchange loss incurred by the Administrative Agent or
         any applicable Lender under this Agreement. A certificate of the
         Administrative Agent, such Issuing Lender or such Lender setting forth
         the basis for determining such additional amount or amounts necessary
         to compensate the Administrative Agent, such Issuing Lender or the
         applicable Lender shall be conclusively presumed to be correct save for
         manifest error.

                  (f) Exchange Rates. For purposes of determining the Borrower's
         compliance with Section 2.8(b)(i)(B) or the borrowing limits set forth
         in Section 2.1(a)(ii), Section 2.3(a)(i), Section 2.3(a)(iii) and
         Section 4.3(c), the Dollar Amount of any Multi-currency Revolving-1
         Loan or Multi-currency LOC Obligation with respect to a Multi-currency
         Letter of Credit to be made, continued, converted or issued in an
         Alternative Currency shall be determined in accordance with the terms
         of this Agreement by the Administrative Agent (in respect of the most
         recent Revaluation Date). Such Dollar Amount shall become effective as
         of such Revaluation Date for such Multi-currency Revolving-1 Loan or
         Multi-currency Letter of Credit and shall be the Dollar Amount employed
         in converting any amounts between the applicable currencies until the
         next Revaluation Date to occur for such Multi-currency Revolving-1 Loan
         or Multi-currency Letter of Credit.

                  (g) Rounding and Other Consequential Changes. Subject to
         clause (a) above, without prejudice and in addition to any method of
         conversion or rounding prescribed by any EMU Legislation and without
         prejudice to the respective obligations of the Borrower to the
         Administrative Agent and the Lenders and the Administrative Agent and
         the Lenders to the Borrower under or pursuant to this Agreement, except
         as expressly provided in this Agreement, each provision of this
         Agreement, including, without limitation, the right to combine
         currencies to effect a set-off, shall be subject to such reasonable
         changes of interpretation as the Administrative Agent may from time to
         time specify to be necessary or appropriate to reflect the introduction
         of or change over to the euro in Participating Member States.

                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

         To induce the Lenders to enter into this Agreement and to make the
Extensions of Credit herein provided for, the Credit Parties hereby represent
and warrant to the Administrative Agent and to each Lender that as of the
Funding Date and thereafter for so long as this Agreement is in






                                       69


effect and until the Commitments have terminated, no Note remains outstanding
and unpaid and the Credit Party Obligations, together with interest, Commitment
Fees and all other amounts owing to the Administrative Agent or any Lender
hereunder are paid in full:

         SECTION 3.1 FINANCIAL CONDITION.

         The consolidated balance sheets and the related statements of income,
retained earnings and cash flows of the Borrower and its Subsidiaries (excluding
the Acquired Company and its Subsidiaries) for the fiscal year ending December
31, 2000 and for the most recently ended fiscal quarter ending more than sixty
(60) days prior to the Funding Date, and for the Acquired Company and its
Subsidiaries for the fiscal year ending May 25, 2001 and for the most recently
ended fiscal quarter ending more than sixty (60) days prior to the Funding Date,
are complete and correct and present fairly, in all material respects, the
financial condition of, and the results of operations for, such Persons as of
such dates. All such financial statements, including the related schedules and
notes thereto, have been prepared in accordance with GAAP applied consistently
throughout the periods involved (except as disclosed therein). The Borrower and
its Restricted Subsidiaries, taken as a whole, have on the date hereof no
material contingent liabilities, liabilities for taxes, unusual forward or
long-term commitments or unrealized or anticipated losses from any unfavorable
commitments, except as referred to or reflected or provided for in the annual
financial information provided as of the immediately preceding fiscal year end
referred to above and as set forth on Schedule 3.1 or as set forth on Schedule
6.1(b).

         SECTION 3.2 NO CHANGE.

         Since December 31, 2000 (and after delivery of annual audited financial
statements in accordance with Section 5.1(a), from the date of the most recently
delivered annual audited financial statements) there has been no development or
event which has had or could reasonably be expected to have a Material Adverse
Effect.

         SECTION 3.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW.

         Each of the Borrower and its Subsidiaries (a) is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, (b) has the requisite power and authority and the legal right to
own and operate all its material property, to lease the material property it
operates as lessee and to conduct the business in which it is currently engaged,
(c) is duly qualified to conduct business 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 except to the extent that
the failure to so qualify or be in good standing could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect and except for those
Subsidiaries required to be so qualified and in good standing pursuant to the
terms of Section 5.15 following their reorganization or restructure on or about
the Funding Date and (d) is in compliance with all Requirements of Law except to
the extent that the failure to comply therewith could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.




                                       70


         SECTION 3.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.

         Each of the Borrower and the other Credit Parties has full power and
authority and the legal right to make, deliver and perform the Credit Documents
to which it is party and has taken all necessary limited liability company or
corporate action to authorize the execution, delivery and performance by it of
the Credit Documents to which it is party. No consent or authorization of,
filing with, notice to or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with the borrowings
hereunder or with the execution, delivery or performance of any Credit Document
by the Borrower and the other Credit Parties (other than those which have been
obtained) or with the validity or enforceability of any Credit Document against
the Borrower and the other Credit Parties (except such filings as are necessary
in connection with the perfection of the Liens created by such Credit
Documents). Each Credit Document to which it is a party has been duly executed
and delivered on behalf' of each of the Borrower and the other Credit Parties,
as the case may be. Each Credit Document to which it is a party constitutes a
legal, valid and binding obligation of each of the Borrower and the other Credit
Parties, as the case may be, enforceable against each of the Borrower and Credit
Parties, as the case may be, in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, 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).

         SECTION 3.5 NO LEGAL BAR; NO DEFAULT.

         The execution, delivery and performance of the Credit Documents, the
borrowings thereunder and the use of the proceeds of the Loans will not violate
any Requirement of Law or any Contractual Obligation of the Borrower or its
Subsidiaries (except those as to which waivers or consents have been obtained),
and will not result in, or require, the creation or imposition of any Lien on
any of its or their respective properties or revenues pursuant to any
Requirement of Law or Contractual Obligation other than the Liens arising under
or contemplated in connection with the Credit Documents. Neither the Borrower
nor any of its Subsidiaries is in default under or with respect to any of its
Contractual Obligations in any respect which could reasonably be expected to
have a Material Adverse Effect. No Default or Event of Default has occurred and
is continuing.

         SECTION 3.6 NO MATERIAL LITIGATION.

         Except as set forth in Schedule 3.6, no litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the best knowledge of the Borrower, threatened by or against the Borrower or
any of its Subsidiaries or against any of its or their respective properties or
revenues (a) with respect to the Credit Documents or any Loan or any of the
transactions contemplated hereby, or (b) which, if adversely determined, could
reasonably be expected to have a Material Adverse Effect.

         SECTION 3.7 GOVERNMENT ACTS.

         (a) Neither the Borrower nor any Credit Party is an "investment
company", or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.




                                       71


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

         SECTION 3.8 MARGIN REGULATIONS.

         No part of the proceeds of any Loan hereunder will be used directly or
indirectly for any purpose which violates, or which would be inconsistent with,
the provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System as now and from time to time hereafter in effect. The aggregate
value of all "margin stock" owned by the Borrower and its Subsidiaries taken as
a group does not exceed 25% of the value of their assets.

         SECTION 3.9 ERISA.

         Except as could not reasonably be expected to have a Material Adverse
Effect,

         (a) neither a Reportable Event nor an "accumulated funding deficiency"
(within the meaning of Section 412 of the Code or Section 302 of ERISA) has
occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code;

         (b) no termination of a Single Employer Plan has occurred resulting in
any liability that has remained underfunded, and no Lien in favor of the PBGC or
a Plan has arisen, during such five-year period;

         (c) the present value of all accrued benefits under each Single
Employer Plan (based on those assumptions used to fund such Plans) did not, as
of the last annual valuation date prior to the date on which this representation
is made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits; and

         (d) neither the Borrower, nor any of its Subsidiaries, nor any Commonly
Controlled Entity is currently subject to any liability for a complete or
partial withdrawal from a Multiemployer Plan.

         SECTION 3.10 ENVIRONMENTAL MATTERS.

         Except as to matters with respect to which the Borrower and its
Subsidiaries could not reasonably be expected to incur liabilities in excess of
$50,000,000 in the aggregate:

                  (a) the facilities and properties owned, leased or operated by
         the Borrower or any of its Subsidiaries (the "Real Properties") do not
         contain any Hazardous Materials in amounts or concentrations which (i)
         constitute a violation of, or (ii) could give rise to liability under,
         any Environmental Law;




                                       72


                  (b) the Real Properties and all operations of the Borrower
         and/or its Subsidiaries at the Real Properties are in compliance, and
         have in the last five years been in compliance, in all material
         respects with all applicable Environmental Laws, and there is no
         contamination at, under or about the Real Properties or violation of
         any Environmental Law with respect to the Real Properties or the
         business operated by the Borrower or any of its Subsidiaries (the
         "Business");

                  (c) neither the Borrower nor any of its Subsidiaries has
         received any written or actual notice of 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 Business, nor does the Borrower or
         any of its Subsidiaries have knowledge or reason to believe that any
         such notice will be received or is being threatened;

                  (d) Hazardous Materials have not been transported or disposed
         of from the Real Properties in violation of, or in a manner or to a
         location which could give rise to liability under any Environmental
         Law, nor have any Hazardous Materials been generated, treated, stored
         or disposed of at, on or under any of the Real Properties 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 knowledge of the Borrower, threatened,
         under any Environmental Law to which the Borrower or any Subsidiary is
         or will be named as a party with respect to the Real Properties or the
         Business, 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 Real Properties or the Business; and

                  (f) there has been no release or threat of release of
         Hazardous Materials at or from the Real Properties, or arising from or
         related to the operations of the Borrower or any Subsidiary in
         connection with the Real Properties or otherwise in connection with the
         Business, in violation of or in amounts or in a manner that could give
         rise to liability under Environmental Laws.

         SECTION 3.11 PURPOSE OF LOANS.

         The proceeds of the Loans hereunder shall be used solely by the
Borrower to (i) consummate the Acquisition and to pay fees and expenses related
thereto, and to pay accrued quarterly dividends to shareholders of the Acquired
Company, (ii) acquire all partnership and other ownership interests currently
held by Dairy Farmers of America, Inc. in Suiza Dairy Group, L.P., a Delaware
limited partnership, (iii) refinance existing Indebtedness of Borrower, its
Restricted Subsidiaries and the Acquired Company and (iv) provide for working
capital, Permitted Acquisitions and other general corporate purposes (including
Capital Stock repurchase programs). The Letters of Credit shall be used for
general corporate purposes.




                                       73


         SECTION 3.12 SUBSIDIARIES.

         Set forth on Schedule 3.12 is a complete and accurate list of all
Subsidiaries of the Borrower. Information on the attached Schedule includes
jurisdiction of incorporation; the number of shares of each class of Capital
Stock or other equity interests outstanding; the number and percentage of
outstanding shares of each class of stock owned by Borrower or its Subsidiaries;
and the number and effect, if exercised, of all outstanding options, warrants,
rights of conversion or purchase and similar rights. The outstanding Capital
Stock and other equity interests of all such Subsidiaries is validly issued,
fully paid and non-assessable and is owned, free and clear of all Liens (other
than those arising under or contemplated in connection with the Credit
Documents). As of the Funding Date, there are no Unrestricted Subsidiaries other
than the Unrestricted Subsidiaries specifically listed in the definition
thereof. Schedule 3.12 shall be updated quarterly by the Borrower with the
delivery of the financial information required pursuant to Section 5.1(b) by
giving written notice thereof to the Administrative Agent.

         SECTION 3.13 OWNERSHIP.

         Each of the Borrower and its Restricted Subsidiaries (a) is the owner
of, and has good and marketable title to, all of its respective assets, except
as may be permitted pursuant to Section 6.12 hereof, and none of such assets is
subject to any Lien other than Permitted Liens and (b) enjoys peaceful and
undisturbed possession of all Real Properties that are necessary for the
operation and conduct of its business.

         SECTION 3.14 INDEBTEDNESS.

         Except as otherwise permitted under Section 6.1, the Borrower and its
Restricted Subsidiaries have no Indebtedness.

         SECTION 3.15 TAXES.

         Each of the Borrower and its Subsidiaries has filed, or caused to be
filed, all tax returns (federal, state, local and foreign) required to be filed
other than returns for which failure to file would not have a Material Adverse
Effect and paid (a) all amounts of taxes shown thereon to be due (including
interest and penalties) and (b) all other 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 or (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) for which nonpayment would not have a Material
Adverse Effect. Neither the Borrower nor any of its Subsidiaries is aware as of
the Closing Date of any proposed tax assessments against it or any of its
Subsidiaries which could reasonably be expected to have a Material Adverse
Effect.

         SECTION 3.16 INTELLECTUAL PROPERTY.

         Each of the Borrower and its Restricted Subsidiaries owns, or has the
legal right to use, all trademarks, tradenames, patents, copyrights, technology,
know-how and processes





                                       74


(collectively, the "Intellectual Property") necessary for each of them to
conduct its business as currently conducted. Set forth on Schedule 3.16 is a
list of all Intellectual Property owned by the Borrower and its Restricted
Subsidiaries or that the Borrower and its Restricted Subsidiaries has the right
to use. Except as provided on Schedule 3.16, no claim has been asserted and is
pending by any Person challenging or questioning the use of any such
Intellectual Property or the validity or effectiveness of any such Intellectual
Property, nor does the Borrower or any of its Restricted Subsidiaries know of
any such claim, and, to the knowledge of the Borrower or any of its Restricted
Subsidiaries, the use of such Intellectual Property by the Borrower or any of
its Restricted Subsidiaries 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. Schedule 3.16 shall be
updated (by additions and deletions of such claims) by the Borrower quarterly
with the delivery of the financial information required pursuant to Section
5.1(b) by giving written notice thereof to the Administrative Agent.

         SECTION 3.17 SOLVENCY.

         The fair saleable value of all Credit Parties' assets, measured on a
going concern basis, exceeds all probable liabilities, including those to be
incurred pursuant to this Credit Agreement. The Credit Parties on a consolidated
basis, will not (a) have unreasonably small capital in relation to the business
in which they are engaged or (b) have incurred, or believe that they will have
incurred after giving effect to the transactions contemplated by this Credit
Agreement, Indebtedness beyond their ability to pay such Indebtedness as it
becomes due.

         SECTION 3.18 INVESTMENTS.

         All Investments of each of the Borrower and its Restricted Subsidiaries
are Permitted Investments.

         SECTION 3.19 LOCATION OF COLLATERAL.

         Set forth on Schedule 3.19(a) is a list of the owned real property of
the Borrower and its Restricted Subsidiaries with street address, county and
state where located. Set forth on Schedule 3.19(b) is a list of all locations
where any material tangible personal property of the Borrower and its Restricted
Subsidiaries is located, including county and state where located.
Set forth on Schedule 3.19(c) is the chief executive office and principal place
of business of each of the Borrower and its Restricted Subsidiaries. Schedule
3.19(a), 3.19(b) and 3.19(c) shall be updated by the Borrower, quarterly with
the delivery of the financial information required pursuant to Section 5.1(b) by
giving written notice thereof to the Administrative Agent.

         SECTION 3.20 NO BURDENSOME RESTRICTIONS.

         None of the Borrower or any of its Restricted Subsidiaries is a party
to any agreement or instrument or subject to any other obligation or any charter
or corporate restriction or any provision of any applicable law, rule or
regulation which, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect.




                                       75


         SECTION 3.21 BROKERS' FEES.

         None of the Borrower or any of its Subsidiaries has any obligation to
any Person in respect of any finder's, broker's, investment banking or other
similar fee in connection with the Extensions of Credit contemplated under the
Credit Documents other than the closing and other fees payable pursuant to this
Credit Agreement and the Fee Letter.

         SECTION 3.22 LABOR MATTERS.

         None of the Borrower or any of its Restricted Subsidiaries (i) is
currently suffering any strikes, walkouts, work stoppages or other material
labor difficulty, other than as set forth in Schedule 3.22 hereto or (ii) has
knowledge of any potential or pending strike, walkout or work stoppage, other
than as set forth in Schedule 3.22 hereto.

         SECTION 3.23 SECURITY DOCUMENTS.

         The Security Documents create valid security interests in, and Liens
on, the Collateral purported to be covered thereby, which security interests and
Liens are currently (or will be, upon the filing of appropriate financing
statements and the recordation of the applicable Mortgage Instruments in each
case in favor of First Union, as Administrative Agent for the Lenders) perfected
security interests and Liens, prior to all other Liens other than Permitted
Liens to the extent required by the Security Documents.

         SECTION 3.24 CONSUMMATION OF ACQUISITION.

         The Acquisition and related transactions have been consummated
substantially in accordance with the terms of the Acquisition Documents. As of
the Closing Date and as of the Funding Date, the Acquisition Documents have not
been altered, amended or otherwise modified or supplemented or any condition
thereof waived in any material respect without the prior written consent of the
Administrative Agent. Each of the representations and warranties made in the
Acquisition Documents by each of the Credit Parties (other than the Acquired
Company and its Subsidiaries) is true and correct except for any representation
or warranty therein the failure of which to be true and correct does not have or
could not reasonably be expected to have a Material Adverse Effect.

         SECTION 3.25 MATERIAL CONTRACTS.

         Schedule 3.25 sets forth a true and correct and complete list of all
Material Contracts currently in effect. All of the Material Contracts are in
full force and effect and no material defaults currently exist thereunder.
Schedule 3.25 shall be updated by the Borrower quarterly with the delivery of
the financial information required pursuant to Section 5.1(b) by giving written
notice thereof to the Administrative Agent.




                                       76


         SECTION 3.26 ACCURACY AND COMPLETENESS OF INFORMATION.

         All factual information heretofore, contemporaneously or hereafter
furnished by or on behalf of the Borrower or any of its Subsidiaries to the
Administrative Agent or any Lender for purposes of or in connection with this
Agreement or any other Credit Document, or any transaction contemplated hereby
or thereby, is or will be true and accurate in all material respects and not
incomplete by omitting to state any material fact necessary to make such
information not misleading. There is no fact now known to the Borrower or any of
its Subsidiaries which has, or could reasonably be expected to have, a Material
Adverse Effect which fact has not been set forth herein, in the financial
statements of the Borrower and its Subsidiaries furnished to the Administrative
Agent and/or the Lenders, or in any certificate, opinion or other written
statement made or furnished by the Borrower to the Administrative Agent and/or
the Lenders.

         SECTION 3.27 INTEREST RATE PROTECTION.

         The Borrower has, as of the Funding Date, Hedging Agreements in place
protecting against fluctuations in interest rates which provide for coverage of
not less than $500,000,000 for a period of not less than two (2) years.


                                   ARTICLE IV

                              CONDITIONS PRECEDENT

         SECTION 4.1 CONDITIONS TO CLOSING DATE.

         This Agreement shall become effective upon the satisfaction of the
following conditions precedent:

                  (a) Execution of Agreement. The Administrative Agent shall
         have received (i) counterparts of this Agreement, executed by a duly
         authorized officer of each party hereto and (ii) for the account of
         each Lender, a Revolving-1 Note, a Tranche A-1 Term Note and a Tranche
         B-1 Term Note and for the account of the Swingline Lender, a Swingline
         Note.

                  (b) Authority Documents. The Administrative Agent shall have
         received a secretary's certificate substantially in the form of
         Schedule 4.1(b) with respect to the following:

                           (i) Charter Documents. Copies of the certificate of
                  incorporation of the Borrower certified to be true and
                  complete as of a recent date by the appropriate Governmental
                  Authority of the state of its incorporation.

                           (ii) Resolutions. Copies of resolutions of the board
                  of directors of the Borrower approving and adopting the Credit
                  Documents, the transactions contemplated therein and
                  authorizing execution and delivery thereof, certified by an
                  officer of Borrower as of the Closing Date to be true and
                  correct and in force and effect as of such date.



                                       77


                           (iii) Bylaws. A copy of the bylaws of the Borrower
                  certified by an officer of the Borrower as of the Closing Date
                  to be true and correct and in force and effect as of such
                  date.

                           (iv) Good Standing. Copies of (i) certificates of
                  good standing, existence or its equivalent with respect to the
                  Borrower certified as of a recent date by the appropriate
                  Governmental Authorities of the state of incorporation and
                  each other state in which the failure to so qualify and be in
                  good standing could reasonably be expected to have a Material
                  Adverse Effect on the business or operations of the Borrower
                  and its Subsidiaries, taken as a whole, and (ii) if available,
                  a certificate indicating payment of all corporate franchise
                  taxes certified as of a recent date by the appropriate
                  governmental taxing authorities.

                           (v) Incumbency. An incumbency certificate of the
                  Borrower certified by a secretary or assistant secretary to be
                  true and correct as of the Closing Date.

                  (c) Legal Opinions of Counsel. The Administrative Agent shall
         have received an opinion of legal counsel for the Borrower, dated the
         Closing Date and addressed to the Administrative Agent and the Lenders,
         in form and substance reasonably acceptable to the Administrative
         Agent.

                  (d) Disclosure Schedules. The Lenders shall have received and
         approved to their reasonable satisfaction copies of each of the
         disclosure schedules to this Agreement showing projected information to
         be included in the final versions of such schedules to be provided on
         the Funding Date. Such schedules shall have been prepared by the
         Borrower in good faith and based upon reasonable assumptions.

         SECTION 4.2 CONDITIONS TO INITIAL EXTENSIONS OF CREDIT.

         The obligation of each Lender to make the initial Extensions of Credit
on the Funding Date is subject to the satisfaction of the following conditions
precedent on or before December 31, 2001:

                  (a) Execution of Agreements. The Administrative Agent shall
         have received counterparts of (i) the Security Agreement and Pledge
         Agreement and all other Security Documents executed by a duly
         authorized officer of the Borrower and (ii) a Joinder Agreement to this
         Agreement, the Pledge Agreement, the Security Agreement and all other
         Security Documents, in each case conforming to the requirements of this
         Agreement and executed by a duly authorized officer of each of the
         other Credit Parties party thereto.

                  (b) Authority Documents. The Administrative Agent shall have
         received a secretary's certificate substantially in the form of
         Schedule 4.1(b) with respect to the following:




                                       78


                           (i) Charter Documents. Copies of the articles of
                  incorporation or other charter documents, as applicable, of
                  the Credit Parties Joining on the Funding Date, including the
                  Acquired Company and its Subsidiaries and each corporate
                  general partner of such Person, as applicable, certified to be
                  true and complete as of a recent date by the appropriate
                  Governmental Authority of the state of its incorporation.

                           (ii) Partnership Agreements; Disclosure Information.
                  With respect to each such Person that is a partnership or
                  limited partnership, a copy of the partnership agreement of
                  such Person, together with all amendments thereto, schedules
                  and any disclosure information, in each case certified) by a
                  general partner of such Person as of the Closing Date to be
                  true and correct and in force and effect as of such date.

                           (iii) Resolutions. Copies of resolutions or
                  certificate of authorization of the board of directors or
                  general partner of each of the Credit Parties joining on the
                  Funding Date, including the Acquired Company and its
                  Subsidiaries approving and adopting the Credit Documents, the
                  transactions contemplated therein and authorizing execution
                  and delivery thereof, certified by an officer or general
                  partner of such Person, as applicable, as of the Closing Date
                  to be true and correct and in force and effect as of such
                  date.

                           (iv) Bylaws. A copy of the bylaws of each of the
                  Acquired Company and its Subsidiaries and each corporate
                  general partner of such Person, as applicable, certified by an
                  officer of such Person or corporate general partner, as
                  applicable, as of the Closing Date to be true and correct and
                  in force and effect as of such date.

                           (v) Good Standing. Copies of (i) certificates of good
                  standing, existence or its equivalent with respect to each of
                  the Credit Parties joining on the Funding Date, including the
                  Acquired Company and its Subsidiaries certified as of a recent
                  date by the appropriate Governmental Authorities of the state
                  of incorporation or organization and each other state in which
                  the failure to so qualify and be in good standing could
                  reasonably be expected to have a Material Adverse Effect on
                  the business or operations of the Borrower and its
                  Subsidiaries, taken as a whole, except for those Subsidiaries
                  required to be so qualified and in good standing pursuant to
                  the terms of Section 5.15 following their :reorganization or
                  restructure on or about the Funding Date, and (ii) if
                  available, a certificate indicating payment of all corporate
                  franchise taxes certified as of a recent date by the
                  appropriate governmental taxing authorities.

                           (vi) Incumbency. An incumbency certificate of each of
                  the Credit Parties joining on the Funding Date, including the
                  Acquired Company and its Subsidiaries and each corporate
                  general partner of such Person, as applicable, certified by a
                  secretary or assistant secretary to be true and correct as of
                  the Funding Date.




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                  (c) Legal Opinions of Counsel.

                           (i) The Administrative Agent shall have received an
                  opinion of legal counsel for the Borrower and its Subsidiaries
                  (including the Acquired Company and its Subsidiaries), dated
                  the Funding Date and addressed to the Administrative Agent and
                  the Lenders, in form and substance reasonably acceptable to
                  the Administrative Agent; and

                           (ii) The Administrative Agent shall have received an
                  opinion of Moore & Van Allen, PLLC, dated the Funding Date and
                  addressed to the Administrative Agent and the Lenders, in form
                  and substance reasonably acceptable to the Administrative
                  Agent.

                  (d) Litigation. There shall not exist any pending litigation
         or investigation or unresolved regulatory matters affecting or relating
         to the Borrower or any of its Subsidiaries, this Agreement and the
         other Credit Documents or the Acquisition that in the reasonable
         judgment of the Agents could be expected to have a Material Adverse
         Effect, that has not been settled, dismissed, vacated, discharged or
         terminated prior to the Closing Date.

                  (e) Personal Property Collateral. The Administrative Agent
         shall have received, in form and substance satisfactory to the Agents:

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

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

                           (iii) duly executed consents as are necessary to
                  perfect the Lenders' security interest in the Collateral; and

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

                  (f) Real Property Collateral. The Administrative Agent shall
         have received, in form and substance satisfactory to the Agents:




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                           (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 in the properties
                  listed in Schedule 3.19(a) as properties owned by the Credit
                  Parties and designated as a material property, other than real
                  properties owned by the Acquired Company or its Subsidiaries
                  (each a "Mortgaged Property" and collectively the "Mortgaged
                  Properties") and a legal opinion with respect to the
                  enforceability of the Mortgage Instruments in form and
                  substance reasonably satisfactory to the Administrative Agent;

                           (ii) a title report obtained by the Credit Parties in
                  respect of each of the Mortgaged Properties attached as
                  Schedule 4.2(fl(ii) (each a "Significant Mortgaged Property");

                           (iii) with respect to each Significant Mortgaged
                  Property, an ALTA or substantially equivalent mortgagee title
                  insurance policy issued by a title company acceptable to the
                  Administrative Agent (the "Mortgage Policies"), in amounts
                  acceptable to the Administrative Agent with respect to any
                  particular Significant Mortgaged Property, assuring the
                  Administrative Agent that each of the Mortgage Instruments
                  creates a valid and enforceable first priority mortgage lien
                  on the applicable Significant Mortgaged Property, free and
                  clear of all defects and encumbrances except Permitted Liens,
                  which Mortgage Policies shall be in form and substance
                  reasonably satisfactory to the Administrative Agent and shall
                  provide for affirmative insurance and such reinsurance as the
                  Administrative Agent may reasonably request, all of the
                  foregoing in form and substance reasonably satisfactory to the
                  Administrative Agent;

                           (iv) 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 Administrative 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 Borrower and its
                  Subsidiaries evidencing flood insurance reasonably
                  satisfactory to the Administrative Agent and naming the
                  Administrative Agent as sole loss payee on behalf of the
                  Lenders; and

                           (v) existing maps or plats of an as-built survey of
                  the sites of the Significant Mortgaged Properties certified to
                  the Administrative Agent and the Title Insurance Company in a
                  manner reasonably satisfactory to them, dated a date
                  satisfactory to each of the Administrative Agent and the Title
                  Insurance





                                       81


                  Company by an independent professional licensed land surveyor
                  reasonably satisfactory to each of the Administrative Agent
                  and the Title Insurance Company, which maps or plats and the
                  surveys on which they are based shall be (A) 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 1992 or (B) otherwise satisfactory to the Administrative
                  Agent.

                  (g) Liability, Casualty and Business Interruption Insurance.
         The Administrative Agent shall have received copies of insurance
         policies or certificates of insurance evidencing liability and casualty
         insurance meeting the requirements set forth herein or in the Security
         Documents and business interruption insurance satisfactory to the
         Agents. The Administrative Agent shall be named (to the extent
         permitted) as loss payee and/or additional insured on all such
         insurance policies for the benefit of the Lenders.

                  (h) Fees. The Administrative Agent, the Syndication Agent and
         the Lenders shall have received all fees, if any, owing pursuant to the
         Fee Letter and Section 2.6.

                  (i) Reliance. The Administrative Agent shall have received a
         copy of each opinion, report, agreement, and other document required to
         be delivered pursuant to the Acquisition Documents in connection with
         the Acquisition and related transactions, and to the extent available
         with a letter from each Person delivering any such opinion authorizing
         reliance thereon by the Agents and the Lenders, all in form and
         substance reasonably satisfactory to the Agents.

                  (j) Solvency Evidence. The Administrative Agent shall have
         received an officer's certificate for the Credit Parties prepared by
         the chief financial officer or treasurer of the Borrower as to the
         financial condition, solvency and related matters of the Credit Parties
         taken as a whole, after giving effect to the initial borrowings under
         the Credit Documents, in substantially the form of Schedule 4.2(j)
         hereto.

                  (k) Account Designation Letter. The Administrative Agent shall
         have received the executed Account Designation Letter in the form of
         Schedule 1.1(a) hereto.

                  (l) Corporate Structure. The corporate capital and ownership
         structure of the Borrower and its Subsidiaries (after giving effect to
         the Acquisition) shall be as described in Schedule 3.12. The Agents
         shall be satisfied that the management structure, legal structure,
         voting control, liquidity and capitalization of the Borrower as of the
         Funding Date shall not have materially and adversely changed from the
         information relating thereto previously provided to the Lenders.

                  (m) Consummation of Acquisition. The Administrative Agent
         shall have received evidence that the transactions contemplated by the
         Merger Agreement have been consummated in accordance with the terms
         thereof which shall be reasonably acceptable





                                       82


         to the Agents (including without limitation the amount and form of
         consideration to be paid to shareholders of the Acquired Company), that
         the representations and warranties in the Merger Agreement shall be
         accurate as of the Funding Date and the conditions contained therein
         shall have been satisfied as of such date, that the Senior Notes shall
         remain outstanding and that the Acquired Company shall remain in full
         compliance with the terms thereof and the Administrative Agent shall
         have received a final copy of the Merger Agreement, all material
         documents executed in connection therewith and all amendments or
         supplements thereto, certified by a Responsible Officer of the Borrower
         to be true and correct and in full force and effect.

                  (n) Government Consent. The Administrative Agent shall have
         received evidence that all governmental, shareholder and material third
         party consents and approvals (including, without limitation, consents
         and approvals of the Board of Directors of the Acquired Company)
         necessary in connection with the transactions contemplated by the
         Merger Agreement and the financings and other transactions contemplated
         hereby have been obtained and all applicable waiting periods have
         expired without any action being taken by any authority that could
         restrain, prevent or impose any material adverse conditions on such
         transactions or that could seek or threaten any of the foregoing.

                  (o) Compliance with Laws. The financings and other
         transactions contemplated hereby shall be in compliance with all
         applicable laws and regulations (including Environmental Laws and all
         applicable securities and banking laws, rules and regulations).

                  (p) Bankruptcy. There shall be no bankruptcy or insolvency
         proceedings with respect to the Borrower or any of its Restricted
         Subsidiaries.

                  (q) Financial Statements. The Administrative Agent shall have
         received copies of the financial statements referred to in Section 3.1
         hereof. The Agents and the Lenders shall have received audited
         financial statements for the Borrower and the Acquired Company for the
         most recently ended fiscal year ending more than 90 days prior to the
         Funding Date.

                  (r) Sources and Uses of Funds. The Administrative Agent shall
         have received a memorandum detailing the sources and uses of the funds
         to be used to consummate the Acquisition, the other transactions
         contemplated by this Agreement and the other Credit Documents and
         related expenses, in form and substance reasonably satisfactory to the
         Agents.

                  (s) Pro Forma Opening Statements and Updated Projections: The
         Agents and the Lenders shall have received pro forma opening financial
         statements ("Pro Forma Opening Statements") giving effect to the
         Acquisition and projections ("Updated Projections") updating the
         projection previously provided to the Lenders, together with such
         information as the Agents and the Lenders may reasonably request to
         confirm the tax, legal, and business assumptions made in such Pro Forma
         Opening Statements and Updated Projections. The Pro Forma Opening
         Statements and




                                       83


         Updated Projections must demonstrate, in the reasonable judgment of the
         Agents, together with all other information then available to the
         Agents and the Lenders, the ability of the Borrower and its
         Subsidiaries, taken as a whole, to repay their debts and satisfy their
         respective other obligations as and when due and to comply with the
         financial covenants set forth in Section 5.9 hereof.

                  (t) Fairness Opinion. Receipt by the Agents of a copy of any
         fairness opinion from the Acquired Company's investment banker
         addressed to the Acquired Company's board of directors, relating to the
         terms of the Acquisition.

                  (u) Environmental Reports: The Administrative Agent shall have
         received a copy of each existing environmental review report detailing
         any environmental hazards or liabilities relating to the Mortgaged
         Properties, and, if requested by the Agents, a reliance letter
         satisfactory in form and substance to the Agents, from the
         environmental review firm that prepared such report.

                  (v) Approval of Asset Disposition. The Agents shall have
         reviewed and approved (such approval not to be unreasonably withheld)
         any asset sale, disposition or other divestiture required by or in
         connection with any governmental or regulatory approval required in
         connection with the consummation of the Acquisition.

                  (w) Leverage Ratio. The Borrower shall have demonstrated to
         the Agents that the ratio of Funded Debt to pro forma adjusted
         consolidated EBITDA for the Borrower and its Subsidiaries (to be
         determined by the Agents), after giving effect to the Acquisition, for
         the twelve consecutive calendar month period ending with the last
         calendar month immediately preceding the Funding Date, shall be no
         greater than 4.25 to 1.0.

                  (x) Existing Indebtedness. All existing Indebtedness for
         borrowed money of the Borrower and its Restricted Subsidiaries (other
         than the Indebtedness listed on Schedule 6.1(b) and the Senior Notes
         which shall remain outstanding and with respect to which the Acquired
         Company shall remain in full compliance with the terms thereof) shall
         have been repaid in full with the proceeds of the initial Loans
         hereunder and terminated, and Indebtedness under that certain
         $300,000,000 Credit Agreement dated as of January 4, 2000 among the
         Borrower, First Union, as administrative agent, Bank One, NA, as
         syndication agent, and the lenders party thereto shall have been repaid
         in full and such credit agreement shall have been terminated and any
         Liens granted thereunder or pursuant thereto shall have been released
         or arrangements satisfactory to the Agents shall have been made with
         respect thereto.

                  (y) Material Adverse Change. There shall not have been any
         occurrence or happening resulting in a Material Adverse Effect since
         (i) May 30, 2000 or (ii) the pro forma financial statements received by
         the Agents on March 22, 2001.




                                       84


                  (z) Officer's Certificates. The Administrative Agent shall
         have received a certificate or certificates executed by the chief
         financial officer or treasurer of the Borrower on behalf of the Credit
         Parties as of the Funding Date stating that (A) the Credit Parties and
         each of their Subsidiaries are in compliance with all existing material
         financial obligations, (B) all 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 a Credit Party, any of the
         Credit Parties' Subsidiaries or any transaction contemplated by the
         Credit Documents, if such action, suit, investigation or proceeding
         would have or be reasonably expected to have a Material Adverse Effect,
         and (D) immediately after giving effect to this Credit Agreement, the
         other Credit Documents and all the transactions contemplated therein to
         occur on such date, (1) no Default or Event of Default exists, (2) all
         representations and warranties contained herein and in the other Credit
         Documents are true and correct in all material respects, and (3) the
         Credit Parties are in compliance with each of the financial covenants
         set forth in Section 5.9 on a pro forma basis.

                  (aa) Disclosure Schedules. The Lenders shall have received
         final completed copies of each of the disclosure schedules to this
         Agreement and the Agents shall have approved the information contained
         therein to their reasonable satisfaction to the extent that such
         information varies materially and adversely from the disclosure
         schedules delivered on the Closing Date.

                  (bb) Additional Matters. All other documents and legal matters
         in connection with the transactions contemplated by this Agreement
         shall be reasonably satisfactory in form and substance to the
         Administrative Agent and its counsel.

         SECTION 4.3 CONDITIONS TO ALL EXTENSIONS OF CREDIT.

         The obligation of each Lender to make any Extension of Credit hereunder
is subject to the satisfaction of the following conditions precedent on the date
of making such Extension of Credit:

                  (a) Representations and Warranties. The representations and
         warranties made by the Credit Parties herein, in the Security Documents
         or which are contained in any certificate furnished at any time under
         or in connection herewith shall be true and correct in all material
         respects on and as of the date of such Extension of Credit as if made
         on and as of such date (or, if any such representation or warranty is
         expressly stated to have been made as of a specific date, as of such
         specific date).

                  (b) No Default or Event of Default. No Default or Event of
         Default shall have occurred and be continuing on such date or after
         giving effect to the Extension of Credit to be made on such date unless
         such Default or Event of Default shall have been waived in accordance
         with this Agreement.





                                       85


                  (c) Compliance with Commitments. Immediately after giving
         effect to the making of any such Extension of Credit (and the
         application of the proceeds thereof), (i) the sum of the aggregate
         principal amount of outstanding Dollar Revolving-1 Loans plus Swingline
         Loans plus Dollar LOC Obligations shall not exceed the Dollar
         Revolving-1 Committed Amount, (ii) the sum of the aggregate principal
         Dollar Amount of outstanding Multi-currency Revolving-1 Loans plus the
         Dollar Amount of Multi-currency LOC Obligations shall not exceed the
         Multi-currency Revolving-1 Committed Amount, (iii) the Dollar Amount of
         the LOC Obligations shall not exceed the LOC Committed Amount and (iv)
         the Swingline Loans shall not exceed the Swingline Committed Amount.

                  (d) Additional Conditions to Revolving-1 Loans. If such Loan
         is made pursuant to Section 2.1, all conditions set forth in such
         Section shall have been satisfied.

                  (e) Additional Conditions to Swingline Loan. If such Loan is
         made pursuant to Section 2.2, all conditions set forth in such Section
         shall have been satisfied.

                  (f) Additional Conditions to Letters of Credit. If such
         Extension of Credit is made pursuant to Section 2.3, all conditions set
         forth in such Section shall have been satisfied.

         Each request for an Extension of Credit and each acceptance by the
Borrower of any such Extension of Credit shall be deemed to constitute a
representation and warranty by the Borrower as of the date of such Extension of
Credit that the applicable conditions in paragraphs (a) through (f) of this
Section have been satisfied.

                                    ARTICLE V
                              AFFIRMATIVE COVENANTS

         The Borrower hereby covenants and agrees that on the Closing Date or
Funding Date (where so indicated), and thereafter for so long as this Agreement
is in effect and until the Commitments have terminated, no Note remains
outstanding and unpaid and the Credit Party Obligations, together with interest,
Commitment Fees and all other amounts owing to the Administrative Agent or any
Lender hereunder, are paid in full, the Borrower shall, and shall cause each of
its Subsidiaries to:

         SECTION 5.1 FINANCIAL STATEMENTS.

         Furnish to the Administrative Agent and each of the Lenders:

                  (a) Annual Financial Statements. As soon as available and in
         any event within 90 days after the end of each fiscal year of the
         Borrower:

                           (i) (A) consolidated statements of income,
                  stockholders' equity and cash flows of the Borrower and its
                  Subsidiaries for such fiscal year and (B) the related
                  consolidated balance sheet of the Borrower and its
                  Subsidiaries as at the end of such fiscal year, setting forth
                  in each case after the first anniversary of the





                                       86


                  Funding Date in comparative form the corresponding
                  consolidated figures for the preceding fiscal year, and
                  accompanied by an opinion thereon of independent certified
                  public accountants of recognized national standing, which
                  opinion shall state that such consolidated financial
                  statements fairly present the consolidated financial condition
                  and results of operations of the Borrower and its
                  Subsidiaries, as at the end of, and for, such fiscal year in
                  accordance with GAAP, and a certificate of such accountants
                  stating that, in making the examination necessary for their
                  opinion, they obtained no knowledge, except as specifically
                  stated, of any Default or Event of Default; and

                           (ii) (A) consolidated statements of income and cash
                  flows of the Borrower and its Restricted Subsidiaries and (B)
                  the related consolidated balance sheet of the Borrower and its
                  directly owned Subsidiaries combined in significant groups, in
                  each case as at the end of such fiscal year,, setting forth in
                  each case after the first anniversary of the Funding Date in
                  comparative form the corresponding consolidated figures for
                  the preceding fiscal year, accompanied by a certificate of a
                  Responsible Officer of the Borrower, which certificate shall
                  state that such consolidated financial statements fairly
                  present the consolidated financial condition and results of
                  operations of the Borrower and its Subsidiaries as combined or
                  of the Borrower and its Restricted Subsidiaries, as the case
                  may be, and such consolidated financial statements fairly
                  present the respective financial condition and results of
                  operations of the Borrower and each group of such
                  Subsidiaries, in accordance with GAAP consistently applied, as
                  at the end of and for such period (subject to normal year-end
                  audit adjustments); and

                  (b) Quarterly Financial Statements. As soon as available and
         in any event within 45 days after the end of each of the first three
         quarterly fiscal periods of each fiscal year of the Borrower, (i) (A)
         consolidated statements of income and cash flows of the Borrower and
         its Subsidiaries, (B) consolidated statements of income and cash flows
         of the Borrower and its Restricted Subsidiaries, in each case for such
         period and for the period from the beginning of the respective fiscal
         year to the end of such period, and (C) consolidating statements of
         income of the Borrower and its directly owned Subsidiaries combined in
         significant groups for such period, and (ii) (A) the related
         consolidated and consolidating balance sheet of the Borrower and its
         Subsidiaries and (B) the related consolidated balance sheet of the
         Borrower and its Restricted Subsidiaries, in each case as at the end of
         such period, setting forth in each case after the first anniversary of
         the Funding Date (other than consolidating statements) in comparative
         form the corresponding consolidated figures for the corresponding
         periods in the preceding fiscal year, accompanied by a certificate of a
         Responsible Officer of the Borrower, which certificate shall state that
         such consolidated financial statements fairly present the consolidated
         financial condition and results of operations of the Borrower and its
         Subsidiaries or of the Borrower and its Restricted Subsidiaries, as the
         case may be, and such consolidating financial statements fairly present
         the respective unconsolidated financial condition and results of
         operations of the Borrower and each group of such Subsidiaries, in
         accordance with GAAP consistently applied, as at the end of, and for,
         such period (subject to normal year-end audit adjustments);




                                       87


all such financial statements to be accompanied by a description of, and an
estimation of the effect on the financial statements on account of, a change, if
any, in the application of accounting principles as provided in Section 1.3.

         SECTION 5.2 CERTIFICATES; OTHER INFORMATION.

         Furnish to the Administrative Agent and each of the Lenders:

                  (a) promptly upon their becoming available, to the extent not
         available by electronic means, copies of all registration statements
         and regular periodic reports, if any, that the Borrower shall have
         filed with the SEC or any national securities exchange;

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

                  (c) at the time it furnishes each set of financial statements
         pursuant to Sections 5.1(a) and 5.1(b) above, a certificate of a
         Responsible Officer of the Borrower (i) certifying that (A) each of the
         Credit Parties and its Subsidiaries during such period observed or
         performed in all material respects all of its covenants and other
         agreements, and satisfied in all material respects every condition,
         contained in this Agreement to be observed, performed or satisfied by
         it and (B) no Default or Event of Default has occurred and is
         continuing (or, if any Default or Event of Default has occurred and is
         continuing, describing the same in reasonable detail and describing the
         action that the Borrower has taken or proposes to take with respect
         thereto), (ii) setting forth in reasonable detail the computations
         necessary to determine whether the Credit Parties are in compliance
         with Section 5.9 hereof as of the end of the respective quarterly
         fiscal period or fiscal year and (iii) the information on Schedule
         3.12, Schedule 3.16, Schedule 3.19 and Schedule 3.25 is updated to be
         true and correct as of such date;

                  (d) within thirty (30) days after the same are sent, to the
         extent not available by electronic or other readily accessible means,
         copies of all reports (other than those otherwise provided pursuant to
         Section 5.1 and those which are of a promotional nature) and other
         financial information which the Borrower sends to its stockholders, and
         within thirty days after the same are filed, copies of all financial
         statements and non-confidential reports which the Borrower may make to,
         or file with the Securities and Exchange Commission or any successor or
         analogous Governmental Authority;

                  (e) within ninety (90) days after the end of each fiscal year
         of the Borrower, a certificate containing information regarding the
         amount of all Asset Dispositions, Debt Issuances, and Equity Issuances
         that were made during such prior fiscal year and amounts received in
         connection with any Recovery Event during such prior fiscal year; and

                  (f) from time to time such other information regarding the
         financial condition, operations, business or prospects of the Borrower
         or any of its Subsidiaries (including, without limitation, any Plan or
         Multiemployer Plan and any reports or other information





                                       88


         required to be filed under ERISA) as any Lender or the Administrative
         Agent may reasonably request.

         SECTION 5.3 PAYMENT OF OBLIGATIONS.

         Pay, discharge or otherwise satisfy at or before maturity or before
they become delinquent, as the case may be, in accordance with industry practice
(subject, where applicable, to specified grace periods) all of its material
obligations of whatever nature and any additional costs that are imposed as a
result of any failure to so pay, discharge or otherwise satisfy such
obligations, except when the amount or validity of such obligations and costs is
currently being contested in good faith by appropriate proceedings and reserves,
if applicable, in conformity with GAAP with respect thereto have been provided
on the books of the Borrower or its Restricted Subsidiaries, as the case may be.

         SECTION 5.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE.

                  (a) Preserve and maintain its legal existence and all of its
         material rights, privileges, licenses and franchises (provided that
         nothing in this Section 5.4 shall prohibit any transaction expressly
         permitted under Section 6.4 hereof).

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

         SECTION 5.5 MAINTENANCE OF PROPERTY, INSURANCE.

                  (a) Keep all material property used or useful in its business
         in ;good working order and condition (ordinary wear and tear and
         obsolescence excepted).

                  (b) Maintain insurance with financially sound and reputable
         insurance companies, and with respect to Property and risks of a
         character usually maintained by corporations engaged in the same or
         similar business similarly situated, against loss, damage and liability
         of the kinds and in the amounts customarily maintained by such
         corporations; and furnish to the Administrative Agent, upon written
         request, full information as to the insurance carried; provided,
         however, that the Borrower and its Subsidiaries may maintain self
         insurance plans to the extent companies of similar size and in similar
         businesses do so. The Administrative 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 Administrative Agent, that it will give
         the Administrative Agent thirty (30) days' prior written notice before
         any such policy or policies shall be altered or canceled, and that no
         act or default of the Borrower or any of its Subsidiaries or any other
         Person shall affect the rights of the Administrative Agent or





                                       89



         the Lenders under such policy or policies. The present insurance
         coverage of the Borrower and its Subsidiaries is outlined as to
         carrier, policy number, expiration date, type and amount on Schedule
         5.5(b).

                  (c) On or before the Funding Date, deliver, to the extent not
         previously delivered, to the Administrative Agent certificates of
         insurance satisfactory to the Administrative Agent evidencing the
         existence of all insurance required to be maintained by the Borrower
         and its Restricted Subsidiaries hereunder and setting forth the
         respective coverages, limits of liability, carrier, policy number and
         period of coverage. Thereafter, each year the Borrower will deliver to
         the Administrative Agent certificates of insurance evidencing that all
         insurance required to be maintained by the Borrower and its Restricted
         Subsidiaries hereunder will be in effect through the calendar year
         following the date of such certificates, subject only to the payment of
         premiums as they become due.

                  (d) In case of any material loss, damage to or destruction of
         the Property of any Credit Party or any part thereof, such Credit Party
         shall promptly give written notice thereof to the Administrative Agent
         generally describing the nature and extent of such damage or
         destruction.

         SECTION 5.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS.

                  (a) Keep adequate records and books of account in which
         complete entries in accordance with GAAP consistently applied and all
         Requirements of Law shall be made of all dealings and transactions in
         relation to its businesses and activities.

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

         SECTION 5.7 NOTICES.

         Give prompt notice in writing to the Administrative Agent (which shall
promptly transmit such notice to each Lender) of:

                  (a) within five Business Days after any Credit Party knows or
         has reason to know thereof, the occurrence of any Default or Event of
         Default or a change in the Borrower's long-term public debt rating by
         either S&P or Moody's;

                  (b) any default or event of default under any Contractual
         Obligation of the Borrower or any of its Restricted Subsidiaries which
         could reasonably be expected to have a Material Adverse Effect;

                  (c) any legal or arbitral proceedings before any Governmental
         Authority and any material development in respect of such legal or
         other proceedings affecting the





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         Borrower or any of its Restricted Subsidiaries, except proceedings
         that., if adversely determined, would not (either individually or in
         the aggregate) have a Material Adverse Effect;

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

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

                           (ii) the distribution under Section 4041 of ERISA of
                  a notice of intent to terminate any Plan or any action taken
                  by any Credit Party or any of its Subsidiaries or any ERISA
                  Affiliate to terminate any Plan;

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

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

                           (v) the institution of a proceeding by a fiduciary of
                  any Multiemployer Plan against any Credit Party or any of its
                  Subsidiaries or any ERISA Affiliate to




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                  enforce Section 515 of ERISA, which proceeding is not
                  dismissed within 30 days; and

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

                  (e) any assertion of any Environmental Claim by any Person
         against, or with respect to the activities of, the Borrower or any of
         its Subsidiaries and notice of any alleged violation of or
         non-compliance with any Environmental Laws or any permits, licenses or
         authorizations, other than any Environmental Claim or alleged violation
         that, if adversely determined, would not (either individually or in the
         aggregate) have a Material Adverse Effect; and

                  (f) any other development or event which could reasonably be
         expected to have a Material Adverse Effect.

Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth- details of the occurrence referred to therein
and stating what action the Borrower proposes to take with respect thereto. In
the case of any notice of a Default or Event of Default, the Borrower shall
specify that such notice is a Default or Event of Default notice on the face
thereof.

         SECTION 5.8 ENVIRONMENTAL LAWS.

         Without limiting the general terms set forth in Section 5.11:

                  (a) Comply in all material respects with, and ensure
         compliance in all material respects by all tenants and subtenants, if
         any, with, all applicable Environmental Laws and obtain and comply in
         all material respects with and maintain, and ensure that all tenants
         and subtenants obtain and comply in all material respects with and
         maintain, any and all licenses, approvals, notifications, registrations
         or permits required by applicable Environmental Laws except to the
         extent that failure to do so could not reasonably be expected to have a
         Material Adverse Effect;

                  (b) Conduct and complete all investigations, studies, sampling
         and testing, and all remedial, removal and other actions required under
         Environmental Laws and promptly comply in all material respects with
         all lawful orders and directives of all Governmental Authorities
         regarding Environmental Laws except to the extent that the same are
         being contested in good faith by appropriate proceedings and the
         pendency of such proceedings could not reasonably be expected to have a
         Material Adverse Effect; and




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                  (c) Defend, indemnify and hold harmless the Administrative
         Agent and the Lenders, and their respective employees, agents, officers
         and directors, from and against any and all claims, demands, penalties,
         fines, liabilities, settlements, damages, costs and expenses of
         whatever kind or nature known or unknown, contingent or otherwise,
         arising out of, or in any way relating to the violation of,
         noncompliance with or liability under, any Environmental Law applicable
         to the operations of the Borrower any of its Subsidiaries or the Real
         Properties, or any orders, requirements or demands of Governmental
         Authorities related thereto, including, without limitation, reasonable
         attorney's and consultant's fees, investigation and laboratory fees,
         response costs, court costs and litigation expenses, except to the
         extent that any of the foregoing arise out of the gross negligence or
         willful misconduct of the party seeking indemnification therefor. The
         agreements in this paragraph shall survive repayment of the Notes and
         all other amounts payable hereunder.

         SECTION 5.9  FINANCIAL COVENANTS.

                  The Borrower shall, and shall cause each of its Restricted
         Subsidiaries to, comply with the following financial covenants:

                  (a) Leverage Ratio. The Leverage Ratio, as of the last day of
         each fiscal quarter of the Borrower and its Restricted Subsidiaries
         occurring during each of the periods set forth below, shall be less
         than or equal to the following:



         Period                                              Ratio
         ------                                              -----
                                                       
         Fifth Amendment Effective Date through and       4.00 to 1.00
         including March 31, 2005
         April 1, 2005 and thereafter                     3.75 to 1.00


                  (b) Interest Coverage Ratio. The Interest Coverage Ratio, as
         of the last day of each fiscal quarter of the Borrower and its
         Restricted Subsidiaries, shall be greater than or equal to 3.00 to 1.0.

                  (c) Minimum Consolidated Net Worth. The Consolidated Net Worth
         shall at all times be equal to or greater than $1,750,000,000,
         increased on a cumulative basis as of the end of each fiscal quarter of
         the Borrower and its Restricted Subsidiaries, commencing with the
         fiscal quarter ending September 30, 2003, by an amount equal to 50% of
         the Consolidated Net Income (with no deduction for net losses) for the
         fiscal quarter then ended plus 50% of the amount by which the "total
         stockholders equity" of the Borrower is increased as a result of any
         public or private offering of ownership interests of the Borrower after
         the Fourth Amendment Effective Date (other than increases to the extent
         such increases result from Equity Issuances to, or capital
         contributions from, any Affiliate of the Borrower or Equity Issuances
         pursuant to an employee or director stock option or incentive plan or
         other employee benefit plan or from Equity Issuances in connection with
         the acquisition of assets or Capital Stock). Promptly upon consummation
         of each such public or private offering, the Borrower shall





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         notify the Administrative Agent in writing of the amount of such
         increase in total stockholders equity.

         SECTION 5.10 OBLIGATIONS REGARDING SUBSIDIARIES; ADDITIONAL SUBSIDIARY
GUARANTORS.

                  (a) Except as permitted by Section 6.4, the Borrower will, and
         will cause each of its Restricted Subsidiaries to take such action from
         time to time as shall be necessary to ensure that each of its
         Restricted Subsidiaries remains a Subsidiary at all times.

                  (b) The Credit Parties will cause each of their wholly-owned
         Domestic Subsidiaries that are Material Subsidiaries and Restricted
         Subsidiaries (other than Suiza Capital Trust II), whether newly formed,
         after acquired or otherwise existing, to promptly become a Guarantor
         hereunder by way of execution of a Joinder Agreement and take such
         other action as may be required pursuant to the terms of Section 5.13.
         The guaranty obligations of each Additional Credit Party shall be
         secured by all real and personal property assets of such Additional
         Credit Party pursuant to the requirements of Section 5.13; provided,
         that obligations of the Acquired Company and its Subsidiaries shall not
         be secured by any real property owned by the Acquired Company or any of
         its Subsidiaries nor by any equity ownership interests of any of the
         Acquired Company's Subsidiaries that own any real property.

         SECTION 5.11 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 imposed by all Governmental Authorities, applicable to it and its
assets if noncompliance with any such law, rule, regulation, order or
restriction could reasonably be expected to have a Material Adverse Effect.

         SECTION 5.12  PLEDGED ASSETS.

                  (a) Each Credit Party will cause (i) (A) 100% of the Capital
         Stock (or, if less, the full amount owned by such Credit Party) of each
         of the direct or indirect Domestic Subsidiaries which are Material
         Subsidiaries of such Person and which are Restricted Subsidiaries, but
         which are not Subsidiaries of the Acquired Company, and (B) 65% of the
         Capital Stock (or, if less, the full amount owned by such Credit Party)
         of each of the First Tier Foreign Subsidiaries which are Material
         Subsidiaries of such Person (but which are not Subsidiaries of the
         Acquired Company), unless otherwise agreed by the Administrative Agent,
         and (ii) all of such Credit Party's real and personal property
         Collateral to be subject at all times to a first priority, perfected
         Lien in, favor of the Administrative Agent pursuant to the terms and
         conditions of the Security Documents or such other security documents
         as the Administrative Agent shall reasonably request subject only to
         Permitted Liens; provided, however, that notwithstanding the foregoing,
         no Unrestricted Subsidiary shall be required to pledge the Capital
         Stock of its Subsidiaries and the Borrower shall not be required to
         pledge the Capital Stock of Suiza Capital Trust II, and the Acquired
         Company and its Subsidiaries shall not be required to





                                       94



         grant Liens in any real property nor in any equity ownership interests
         of any of the Acquired Company's Subsidiaries that own any real
         property.

                  (b) Within 30 days after a Credit Party changes the location
         of its chief executive office, the Borrower shall notify the
         Administrative Agent of such change and shall execute and deliver, or
         cause to be executed and delivered, to the Administrative Agent such
         UCC financing statements and other documentation as the Administrative
         Agent may reasonably request.

         SECTION 5.13  ADDITIONAL CREDIT PARTIES.

         As soon as practicable and in any event within 30 days after any Person
(whether newly formed, acquired or otherwise) becomes a Material Subsidiary that
is a Restricted Subsidiary of any Credit Party the Borrower shall provide the
Administrative Agent with written notice thereof setting forth information in
reasonable detail describing all of the assets of such Person and shall (a) if
such Person is a wholly-owned Domestic Subsidiary of a Credit Party, cause such
Person to execute a Joinder Agreement in substantially the same form as Schedule
5.13 (subject to exceptions regarding real property and ownership interests as
collateral as set forth. herein in the case of a Subsidiary of the Acquired
Company), (b) cause 100% (if such Person is a Domestic Subsidiary of a Credit
Party other than a Subsidiary of the Acquired Company) or, unless otherwise
agreed by the Administrative Agent, 65% (if such Person is a First Tier Foreign
Subsidiary of a Credit Party that is also a Material Subsidiary) of the Capital
Stock of such Person owned by a Credit Party to be delivered to the
Administrative Agent (together with undated stock powers signed in blank
(unless, with respect to a First Tier Foreign Subsidiary, such stock powers are
deemed unnecessary by the Administrative Agent in its reasonable discretion
under the law of the jurisdiction of incorporation of such Person)) and pledged
to the Administrative Agent pursuant to an appropriate pledge agreement(s) in
substantially the form of the Pledge Agreement or joinder to the Pledge
Agreement and otherwise in form acceptable to the Administrative Agent, (c) if
such Person is a Restricted Subsidiary, cause such Person to grant a security
interest in its material real property (excluding real property owned by a
Subsidiary of the Acquired Company) and the personal property Collateral of such
Person pursuant to appropriate mortgages and/or security agreements in
substantially the form of the Security Agreement or a joinder to the Security
Agreement, subject to no other Liens other than Permitted Liens [NOTE: PURSUANT
TO THE TERMS OF THE FIFTH AMENDMENT, ONLY RESTRICTED SUBSIDIARIES WHICH ARE
DOMESTIC SUBSIDIARIES WILL BE REQUIRED TO JOIN THE SECURITY AGREEMENT AND PLEDGE
A SECURITY INTEREST IN THEIR ASSETS], and (d) deliver such other documentation
as the Administrative Agent may reasonably request in connection with the
foregoing, including, without limitation, appropriate UCC-1 financing
statements, certified resolutions and other organizational and authorizing
documents of such Person and 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
Administrative Agent's liens thereunder).


                                       95


         SECTION 5.14  AMENDMENTS, MODIFICATIONS.

         The Borrower will furnish to the Administrative Agent a copy of each
modification, supplement or waiver of any provisions of any agreement,
instrument or other document evidencing or relating to the charter or bylaws of
the Borrower or any of its Restricted Subsidiaries promptly upon the
effectiveness thereof (and the Administrative Agent will promptly furnish a copy
thereof to each Lender).

         SECTION 5.15  FURTHER ASSURANCES.

         Upon the request of the Administrative Agent promptly perform or cause
to be performed any and all acts and execute or cause to be executed any and all
documents (including, without limitation, financing statements and continuation
statements) for filing under the provisions of the Uniform Commercial Code or
any other Requirement of Law which are necessary or advisable to maintain in
favor of the Administrative Agent, for the benefit of the Lenders, Liens on the
Collateral that are duly perfected in accordance with all applicable
Requirements of Law.

         SECTION 5.16  GOOD STANDING; POST-CLOSING QUALIFICATION.

         Within 30 days after the Funding Date, the Credit Parties will cause
each of their Subsidiaries that are restructured or reorganized on or about the
Funding Date to be duly qualified to conduct business 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 except to
the extent that the failure to so qualify or be in good standing could not, in
the aggregate, reasonably be expected to have a Material Adverse Effect.

                                   ARTICLE VI
                               NEGATIVE COVENANTS

         The Borrower hereby covenants and agrees that on the Funding Date, and
thereafter for so long as this Agreement is in effect and until the Commitments
have terminated, no Note remains outstanding and unpaid and the Credit Party
Obligations, together with interest, Commitment Fees and all other amounts owing
to the Administrative Agent or any Lender hereunder, are paid in full, the
Borrower shall, and shall cause each of its Subsidiaries, to act in accordance
with the following:

         SECTION 6.1 INDEBTEDNESS.

         The Borrower will not, nor will it permit any Restricted Subsidiary to,
contract, create, incur, assume or permit to exist any Indebtedness, except:

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

                  (b) Indebtedness of the Borrower and its Restricted
         Subsidiaries existing as of the Funding Date (and not to be refinanced
         by the Loans as provided herein) as referenced in the financial
         statements referenced in Section 3.1 (and set out more specifically in
         Schedule 6.1(b)) hereto and renewals, refinancings or extensions
         thereof in





                                       96


         a principal amount not in excess of that outstanding as of the date of
         such renewal, refinancing or extension.

                  (c) Indebtedness (including Capital Lease Obligations and
         obligations permitted under Section 6.12) incurred to finance the
         purchase of equipment, and other Capital Lease Obligations, not to
         exceed $50,000,000 in the aggregate outstanding at any time; provided
         that (i) such Indebtedness when incurred shall not exceed the purchase
         price or cost of construction of such asset and (ii) 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) intercompany Indebtedness of the Restricted Subsidiaries
         of the Borrower to the Borrower or to other Restricted Subsidiaries of
         the Borrower or of the Borrower to any of its Restricted Subsidiaries;

                  (e) obligations in connection with any Permitted Receivables
         Financing, to the extent such obligations constitute Indebtedness;

                  (f) additional unsecured Indebtedness and/or Subordinated
         Indebtedness on terms and conditions reasonably satisfactory to the
         Agents of the Borrower and its Restricted Subsidiaries up to but not
         exceeding $100,000,000 in the aggregate at any one time outstanding;

                  (g) Indebtedness of a Restricted Subsidiary (i) consisting of
         tax-advantaged industrial revenue bond, industrial development bond or
         other similar financings assumed (or taken subject to) in connection
         with (but not incurred in connection with or in anticipation of) a
         Permitted Acquisition and (ii) existing at the time such Person becomes
         a Restricted Subsidiary pursuant to a Permitted Acquisition provided
         that such Indebtedness was not incurred by such Person in connection
         with, or in anticipation or contemplation of, such Person becoming a
         Restricted Subsidiary;

                  (h) Indebtedness in respect of Hedging Agreements to the
         extent permitted hereunder;

                  (i) Indebtedness of the Acquired Company and its Subsidiaries
         under the Senior Notes in an aggregate principal amount not to exceed
         $700,000,000 (as such amount may be reduced from time to time);

                  (j) other Subordinated Indebtedness; and

                  (k) other secured Indebtedness of the Borrower and its
         Restricted Subsidiaries up to but not exceeding $30,000,000 in the
         aggregate at any one time outstanding.






                                       97


         SECTION 6.2 LIENS.

         The Borrower will not, nor will it permit any Restricted Subsidiary to,
contract, create, incur, assume or permit to exist any Lien with respect to any
of its assets, whether now owned or hereafter acquired, except for Permitted
Liens.

         SECTION 6.3 NATURE OF BUSINESS.

         Neither the Borrower nor any of its Restricted Subsidiaries will engage
to any substantial extent in any line or lines of business activity other than
operations involved in the manufacture, processing and distribution of food or
packaging products or the lines of business conducted by the Borrower or any of
its Restricted Subsidiaries as of the Closing Date or which are related thereto.

         SECTION 6.4 CONSOLIDATION, MERGER, SALE OR PURCHASE OF ASSETS, ETC.

         The Borrower will not, nor will it permit any Restricted Subsidiary to,

                  (a) enter into any transaction of merger or consolidation or
         amalgamation, or liquidate, wind up or dissolve itself (or suffer any
         liquidation or dissolution);

                  (b) acquire any business or assets from, or Capital Stock of,
         or be a party to any acquisition of, any Person except:

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

                           (ii) Investments permitted under Section 6.5 hereof,
                  and

                           (iii) Permitted Acquisitions;

                  (c) convey, sell, lease, transfer or otherwise dispose of, in
         one transaction or a series of transactions, any part of its business
         or assets, whether now owned or hereafter acquired (including, without
         limitation, receivables and leasehold interests), but excluding:

                           (i) any Excluded Disposition or Specified Sale;

                           (ii) obsolete or worn-out Property, tools or
                  equipment no longer used or useful in its business (other than
                  any Excluded Disposition) or real Property no longer used or
                  useful in its business;

                           (iii) any sale, lease or transfer of assets from a
                  Credit Party to another Credit Party;

                           (iv) any sale of Transferred Assets by such Person to
                  a Receivables Financier in connection with a Permitted
                  Receivables Financing;




                                       98


                           (v) any sale to the extent permitted under Section
                  6.12;

                           (vi) transfers of Capital Stock and assets pursuant
                  to the DFA Agreement, and sales, transfers and other
                  dispositions required or requested by any Governmental
                  Authority in connection with any required consent to
                  transactions contemplated by the Merger Agreement; and

                           (vii) transfers of other assets so long as the
                  aggregate amount thereof sold or otherwise disposed of in any
                  single fiscal year by the Borrower and its Restricted
                  Subsidiaries shall not have a book value in excess of ten
                  percent of the book value of the total assets of the Borrower
                  and its Restricted Subsidiaries owned on the later of the
                  Funding Date or the first day of such fiscal year;

         provided, that in each case with respect to subsections (vii) above at
         least 85% of the consideration received therefor by the Borrower or any
         such Restricted Subsidiary is in the form of cash or Cash Equivalents
         or Capital Stock or assets acquired in connection with a Permitted
         Acquisition or Permitted Investment; and

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

                           (i) any Restricted Subsidiary of the Borrower may be
                  merged or consolidated with or into: (A) the Borrower if the
                  Borrower shall be the continuing or surviving corporation or
                  (B) any other Subsidiary (so long as such surviving Subsidiary
                  is either (x) a Credit Party or (y) an Additional Credit
                  Party);

                           (ii) any Restricted Subsidiary of the Borrower may
                  sell, lease, transfer or otherwise dispose of any or all of
                  its assets (upon voluntary liquidation or otherwise) to the
                  Borrower or a Restricted Subsidiary of the Borrower; and

                           (iii) any Unrestricted Subsidiary may be sold,
                  liquidated, wound up or dissolved, or may sell, lease,
                  transfer or otherwise dispose of any or all of its assets.

         SECTION 6.5 ADVANCES, INVESTMENTS AND LOANS.

         The Borrower will not, nor will it permit any Restricted Subsidiary to,
lend money or extend credit or make advances to any Person, or purchase or
acquire any stock, obligations or securities of, or any other interest in, or
make any capital contribution to, any Person except for Permitted Investments.






                                       99


         SECTION 6.6 TRANSACTIONS WITH AFFILIATES.

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

         SECTION 6.7 OWNERSHIP OF SUBSIDIARIES; RESTRICTIONS.

         The Borrower will not, nor will it permit any Restricted Subsidiary to,
create, form or acquire any Subsidiaries, except for (a) wholly-owned Domestic
Subsidiaries which, if Material Subsidiaries and not a Receivables Financing
SPC, are joined as Additional Credit Parties in accordance with the terms
hereof, (b) other Domestic Subsidiaries which are Restricted Subsidiaries, or
(c) Foreign Subsidiaries. The Borrower will not, nor will it permit its
Restricted Subsidiaries to, sell, transfer, pledge or otherwise dispose of any
Capital Stock or other equity interests in any of its Restricted Subsidiaries,
nor will it permit any of its Restricted Subsidiaries to issue, sell, transfer,
pledge or otherwise dispose of any of its Capital Stock or other equity
interests, except in a transaction permitted by Section 6.4.

         SECTION 6.8 FISCAL YEAR; ORGANIZATIONAL DOCUMENTS; MATERIAL CONTRACTS.

         The Borrower will not, nor will it permit any of its Subsidiaries to,
change its fiscal year except in the event that any such change could not
reasonably be expected to have a Material Adverse Effect. The Borrower will not,
nor will it permit any Subsidiary to, amend, modify or change its articles of
incorporation (or corporate charter or other similar organizational document) or
bylaws (or other similar document) or its jurisdiction of incorporation in any
manner that could reasonably be expected to have a Material Adverse Effect
without the prior written consent of the Required Lenders. The Borrower will
not, nor will it permit any of its Subsidiaries to, without the prior written
consent of the Administrative Agent, amend, modify, cancel or terminate or fail
to renew or extend or permit the amendment, modification, cancellation or
termination of any of the Material Contracts, except in the event that such
amendments, modifications, cancellations or terminations could not reasonably be
expected to have a Material Adverse Effect.




                                      100


         SECTION 6.9 LIMITATION ON ACTIONS.

                  (a) The Borrower will not, nor will it permit any Restricted
         Subsidiary 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 (i) 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,
         (ii) pay any Indebtedness or other obligation owed to any Credit Party,
         (iii) make loans or advances to any Credit Party, (iv) sell, lease or
         transfer any of its properties or assets to any Credit Party, or (v)
         act as a Guarantor and pledge its assets pursuant to the Credit
         Documents or any renewals, refinancings, exchanges, refundings or
         extension thereof, except (in respect of any of the matters referred to
         in clauses (i)-(v) above) for such encumbrances or restrictions
         existing under or by reason of (A) this Agreement and the other Credit
         Documents, (B) applicable law, (C) any document or instrument governing
         Indebtedness incurred pursuant to Section 6.1(c), provided that any
         such restriction contained therein relates only to the asset or assets
         constructed or acquired in connection therewith, (D) customary
         restrictions and conditions contained in agreements relating to the
         sale of a Subsidiary or assets pending such sale, provided such
         restrictions and conditions apply only to the Subsidiary or assets that
         are to be sold and such sale is permitted hereunder, (E) restrictions
         or conditions imposed by any agreement relating to secured Indebtedness
         permitted by this Agreement if such restrictions or conditions apply
         only to the assets securing such Indebtedness, (F) customary provisions
         in leases and other contracts restricting the assignment thereof, (G)
         restrictions contained in documents executed in connection with any
         Permitted Receivables Financing, (H) 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, (I) restrictions or conditions existing
         as a result of the issuance of preferred stock by a Subsidiary pursuant
         to warrants outstanding as of the Funding Date for the acquisition
         thereof, (J) any document or instrument governing the Senior Notes as
         in effect on the Funding Date, and (K) any indenture agreement,
         instrument or other arrangement relating to the assets or business of
         any Subsidiary and existing prior to the consummation of the Permitted
         Acquisition in which such Subsidiary was acquired.

                  (b) The Borrower will not, nor will it permit any Restricted
         Subsidiary to, enter into, assume or become subject to any agreement
         prohibiting or otherwise restricting the creation or assumption of any
         Lien upon its properties or assets, whether now owned or hereafter
         acquired, or requiring the grant of any security for such obligation if
         security is given for some other obligation except (i) pursuant to this
         Agreement and the other Credit Documents, (ii) pursuant to applicable
         law, (iii) pursuant to any document or instrument governing
         Indebtedness incurred pursuant to Section 6.1(c), provided that in the
         case of Section 6.1(c) any such restriction contained therein relates
         only to the asset or assets constructed or acquired in connection
         therewith, (iv) customary restrictions and conditions contained in
         agreements relating. to the sale of a Subsidiary or assets pending such
         sale, provided such restrictions and conditions apply only to the
         Subsidiary or assets that are to be sold and such sale is permitted
         hereunder, (v) restrictions or conditions imposed by any agreement
         relating to secured Indebtedness permitted by this Agreement if such
         restrictions or conditions apply only to the assets securing such
         Indebtedness, (vi) restrictions or conditions as the result of the
         issuance of





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         preferred stock by a Subsidiary pursuant to warrants outstanding as of
         the Funding Date for the acquisition thereof, (vii) customary
         provisions in leases and other contracts restricting the assignment
         thereof, (viii) pursuant to the documents executed in connection with
         any Permitted Receivables Financing (but only to the extent that the
         related prohibitions against other encumbrances pertain to the
         applicable Transferred Assets actually sold, contributed, financed or
         otherwise conveyed or pledged pursuant to such Permitted Receivables
         Financing), (ix) restrictions in 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, (x) restrictions or conditions contained in any document or
         instrument governing the Senior Notes as in effect on the Funding Date,
         and (xi) any indenture agreement, instrument or other arrangement
         relating to the assets or business of any Subsidiary and existing prior
         to the consummation of the Permitted Acquisition in which such
         Subsidiary was acquired.

         SECTION 6.10 RESTRICTED PAYMENTS.

                  The Borrower will not, nor will it permit any Restricted
         Subsidiary to, directly or indirectly, declare, order, make or set
         apart any sum for or pay any Restricted Payment, except (a) to make
         dividends payable solely in the same class of Capital Stock of such
         Person, (b) to make dividends or other distributions payable to any
         Credit Party (directly or indirectly through Subsidiaries), (c) to make
         dividends or repurchases on or before the Funding Date in order to
         consummate the transactions contemplated by the Credit Documents,
         Merger Documents and DFA Agreement, (d) to make dividends to or
         repurchases from the Borrower or the holders of ownership interests of
         such Subsidiary the proceeds of which shall be used to pay taxes that
         are then due and payable, (e) in the case of a Receivables Financing
         SPC, to make Restricted Payments to its owners to the extent of net
         income or other assets available therefor under applicable law, and (f)
         to make other Restricted Payments; provided, however (i) for so long as
         the Leverage Ratio of the Borrower as of the end of the most recently
         ended fiscal quarter for which financial statements have been delivered
         in accordance with Section 5.1(b) is greater than or equal to 3.75 to
         1.0, such Restricted Payments shall not exceed $50,000,000 during any
         fiscal year, and (ii) after giving effect to such Restricted Payments
         on a Pro Forma Basis, no Default or Event of Default shall have
         occurred and/or be continuing or be directly or indirectly caused as a
         result thereof. For the purpose of clarification, it is hereby
         understood and agreed that to the extent any Restricted Payments are
         made by the Borrower or any Restricted Subsidiary in a fiscal year
         prior to the time upon which subclause (f)(i)(A) above applies (i.e.,
         at the time that the Leverage Ratio of the Borrower as of the end of
         the most recently ended fiscal quarter is less than 3.75 to 1.0), the
         amount of such Restricted Payments made prior to such time shall not be
         counted in the limitation set forth in subclause (f)(i)(A) above.

         SECTION 6.11 PAYMENTS OF SUBORDINATED DEBT, ETC.

         The Borrower will not, nor will it permit any Restricted Subsidiary to,
after the issuance thereof, amend or modify (or permit the amendment or
modification of) any of the terms of any Subordinated Indebtedness in a manner
adverse to the interests of the Lenders (including





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specifically shortening the final maturity or average life to maturity or
requiring any payment to be made sooner than originally scheduled or increase
the interest rate or fees applicable thereto or change any subordination
provision thereof). The Borrower will not, nor will it permit any Restricted
Subsidiary to make any optional or voluntary prepayment of Subordinated
Indebtedness until the Credit Party Obligations shall have been paid in full and
the Commitments relating thereto shall have been terminated.

         SECTION 6.12 SALE LEASEBACKS.

         The Borrower will not, nor will it permit any Restricted Subsidiary to,
directly or indirectly, become or remain liable as lessee or as guarantor or
other surety with respect to any lease, whether an operating lease or a Capital
Lease, of any property (whether real, personal or mixed), whether now owned or
hereafter acquired in excess of $50,000,000 in the aggregate on an annual basis,
(a) which the Borrower or any Subsidiary has sold or transferred or is to sell
or transfer to a Person which is not the Borrower or any Subsidiary or (b) which
the Borrower or any Subsidiary intends to use for substantially the same purpose
as any other property which has been sold or is to be sold or transferred by the
Borrower or any Subsidiary to another Person which is not the Borrower or any
Subsidiary in connection with such lease.

         SECTION 6.13 USE OF PROCEEDS.

         The Borrower will not use the proceeds of the Loans and Letters of
Credit in a manner inconsistent with the uses permitted under Section 3.11
hereof.

         SECTION 6.14 SENIOR NOTES.

         The Borrower will not, nor will it permit any of its Subsidiaries to,
make any prepayment of principal, interest or premium, if any, with respect to
the Senior Notes prior to the date upon which the Commitments have been
terminated and the Credit Party Obligations have been paid in full.

                                   ARTICLE VII
                                EVENTS OF DEFAULT

         SECTION 7.1 EVENTS OF DEFAULT.

         An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "Event of Default"):

                  (a) The Borrower shall fail to pay any principal on any Note
         when due in accordance with the terms thereof or hereof; or the
         Borrower shall fail to reimburse the Issuing Lender for any LOC
         Obligations when due in accordance with the terms hereof; or the
         Borrower shall fail to pay any interest on any Note or any fee or other
         amount payable hereunder when due in accordance with the terms thereof
         or hereof and such failure shall continue unremedied for three (3)
         Business Days (or any Guarantor shall fail





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         to pay on the Guaranty in respect of any of the foregoing or in respect
         of any other Guaranty Obligations thereunder); or

                  (b) Any representation or warranty made or deemed made herein,
         in the Security Documents or in any of the other Credit Documents or
         which is contained in any certificate, document or financial or other
         statement furnished at any time under or in connection with this
         Agreement shall prove to have been incorrect, false or misleading in
         any material respect on or as of the date made or deemed made; or

                  (c) (i) Any Credit Party shall fail to perform, comply with or
         observe any term, covenant or agreement applicable to it contained in
         Sections 5.4(a), 5.7(a) or 5.9 or Article VI hereof; or (ii) any Credit
         Party shall fail to comply with any other covenant, contained in this
         Credit Agreement or the other Credit Documents or any other agreement,
         document or instrument among any Credit Party, the Administrative Agent
         and the Lenders or executed by any Credit Party in favor of the
         Administrative Agent or the Lenders (other than as described in
         Sections 7.1 (a) or 7.1(c)(i) above), and in the event such breach or
         failure to comply is capable of cure, is not cured within thirty (30)
         days of its occurrence; or

                  (d) The Borrower or any of its Restricted Subsidiaries shall
         (i) default in any payment of principal of or interest on any
         Indebtedness (other than the Notes) in a principal amount outstanding
         of at least $50,000,000 in the aggregate for the Borrower and any of
         its Restricted Subsidiaries beyond the period of grace (not to exceed
         30 days), if any, provided in the instrument or agreement under which
         such Indebtedness was created; or (ii) default in the observance or
         performance of any other agreement or condition relating to any
         Indebtedness in a principal amount outstanding of at least $50,000,000
         in the aggregate for the Borrower and its Restricted Subsidiaries or
         contained in any instrument or agreement evidencing, securing or
         relating thereto, or any other event shall occur or condition exist,
         the effect of which default or other event or condition is to cause, or
         to permit the holder or holders of such Indebtedness or beneficiary or
         beneficiaries of such Indebtedness (or a trustee or agent on behalf of
         such holder or holders or beneficiary or beneficiaries) to cause, with
         the giving of notice if required, such Indebtedness to become due prior
         to its stated maturity; or

                  (e) (i) The Borrower or any of its Restricted Subsidiaries
         shall commence any case, proceeding or other action (A) under any
         existing or future law of any jurisdiction, domestic or foreign,
         relating to bankruptcy, insolvency, reorganization or relief of
         debtors, seeking to have an order for relief entered with respect to
         it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
         reorganization, arrangement, adjustment, winding-up, liquidation,
         dissolution, composition or other relief with respect to it or its
         debts, or (B) seeking appointment of a receiver, trustee, custodian,
         conservator or other similar official for it or for all or any
         substantial part of its assets, or the Borrower or any Restricted
         Subsidiary shall make a general assignment for the benefit of its
         creditors; or (ii) there shall be commenced against the Borrower or any
         Restricted Subsidiary any case, proceeding or other action of a nature
         referred to in clause (i) above which (A) results in the entry of an
         order for relief or any such adjudication or appointment or (B)





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         remains undismissed, undischarged or unbonded for a period of 60 days;
         or (iii) there shall be commenced against the Borrower or any
         Restricted Subsidiary any case, proceeding or other action seeking
         issuance of a warrant of attachment, execution, distraint or similar
         process against all or any substantial part of its assets which results
         in the entry of an order for any such relief which shall not have been
         vacated, discharged, or stayed or bonded pending appeal within 60 days
         from the entry thereof; or (iv) the Borrower or any Restricted
         Subsidiary shall take any action in furtherance of, or indicating its
         consent to, approval of, or acquiescence in, any of the acts set forth
         in clause (i), (ii), or (iii) above; or (v) the Borrower or any
         Restricted Subsidiary shall generally not, or shall be unable to, or
         shall admit in writing its inability to., pay its debts as they become
         due; or

                  (f) One or more judgments or decrees shall be entered against
         the Borrower or any of its Restricted Subsidiaries involving in the
         aggregate a liability (to the extent not paid when due or covered by
         insurance) of $50,000,000 or more and all such judgments or decrees
         shall not have been paid and satisfied, vacated, discharged, stayed or
         bonded pending appeal within 30 days from the entry thereof, or

                  (g) (i) Any Person shall engage in any "prohibited
         transaction" (as defined in Section 406 of ERISA or Section 4975 of the
         Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
         defined in Section 302 of ERISA), whether or not waived, shall exist
         with respect to any Plan or any Lien in favor of the PBGC or a Plan
         (other than a Permitted Lien) shall arise on the assets of the
         Borrower, any of its Restricted Subsidiaries or any Commonly Controlled
         Entity, (iii) a Reportable Event shall occur with respect to, or
         proceedings shall commence to have a trustee appointed, or a trustee
         shall be appointed, to administer or to terminate, any Single Employer
         Plan, which Reportable Event or commencement of proceedings or
         appointment of a Trustee is, in the reasonable opinion of the Required
         Lenders, likely to result in the termination of such Plan for purposes
         of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for
         purposes of Title IV of ERISA, (v) the Borrower, any of its Restricted
         Subsidiaries or any Commonly Controlled Entity shall, or in the
         reasonable opinion of the Required Lenders is likely to, incur any
         liability in connection with a withdrawal from, or the Insolvency or
         Reorganization of, any Multiemployer Plan or (vi) any other similar
         event or condition shall occur or exist with respect to a Plan; and in
         each case in clauses (i) through (vi) above, such event or condition,
         together with all other such events or conditions, if any, could have a
         Material Adverse Effect; or

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





                                      105


                  (i) A Change of Control shall occur; or

                  (j) The Guaranty or any provision thereof shall cease to be in
         full force and effect or any Guarantor or any Person acting by or on
         behalf of any Guarantor shall deny or disaffirm any Guarantor's
         obligations under the Guaranty; or

                  (k) Any other Credit Document shall fail to be in full force
         and effect or to give the Administrative Agent and/or the Lenders the
         security interests, liens, rights, powers and privileges purported to
         be created thereby (except as such documents may be terminated or no
         longer in force and effect in accordance with the terms thereof, other
         than those indemnities and provisions which by their terms shall
         survive).

         SECTION 7.2 ACCELERATION; REMEDIES.

         Upon the occurrence of an Event of Default, then, and in any such
event, (a) if such event is an Event of Default specified in Section 7.1(e)
above, automatically the Commitments shall immediately terminate and the Loans
(with accrued interest thereon), and all other amounts under the Credit
Documents (including without limitation the maximum amount of all contingent
liabilities under Letters of Credit) shall immediately become due and payable,
the Administrative Agent shall have the right to enforce any and all other
rights and interests created and existing under the Credit Documents, including,
without limitation, all rights and remedies existing under the Security
Documents, all rights and remedies against a Guarantor and all rights of
set-off, and the Administrative Agent shall have the right to enforce any and
all other rights and remedies of a creditor under applicable law, and (b) if
such event is any other Event of Default, with the written consent of the
Required Lenders, the Administrative Agent may, or upon the written request of
the Required Lenders, the Administrative Agent shall, by notice to the Borrower
(a copy of which shall be sent to the Lenders), take any or all of the following
actions: (i) declare the Commitments to be terminated forthwith, whereupon the
Commitments shall immediately terminate; (ii) declare the Loans (with accrued
interest thereon) and all other amounts owing under this Agreement and the Notes
to be due and payable forthwith and direct the Borrower to pay to the
Administrative Agent cash collateral as security for the LOC Obligations for
subsequent drawings under then outstanding Letters of Credit in an amount equal
to the maximum amount of which may be drawn under Letters of Credit then
outstanding, whereupon the same shall immediately become due and payable; (iii)
enforce any and all other rights and interests created and existing under the
Credit Documents, including, without limitation, all rights and remedies
existing under the Security Documents, all rights and remedies against a
Guarantor and all rights of set-off; and (iv) enforce any and all rights and
remedies of a creditor under applicable law. Except as expressly provided above
in this Section 7.2, presentment, demand, protest and all other notices of any
kind are hereby expressly waived.

         SECTION 7.3 JUDGMENT CURRENCY.

The obligation of the Borrower to pay the Credit Party Obligations and the
obligation of any such Person to make payments of any other amounts payable
hereunder or pursuant to any other





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Credit Document in the currency specified for such payment shall not be
discharged or satisfied by any tender, or any recovery pursuant to any judgment,
which is expressed in or converted into any other currency, except to the extent
that such tender or recovery shall result in the actual receipt by each of the
Administrative Agent and Lenders of the full amount of the particular Permitted
Currency expressed to be payable pursuant to the applicable Credit Document. The
Administrative Agent shall, using all amounts obtained or received from the
Borrower pursuant to any such tender or recovery in payment of principal of and
interest on the Credit Party Obligations, promptly purchase the applicable
currency at the most favorable spot exchange rate determined by the
Administrative Agent to be available to it. The obligation of the Borrower to
make payments in the applicable currency shall be enforceable as an alternative
or additional cause of action solely for the purpose of recovering in the
applicable currency the amount, if any, by which such actual receipt shall fall
short of the full amount of the currency expressed to be payable pursuant to the
applicable Credit Document.

                                  ARTICLE VIII
                                    THE AGENT

         SECTION 8.1 APPOINTMENT.

         Each Lender hereby irrevocably designates and appoints First Union
National Bank as the Administrative Agent of such Lender under this Agreement,
and each such Lender irrevocably authorizes First Union National Bank, as the
Administrative Agent for such Lender, to take such action on its behalf under
the provisions of this Agreement and to exercise such powers and perform such
duties as are expressly delegated to the Administrative Agent by the terms of
this Agreement, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Administrative Agent.

         SECTION 8.2 DELEGATION OF DUTIES.

         The Administrative Agent may execute any of its duties under this
Agreement by or through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact selected by it with reasonable care. Without
limiting the foregoing, the Administrative Agent may appoint one of its
Affiliates as its agent to perform the functions of the Administrative Agent
hereunder relating to the advancing of funds to the Borrower and distribution of
funds to the Lenders and to perform such other related functions of the
Administrative Agent hereunder as are reasonably incidental to such functions.






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         SECTION 8.3 EXCULPATORY PROVISIONS.

         Neither the Administrative Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be (i) liable for any
action lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement (except for its or such Person's own gross
negligence or willful misconduct) or (ii) responsible in any manner to any of
the Lenders for any recitals, statements, representations or warranties made by
any Credit Party or any officer thereof contained in this Agreement or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Administrative Agent under or in connection with, this
Agreement or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of any of the Credit Documents or for any failure of any Credit
Party to perform its obligations hereunder or thereunder. The Administrative
Agent shall not be under any obligation to any Lender to ascertain or to inquire
as to the observance or performance by the Credit Parties of any of the
agreements contained in, or conditions of, this Agreement, or to inspect the
properties, books or records of the Credit Parties.

         SECTION 8.4 RELIANCE BY ADMINISTRATIVE AGENT.

         The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any Note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it in
good faith to be genuine and correct and to have been signed, sent or made by
the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Credit Parties), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless (a) a written notice of assignment, negotiation
or transfer thereof shall have been filed with the Administrative Agent and (b)
the Administrative Agent shall have received the written agreement of such
assignee to be bound hereby as fully and to the same extent as if such assignee
were an original Lender party hereto, in each case in form satisfactory to the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement unless it shall
first receive such advice or concurrence of the Required Lenders as it deems
appropriate or 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 or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
any of the Credit Documents in accordance with a request of the Required Lenders
or all of the Lenders, as may be required under this Agreement, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Lenders and all future holders of the Notes.

         SECTION 8.5 NOTICE OF DEFAULT.

         The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless the
Administrative Agent has received written notice from a Lender or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default"'. In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall give
prompt notice thereof to the Lenders. The Administrative Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required





                                      108


Lenders; provided, however, that unless and until the Administrative Agent shall
have received such directions, the Administrative 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
interests of the Lenders except to the extent that this Credit Agreement
expressly requires that such action be taken, or not taken, only with the
consent or upon the authorization of the Required Lenders, or all of the
Lenders, as the case may be.

         SECTION 8.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS.

         Each Lender expressly acknowledges that neither the Administrative
Agent nor any of its officers, directors, employees, agents, attorneys-in-fact
or affiliates has made any representation or warranty to it and that no act by
the Administrative Agent hereinafter taken, including any review of the affairs
of the Credit Parties, shall be deemed to constitute any representation or
warranty by the Administrative Agent to any Lender. Each Lender represents to
the Administrative Agent that it has, independently and without reliance upon
the Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrower and made its own decision to make
its Loans hereunder and enter into this Agreement. Each Lender also represents
that it will, independently and without reliance upon the Administrative 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 credit analysis,
appraisals and decisions in taking or not taking action under this Agreement,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Credit Parties which may come
into the possession of the Administrative Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates.

         SECTION 8.7 INDEMNIFICATION.

The Lenders agree to indemnify the Administrative Agent in its capacity
hereunder (to the extent not reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so), ratably according to their respective
Commitment Percentages in effect on the date on which indemnification is sought
under this Section, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever which may at any time (including, without
limitation, at any time following the payment of the Notes) be imposed on,
incurred by or asserted against the Administrative Agent in any way relating to
or arising out of any Credit Document' or any documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
or any action taken or omitted by the Administrative Agent under or in
connection with any of the foregoing; provided, however, that no Lender shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
to the extent resulting from the Administrative Agent's gross negligence or
willful





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misconduct, as determined by a court of competent jurisdiction. The agreements
in this Section 8.7 shall survive the termination of this Agreement and payment
of the Notes and all other amounts payable hereunder.

         SECTION 8.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY.

         The Administrative Agent and its affiliates may make loans to, accept
deposits from and generally engage in any kind of business with the Borrower as
though the Administrative Agent were not the Administrative Agent hereunder.
With respect to its Loans made or renewed by it and any Note issued to it, the
Administrative Agent shall have the same rights and powers under this Agreement
as any Lender and may exercise the same as though it were not the Administrative
Agent, and the terms "Lender" and "Lenders" shall include the Administrative
Agent in its individual capacity.

         SECTION 8.9 SUCCESSOR ADMINISTRATIVE AGENT.

         The Administrative Agent may resign as Administrative Agent upon 30
days' prior notice to the Borrower and the Lenders. If the Administrative Agent
shall resign as Administrative Agent under this Agreement and the Notes, then
the Required Lenders shall appoint from among the Lenders a successor agent for
the Lenders, which successor agent shall be approved by the Borrower, so long as
no Default or Event of Default has occurred and is continuing, whereupon such
successor agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term "Administrative Agent" shall mean such
successor agent effective upon such appointment and approval, and the former
Administrative Agent's rights, powers and duties as Administrative Agent shall
be terminated, without any other or further act or deed on the part of such
former Administrative Agent or any of the parties to this Agreement or any
holders of the Notes. If no successor Administrative Agent has accepted
appointment as Administrative Agent within sixty (60) days after the retiring
Administrative Agent's giving notice of resignation, the retiring Administrative
Agent's resignation shall nevertheless become effective and the Lenders shall
perform all duties of the Administrative Agent hereunder until such time, if
any, as the Required Lenders appoint a successor Administrative Agent as
provided for above. After any retiring Administrative Agent's resignation as
Administrative Agent, the provisions of this Section 8.9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.

         SECTION 8.10 RESPONSIBILITY OF OTHER AGENTS.

         The Syndication Agent, the co-documentation agents and any other agents
designated as such on the signature pages hereto (other than the Administrative
Agent) shall have no responsibilities under this Agreement or the other Credit
Documents other than as a Lender.

                                   ARTICLE IX
                                  MISCELLANEOUS

         SECTION 9.1 AMENDMENTS, WAIVERS AND RELEASE OF COLLATERAL.




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         Neither this Agreement, nor any of the Notes, nor any of the other
Credit Documents, nor any terms hereof or thereof may be amended, supplemented,
waived or modified except in accordance with the provisions of this Section nor
may be released except as specifically provided herein or in the Security
Documents or in accordance with the provisions of this Section 9.1. The Required
Lenders may, or, with the written consent of the Required Lenders, the
Administrative Agent may, from time to time, (a) enter into with the Borrower
written amendments, supplements or modifications hereto and to the other Credit
Documents for the purpose of adding any provisions to this Agreement or the
other Credit Documents or changing in any manner the rights of the Lenders or of
the Borrower hereunder or thereunder or (b) waive, on such terms and conditions
as the Required Lenders may specify in such instrument, any of the requirements
of this Agreement or the other Credit Documents or any Default or Event of
Default and its consequences or (c) release Collateral in accordance with the
terms hereof or of any Security Document or on such other terms and conditions
as the Required Lenders may agree; provided, however, that no such waiver and no
such amendment, waiver, supplement, modification or release shall:

                           (i) reduce the amount or extend the scheduled date of
                  maturity of any Loan or Note or any installment thereon, or
                  the reimbursement obligations with respect to any Letters of
                  Credit, or extend the expiry of any Letter of Credit beyond
                  the Maturity Date, or reduce the stated rate of any interest
                  or fee payable hereunder (other than interest at the increased
                  post-default rate) or extend the scheduled date of any payment
                  thereof or increase the amount or extend the expiration date
                  of any Lender's Commitment, in each case without the written
                  consent of each Lender directly affected thereby (it being
                  understood and agreed that changes to the financial
                  definitions and financial covenants herein shall only require
                  the consent of the Required Lenders and waivers of mandatory
                  prepayments of the Loans required pursuant to Section 2.8(b)
                  hereof shall not constitute increases in the Commitment of any
                  Lender or extensions of the scheduled date of any payments to
                  any Lender); or

                           (ii) amend, modify or waive any provision of Section
                  2.13 or this Section 9.1, or reduce the percentage specified
                  in the definition of Required Lenders, without the written
                  consent of all the Lenders; or

                           (iii) amend, modify or waive any provision of Article
                  VIII without the written consent of the then Administrative
                  Agent; or

                           (iv) release all or any substantial portion of the
                  Guarantors from their obligations under the Guaranty without
                  the written consent of all of the Lenders; or

                           (v) release all or any substantial portion of the
                  Collateral without the written consent of all of the Lenders,
                  or

                           (vi) amend, modify or waive the allocation of any
                  payments or the realization of proceeds of Collateral among
                  the Revolving-1 Loans, the Tranche




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                  A-1 Term Loans and/or the Tranche B-1 Term Loans (or between
                  any two of such Loans), or the order of application of
                  payments specified in Section 2.8 without the consent of, if
                  affected thereby, (i) Lenders holding greater than 50% of the
                  Revolving-1 Committed Amount, (ii) Lenders holding greater
                  than 50% of the outstanding Tranche A-1 Term Loans and (iii)
                  Lenders holding greater than 50% of the outstanding Tranche
                  B-1 Term Loans.

                           (vii) amend, modify or waive the requirement that any
                  issue be resolved or determined with the consent, approval or
                  upon the request of the Required Lenders without the written
                  consent of the Required Lenders, or with the consent, approval
                  or upon the request of all Lenders, without the written
                  consent of all of the Lenders to the change of such voting
                  requirement and, provided, further, that no amendment, waiver
                  or consent affecting the rights or duties of the
                  Administrative Agent or the Issuing Lender under any Credit
                  Document shall in any event be effective, unless in writing
                  and signed by the Administrative Agent and/or the Issuing
                  Lender, as applicable, in addition to the Lenders required
                  hereinabove to take such action.

         Any such waiver, any such amendment, supplement or modification and any
such release shall apply equally to each of the Lenders and shall be binding
upon the Borrower, the other Credit Parties, the Lenders, the Administrative
Agent and all future holders of the Notes. In the case of any waiver, the
Borrower, the other Credit Parties, the Lenders and the Administrative Agent
shall be restored to their former position and rights hereunder and under the
outstanding Loans and Notes and other Credit Documents, and any Default or Event
of Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon.

         Notwithstanding any of the foregoing to the contrary, the consent of
the Credit Parties shall not be required for any amendment, modification or
waiver of the provisions of Article VIII (other than the provisions of Section
8.9); provided, however, that the Administrative Agent will provide written
notice to the Borrower of any such amendment, modification or waiver. In
addition, the Borrower and the Lenders hereby authorize the Administrative Agent
to modify this Credit Agreement by unilaterally amending or supplementing the
Register from time to time in the manner requested by the Borrower, the
Administrative Agent or any Lender in order to reflect any assignments or
transfers of the Loans as provided for hereunder; provided, however, that the
Administrative Agent shall promptly deliver a copy of any such modification to
the Borrower and each Lender.

         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 supersede the unanimous consent
provisions set forth herein and (y) the Required Lenders may consent to allow a
Credit Party to use cash collateral in the context of a bankruptcy or insolvency
proceeding.




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         SECTION 9.2 NOTICES.

         Except as otherwise provided in Article II, all notices, requests and
demands to or upon the respective parties hereto to be effective shall be in
writing (including by telecopy), and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made (a) when delivered by
hand, (b) when transmitted via telecopy (or other facsimile device) to the
number set out herein and the appropriate confirmation is received, (c) the 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) on the earlier of receipt or the fifth Business Day following the day on
which the same is sent by certified or registered mail, postage prepaid, return
receipt requested, in each case, addressed as follows in the case of the
Borrower, the other Credit Parties and the Administrative Agent, and as set
forth on Schedule 9.2 in the case of the Lenders, or to such other address as
may be hereafter notified by the respective parties hereto and any future
holders of the Notes:

         The Borrower               [Borrower/Name of Credit Party]
         and the other              c/o Dean Foods Company
         Credit Parties:            2515 McKinney Ave., Suite 1200
                                    Dallas, Texas 75201
                                    Attention:  Treasurer
                                    Telecopier:  (214) 303-3499
                                    Telephone:  (214) 303-3400

         The Administrative         Wachovia Bank, National Association
         Agent:                     Charlotte Plaza, 23rd Floor
                                    201 South College Street
                                    Charlotte, North Carolina 28288-0608
                                    Attention:  Syndication Agency Services
                                    Telecopier:  (704) 383-0288
                                    Telephone:  (704) 374-2698

                                    with a copy to:

                                    First Union National Bank
                                    One First Union Center, DC-5
                                    Charlotte, North Carolina 28288-0737
                                    Attention:  Mr. Jorge Gonzalez
                                    Telecopier:  (704) 715-1117
                                    Telephone:  (704) 383-8461

         SECTION 9.3 NO WAIVER; CUMULATIVE REMEDIES.

         No failure to exercise and no delay in exercising, on the part of the
Administrative Agent or any Lender, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or




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privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.

         SECTION 9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.

         All representations and warranties made hereunder and in any document;,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the Notes and the
making of the Loans, provided that all such representations and warranties shall
terminate on the date upon which the Commitments have been terminated and all
amounts owing hereunder and under any Notes have been paid in full.

         SECTION 9.5 PAYMENT OF EXPENSES AND TAXES.

The Credit Parties agree (a) to pay or reimburse the Administrative Agent for
all its reasonable out-of-pocket costs and expenses incurred in connection with
the development, preparation, negotiation, printing and execution of, and any
amendment, supplement or modification to, this Agreement and the other Credit
Documents and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions contemplated hereby
and thereby, together with the reasonable fees and disbursements of counsel to
the Administrative Agent, (b) to pay or reimburse each Lender and the
Administrative Agent for all its costs and expenses incurred in connection with
the enforcement or preservation of any rights under this Agreement, the Notes
and any such other documents, including, without limitation, the reasonable fees
and disbursements of counsel to the Administrative Agent and to the Lenders
(including reasonable allocated costs of in-house legal counsel), (c) on demand,
to pay, indemnify, and hold each Lender and the Administrative Agent harmless
from, any and all recording and filing fees and any and all liabilities with
respect to, or resulting from any delay in paying, stamp, excise and other
similar taxes, if any, which may be payable or determined to be payable in
connection with the execution and delivery of, or consummation or administration
of any of the transactions contemplated by, or any amendment, supplement or
modification of, or any waiver or consent under or in respect of, the Credit
Documents and any such other documents, and (d) to pay, indemnify, and hold each
Lender and the Administrative Agent and their Affiliates harmless from and
against, any and all other liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of the Credit Documents and any such other
documents and the use, or proposed use, of proceeds of the Loans (all of the
foregoing, collectively, the "indemnified liabilities"); provided, however, that
the Borrower shall not have any obligation hereunder to the Administrative Agent
or any Lender with respect to indemnified liabilities arising from the gross
negligence or willful misconduct of the Administrative Agent or any such Lender,
as determined by a court of competent jurisdiction. The agreements in this
Section 9.5 shall survive repayment or assignment of the Loans, Notes and all
other amounts payable hereunder.

         SECTION 9.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; PURCHASING LENDERS.

                  (a) This Agreement shall be binding upon and inure to the
         benefit of the Borrower, the Lenders, the Administrative Agent, all
         future holders of the Notes and their





                                      114


         respective successors and assigns, except that the Borrower may not
         assign or transfer any of its rights or obligations under this
         Agreement or the other Credit Documents without the prior written
         consent of each Lender.

                  (b) Any Lender may, without notice to or consent of the
         Borrower and the Administrative Agent, in the ordinary course of its
         commercial banking business and in accordance with applicable law, at
         any time sell to one or more banks or other entities ("Participants")
         participating interests in any Loan owing to such Lender, any Note held
         by such Lender, any Commitment of such Lender, or any other interest of
         such Lender hereunder; (provided, however, that no settlement date
         relating to any such sale shall occur prior to the date which is one
         Business Day after the Funding Date).. In the event of any such sale by
         a Lender of participating interests to a Participant, such Lender's
         obligations under this Agreement to the other parties to this Agreement
         shall remain unchanged, such Lender shall remain solely responsible for
         the performance thereof, such Lender shall remain the holder of any
         such Note for all purposes under this Agreement, and the Borrower and
         the Administrative Agent shall continue to deal solely and directly
         with such Lender in connection with such Lender's rights and
         obligations under this Agreement. No Lender shall transfer or grant any
         participation under which the Participant shall have rights to approve
         any amendment to or waiver of this Agreement or any other Credit
         Document except to the extent such amendment or waiver would (i) extend
         the scheduled maturity of any Loan or Note, or extend the expiry date
         of any Letter of Credit in which such Participant is participating
         beyond the Maturity Date, or any installment thereon in which such
         Participant is participating, or reduce the stated rate or extend the
         time of payment of interest or fees thereon (except in connection with
         a waiver of interest at the increased post-default rate) or reduce the
         principal amount thereof, or increase the amount of the Participant's
         participation over the amount thereof then in effect (it being
         understood that a waiver of any Default or Event of Default shall not
         constitute a change in the terms of such participation, and that an
         increase in any Commitment or Loan shall be permitted without consent
         of any Participant if the Participant's participation is not increased
         as a result thereof), (ii) release all or substantially all of the
         Guarantors from their obligations under the Guaranty, (iii) release all
         or substantially all of the Collateral, or (iv) consent to the
         assignment or transfer by the Borrower of any of its rights and
         obligations under this Agreement other than in accordance with this
         Agreement. In the case of any such participation, the Participant shall
         not have any rights under this Agreement or any of the other Credit
         Documents (the Participant's rights against such Lender in respect of
         such participation to be those set forth in the agreement executed by
         such Lender in favor of the Participant relating thereto) and all
         amounts payable by the Borrower hereunder shall be determined as if
         such Lender had not sold such participation; provided that each
         Participant shall be entitled to the benefits of Sections 2.15, 2.16,
         2.17, 2.18, 2.19 and 9.5 with respect to its participation in the
         Commitments and the Loans outstanding from time to time, but no
         Participant shall be entitled to receive any greater amount pursuant to
         such Sections than the transferor Lender would have been entitled to
         receive in respect of the amount of the participation transferred by
         such transferor Lender to such Participant had no such transfer
         occurred.





                                      115


                  (c) Any Lender may, in the ordinary course of its business and
         in accordance with applicable law, at any time after the Funding Date,
         sell or assign to any Lender, any Affiliate of a Lender or in the case
         of the Tranche A-1 Term Loan or the Tranche B-1 Term Loan, any special
         purpose entity created thereby (including, without limitation, any
         entity which is engaged in investing in bank loans and is administered
         by a Lender or an Affiliate of a Lender) or an Approved Fund and with
         the consent of the Administrative Agent (provided, however, that no
         settlement date relating to such sale or assignment shall occur prior
         to the date which is one Business Day after the Funding Date) and, so
         long as no Event of Default has occurred and is continuing, the
         Borrower (in each case, which consent shall not be unreasonably
         withheld or delayed), to one or more additional banks, funds or other
         financial institutions ("Purchasing Lenders"), all or any part of its
         rights and obligations under this Agreement and the Notes in minimum
         amounts of (x) $5,000,000 with respect to its Dollar Revolving-1
         Subcommitment and its Dollar Revolving-1 Loans, (y) $5,000,000 with
         respect to its Multi-currency Revolving-1 Subcommitment and its
         Multi-currency Revolving-1 Loans or (z) $1,000,000 with respect to its
         Tranche A-1 Term Loan or Tranche B-1 Term Loan (or, if less, the entire
         amount of such Lender's obligations or such lesser amount agreed to by
         the Borrower and the Administrative Agent), pursuant to a Commitment
         Transfer Supplement, executed by such Purchasing Lender and such
         transferor Lender (and, in the case of a Purchasing Lender that is not
         then a Lender or an affiliate thereof, the Administrative Agent and, so
         long as no Event of Default has occurred and is continuing, the
         Borrower), and delivered to the Administrative Agent for its acceptance
         and recording in the Register; provided, however, that any sale or
         assignment to an existing Lender, an Affiliate of a Lender or in the
         case of the Tranche A-1 Term Loan or the Tranche B-1 Term Loan, a
         special purpose entity created thereby or an Approved Fund shall not
         require the consent of the Administrative Agent or the Borrower nor
         shall any such sale or assignment be subject to the minimum assignment
         amounts specified herein. Upon such execution, delivery, acceptance and
         recording, from and after the Transfer Effective Date specified in such
         Commitment Transfer Supplement, (x) the Purchasing Lender thereunder
         shall be a party hereto and, to the extent provided in such Commitment
         Transfer Supplement, have the rights and obligations of a Lender
         hereunder with a Commitment as set forth therein, and (y) the
         transferor Lender thereunder shall, to the extent provided in such
         Commitment Transfer Supplement, be released from its obligations under
         this Agreement (and, in the case of a Commitment Transfer Supplement
         covering all or the remaining portion of a transferor Lender's rights
         and obligations under this Agreement, such transferor Lender shall
         cease to be a party hereto). Such Commitment Transfer Supplement shall
         be deemed to amend this Agreement to the extent, and only to the
         extent, necessary to reflect the addition of such Purchasing Lender and
         the resulting adjustment of Commitment Percentages arising from the
         purchase by such Purchasing Lender of all or a portion of the rights
         and obligations of such transferor Lender under this Agreement and the
         Notes. On or prior to the Transfer Effective Date specified in such
         Commitment Transfer Supplement, the Borrower, at its own expense, and
         to the extent requested by the Purchasing Lender shall execute and
         deliver to the Administrative Agent in exchange for the Notes delivered
         to the Administrative Agent pursuant to such Commitment Transfer
         Supplement new Notes to the order of such Purchasing Lender in an
         amount equal to the Commitment assumed by





                                      116


         it pursuant to such Commitment Transfer Supplement and, unless the
         transferor Lender has not retained a Commitment hereunder, new Notes to
         the order of the transferor Lender in an amount equal to the Commitment
         retained by it hereunder. Such new Notes shall be dated the Closing
         Date and shall otherwise be in the form of the Notes replaced thereby.
         The Notes surrendered by the transferor Lender shall be returned by the
         Administrative Agent to the Borrower marked "canceled".

                  (d) The Administrative Agent shall maintain at its address
         referred to in Section 9.2 a copy of each Commitment Transfer
         Supplement delivered to it and a register (the "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 entries in the Register shall be conclusive, in
         the absence of manifest error, and the Borrower, the Administrative
         Agent and the Lenders may treat each Person whose name is recorded in
         the Register as the owner of the Loan recorded therein for all purposes
         of this Agreement. The Register shall be available for inspection by
         the Borrower or any Lender at any reasonable time and from time to time
         upon reasonable prior notice.

                  (e) Upon its receipt of a duly executed Commitment Transfer
         Supplement, together with payment to the Administrative Agent by the
         transferor Lender or the Purchasing Lender, as agreed between them, of
         a registration and processing fee of $3,500 for each Purchasing Lender
         listed in such Commitment Transfer Supplement and the Notes subject to
         such Commitment Transfer Supplement, the Administrative Agent shall (i)
         accept such Commitment Transfer Supplement, (ii) record the information
         contained therein in the Register and (iii) give prompt notice of such
         acceptance and recordation to the Lenders and the Borrower.

                  (f) The Credit Parties authorize each Lender to disclose to
         any Participant or Purchasing Lender (each, a "Transferee") and any
         prospective Transferee any and all financial information in such
         Lender's possession concerning the Credit Parties, their Subsidiaries
         and their Affiliates which has been delivered to such Lender by or on
         behalf of the Credit Parties pursuant to this Agreement or which has
         been delivered to such Lender by or on behalf of the Credit Parties in
         connection with such Lender's credit evaluation of the Credit Parties
         and their Affiliates prior to becoming a party to this Agreement, in
         each case subject to Section 9.15.

                  (g) At the time of each assignment pursuant to this Section
         9.6 to a Person which is not already a Lender hereunder and which is
         not a United States person (as such term is defined in Section
         7701(a)(30) of the Code) for Federal income tax purposes, the
         respective assignee Lender shall provide to the Borrower and the
         Administrative Agent the appropriate Internal Revenue Service Forms
         (and, if applicable, a 2.19 Certificate) described in Section 2.19.

                  (h) Nothing herein shall prohibit any Lender from pledging or
         assigning any of its rights under this Agreement (including, without
         limitation, any right to payment of principal and interest under any
         Note) to any creditor or representative of creditors





                                      117


         including any assignment to any Federal Reserve Bank in accordance with
         applicable laws. In the case of any Lender that is a fund that invests
         in bank loans, such Lender may, without the consent of the Borrower or
         Administrative Agent, assign or pledge all or any portion of its
         Tranche A-1 Term Note or its Tranche B-1 Term Note or any other
         instrument evidencing its rights as a Lender under the Tranche A-1 Term
         Loan or Tranche B-1 Term Loan under this Agreement to any trustee for,
         or any other representative of, holders of obligations owed or
         securities issued, by such fund, as security for such obligations or
         securities; provided that any foreclosure or similar action by such
         trustee or representative shall be subject to the provisions of this
         Section 9.6 concerning assignments.

         SECTION 9.7 ADJUSTMENTS; SET-OFF.

                  (a) Each Lender agrees that if any Lender (a "benefited
         Lender") shall at any time receive any payment of all or part of its
         Loans, or interest thereon, or receive any collateral in respect
         thereof (whether voluntarily or involuntarily, by set-off, pursuant to
         events or proceedings of the nature referred to in Section 7.1(e), or
         otherwise) in a greater proportion than any such payment to or
         collateral received by any other Lender, if any, in respect of such
         other Lender's Loans, or interest thereon, such benefited Lender shall
         promptly notify the Administrative Agent thereof, and purchase for cash
         from the other Lenders a participating interest in such portion of each
         such other Lender's Loans, or shall provide such other Lenders with the
         benefits of any such collateral, or the proceeds thereof, as shall be
         necessary to cause such benefited Lender to share the excess payment or
         benefits of such collateral or proceeds ratably with each of the
         Lenders; provided, however, that if all or any portion of such excess
         payment or benefits is thereafter recovered from such benefited Lender,
         such purchase shall be rescinded, and the purchase price and benefits
         returned, to the extent of such recovery, but without interest. The
         Borrower agrees that each Lender so purchasing a portion of another
         Lender's Loans may exercise all rights of payment (including, without
         limitation, rights of set-off) with respect to such portion as fully as
         if such Lender were the direct holder of such portion.

                  (b) In addition to any rights and remedies of the Lenders
         provided by law (including, without limitation, other rights of
         set-off), each Lender shall have the right, without prior notice to the
         Borrower, any such notice being expressly waived by the Borrower to the
         extent permitted by applicable law, upon the occurrence of any Event of
         Default, to setoff and appropriate and apply any and all deposits
         (general or special, time or demand, provisional or final), in any
         currency, and any other credits, indebtedness or claims, in any
         currency, in each case whether direct or indirect, absolute or
         contingent, matured or unmatured, at any time held or owing by such
         Lender or any branch or agency thereof to or for the credit or the
         account of the Borrower, or any part thereof in such amounts as such
         Lender may elect, against and on account of the obligations and
         liabilities of the Borrower to such Lender hereunder and claims of
         every nature and description of such Lender against the Borrower, in
         any currency, whether arising hereunder, under the Notes or under any
         documents contemplated by or referred to herein or therein, as such
         Lender may elect, whether or not such Lender has made any demand for
         payment and although such obligations, liabilities and claims may be
         contingent or






                                      118


         unmatured. The aforesaid right of set-off may be exercised by such
         Lender against the Borrower or against any trustee in bankruptcy,
         debtor in possession, assignee for the benefit of creditors, receiver
         or execution, judgment or attachment creditor of the Borrower, or
         against anyone else claiming through or against the Borrower or any
         such trustee in bankruptcy, debtor in possession, assignee for the
         benefit of creditors, receiver, or execution, judgment or attachment
         creditor, notwithstanding the fact that such right of set-off shall not
         have been exercised by such Lender prior to the occurrence of any Event
         of Default. Each Lender agrees promptly to notify the Borrower and the
         Administrative Agent 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.

                  (c) Any amount to be set-off pursuant to clause (b) above may
         be denominated in any Permitted Currency. Any such amount which is
         denominated in an Alternative Currency shall be converted to Dollars in
         an amount equal to the Dollar Amount of such amount at the most
         favorable spot exchange rate determined by the Administrative Agent to
         be available to it; provided that if at the time of any such
         determination no such spot exchange rate can reasonably be determined,
         the Administrative Agent may use any reasonable method as it deems
         applicable to determine such rate, any such determination to be
         conclusive absent manifest error. Each Lender and any assignee or
         participant of such Lender in accordance with Section 9.6 are hereby
         authorized by each Borrower to combine currencies, as deemed necessary
         by such Person, in order to effect any set-off pursuant to clause (b)
         above.

         SECTION 9.8 TABLE OF CONTENTS AND SECTION HEADINGS.

The table of contents and the Section and subsection headings herein are
intended for convenience only and shall be ignored in construing this Agreement.

         SECTION 9.9 COUNTERPARTS.

         This Agreement may be executed by one or more of the parties to this
Agreement on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. A set
of the copies of this Agreement signed by all the parties shall be lodged with
the Borrower and the Administrative Agent.

         SECTION 9.10 EFFECTIVENESS.

This Credit Agreement shall become effective on the date on which all of the
parties have signed a copy hereof (whether the same or different copies) and
shall have delivered the same to the Administrative Agent pursuant to Section
9.2 or, in the case of the Lenders, shall have given to the Administrative Agent
written, telecopied or telex notice (actually received) at such office that the
same has been signed and mailed to it.





                                      119


         SECTION 9.11 SEVERABILITY.

         Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

         SECTION 9.12 INTEGRATION.

         This Agreement, the Notes and the other Credit Documents represent the
entire agreement of the Borrower, the Administrative Agent and the Lenders with
respect to the subject matter hereof, and there are no promises, undertakings,
representations or warranties by the Administrative Agent, the Borrower or any
Lender relative to the subject matter hereof not expressly set forth or referred
to herein or in the Notes or the other Credit Documents.

         SECTION 9.13 GOVERNING LAW.

         This Agreement and the Notes and the rights and obligations of the
parties under this Agreement and the Notes shall be governed by, and construed
and interpreted in accordance with, the law of the State of North Carolina
(without giving effect to the principles thereof relating to conflict of laws).

         SECTION 9.14 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.

         All judicial proceedings brought against the Borrower and/or any other
Credit Party with respect to this Agreement, any Note or any of the other Credit
Documents may be brought in any state or federal court of competent jurisdiction
in the State of North Carolina, and., by execution and delivery of this
Agreement, each of the Borrower and the other Credit Parties accepts, for itself
and in connection with its properties, generally and unconditionally, the
non-exclusive jurisdiction of the aforesaid courts and irrevocably agrees to be
bound by any final judgment rendered thereby in connection with this Agreement
from which no appeal has been taken or is available. Each of the Borrower and
the other Credit Parties irrevocably agrees that all service of process in any
such proceedings in any such court may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form of mail),
postage prepaid, to it at its address set forth in Section 9.2 or at such other
address of which the Administrative Agent shall have been notified pursuant
thereto, such service being hereby acknowledged by each of the Borrower and the
other Credit Parties to be effective and binding service in every respect. To
the fullest extent it may legally and effectively do so, each of the Borrower,
the other Credit Parties, the Administrative Agent and the Lenders irrevocably
waives any objection, including, without limitation, any objection to the laying
of venue or based on the grounds of forum non conveniens which it may now or
hereafter have to the bringing of any such action or proceeding in any such
jurisdiction. Nothing herein shall affect the right to serve process in any
other manner permitted by law or shall limit the right of any Lender to bring
proceedings against the Borrower or the other Credit Parties in the court of any
other jurisdiction.




                                      120


         SECTION 9.15 CONFIDENTIALITY.

         The Administrative Agent and each of the Lenders agrees that it will
use its best efforts not to disclose without the prior consent of the Borrower
(other than to its employees, affiliates, auditors or counsel or to another
Lender) any information with respect to the Borrower and its Subsidiaries which
is furnished pursuant to this Agreement, any other Credit Document or any
documents contemplated by or referred to herein or therein and which is
designated by the Borrower to the Lenders in writing as confidential or as to
which it is otherwise reasonably clear such information is not public, except
that any Lender may disclose any such information (a) as has become generally
available to the public other than by a breach of this Section 9.15, (b) as may
be required or appropriate in any report, statement or testimony submitted to
any municipal, state or federal regulatory body having or claiming to have
jurisdiction over such Lender or to the Federal Reserve Board or the Federal
Deposit Insurance Corporation or the Office of the Comptroller of the Currency
("OCC") or the National Association of Insurance Commissioners ("NAIC") or
similar organizations (whether in the United States or elsewhere) or their
successors, (c) as may be required or appropriate in response to any summons or
subpoena or any law, order, regulation or ruling applicable to such Lender,
after notice to the Borrower and opportunity to object to such disclosure to the
extent reasonably practicable, (d) to any direct or indirect contractual
counterparty in any swap, hedge or similar agreement (or to any such contractual
counterparty's professional advisor), so long as such contractual counterparty
(or such professional advisor) agrees to be bound by the provisions of this
Section 9.15, (e) to any prospective Participant or assignee in connection with
any contemplated transfer pursuant to Section 9.6, provided that such
prospective transferee shall have been made aware of this Section 9.15 and shall
have agreed to be bound by its provisions as if it were a party to this
Agreement or (f) to Gold Sheets and other similar bank trade publications; such
information to consist of deal terms and other information regarding the credit
facilities evidenced by this Credit Agreement customarily found in such
publications.

         SECTION 9.16 ACKNOWLEDGMENTS.

The Borrower and the other Credit Parties each hereby acknowledges that:

                  (a) it has been advised by counsel in the negotiation,
         execution and delivery of each Credit Document;

                  (b) neither the Administrative Agent nor any Lender has any
         fiduciary relationship with or duty to the Borrower or any other Credit
         Party arising out of or in connection with this Agreement and the
         relationship between Administrative Agent and Lenders, on one hand, and
         the Borrower and the other Credit Parties, on the other hand, in
         connection herewith is solely that of debtor and creditor; and

                  (c) no joint venture exists among the Lenders or among the
         Borrower or the other Credit Parties and the Lenders.

         SECTION 9.17 WAIVERS OF JURY TRIAL.

         THE BORROWER, THE OTHER CREDIT PARTIES, THE ADMINISTRATIVE AGENT AND
THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY





                                      121


WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND
FOR ANY COUNTERCLAIM THEREIN. The parties hereto agree that they shall not have
a remedy of punitive or exemplary damages against the other in any judicial
proceeding, any dispute, claim or controversy arising out of, connected with or
relating to this Agreement and other Credit Documents ("Disputes"), and hereby
waive any right or claim to punitive or exemplary damages they have now or which
may arise in the future in connection with any Dispute.

         SECTION 9.18  BORROWER NAME CHANGE EFFECTIVE ON FUNDING DATE

         It is hereby acknowledged and agreed that the Borrower will change its
name to Dean Foods Company effective on the Funding Date and from after the
Funding Date, all references in this Agreement or any other Credit Document,
including without limitation, the Notes, shall be deemed to refer to Dean Foods
Company, formerly known as Suiza Foods Corporation, as Borrower.


                                    ARTICLE X
                                    GUARANTY

         Each of the Guarantors hereby agrees as follows:

         SECTION 10.1 THE GUARANTY.

         In order to induce the Lenders to enter into this Agreement and to
extend credit hereunder and in recognition of the direct benefits to be received
by the Guarantors from the Extensions of Credit hereunder, each of the
Guarantors hereby agrees with the Administrative Agent and the Lenders as
follows: each Guarantor hereby unconditionally and irrevocably jointly and
severally guarantees as primary obligor and not merely as surety the full and
prompt payment when due, whether upon maturity, by acceleration or otherwise, of
any and all indebtedness of the Borrower to the Administrative Agent and the
Lenders. If any or all of the indebtedness of the Borrower to the Administrative
Agent and the Lenders becomes due and payable hereunder, each Guarantor
unconditionally promises to pay such indebtedness to the Administrative Agent
and the Lenders, on order, on demand, together with any and all reasonable
expenses which may be incurred by the Administrative Agent or the Lenders in
collecting any of the indebtedness. The word "indebtedness" is used in this
Article X in its most comprehensive sense and includes any and all advances,
debts, obligations and liabilities of the Borrower arising in connection with
this Agreement, including, without limitation, Hedging Obligations permitted
hereunder, in each case, heretofore, now, or hereafter made, incurred or
created, whether voluntarily or involuntarily, absolute or contingent,
liquidated or unliquidated, determined or undetermined, whether or not such
indebtedness is from time to time reduced, or extinguished and thereafter
increased or incurred, whether the Borrower may be liable individually or
jointly with others, whether or not recovery upon such indebtedness may be or
hereafter become barred by any statute of limitations, and whether or not such
indebtedness may be or hereafter become otherwise unenforceable.




                                      122


         Notwithstanding any provision to the contrary contained herein or in
any other of the Credit Documents, to the extent the obligations of a Guarantor
shall be adjudicated to be invalid or unenforceable for any reason (including,
without limitation, because of any applicable state or federal law relating to
fraudulent conveyances or transfers) then the obligations of each such Guarantor
hereunder shall be limited to the maximum amount that is permissible under
applicable law (whether federal or state and including, without limitation, the
Bankruptcy Code).

         SECTION 10.2 BANKRUPTCY.

         Additionally, each of the Guarantors unconditionally and irrevocably
guarantees jointly and severally the payment of any and all indebtedness of the
Borrower to the Lenders whether or not due or payable by the Borrower upon the
occurrence of any of the events specified in Section 7.1(e), and unconditionally
promises to pay such indebtedness to the Administrative Agent for the account of
the Lenders, or order, on demand, in lawful money of the United States. Each of
the Guarantors further agrees that to the extent that the Borrower or a
Guarantor shall make a payment or a transfer of an interest in any property to
the Administrative Agent or any Lender, which payment or transfer or any part
thereof is subsequently invalidated, declared to be fraudulent or preferential,
or otherwise is avoided, and/or required to be repaid to the Borrower or a
Guarantor, the estate of the Borrower or a Guarantor, a trustee, receiver or any
other party under any bankruptcy law, state or federal law, common law or
equitable cause, then to the extent of such avoidance or repayment, the
obligation or part thereof intended to be satisfied shall be revived and
continued in full force and effect as if said payment had not been made.

         SECTION 10.3 NATURE OF LIABILITY.

         The liability of each Guarantor hereunder is exclusive and independent
of any security for or other guaranty of the indebtedness of the Borrower
whether executed by any such Guarantor, any other guarantor or by any other
party, and no Guarantor's liability hereunder shall be affected or impaired by
(a) any direction as to application of payment by the Borrower or by any other
party, or (b) any other continuing or other guaranty, undertaking or maximum
liability of a guarantor or of any other party as to the indebtedness of the
Borrower, or (c) any payment on or in reduction of any such other guaranty or
undertaking, or (d) any dissolution, termination or increase, decrease or change
in personnel by the Borrower, or (e) any payment made to the Administrative
Agent or the Lenders on the indebtedness which the Administrative Agent or such
Lenders repay the Borrower pursuant to court order in any bankruptcy,
reorganization, arrangement, moratorium or other debtor relief proceeding, and
each of the Guarantors waives any right to the deferral or modification of its
obligations hereunder by reason, of any such proceeding. The obligations of the
Guarantors hereunder are absolute and unconditional, irrespective of the value,
genuineness, validity, regularity or enforceability of any of the Credit
Documents, any Hedging Agreement entered into in connection with this Agreement,
or any other agreement or instrument referred to therein, 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 a guarantor.




                                      123


         SECTION 10.4 INDEPENDENT OBLIGATION.

         The obligations of each Guarantor hereunder are independent of the
obligations of any other Guarantor or the Borrower, and a separate action or
actions may be brought and prosecuted against each Guarantor whether or not
action is brought against any other Guarantor or the Borrower and whether or not
any other Guarantor or the Borrower is joined in any such action or actions.

         SECTION 10.5 AUTHORIZATION.

         Each of the Guarantors authorizes the Administrative Agent and each
Lender without notice or demand (except as shall be required by applicable
statute and cannot be waived), and without affecting or impairing its liability
hereunder, from time to time to (a) renew, compromise, extend, increase,
accelerate or otherwise change the time for payment of, or otherwise change the
terms of the indebtedness or any part thereof in accordance with this Agreement,
including any increase or decrease of the rate of interest thereon, (b) take and
hold security from any Guarantor or any other party for the payment of this
Guaranty or the indebtedness and exchange, enforce, waive and release any such
security, (c) apply such security and direct the order or manner of sale thereof
as the Administrative Agent and the Lenders in their discretion may determine
and (d) release or substitute any one or more endorsers, guarantors, the
Borrower or other obligors.

         SECTION 10.6 RELIANCE.

         It is not necessary for the Administrative Agent or the Lenders to
inquire into the capacity or powers of the Borrower or the officers, directors,
partners or agents acting or purporting to act on their behalf, and any
indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder.

         SECTION 10.7 WAIVER.

                  (a) Each of the Guarantors waives any right (except as shall
         be required by applicable statute and cannot be waived) to require the
         Administrative Agent or any Lender to (i) proceed against the Borrower,
         any other Guarantor or any other party, (ii) proceed against or exhaust
         any security held from the Borrower, any other Guarantor or any other
         party, or (iii) pursue any other remedy in the Administrative Agent's
         or any Lender's power whatsoever. Each of the Guarantors waives any
         defense based on or arising out of any defense of the Borrower, any
         other Guarantor or any other party other than payment in full of the
         indebtedness, including without limitation any defense based on or
         arising out of the disability of the Borrower, any other Guarantor or
         any other party, or the unenforceability of the indebtedness or any
         part thereof from any cause, or the cessation from any cause of the
         liability of the Borrower other than payment in full of the
         indebtedness. Without limiting the generality of the provisions of this
         Article X, each of the Guarantors hereby specifically waives the
         benefits of N.C. Gen. Stat. Section 26-7 through 26-9, inclusive. The
         Administrative Agent or any of the Lenders may, at their election,
         foreclose on any security held by the Administrative Agent or a Lender
         by one or more judicial or nonjudicial sales, whether or not every
         aspect of any such sale is commercially reasonable (to the extent such
         sale is permitted by applicable law), or exercise any other right or
         remedy the Administrative Agent and any Lender may have





                                      124


         against the Borrower or any other party, or any security, without
         affecting or impairing in any way the liability of any Guarantor
         hereunder except to the extent the indebtedness has been paid. Each of
         the Guarantors waives any defense arising out of any such election by
         the Administrative Agent and each of the Lenders, even though such
         election operates to impair or extinguish any right of reimbursement or
         subrogation or other right or remedy of the Guarantors against the
         Borrower or any other party or any security.

                  (b) Each of the Guarantors waives all presentments, demands
         for performance, protests and notices, including without limitation
         notices of nonperformance, notice of protest, notices of dishonor,
         notices of acceptance of this Guaranty, and notices of the existence,
         creation or incurring of new or additional indebtedness. Each Guarantor
         assumes all responsibility for being and keeping itself informed of
         each of the Borrower's financial condition and assets, and of all other
         circumstances bearing upon the risk of nonpayment of the indebtedness
         and the nature, scope and extent of the risks which such Guarantor
         assumes and incurs hereunder, and agrees that neither the
         Administrative Agent nor any Lender shall have any duty to advise such
         Guarantor of information known to it regarding such circumstances or
         risks.

                  (c) Each of the Guarantors hereby agrees it will not exercise
         any rights of subrogation which it may at any time otherwise have as a
         result of this Guaranty (whether contractual, under Section 509 of the
         U.S. Bankruptcy Code, or otherwise) to the claims of the Lenders
         against the Borrower or any other guarantor of the indebtedness of the
         Borrower owing to the Lenders (collectively,. the "Other Parties") and
         all contractual, statutory or common law rights of reimbursement,
         contribution or indemnity from any Other Party which it may at any time
         otherwise have as a result of this Guaranty until such time as the
         Loans hereunder shall have been paid and the Commitments have been
         terminated. Each of the Guarantors hereby further agrees not to
         exercise any right to enforce any other remedy which the Administrative
         Agent and the Lenders now have or may hereafter have against any Other
         Party, any endorser or any other guarantor of all or any part of the
         indebtedness of the Borrower and any benefit of, and any right to
         participate in, any security or collateral given to or for the benefit
         of the Lenders to secure payment of the indebtedness of the Borrower
         until such time as the Loans hereunder shall have been paid and the
         Commitments have been terminated.

         SECTION 10.8 LIMITATION ON ENFORCEMENT.

         The Lenders agree that this Guaranty may be enforced only by the action
of the Administrative Agent acting upon the instructions of the Required Lenders
and that no Lender shall have any right individually to seek to enforce or to
enforce this Guaranty, it being understood and agreed that such rights and
remedies may be exercised by the Administrative Agent for the benefit of the
Lenders upon the terms of this Agreement. The Lenders further agree that this
Guaranty may not be enforced against any director, officer, employee or
stockholder of the Guarantors.




                                      125


         SECTION 10.9 CONFIRMATION OF PAYMENT.

         The Administrative Agent and the Lenders will, upon request after
payment of the indebtedness and obligations which are the subject of this
Guaranty and termination of the commitments relating thereto, confirm to the
Borrower, the Guarantors or any other Person that such indebtedness and
obligations have been paid and the commitments relating thereto terminated,
subject to the provisions of Section 10.2.




                                      126



         IN WITNESS WHEREOF, each of the parties hereto have caused this
Agreement to be duly executed and delivered by its proper and duly authorized
officers as of the day and year first above written.


BORROWER:                    DEAN FOODS COMPANY (FORMERLY KNOWN AS SUIZA
                             FOODS CORPORATION),
                             a Delaware corporation


                             By:
                                 ------------------------------------
                             Name:  Cory M Olson
                             Title:  VP/Treasure




                                      127





AGENTS AND LENDERS           WACHOVIA BANK, NATIONAL ASSOCIATION
                             (FORMERLY KNOWN AS FIRST UNION NATIONAL BANK),
                             in its capacity as Administrative Agent and
                             individually in its capacity as a Lender


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





                                       1




                             BANK ONE, N.A., in its capacity as Syndication
                             Agent and individually in its capacity as a Lender


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

                           [signature pages continue]





                                       2




                        [LENDER SIGNATURE PAGES OMITTED]




                                       3

EX-10.11

                                                                   EXHIBIT 10.11


                           THIRD AMENDED AND RESTATED
                         RECEIVABLES PURCHASE AGREEMENT


                          dated as of November 20, 2003

                                      Among

                   DAIRY GROUP RECEIVABLES, L.P., as a Seller,

                 DAIRY GROUP RECEIVABLES II, L.P., as a Seller,

                 SPECIALTY GROUP RECEIVABLES, L.P., as a Seller,


                                 THE SERVICERS,

                                 THE COMPANIES,

                           THE FINANCIAL INSTITUTIONS

                                       and

                       BANK ONE, NA (MAIN OFFICE CHICAGO),
                                    as Agent



                           THIRD AMENDED AND RESTATED
                         RECEIVABLES PURCHASE AGREEMENT


         This Third Amended and Restated Receivables Purchase Agreement, dated
as of November 20, 2003, is among Dairy Group Receivables, L.P., a Delaware
limited partnership ("Dairy Group"), Dairy Group Receivables II, L.P., a
Delaware limited partnership ("Dairy Group II"), Specialty Group Receivables,
L.P., a Delaware limited partnership ("Specialty Group" and, together with Dairy
Group and Dairy Group II, the "Sellers" and each a "Seller"), each of the
parties listed on the signature pages hereof as a Servicer (the Servicers,
together with the Sellers, the "Seller Parties," and each a "Seller Party"), the
entities listed on Schedule A to this Agreement under the heading "Financial
Institution" (together with any of their respective successors and assigns
hereunder, the "Financial Institutions"), the entities listed on Schedule A to
this Agreement under the heading "Company" (together with any of their
respective successors and assigns hereunder, the "Companies") and Bank One, NA
(Main Office Chicago), as agent for the Purchasers hereunder or any successor
agent hereunder (together with its successors and assigns hereunder, the
"Agent"). Unless defined elsewhere herein, capitalized terms used in this
Agreement shall have the meanings assigned to such terms in Exhibit I.


                             PRELIMINARY STATEMENTS

         Certain Seller Parties, certain Financial Institutions, certain
Companies and the Agent are parties to that certain Receivables Purchase
Agreement, dated as of June 30, 2000, as amended and restated by that certain
Amended and Restated Receivables Purchase Agreement, dated as of December 21,
2001, and as further amended and restated by that certain Second Amended and
Restated Receivables Purchase Agreement, dated as of May 15, 2002 and effective
for all purposes as of March 31, 2002, as amended by the Amendment No. 1 thereto
and Reaffirmation of Performance Undertakings, dated as of December 17, 2002, as
further amended by the Amendment No. 2 thereto and Reaffirmation of Performance
Undertakings, dated as of July 31, 2003, and as further amended by the Amendment
No. 3 thereto and Reaffirmation of Performance Undertakings, dated as of
September 2, 2003 (the "Original Agreement").

         Dairy Group and Dairy Group II have transferred and assigned pursuant
to the Original Agreement, and desire to continue to transfer and assign
Purchaser Interests to the Purchasers from time to time.

         Specialty Group desires to become a party to the Original Agreement as
a seller and to transfer and assign Purchaser Interests to the Purchasers from
time to time.

         Each of Rabobank and Wachovia desire to become a party to the Original
Agreement as a Financial Institution and each of the Rabo Company and the
Wachovia Company



                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

desire to become a party to the Original Agreement as a Company. Credit Ag
desires to no longer be a party to the Original Agreement as a Financial
Institution.

         The Bank One Company desires to assign and transfer an undivided 20%
interest in its, and the Wachovia Company desires to acquire an undivided 20%
interest in the Bank One Company's, rights and obligations under the Original
Agreement and the other Transaction Documents (including, without limitation,
the Capital of the Bank One Company's Purchaser Interests) as set forth herein.
The CL Company desires to assign and transfer an undivided 60% interest in its,
and the Wachovia Company desires to acquire an undivided 20% interest in and the
Rabo Company desires to acquire an undivided 40% interest in the CL Company's,
rights and obligations under the Original Agreement and the other Transaction
Documents (including, without limitation, the Capital of the CL Company's
purchaser interests) as set forth herein.

         Bank One, in its capacity as a Financial Institution, desires to assign
and transfer an undivided 20% interest in its, and each of Rabobank and Wachovia
desires to acquire an undivided 10% interest in Bank One's, rights and
obligations as a Financial Institution under the Original Agreement and the
other Transaction Documents (including, without limitation, Bank One's
Commitment) as set forth herein. CLNY, in its capacity as a Financial
Institution, desires to assign and transfer an undivided 20% interest in its,
and each of Rabobank and Wachovia desires to acquire an undivided 10% interest
in CLNY's, rights and obligations as a Financial Institution under the Original
Agreement and the other Transaction Documents (including, without limitation,
CLNY's Commitment) as set forth herein. Credit Ag, in its capacity as a
Financial Institution, desires to assign and transfer an undivided 100% interest
in its, and each of Rabobank and Wachovia desires to acquire an undivided 50%
interest in Credit Ag's, rights and obligations as a Financial Institution under
the Original Agreement and the other Transaction Documents (including, without
limitation, Credit Ag's Commitment) as set forth herein.

         Each of the parties hereto desires to increase the Purchase Limit under
the Original Agreement from $400,000,000 to $500,000,000 and to increase the
aggregate amount of the Commitments under the Original Agreement from
$408,000,000 to $510,000,000.

         Each Company may, in its absolute and sole discretion, purchase the
Purchaser Interests from the Sellers from time to time.

         In the event that any Company declines to make any purchase, such
Company's Related Financial Institutions shall, at the request of the
Administrative Seller, purchase Purchaser Interests that such Company declined
to purchase from time to time.


                                       2


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT


         Bank One, NA (Main Office Chicago) has been requested and is willing to
act as Agent on behalf of the Companies and the Financial Institutions in
accordance with the terms hereof.

         The parties hereto now desire to amend and restate the Original
Agreement in its entirety to read as set forth herein.


                                    AGREEMENT

         Now Therefore, in consideration of the foregoing and for other valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto hereby agree that, subject to satisfaction of the conditions
precedent set forth in Section 6.1 hereof, the Original Agreement is hereby
amended and restated in its entirety to read as follows:

                                    ARTICLE I
                              PURCHASE ARRANGEMENTS

         Section 1.1 Purchase Facility.

                  (a) Upon the terms and subject to the conditions hereof, each
Seller may, at its option, sell and assign Purchaser Interests to the Agent for
the benefit of one or more of the Purchasers. In accordance with the terms and
conditions set forth herein, each Company may, at its option, instruct the Agent
to purchase on behalf of such Company, or if any Company shall decline to
purchase, the Agent shall purchase, on behalf of such declining Company's
Related Financial Institutions, Purchaser Interests from time to time in an
amount not to exceed in the aggregate for all Sellers at such time (i) in the
case of each Company, its Company Purchase Limit and (ii) in the aggregate, the
lesser of (A) the Purchase Limit and (B) the aggregate amount of the Commitments
during the period from the date hereof to but not including the Facility
Termination Date.

                  (b) The Administrative Seller may, upon at least 10 Business
Days' notice to the Agent, each Company and each Financial Institution,
terminate in whole or reduce in part, ratably among the Financial Institutions,
the unused portion of the Purchase Limit; provided that (i) any such notice
shall be irrevocable, (ii) each partial reduction of the Purchase Limit shall be
in an amount equal to $5,000,000 or an integral multiple thereof and (iii) the
aggregate of the Company Purchase Limits for all of the Companies shall also be
terminated in whole or reduced in part, ratably among the Companies, by an
amount equal to such termination or reduction in the Purchase Limit.


                                       3


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

         Section 1.2 Increases.

                  The Administrative Seller shall provide the Agent and each
Purchaser with at least two Business Days' prior notice in a form set forth as
Exhibit II hereto of each Incremental Purchase (a "Purchase Notice") to be made
by a Seller. Each Purchase Notice shall be subject to Section 6.2 hereof and,
except as set forth below, (i) shall be irrevocable and shall specify the
requested Purchase Price (which, in the case of the initial Incremental Purchase
hereunder shall not be less than $10,000,000 and in the case of subsequent
Incremental Purchases shall not be less than $1,000,000), (ii) the date of
purchase (which, in the case of Incremental Purchases after the initial
Incremental Purchase hereunder, shall not exceed four per calendar month), (iii)
in the case of an Incremental Purchase to be funded by any of the Financial
Institutions, the requested Discount Rate and Tranche Period and (iv) in the
case of an Incremental Purchase to be funded by the CL Company or by any Pool
Company (other than an Incremental Purchase funded by such Pool Company
substantially with Pooled Commercial Paper), the requested CP (Tranche) Accrual
Period. Following receipt of a Purchase Notice, the Agent will promptly notify
each Company of such Purchase Notice and the Agent will identify the Companies
that agree to make the purchase. If any Company declines to make a proposed
purchase, the Administrative Seller may cancel the Purchase Notice as to all
purchasers no later than 2:00 p.m. (Chicago time) on the Business Day
immediately prior to the date of purchase specified in the Purchase Notice or,
in the absence of such a cancellation, the Incremental Purchase Of the Purchaser
Interest, which such Company has declined to purchase, will be made by such
declining Company's related Financial Institutions in accordance with the rest
of this Section 1.2. If the proposed Incremental Purchase or any portion thereof
is to be made by any of the Financial Institutions, the Agent shall send notice
of the Proposed Incremental Purchase to the applicable Financial Institutions
concurrently by telecopier, telex or cable specifying (i) the date of such
Incremental Purchase, which date must be at least one Business Day after such
notice is received by the applicable Financial Institutions, (ii) each Financial
Institution's Pro Rata Share of the aggregate Purchase Price of the Purchaser
Interests the Financial Institutions in such Financial Institution's Purchaser
Group are then purchasing and (iii) the requested Discount Rate and Tranche
Period. On the date of each Incremental Purchase, upon satisfaction of the
applicable conditions precedent set forth in Article VI and the conditions set
forth in this Section 1.2, the Companies and/or the Financial Institutions, as
applicable, shall use their reasonable best efforts to deposit to the Facility
Account, in immediately available funds, no later than 12:00 noon (Chicago
time), and in any event no later than 2:00 pm (Chicago time), an amount equal to
(i) in the case of a Company that has agreed to make such Incremental Purchase,
such Company's Pro Rata Share of the aggregate Purchase Price of the Purchaser
Interests of such Incremental Purchase or (ii) in the case of a Financial
Institution, such Financial Institution's Pro Rata Share of the aggregate
Purchase Price of the Purchaser Interests the Financial Institutions in such
Financial Institution's Purchaser Group are then purchasing. Each Financial
Institution's Commitment hereunder


                                       4


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

shall be limited to purchasing Purchaser Interests that the Company in such
Financial Institution's Purchaser Group has declined to purchase. Each Financial
Institution's obligation shall be several, such that the failure of any
Financial Institution to make available to any Seller any funds in connection
with any purchase shall not relieve any other Financial Institution of its
obligation, if any, hereunder to make funds available on the date of such
purchase, but no Financial Institution shall be responsible for the failure of
any other Financial Institution to make funds available in connection with any
purchase.

         Section 1.3 Decreases. The Administrative Seller shall provide the
Agent with an irrevocable prior written notice in conformity with the Required
Notice Period (a "Reduction Notice") of any proposed reduction of Aggregate
Capital from Collections and the Agent will promptly notify each Purchaser of
such Reduction Notice after Agent's receipt thereof. Such Reduction Notice shall
designate (i) the date (the "Proposed Reduction Date") upon which any such
reduction of Aggregate Capital shall occur (which date shall give effect to the
applicable Required Notice Period), and (ii) the amount of Aggregate Capital to
be reduced that shall be applied ratably to the Purchaser Interests of the
Companies and the Financial Institutions in accordance with the amount of
Capital (if any) owing to the Companies (ratably to each Company, based on the
ratio of such Company's Capital at such time to the aggregate Capital of all the
Companies at such time), on the one hand, and the amount of Capital (if any)
owing to the Financial Institutions (ratably to each Financial Institution,
based on the ratio of such Financial Institution's Capital at such time to the
aggregate Capital of all of the Financial Institutions at such time), on the
other hand (the "Aggregate Reduction"). Only one (1) Reduction Notice shall be
outstanding at any time. Concurrently with any reduction of Aggregate Capital
pursuant to this Section, the Sellers shall pay to the applicable Purchaser all
Broken Funding Costs arising as a result of such reduction. No Aggregate
Reduction will be made following the occurrence of the Amortization Date without
the prior written consent of the Agent.

         Section 1.4 Payment Requirements. All amounts to be paid or deposited
by any Seller Party pursuant to any provision of this Agreement or any other
Transaction Documents shall be paid or deposited in immediately available funds
in accordance with the terms hereof. Such Seller Party shall use its reasonable
best efforts to pay or deposit all such amounts no later than 12:00 noon
(Chicago time) on the day when due. Any such payment or deposit not received by
1:00 pm (Chicago time) shall be deemed to be received on the next succeeding
Business Day. If such amounts are payable to a Purchaser, they shall be paid to
such Purchaser at the "Payment Address" specified for such Purchaser on Schedule
A or such other address specified in writing to each other party hereto. If such
amounts are payable to the Agent, they shall be paid to the Agent at 1 Bank One
Plaza, Chicago, Illinois 60670 until otherwise notified by the Agent. Upon
notice to the Administrative Seller, the Agent may debit the Facility Account
for all amounts due and payable hereunder. All computations of Yield, per annum
fees or discount calculated as part of any


                                       5


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT


CP Costs, per annum fees hereunder and per annum fees under any Fee Letter shall
be made on the basis of a year of 360 days for the actual number of days
elapsed. If any amount hereunder or under any other Transaction Document shall
be payable on a day that is not a Business Day, such amount shall be payable on
the next succeeding Business Day.


                                   ARTICLE II
                            PAYMENTS AND COLLECTIONS

         Section 2.1 Payments. Notwithstanding any limitation on recourse
contained in this Agreement, the Sellers shall immediately pay to the Agent or
relevant Purchaser, as applicable, when due, for the account of the relevant
Purchaser or Purchasers on a full recourse basis, (i) such fees as set forth in
each Fee Letter (which fees collectively shall be sufficient to pay all fees
owing to the Financial Institutions and other Funding Sources), (ii) all CP
Costs, (iii) all amounts payable as Yield, (iv) all amounts payable as Deemed
Collections (which shall be immediately due and payable by the Sellers and
applied to reduce outstanding Aggregate Capital hereunder in accordance with
Sections 2.2 and 2.3 hereof), (v) all amounts required pursuant to Section 2.6,
(vi) all amounts payable pursuant to Article X, if any, (vii) all Servicer costs
and expenses, including the Servicing Fee, in connection with servicing,
administering and collecting the Receivables, (viii) all Broken Funding Costs
(any request for reimbursement of which shall be accompanied by a certificate in
reasonable detail demonstrating the reasonable calculation of ay such amount)
and (ix) all Default Fees (collectively, the "Obligations"). If any Person fails
to pay any of the Obligations (other than the Default Fee) when due, such Person
agrees to pay, on demand, the Default Fee in respect thereof until paid.
Notwithstanding the foregoing, no provision of this Agreement or any Fee Letter
shall require the payment or permit the collection of any amounts hereunder in
excess of the maximum permitted by applicable law. If at any time any Seller
receives any Collections or is deemed to receive any Collections, such Seller
shall immediately pay such Collections or Deemed Collections to the applicable
Servicer for application in accordance with the terms and conditions hereof and,
at all times prior to such payment, such Collections or Deemed Collections shall
be held in trust by such Seller for the exclusive benefit of the Purchasers and
the Agent.

         Section 2.2 Collections Prior to Amortization. Prior to the
Amortization Date, any Collections and/or Deemed Collections received by each
Servicer shall be set aside and held in trust by such Servicer for the benefit
of the Agent and the Purchasers for the payment of any accrued and unpaid
Aggregate Unpaids or for a Reinvestment as provided in this Section 2.2. If at
any time any Collections and/or Deemed Collections are received by any Servicer
prior to the Amortization Date, (i) such Servicer shall set aside the
Termination Percentage (hereinafter defined) of Collections and/or Deemed
Collections evidenced by the Purchaser Interests of each Terminating Financial
Institution and of each Company in


                                       6


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

a Terminating Financial Institution's Purchaser Group, shall set aside
Collections to be used to effect any Aggregate Reduction in accordance with
Section 1.3 and shall set aside amounts necessary to pay Obligations due on the
next succeeding Settlement Date and (ii) each Seller hereby requests and the
Purchasers (other than any Terminating Financial Institutions and, to the extent
applicable, any Company in a Terminating Financial Institution's Purchaser
Group) hereby agree to make, simultaneously with such receipt, a reinvestment
(each a "Reinvestment") with that portion of the balance of each and every
Collection and Deemed Collection received by any Servicer that is part of any
Purchaser Interest (other than any Purchaser Interests of Terminating Financial
Institutions and, to the extent applicable, of any Company in a Terminating
Financial Institution's Purchaser Group), such that after giving effect to such
Reinvestment, the amount of Capital of such Purchaser Interest immediately after
such receipt and corresponding Reinvestment shall be equal to the amount of
Capital immediately prior to such receipt (but giving effect to any ratable
reduction thereof pursuant to application of an Aggregate Reduction). On each
Settlement Date prior to the occurrence of the Amortization Date, the Servicers
shall remit to the Agent's or applicable Purchaser's account the amounts set
aside during the preceding Settlement Period that have not been subject to a
Reinvestment and apply such amounts (if not previously paid in accordance with
Section 2.1) first, to reduce unpaid CP Costs, Yield and other Obligations and
second, to reduce the Capital of all Purchaser Interests of Terminating
Financial Institutions and, to the extent applicable, of each Company in a
Terminating Financial Institution's Purchaser Group, applied ratably to such
Terminating Financial Institution and each such Company according to its
respective Termination Percentage. If such Capital, CP Costs, Yield and other
Obligations shall be reduced to zero, any additional Collections received by any
Servicer (i) if applicable, shall be remitted to the Agent's or applicable
Purchaser's account to the extent required to fund any Aggregate Reduction on
such Settlement Date and (ii) any balance remaining thereafter shall be remitted
from such Servicer to the Sellers on such Settlement Date. Such Servicer shall
use its reasonable best efforts to remit all deposit amounts in the Agent's or
applicable Purchaser's account no later than 12:00 noon (Chicago time) on such
Settlement Date. Any such amounts not received by Agent or the applicable
Purchaser by 1:00 pm (Chicago time) shall be deemed to be received on the next
succeeding Business Day. Each Terminating Financial Institution and each Company
in such Terminating Financial Institution's Purchaser Group shall be allocated a
ratable portion of Collections from its Termination Date until, with respect to
a Terminating Financial Institution, such Terminating Financial Institution's
Capital, if any, shall be paid in full and, with respect to a related Company
(i) if any Related Financial Institution with respect to such Company continues
to exist, the Capital of such Company is equal to the Company Purchase Limit (as
reduced pursuant to Section 4.6(b)) of such Company or (ii) if there are no
Related Financial Institutions with respect to such Company, the Capital of such
Company shall be paid in full. The applicable ratable portion shall be
calculated, with respect to any Terminating Financial Institution or applicable
Company, on the Termination Date of each Terminating Financial Institution or


                                       7



                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

applicable Company as a percentage equal to (i) the Capital of such Terminating
Financial Institution or applicable Company outstanding on its Termination Date,
divided by (ii) the Aggregate Capital outstanding on such Termination Date (the
"Termination Percentage"). Each Terminating Financial Institution's and
applicable Company's Termination Percentage shall remain constant prior to the
Amortization Date. On and after the Amortization Date, each Termination
Percentage shall be disregarded, and each Terminating Financial Institution's
and each applicable Company's Capital shall be reduced ratably with all
Financial Institutions and Companies in accordance with Section 2.3.

         Section 2.3 Collections Following Amortization. On the Amortization
Date and on each day thereafter, the Servicers shall set aside and hold in
trust, for the holder of each Purchaser Interest, all Collections received on
such day and an additional amount for the payment of any accrued and unpaid
Aggregate Unpaids owed by the Sellers and not previously paid by the Sellers in
accordance with Section 2.1. On and after the Amortization Date, the Servicers
shall, at any time upon the request from time to time by (or pursuant to
standing instructions from) the Agent (i) remit to the Agent's or applicable
Purchaser's account the amounts set aside pursuant to the preceding sentence,
and (ii) apply such amounts to reduce the Capital associated with each such
Purchaser Interest and any other Aggregate Unpaids.

         Section 2.4 Application of Collections. If there shall be insufficient
funds on deposit for the Servicers to distribute funds in payment in full of the
aforementioned amounts pursuant to Section 2.2 or 2.3 (as applicable), the
Servicers shall distribute funds to the applicable payee:

                  first, to the payment of each Servicer's reasonable actual
         out-of-pocket costs and expenses in connection with servicing,
         administering and collecting the Receivables, including the Servicing
         Fee, provided no Seller nor any of its Affiliates is then acting as a
         Servicer,

                  second, to the reimbursement of the Agent's and the
         Purchasers' costs of collection and enforcement of this Agreement,

                  third, ratably to the payment of all accrued and unpaid fees
         under the Fee Letters, CP Costs and Yield,

                  fourth, (to the extent applicable) to the ratable reduction of
         the Aggregate Capital (without regard to any Termination Percentage),

                  fifth, for the ratable payment of all other unpaid
         Obligations, provided that to the extent such Obligations relate to the
         payment of Servicer costs and expenses,


                                       8


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

         including the Servicing Fee, when any Seller or any of its Affiliates
         is acting as a Servicer, such costs and expenses will not be paid until
         after the payment in full of all other Obligations, and

                  sixth, after the Aggregate Unpaids have been indefeasibly
         reduced to zero, to the Administrative Seller for ratable distribution
         to the Sellers.

                  Collections applied to the payment of Aggregate Unpaids shall
be distributed in accordance with the aforementioned provisions, and, giving
effect to each of the priorities set forth in Section 2.4 above, shall be shared
ratably (within each priority) among the Agent and the Purchasers in accordance
with the amount of such Aggregate Unpaids owing to each of them in respect of
each such priority.

         Section 2.5 Payment Rescission. No payment of any of the Aggregate
Unpaids shall be considered paid or applied hereunder to the extent that, at any
time, all or any portion of such payment or application is rescinded by
application of law or judicial authority, or must otherwise be returned or
refunded for any reason. Each Seller shall remain obligated for the amount of
any payment or application so rescinded, returned or refunded, and shall
promptly pay to the Agent (for application to the Person or Persons who suffered
such rescission, return or refund) the full amount thereof, plus the Default Fee
from the date of any such rescission, return or refunding.

         Section 2.6 Maximum Purchaser Interests. Each Seller shall ensure that
the Purchaser Interests of the Purchasers shall at no time exceed in the
aggregate 100%. If the aggregate of the Purchaser Interests of the Purchasers
exceeds 100%, the Sellers shall pay to the Purchasers (ratably based on the
ratio of each Purchaser's Capital at such time to the Aggregate Capital at such
time) within one (1) Business Day an amount to be applied to reduce the
Aggregate Capital, such that after giving effect to such payment the aggregate
of the Purchaser Interests equals or is less than 100%.

         Section 2.7 Clean Up Call. In addition to the Sellers' rights pursuant
to Section 1.3, the Sellers shall have the right, upon two Business Days' prior
written notice to the Agent and the Purchasers, at any time following the
reduction of the Aggregate Capital to a level that is less than 20.0% of the
original Purchase Limit hereunder, to repurchase from the Purchasers all, but
not less than all, of the then outstanding Purchaser Interests. The purchase
price in respect thereof shall be an amount equal to the Aggregate Unpaids
(including any Broken Funding Costs arising as a result of such repurchase)
through the date of such repurchase, payable in immediately available funds.
Such repurchase shall be without representation, warranty or recourse of any
kind by, on the part of, or against any Purchaser or the Agent.


                                       9


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

                                   ARTICLE III
                                 COMPANY FUNDING

         Section 3.1 CP Costs. The Sellers shall pay CP Costs with respect to
the Capital associated with each Purchaser Interest of the Companies for each
day that any Capital in respect of any such Purchaser Interest is outstanding.
Each Purchaser Interest of any Pool Company funded substantially with Pooled
Commercial Paper will accrue CP Costs each day on a pro rata basis, based upon
the percentage share the Capital in respect of such Purchaser Interest
represents in relation to all assets held by the applicable Pool Company and
funded substantially with Pooled Commercial Paper. Each Purchaser Interest of
the CL Company and each Purchaser Interest of any Pool Company not funded
substantially with Pooled Commercial Paper shall accrue CP Costs for each day
during its CP (Tranche) Accrual Period at the rate determined in accordance with
the definition of "Company Costs" set forth in Exhibit I.

         Section 3.2 CP Costs Payments. On each Settlement Date relating to a CP
(Tranche) Accrual Period, the Sellers shall pay to the applicable Company an
aggregate amount equal to all accrued and unpaid CP Costs in respect of the
Capital associated with all Purchaser Interests of such Company for the related
CP (Tranche) Accrual Period in accordance with Article II.

         Section 3.3 Calculation of Pool Company Costs. On the third Business
Day immediately preceding each Settlement Date relating to a CP (Pool) Accrual
Period, each Pool Company shall calculate the aggregate amount of its Company
Costs with respect to all Purchaser Interests funded substantially with Pooled
Commercial Paper for the applicable CP (Pool) Accrual Period and shall notify
the Administrative Seller of such aggregate amount of such Company Costs due and
payable on such Settlement Date.

         Section 3.4 Selection and Calculation of CP (Tranche) Accrual Periods.

                  (a) In the case of Purchaser Interests of each Pool Company,
the Administrative Seller shall (and following the occurrence and during the
continuance of a Potential Amortization Event or an Amortization Event, shall
with consultation from, and approval by, each Pool Company), from time to time
request CP (Tranche) Accrual Periods for the Purchaser Interests of each Pool
Company other than those funded substantially with Pooled Commercial Paper,
provided, that (i) the consent of the Agent and each Purchaser shall be
required, (ii) the Administrative Seller must elect CP (Tranche) Accrual Periods
for all Purchaser Interests of each Pool Company, such that after giving effect
to such election, no Purchaser Interest of any Pool Company is funded with
Pooled Commercial Paper and (iii) the Administrative Seller may only make such
election once hereunder. In the case of


                                       10



                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

Purchaser Interests of the CL Company, the Administrative Seller shall, with
consultation from, and approval by, the CL Company (such approval not to be
unreasonably withheld), from time to time request CP (Tranche) Accrual Periods
for the Purchaser Interests of the CL Company.

                  (b) The Administrative Seller or the applicable Company, upon
notice to and consent by the other received at least three (3) Business Days
prior to the end of a CP (Tranche) Accrual Period (the "Terminating CP Tranche")
for any Purchaser Interest, may, effective on the last day of the Terminating CP
Tranche: (i) divide any such Purchaser Interest into multiple Purchaser
Interests, (ii) combine any such Purchaser Interest with one or more other
Purchaser Interests that have a Terminating CP Tranche ending on the same day as
such Terminating CP Tranche or (iii) combine any such Purchaser Interest with a
new Purchaser Interest (other than a Purchaser Interest funded substantially
with Pooled Commercial Paper) to be purchased on the day such Terminating CP
Tranche ends, provided, that in no event may a Purchaser Interest of any
Purchasers be combined with a Purchaser Interest of any other Purchaser.

                  (c) The Administrative Seller shall, at least three (3)
Business Days prior to the expiration of any Terminating CP Tranche, give the
applicable Company (or its agent) irrevocable notice of the new CP (Tranche)
Accrual Period associated with such Terminating CP Tranche and the amount of
Capital to be allocated to such new CP (Tranche) Accrual Period. The
Administrative Seller shall use its reasonable best efforts to give such notice
such that the applicable Company (or its agent) receives it no later than 12:00
noon (Chicago time) on the day such request is being made. Any such request not
received by the applicable Company by 1:00 pm (Chicago time) shall be deemed to
be received on the next succeeding Business Day.

                                   ARTICLE IV
                          FINANCIAL INSTITUTION FUNDING


         Section 4.1 Financial Institution Funding. Each Purchaser Interest of
the Financial Institutions shall accrue Yield for each day during its Tranche
Period at either the LIBO Rate or the Prime Rate in accordance with the terms
and conditions hereof. Until the Administrative Seller gives notice to the Agent
of another Discount Rate in accordance with Section 4.4, the initial Discount
Rate for any Purchaser Interest transferred to the Financial Institutions
pursuant to the terms and conditions hereof shall be the Prime Rate. If any
Purchaser Interest of any Company is assigned or transferred to, or funded by,
any Funding Source of such Company pursuant to any Funding Agreement or to or by
any other Person, each such Purchaser Interest so assigned, transferred or
funded shall each be deemed to have a new Tranche Period commencing on the date
of any such transfer or funding and shall accrue Yield for each day during its
Tranche Period at either the LIBO Rate or the


                                       11


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

Prime Rate in accordance with the terms and conditions hereof as if each such
Purchaser Interest was held by a Financial Institution, and with respect to each
such Purchaser Interest, the transferee thereof or lender with respect thereto
shall be deemed to be a Financial Institution in the transferring Company's
Purchaser Group for purposes hereof; provided that until the Administrative
Seller gives notice to the Agent of another Discount Rate in accordance with
Section 4.4, the initial Discount Rate for any Purchaser Interest so transferred
shall be the Prime Rate.

         Section 4.2 Yield Payments. On the Settlement Date for each Purchaser
Interest of the Financial Institutions, the Sellers shall pay to the applicable
Financial Institutions an aggregate amount equal to the accrued and unpaid Yield
for the entire Tranche Period of each such Purchaser Interest in accordance with
Article II.

         Section 4.3 Selection and Continuation of Tranche Periods.

                  (a) In the case of Purchaser Interests of any Financial
Institution in the Purchaser Group of the Bank One Company, the Administrative
Seller shall (and following the occurrence and during the continuance of a
Potential Amortization Event or an Amortization Event, shall with consultation
from, and approval by, the applicable Financial Institution), from time to time
request Tranche Periods for the Purchaser Interests of such Financial
Institutions. In the case of Purchaser Interests of any Financial Institution in
the Purchaser Group of any Company other than the Bank One Company, the
Administrative Seller shall, with consultation from, and approval by, the
applicable Financial Institution (such approval not to be unreasonably
withheld), from time to time request Tranche Periods for the Purchaser Interests
of such Financial Institution. Notwithstanding the foregoing provisions of this
subsection (a), if at any time the Financial Institutions shall have a Purchaser
Interest, the Administrative Seller shall always request Tranche Periods such
that at least one Tranche Period shall end on the date specified in clause (A)
of the definition of Settlement Date.

                  (b) The Administrative Seller or the applicable Financial
Institution, upon notice to and consent by the other received at least three (3)
Business Days prior to the end of a Tranche Period (the "Terminating Tranche")
for any Purchaser Interest, may, effective on the last day of the Terminating
Tranche: (i) divide any such Purchaser Interest into multiple Purchaser
Interests, (ii) combine any such Purchaser Interest with one or more other
Purchaser Interests that have a Terminating Tranche ending on the same day as
such Terminating Tranche or (iii) combine any such Purchaser Interest with a new
Purchaser Interest to be purchased on the day such Terminating Tranche ends,
provided, that in no event may a Purchaser Interest of any Purchasers be
combined with a Purchaser Interest of any other Purchaser.


                                       12


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

         Section 4.4 Financial Institution Discount Rates. The Administrative
Seller may select the LIBO Rate or the Prime Rate for each Purchaser Interest of
the Financial Institutions. The Administrative Seller shall: (i) at least three
(3) Business Days prior to the expiration of any Terminating Tranche with
respect to which the LIBO Rate is being requested as a new Discount Rate and
(ii) at least one (1) Business Day prior to the expiration of any Terminating
Tranche with respect to which the Prime Rate is being requested as a new
Discount Rate, give the applicable Financial Institution irrevocable notice of
the new Discount Rate for the Purchaser Interest associated with such
Terminating Tranche. The Administrative Seller shall use its reasonable best
efforts to give such notice such that the applicable Financial Institution
receives it no later than 12:00 noon (Chicago time) on the day such request is
being made. Any such request not received by the applicable Financial
Institution by 1:00 pm (Chicago time) shall be deemed to be received on the next
succeeding Business Day. Until the Administrative Seller gives notice to the
applicable Financial Institution of another Discount Rate, the initial Discount
Rate for any Purchaser Interest transferred to the Financial Institutions
pursuant to the terms and conditions hereof (or transferred to, or funded by,
any Funding Source pursuant to any Funding Agreement or to or by any other
Person) shall be the Prime Rate.

         Section 4.5 Suspension of the LIBO Rate.

                  (a) If any Financial Institution notifies the Agent that it
has determined that funding its Pro Rata Share of the Purchaser Interests of the
Financial Institutions in such Financial Institution's Purchaser Group at the
LIBO Rate would violate any applicable law, rule, regulation or directive of any
governmental or regulatory authority, whether or not having the force of law, or
that (i) deposits of a type and maturity appropriate to match fund its Purchaser
Interests at the LIBO Rate are not available or (ii) the LIBO Rate does not
accurately reflect the cost of acquiring or maintaining a Purchaser Interest at
the LIBO Rate, then the Agent shall suspend the availability of the LIBO Rate
for the Financial Institutions in such Financial Institution's Purchaser Group
and require Seller to select the Prime Rate for any Purchaser Interest funded by
the Financial Institutions in such Financial Institution's Purchaser Group
accruing Yield at the LIBO Rate.

                  (b) If less than all of the Financial Institutions in such
Financial Institution's Purchaser Group give a notice to the Agent pursuant to
Section 4.5(a), each Financial Institution which gave such a notice shall be
obliged, at the request of the Administrative Seller, the Company in such
Financial Institution's Purchaser Group or the Agent, to assign all of its
rights and obligations hereunder to (i) another Financial Institution in such
Financial Institution's Purchaser Group or (ii) another funding entity nominated
by the Administrative Seller or the Agent that is acceptable to the Company in
such Financial Institution's Purchaser Group and willing to participate in this
Agreement through the Liquidity Termination Date in the place of such notifying
Financial Institution; provided


                                       13


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

that (i) the notifying Financial Institution receives payment in full, pursuant
to an Assignment Agreement, of an amount equal to such notifying Financial
Institution's Pro Rata Share of the Capital and Yield owing to all of the
Financial Institutions in such Financial Institution's Purchaser Group and all
accrued but unpaid fees and other costs and expenses payable in respect of its
Pro Rata Share of the Purchaser Interests of the Financial Institutions in such
Financial Institution's Purchaser Group, and (ii) the replacement Financial
Institution otherwise satisfies the requirements of Section 12.1(b).

         Section 4.6 Extension of Liquidity Termination Date.

                  (a) The Administrative Seller may request one or more 364-day
extensions of the Liquidity Termination Date then in effect by giving written
notice of such request to the Agent (each such notice an "Extension Notice") at
least 60 days prior to the Liquidity Termination Date then in effect. After the
Agent's receipt of any Extension Notice, the Agent shall promptly advise each
Financial Institution of such Extension Notice. Each Financial Institution may,
in its sole discretion, by a written irrevocable notice (a "Consent Notice")
given to the Agent on or prior to the 30th day prior to the Liquidity
Termination Date then in effect (such period from the date of the Extension
Notice to such 30th day being referred to herein as the "Consent Period"),
consent to such extension of such Liquidity Termination Date; provided, however,
that such extension shall not be effective with respect to a Financial
Institution if such Financial Institution: (i) notifies the Agent during the
Consent Period that such Financial Institution does not wish to consent to such
extension or (ii) fails to respond to the Agent within the Consent Period (each
Financial Institution that does not wish to consent to such extension or fails
to respond to the Agent within the Consent Period is herein referred to as a
"Non-Renewing Financial Institution"). If at the end of the Consent Period,
there is no Non-Renewing Financial Institution then, the Liquidity Termination
Date shall be irrevocably extended until the date that is 364 days after the
Liquidity Termination Date then in effect. If at the end of the Consent Period
there is a Non-Renewing Financial Institution, then unless such Non-Renewing
Financial Institution assigns its rights and obligations hereunder pursuant to
Section 4.6(b) (each such Non-Renewing Financial Institution whose rights and
obligations under this Agreement and the other applicable Transaction Documents
are not so assigned is herein referred to as a "Terminating Financial
Institution"), the then existing Liquidity Termination Date shall be extended
for an additional 364 days with respect to all Financial Institutions other than
the Terminating Financial Institution; provided, however, that (i) the Purchase
Limit shall be reduced on the Termination Date applicable to each Terminating
Financial Institution by an aggregate amount equal to the Terminating Commitment
Availability of each Terminating Financial Institution and shall thereafter
continue to be reduced by amounts equal to any reduction in the Capital of any
Terminating Financial Institution (after application of Collections pursuant to
Sections 2.2 and 2.3), (ii) the Company Purchase Limit of each Company shall be
reduced by the aggregate amount of the Terminating Commitment



                                       14


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

Amount of each Terminating Financial Institution in such Company's Purchaser
Group and (iii) the Commitment of each Terminating Financial Institution shall
be reduced to zero on the Termination Date applicable to such Terminating
Financial Institution. Upon reduction to zero of the Capital of all of the
Purchaser Interests of a Terminating Financial Institution (after application of
Collections thereto pursuant to Sections 2.2 and 2.3) all rights and obligations
of such Terminating Financial Institution hereunder shall be terminated and such
Terminating Financial Institution shall no longer be a "Financial Institution";
provided, however, that the provisions of Article X shall continue in effect for
its benefit with respect to Purchaser Interests held by such Terminating
Financial Institution prior to its termination as a Financial Institution.

                  (b) Upon receipt of notice from the Agent pursuant to Section
4.6(a) of any Non-Renewing Financial Institution, one or more of the Financial
Institutions (including any Non-Renewing Financial Institution) may proffer to
the Agent and the Company in such Non-Renewing Financial Institution's Purchaser
Group the names of one or more institutions meeting the criteria set forth in
Section 12.1(b)(i) that are willing to accept assignments of and assume the
rights and obligations under this Agreement and the other applicable Transaction
Documents of the Non-Renewing Financial Institution. Provided the proffered
name(s) are acceptable to the Agent and the Company in such Non-Renewing
Financial Institution's Purchaser Group, the Agent shall notify the remaining
Financial Institutions of such fact, and the then existing Liquidity Termination
Date shall be extended for an additional 364 days upon satisfaction of the
conditions for an assignment in accordance with Section 12.1, and the Commitment
of each Non-Renewing Financial Institution shall be reduced to zero.

                  (c) Any requested extension may be approved or disapproved by
a Financial Institution in its sole discretion. In the event that the
Commitments are not extended in accordance with the provisions of this Section
4.6, the Commitment of each Financial Institution shall be reduced to zero on
the Liquidity Termination Date. Upon reduction to zero of the Commitment of a
Financial Institution and upon reduction to zero of the Capital of all of the
Purchaser Interests of such Financial Institution all rights and obligations of
such Financial Institution hereunder shall be terminated and such Financial
Institution shall no longer be a "Financial Institution"; provided, however,
that the provisions of Article X shall continue in effect for its benefit with
respect to Purchaser Interests held by such Financial Institution prior to its
termination as a Financial Institution.


                                    ARTICLE V
                         REPRESENTATIONS AND WARRANTIES



                                       15


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

         Section 5.1 Representations and Warranties of the Seller Parties. Each
Seller Party hereby represents and warrants to the Agent and the Purchasers, as
to itself, as of the date hereof and as of the date of each Incremental Purchase
and the date of each Reinvestment that:

                  (a) Corporate Existence and Power. Such Seller Party is a
corporation, limited liability company or limited partnership duly organized and
validly existing in good standing under the laws of its state of organization.
Each such Seller Party is duly qualified to do business and is in good standing
as a foreign corporation or entity, and has and holds all corporate or other
power and all governmental licenses, authorizations, consents and approvals
required to carry on its business in each jurisdiction in which its business is
conducted except to the extent that the failure to so qualify or hold could not
reasonably be expected to have a Material Adverse Effect.

                  (b) Power and Authority; Due Authorization, Execution and
Delivery. The execution and delivery by such Seller Party of this Agreement and
each other Transaction Document to which it is a party, and the performance of
its obligations hereunder and thereunder and, in the case of each Seller, such
Seller's use of the proceeds of purchases made hereunder, are within its
corporate or other powers and authority and have been duly authorized by all
necessary corporate or other action on its part. This Agreement and each other
Transaction Document to which such Seller Party is a party has been duly
executed and delivered by such Seller Party.

                  (c) No Conflict. The execution and delivery by such Seller
Party of this Agreement and each other Transaction Document to which it is a
party, and the performance of its obligations hereunder and thereunder do not
contravene or violate (i) its certificate or articles of incorporation or
by-laws (or equivalent organizational documents) or any shareholder agreements,
voting trusts or similar arrangements applicable to its authorized shares or
other equity interests, (ii) any law, rule or regulation applicable to it, (iii)
any restrictions under any material agreement, contract or instrument to which
it is a party or by which it or any of its property is bound or (iv) any order,
writ, judgment, award, injunction or decree binding on or affecting it or its
property, and do not result in the creation or imposition of any Adverse Claim
on assets of such Seller Party or its Subsidiaries (except as created
hereunder); and no transaction contemplated hereby requires compliance with any
bulk sales act or similar law.

                  (d) Governmental Authorization. Other than the filing of the
financing statements required hereunder, no authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution and delivery by such Seller
Party of this Agreement and each other Transaction


                                       16


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

Document to which it is a party and the performance of its obligations hereunder
and thereunder.

                  (e) Actions, Suits. There are no actions, suits or proceedings
pending, or to the best of such Seller Party's knowledge, threatened, against or
affecting such Seller Party, or any of its properties, in or before any court,
arbitrator or other body, that could reasonably be expected to have a Material
Adverse Effect. Such Seller Party is not in default with respect to any order of
any court, arbitrator or governmental body.

                  (f) Binding Effect. This Agreement and each other Transaction
Document to which such Seller Party is a party constitute the legal, valid and
binding obligations of such Seller Party enforceable against such Seller Party
in accordance with their respective terms, except as such enforcement may be
limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to or limiting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).

                  (g) Accuracy of Information. All information heretofore
furnished by or on behalf of such Seller Party or any of its Affiliates to the
Agent or the Purchasers for purposes of or in connection with this Agreement,
any of the other Transaction Documents or any transaction contemplated hereby or
thereby is, and all such information hereafter furnished by or on behalf of such
Seller Party or any of its Affiliates to the Agent or the Purchasers will be,
true and accurate in every material respect on the date such information is
stated or certified and does not and will not contain any material misstatement
of fact or omit to state a material fact or any fact necessary to make the
statements contained therein not misleading in light of the circumstances made
or presented.

                  (h) Use of Proceeds. No proceeds of any purchase hereunder
will be used (i) for a purpose that violates, or would be inconsistent with,
Regulation T, U or X promulgated by the Board of Governors of the Federal
Reserve System from time to time or (ii) to acquire any security in any
transaction that is subject to Section 12, 13 or 14 of the Securities Exchange
Act of 1934, as amended.

                  (i) Good Title. Immediately prior to each purchase hereunder,
each Seller shall be the legal and beneficial owner of the Receivables and
Related Security with respect thereto, free and clear of any Adverse Claim,
except as created by the Transaction Documents. There have been duly filed all
financing statements or other similar instruments or documents necessary under
the UCC (or any comparable law) of all appropriate jurisdictions to perfect each
Seller's ownership interest in each of its Receivables, its Collections and the
Related Security.



                                       17


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

                  (j) Perfection. This Agreement, together with the filing of
the financing statements contemplated hereby, is effective to, and shall, upon
each purchase hereunder, transfer to the Agent for the benefit of the relevant
Purchaser or Purchasers (and the Agent for the benefit of such Purchaser or
Purchasers shall acquire from each Seller) a valid and perfected first priority
undivided percentage ownership or security interest in each Receivable existing
or hereafter arising and in the Related Security and Collections with respect
thereto, free and clear of any Adverse Claim, except as created by the
Transactions Documents. There have been duly filed all financing statements or
other similar instruments or documents necessary under the UCC (or any
comparable law) of all appropriate jurisdictions to perfect the Agent's (on
behalf of the Purchasers) ownership or security interest in the Receivables, the
Related Security and the Collections.

                  (k) Jurisdiction of Organization; Places of Business, etc.
Exhibit III correctly sets forth such Seller Party's legal name, jurisdiction of
organization, Federal Employer's Identification Number and State Organizational
Identification Number. Such Seller Party's principal places of business and
chief executive office and the offices where such Seller Party keeps all of its
Records are located at the address(es) listed on Exhibit III, or such other
locations of which the Agent has been notified in accordance with Section 7.2(a)
in jurisdictions where all action required by Section 14.4(a) has been taken and
completed. Such Seller Party has not within the period of six months prior to
the date hereof, (i) changed its location (as defined in Section 9-307 of the
UCC), except as set forth on Exhibit III or (ii) changed its legal name (except
as set forth on Exhibit III), corporate structure or become a "new debtor" (as
defined in Section 9-102(a)(56) of the UCC) with respect to a currently
effective security agreement previously entered into by any other Person. Each
Seller is a Delaware limited partnership and is a "registered organization"
(within the meaning of Section 9-102 of the UCC in effect in the State of
Delaware).

                  (l) Collections. the conditions and requirements set forth in
Section 7.1(j) and Section 8.2 have at all times been satisfied and duly
performed. the names and addresses of all Collection Banks, together with the
account numbers of the Collection Accounts of each seller at each Collection
Bank and the post office box number of each Lock-box, are listed on Exhibit IV.
No Seller has granted any Person, other than the Agent as contemplated by this
Agreement, dominion and control or "control" (within the meaning of Section
9-104 of the UCC of all applicable jurisdictions) of any Lock-box or Collection
Account, or the right to take dominion and control or "control" (within the
meaning of Section 9-104 of the UCC of all applicable jurisdictions) of any such
Lock-Box or Collection Account at a future time or upon the occurrence of a
future event.

                  (m) Material Adverse Effect. (i) Each of the Initial Servicers
represents and warrants that since December 31, 1999, and each of the Additional
Servicers represents and warrants that since December 31, 2000, and each of the
Dean Entities represents and


                                       18


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

warrants that since May 31, 2001, and each of the New Entities represents and
warrants that since December 31, 2002, no event has occurred that would have a
material adverse effect on the financial condition or operations of such
Servicer and its Subsidiaries taken as a whole, or the ability of such Servicer
to perform its obligations under this Agreement, and (ii) Dairy Group represents
and warrants that since June 30, 2000, and Dairy Group II represents and
warrants that since May 14, 2002, and Specialty Group represents and warrants
that since November 20, 2003, no event has occurred that would have a material
adverse effect on (A) the financial condition or operations of such Seller, (B)
the ability of such Seller to perform its obligations under the Transaction
Documents or (C) the collectibility of the Receivables generally or of any
material portion of the Receivables.

                  (n) Names. In the past five (5) years, no Seller has used any
corporate names, trade names or assumed names other than the name in which it
has executed this Agreement and, in the case of Dairy Group, other than Suiza
Receivables, L.P.

                  (o) Ownership of Sellers. (i) Suiza Dairy Group, L.P. and
Provider own, directly or indirectly, 100% of the limited partnership interests
and 99.9% of the partnership interests of Dairy Group, free and clear of any
Adverse Claim (except any Adverse Claim in favor of the Collateral Agent in
accordance with the Dean Credit Agreement). Dairy Group Receivables GP, LLC
(f/k/a Suiza Receivables GP, LLC) is the general partner of Dairy Group and
owns, directly or indirectly, 100% of the general partnership interests and 0.1%
of the partnership interests of Dairy Group, free and clear of any Adverse Claim
(except any Adverse Claim in favor of the Collateral Agent in accordance with
the Dean Credit Agreement). There are no options or other rights to acquire any
partnership interest of Dairy Group. 100% of the membership interests of Dairy
Group Receivables GP, LLC are owned, directly or indirectly by Provider.

                           (ii) Dean Holding Company and Provider own, directly
or indirectly, 100% of the limited partnership interests and 99.9% of the
partnership interests of Dairy Group II, free and clear of any Adverse Claim
(except any Adverse Claim in favor of the Collateral Agent in accordance with
the Dean Credit Agreement). Dairy Group Receivables GP II, LLC is the general
partner of Dairy Group II and owns, directly or indirectly, 100% of the general
partnership interests and 0.1% of the partnership interests of Dairy Group II,
free and clear of any Adverse Claim (except any Adverse Claim in favor of the
Collateral Agent in accordance with the Dean Credit Agreement). There are no
options or other rights to acquire any partnership interest of Dairy Group II.
100% of the membership interests of Dairy Group Receivables GP II, LLC are
owned, directly or indirectly by Provider.

                           (iii) Dean Holding Company and Provider own, directly
or indirectly, 100% of the limited partnership interests and 99.9% of the
partnership interests


                                       19


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

of Specialty Group, free and clear of any Adverse Claim (except any Adverse
Claim in favor of the Collateral Agent in accordance with the Dean Credit
Agreement). Specialty Group Receivables GP, LLC is the general partner of
Specialty Group and owns, directly or indirectly, 100% of the general
partnership interests and 0.1% of the partnership interests of Specialty Group,
free and clear of any Adverse Claim (except any Adverse Claim in favor of the
Collateral Agent in accordance with the Dean Credit Agreement). There are no
options or other rights to acquire any partnership interest of Specialty Group.
100% of the membership interests of Specialty Group Receivables GP, LLC are
owned, directly or indirectly by Provider.

                  (p) Not a Holding Company or an Investment Company. Such
Seller Party is not a "holding company" or a "subsidiary holding company" of a
"holding company" within the meaning of the Public Utility Holding Company Act
of 1935, as amended, or any successor statute. Such Seller Party is not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, or any successor statute.

                  (q) Compliance with Law. Such Seller Party has complied in all
respects with all applicable laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject, except where the
failure to so comply could not reasonably be expected to have a Material Adverse
Effect. Each Receivable, together with any Writing or Contract related thereto,
does not contravene any laws, rules or regulations applicable thereto
(including, without limitation, laws, rules and regulations relating to truth in
lending, fair credit billing, fair credit reporting, equal credit opportunity,
fair debt collection practices and privacy), and no part of such Writing or
Contract is in violation of any such law, rule or regulation.

                  (r) Compliance with Credit and Collection Policies. Such
Seller Party has complied in all material respects with its Credit and
Collection Policy with regard to each Receivable and any related Writing or
Contract, and has not made any material change to such Credit and Collection
Policy, except such material change as to which the Agent has been notified in
accordance with Section 7.1(a)(vii).

                  (s) Payments to Originators and Morningstar. With respect to
each Receivable transferred to the applicable Seller by each Originator under
the Receivables Sale Agreement to which it is a party, such Seller has given
reasonably equivalent value to such Originator in consideration therefor and
such transfer was not made for or on account of an antecedent debt. No transfer
by any Originator of any Receivable under any Receivables Sale Agreement is or
may be voidable under any section of the Bankruptcy Reform Act of 1978 (11
U.S.C. ss.ss. 101 et seq.), as amended. With respect to each Receivable
transferred to MRC by Morningstar under the Transfer Agreement, MRC has given
reasonably equivalent value to Morningstar in consideration therefor and such
transfer was


                                       20


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

not made for or on account of an antecedent debt. No transfer by Morningstar of
any Receivable under the Transfer Agreement is or may be voidable under any
section of the Bankruptcy Reform Act of 1978 (11 U.S.C. ss.ss. 101 et seq.), as
amended.

                  (t) Enforceability of Contracts. Each Contract, if any, with
respect to each Receivable is effective to create, and has created, a legal,
valid and binding obligation of the related Obligor to pay the Outstanding
Balance of the Receivable created thereunder and any accrued interest thereon,
enforceable against the Obligor in accordance with its terms, except as such
enforcement may be limited by applicable bankruptcy, insolvency, reorganization
or other similar laws relating to or limiting creditors' rights generally and by
general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).

                  (u) Eligible Receivables. Each Receivable included in the Net
Receivables Balance as an Eligible Receivable on the date of its purchase under
the applicable Receivables Sale Agreement was an Eligible Receivable on such
purchase date.

                  (v) Net Receivables Balance. Each Seller has determined that,
immediately after giving effect to each purchase hereunder, the Net Receivables
Balance is at least equal to the sum of (i) the Aggregate Capital, plus (ii) the
Aggregate Reserves.

                  (w) Accounting. The manner in which such Seller Party accounts
for the transactions contemplated by this Agreement, each Receivables Sale
Agreement and the Transfer Agreement does not jeopardize the true sale analysis.

         Section 5.2 Financial Institution Representations and Warranties. Each
Financial Institution hereby represents and warrants to the Agent and the
Company in such Financial Institution's Purchaser Group that:

                  (a) Existence and Power. Such Financial Institution is a
corporation or a banking association duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation or
organization, and has all corporate power to perform its obligations hereunder.

                  (b) No Conflict. The execution and delivery by such Financial
Institution of this Agreement and the performance of its obligations hereunder
are within its corporate powers, have been duly authorized by all necessary
corporate action, do not contravene or violate (i) its certificate or articles
of incorporation or association or by-laws, (ii) any law, rule or regulation
applicable to it, (iii) any restrictions under any material agreement, contract
or instrument to which it is a party or by which it or any of its property is
bound, or (iv) any order, writ, judgment, award, injunction or decree binding on
or


                                       21


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

affecting it or its property, and do not result in the creation or imposition of
any Adverse Claim on its assets, except, in any case, where such contravention
or violation could not reasonably be expected to have a material adverse effect
on (i) the financial condition or operations of such Financial Institution, (ii)
the ability of such Financial Institution to perform its obligations under this
Agreement or (iii) the legality, validity or enforceability of this Agreement.
This Agreement has been duly authorized, executed and delivered by such
Financial Institution.

                  (c) Governmental Authorization. No authorization or approval
or other action by, and no notice to or filing with, any governmental authority
or regulatory body is required for the due execution and delivery by such
Financial Institution of this Agreement and the performance of its obligations
hereunder, except that has already been received.

                  (d) Binding Effect. This Agreement constitutes the legal,
valid and binding obligation of such Financial Institution enforceable against
such Financial Institution in accordance with its terms, except as such
enforcement may be limited by applicable bankruptcy, insolvency, reorganization
or other similar laws relating to or limiting creditors' rights generally and by
general principles of equity (regardless of whether such enforcement is sought
in a proceeding in equity or at law).


                                   ARTICLE VI
                             CONDITIONS OF PURCHASES

         Section 6.1 Conditions Precedent to Initial Incremental Purchase. The
effectiveness of this Agreement is subject to the conditions precedent that (a)
the Agent shall have received on or before the date hereof those documents
listed on Schedule B and (b) the Agent and the Purchasers shall have received
all fees and expenses required to be paid on or prior to the date hereof
pursuant to the terms of this Agreement and the Fee Letters.

         Section 6.2 Conditions Precedent to All Purchases and Reinvestments.
Each purchase of a Purchaser Interest and each Reinvestment shall be subject to
the further conditions precedent that (a) in the case of each such purchase or
Reinvestment: (i) the Servicers shall have delivered to the Agent on or prior to
the date of such purchase, in form and substance satisfactory to the Agent, all
Periodic Reports, including, without limitation, the most recent Periodic Report
as and when due under Section 8.5, and (ii) upon the Agent's request, the
Servicers shall have delivered to the Agent at least three (3) days prior to
such purchase or Reinvestment an interim Monthly Report showing the amount of
Eligible Receivables; (b) the Facility Termination Date shall not have occurred;
(c) the Agent shall have received such other approvals, opinions or documents as
it may reasonably

                                       22


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

request and (d) on the date of each such Incremental Purchase or Reinvestment,
the following statements shall be true (and acceptance of the proceeds of such
Incremental Purchase or Reinvestment shall be deemed a representation and
warranty by Seller that such statements are then true):

                  (i) the representations and warranties set forth in Section
5.1 are true and correct on and as of the date of such Incremental Purchase or
Reinvestment as though made on and as of such date;

                  (ii) no event has occurred and is continuing, or would result
from such Incremental Purchase or Reinvestment, that will constitute an
Amortization Event, and no event has occurred and is continuing, or would result
from such Incremental Purchase or Reinvestment, that would constitute a
Potential Amortization Event; and

                  (iii) the Aggregate Capital does not exceed the Purchase Limit
and the aggregate Purchaser Interests do not exceed 100%.

It is expressly understood that each Reinvestment shall, unless otherwise
directed by the Agent or any Purchaser, occur automatically on each day that any
Servicer shall receive any Collections without the requirement that any further
action be taken on the part of any Person and notwithstanding the failure of any
Seller to satisfy any of the foregoing conditions precedent in respect of such
Reinvestment. The failure of any Seller to satisfy any of the foregoing
conditions precedent in respect of any Reinvestment shall give rise to a right
of the Agent, which right may be exercised at any time on demand of the Agent,
to rescind the related purchase and direct the Sellers to pay to the Agent for
the benefit of the Purchasers an amount equal to the Collections prior to the
Amortization Date that shall have been applied to the affected Reinvestment.


                                   ARTICLE VII
                                    COVENANTS

         Section 7.1 Affirmative Covenants of the Seller Parties. Until the date
on which the Aggregate Unpaids have been indefeasibly paid in full and this
Agreement terminates in accordance with its terms, each Seller Party hereby
covenants, as to itself, as set forth below:

                  (a) Financial Reporting. Such Seller Party will maintain, for
itself and each of its Subsidiaries, a system of accounting established and
administered in accordance with GAAP, and furnish or cause to be furnished to
the Agent and each Financial Institution:


                                       23


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

                           (i) Annual Reporting. Within 90 days after the close
         of each of its respective fiscal years, audited, unqualified
         consolidated financial statements (which shall include balance sheets,
         statements of income and retained earnings and a statement of cash
         flows) for Provider for such fiscal year certified in a manner
         acceptable to the Agent by independent public accountants acceptable to
         the Agent.

                           (ii) Quarterly Reporting. Within 45 days after the
         close of the first three (3) quarterly periods of each of its
         respective fiscal years, (A) consolidated balance sheets of Provider
         and its Subsidiaries as at the close of each such period, (B)
         consolidated statements of income and retained earnings and a statement
         of cash flows for Provider for the period from the beginning of such
         fiscal year to the end of such quarter, (C) the balance sheet of each
         Seller as at the close of each such period and (D) statements of income
         and retained earnings and a statement of cash flows for each Seller,
         all certified by its respective chief financial officer or treasurer.

                           (iii) Compliance Certificate. Together with the
         financial statements required hereunder, a compliance certificate in
         substantially the form of Exhibit V signed by an Authorized Officer of
         the Seller Parties and dated the date of such annual financial
         statement or such quarterly financial statement, as the case may be.

                           (iv) Shareholders Statements and Reports. Promptly
         upon the furnishing thereof to the shareholders of such Seller Party,
         to the extent not available electronically, copies of all financial
         statements, reports and proxy statements so furnished.

                           (v) S.E.C. Filings. Promptly upon the filing thereof,
         to the extent not available electronically, copies of all annual,
         quarterly, monthly or other regular reports that Provider or any of its
         Subsidiaries files with the Securities and Exchange Commission.

                           (vi) Copies of Notices. Promptly upon its receipt of
         any notice, request for consent, financial statements, certification,
         report or other communication under or in connection with any
         Transaction Document from any Person other than the Agent, copies of
         the same.


                                       24


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

                           (vii) Change in Credit and Collection Policies. At
         least thirty (30) days prior to the effectiveness of any material
         change in or material amendment to any Credit and Collection Policy, a
         copy of such Credit and Collection Policy then in effect and a notice
         (A) indicating such change or amendment, and (B) if such proposed
         change or amendment would be reasonably likely to adversely affect the
         collectibility of the Receivables or decrease the credit quality of any
         newly created Receivables, requesting the Agent's and the Required
         Purchasers' consent thereto.

                           (viii) Copies of Dean Credit Agreement Amendments.
         Promptly after execution thereof, copies of each amendment to the Dean
         Credit Agreement as in effect from time to time notwithstanding any
         language to the contrary contained in the definition of "Dean Credit
         Agreement."

                           (ix) Other Information. Promptly, from time to time,
         such other information, documents, records or reports relating to the
         Receivables or the condition or operations, financial or otherwise, of
         such Seller Party as the Agent may from time to time reasonably request
         in order to protect the interests of the Agent and the Purchasers under
         or as contemplated by this Agreement.

                  (b) Notices. Such Seller Party will notify the Agent and each
Financial Institution in writing of any of the following promptly upon learning
of the occurrence thereof, describing the same and, if applicable, the steps
being taken with respect thereto:

                           (i) Amortization Events or Potential Amortization
         Events. The occurrence of each Amortization Event and each Potential
         Amortization Event, by a statement of an Authorized Officer of such
         Seller Party.

                           (ii) Judgment and Proceedings. (A) (1) The entry of
         any judgment or decree against Provider or any Servicer or any of its
         respective Subsidiaries if the aggregate amount of all judgments and
         decrees then outstanding against Provider or such Servicer and its
         respective Subsidiaries could reasonably be expected to have a Material
         Adverse Effect, and (2) the institution of any litigation, arbitration
         proceeding or governmental proceeding against Provider that, if
         adversely determined, could reasonably be expected to have a Material
         Adverse Effect, or against any Servicer; and (B) the entry of any
         judgment or decree or the institution


                                       25


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

         of any litigation, arbitration proceeding or governmental proceeding
         against any Seller.

                           (iii) Material Adverse Effect. The occurrence of any
         event or condition that has had, or could reasonably be expected to
         have, a Material Adverse Effect.

                           (iv) Termination Date. The occurrence of the
         "Termination Date" under and as defined in each Receivables Sale
         Agreement.

                           (v) Defaults Under Other Agreements. The occurrence
         of a default or an event of default under any other financing
         arrangement pursuant to which such Seller Party is a debtor or an
         obligor that could reasonably be expected to have a Material Adverse
         Effect.


                  (c) Compliance with Laws and Preservation of Corporate
Existence. Such Seller Party will comply in all respects with all applicable
laws, rules, regulations, orders, writs, judgments, injunctions, decrees or
awards to which it may be subject if noncompliance with any such law, rule,
regulation, order, writ, judgment, injunction, decree or award could reasonably
be expected to have a Material Adverse Effect. Such Seller Party will preserve
and maintain its legal existence, rights, franchises and privileges in the
jurisdiction of its organization, and qualify and remain qualified in good
standing as a foreign entity in each jurisdiction where its business is
conducted, except where the failure to so qualify or remain qualified could not
reasonably be expected, either individually or in the aggregate, to have a
Material Adverse Effect.


                  (d) Audits. Such Seller Party will furnish to the Agent (with
the Agent providing copies thereof to each Financial Institution, subject to the
Agent receiving any necessary consents to disclosure) from time to time such
information with respect to it and the Receivables as the Agent or the Required
Purchasers may reasonably request. Such Seller Party will, from time to time
during regular business hours as requested by the Agent upon reasonable notice,
permit the Agent, or its agents or representatives (and shall cause each
Originator and Morningstar) to permit the Agent or its agents or
representatives), (i) to examine and make copies of and abstracts from all
Records in the possession or under the control of such Person relating to the
Receivables and the Related Security, including, without limitation, the related
Writings or Contracts, and (ii) to visit the offices and properties of such
Person for the purpose of examining such materials described in clause (i)
above, and to discuss matters relating to such Person's financial condition or
the Receivables and the Related Security or any Person's performance under any
of the

                                       26


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

Transaction Documents or any Person's performance under the Writings or
Contracts and, in each case, with any of the officers or employees of any Seller
Party having knowledge of such matters. All such examinations and visits shall
be at the sole cost of such Seller Party; provided, however, that (i) for so
long as no Amortization Event or Potential Amortization Event shall have
occurred and be continuing and (ii) the result of the immediately preceding
examination and/or visit of such Seller Party shall have been reasonably
satisfactory to the Agent, such cost shall be borne by such Seller Party not
more than twice per calendar year in 2004 and once per calendar year thereafter
(although in no event shall the foregoing be construed to limit the Agent or its
agents or representatives to one such examination and/or visit during such
calendar year period with respect to such Seller Party, provided, that if the
Agent or its agents or representatives fails to make any such examination and/or
visit during any calendar year period, any Financial Institution or its agent or
representatives may make such examination and/or visit in the Agent's stead).
Such Seller Party agrees that one of the two audits to be completed in calender
year 2004 shall be completed by March 31, 2004.

                  (e) Keeping and Marking of Records and Books.

                           (i) The Servicers will (and will cause each
         Originator and Morningstar to) maintain and implement administrative
         and operating procedures (including, without limitation, an ability to
         recreate records evidencing Receivables in the event of the destruction
         of the originals thereof), and keep and maintain all documents, books,
         records and other information reasonably necessary or advisable for the
         collection of all Receivables (including, without limitation, records
         adequate to permit the immediate identification of each new Receivable
         and all Collections of and adjustments to each existing Receivable).
         The Servicers will (and will cause each Originator and Morningstar to)
         give the Agent notice of any material change in the administrative and
         operating procedures referred to in the previous sentence.

                           (ii) Such Seller Party will (and will cause each
         Originator and Morningstar to) (A) on or prior to June 30, 2000 with
         respect to any Seller Party or Originator (other than GTL, Tuscan
         Dairies, each Dean Entity, each New Entity, Dairy Group II and
         Specialty Group), on or prior to June 28, 2001 with respect to GTL and
         Tuscan Dairies, on or prior to December 21, 2001 with respect to any
         Seller Party or Originator that is a Dean Entity, on or prior to May
         15, 2002 with respect to Dairy Group II, and on and prior to the date
         hereof with respect to each New Entity and Specialty Group mark its
         master data processing records and other books and records relating to
         the Purchaser Interests with a legend, acceptable to the Agent,
         describing the Purchaser Interests and (B) upon the


                                       27


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

         request of the Agent following the occurrence and during the
         continuance of an Amortization Event (x) mark each Writing or Contract
         with a legend describing the Purchaser Interests and (y) deliver to the
         Agent all Writings and Contracts (including, without limitation, all
         multiple originals of any such Writing or Contract) relating to the
         Receivables.

                  (f) Compliance with Contracts and Credit and Collection
Policies. Such Seller Party will timely and fully (i) perform and comply with
all provisions, covenants and other promises required to be observed by it under
the Contracts related to the Receivables, and (ii) comply in all material
respects with its respective Credit and Collection Policy in regard to each
Receivable and any related Contract.

                  (g) Performance and Enforcement of Receivables Sale
Agreements. Each Seller will, and will require each Originator party thereto to,
perform each of their respective obligations and undertakings under and pursuant
to the Receivables Sale Agreement to which it is a party, will purchase
Receivables thereunder in strict compliance with the terms thereof and will
vigorously enforce the rights and remedies accorded to such Seller under such
Receivables Sale Agreement. Each Seller will require MRC to perform its
obligations and undertakings under the Transfer Agreement, to purchase
Receivables thereunder in strict compliance with the terms thereof and to
vigorously enforce the rights and remedies accorded to it under the Transfer
Agreement. Each Seller will take all actions to perfect and enforce its rights
and interests (and the rights and interests of the Agent and the Purchasers as
assignees of Seller) under the Receivables Sale Agreement to which it is a party
as the Agent may from time to time reasonably request, including, without
limitation, making claims to which it may be entitled under any indemnity,
reimbursement or similar provision contained in such Receivables Sale Agreement
and requiring MRC to make claims to which it may be entitled under any
indemnity, reimbursement or similar provision contained in the Transfer
Agreement.

                  (h) Ownership. Each Seller will (or will cause each Originator
to) take all necessary action to (i) vest legal and equitable title to the
Receivables, the Related Security and the Collections purchased under the
Receivables Sale Agreement to which it is a party irrevocably in such Seller,
free and clear of any Adverse Claims other than Adverse Claims in favor of the
Agent and the Purchasers (including, without limitation, the filing of all
financing statements or other similar instruments or documents necessary under
the UCC (or any comparable law) of all appropriate jurisdictions to perfect such
Seller's interest in such Receivables, Related Security and Collections and such
other action to perfect, protect or more fully evidence the interest of such
Seller therein as the Agent may reasonably request), and (ii) establish and
maintain, in favor of the Agent, for the benefit of the Purchasers, a valid and
perfected first priority undivided percentage ownership interest (and/or a valid
and perfected first priority security interest) in all Receivables, Related



                                       28


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

Security and Collections to the full extent contemplated herein, free and clear
of any Adverse Claims other than Adverse Claims in favor of the Agent for the
benefit of the Purchasers (including, without limitation, the filing of all
financing statements or other similar instruments or documents necessary under
the UCC (or any comparable law) of all appropriate jurisdictions to perfect the
Agent's (for the benefit of the Purchasers) interest in such Receivables,
Related Security and Collections and such other action to perfect, protect or
more fully evidence the interest of the Agent for the benefit of the Purchasers
as the Agent may reasonably request).

                  (i) Purchasers' Reliance. Each Seller acknowledges that the
Purchasers are entering into the transactions contemplated by this Agreement in
reliance upon such Seller's identity as a legal entity that is separate from the
Originators. Therefore, from and after June 30, 2000 (or, May 15, 2002, in the
case of Dairy Group II and the date hereof, in the case of Specialty Group),
each Seller shall take all reasonable steps, including, without limitation, all
steps that the Agent or any Purchaser may from time to time reasonably request,
to maintain such Seller's identity as a separate legal entity and to make it
manifest to third parties that such Seller is an entity with assets and
liabilities distinct from those of the Originators and any Affiliates thereof
and not just a division of an Originator or any such Affiliate. Without limiting
the generality of the foregoing and in addition to the other covenants set forth
herein, each Seller will:

                                    (A) conduct its own business in its own name
         and require that all full-time employees of such Seller, if any,
         identify themselves as such and not as employees of any Originator or
         any Affiliate thereof (including, without limitation, by means of
         providing appropriate employees with business or identification cards
         identifying such employees as such Seller's employees);

                                    (B) compensate all employees, consultants
         and agents directly, from such Seller's own funds, for services
         provided to such Seller by such employees, consultants and agents and,
         to the extent any employee, consultant or agent of such Seller is also
         an employee, consultant or agent of any Originator or any Affiliate
         thereof, allocate the compensation of such employee, consultant or
         agent between such Seller and Originator or such Affiliate, as
         applicable, on a basis that reflects the services rendered to such
         Seller and such Originator or such Affiliate, as applicable;

                                    (C) clearly identify its offices (by signage
         or otherwise) as its offices and, if such office is located in the


                                       29


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

         offices of any Originator or any Affiliate thereof, allocate fairly any
         overhead for shared office space;

                                    (D) have a separate telephone number or
         extension, which will be answered only in its name and separate
         stationery, invoices and checks in its own name;

                                    (E) conduct all transactions with the
         Originators and the Servicers (including, without limitation, any
         delegation of its obligations hereunder as Servicers) strictly on an
         arm's-length basis, allocate all overhead expenses (including, without
         limitation, telephone and other utility charges) for items shared
         between such Seller and each Originator (or any Affiliate thereof) on
         the basis of actual use to the extent practicable and, to the extent
         such allocation is not practicable, on a basis reasonably related to
         actual use;

                                    (F) at all times have as its general partner
         a limited liability company having at least one Independent Manager;

                                    (G) observe all corporate and/or limited
         partnership formalities as a distinct entity, and ensure that all
         corporate and/or limited partnership actions relating to (A) the
         selection, maintenance or replacement of the general partner, (B) the
         dissolution or liquidation of such Seller or (C) the initiation of,
         participation in, acquiescence in or consent to any bankruptcy,
         insolvency, reorganization or similar proceeding involving Seller, are
         duly authorized by the Independent Manager of the general partner;

                                    (H) maintain such Seller's books and records
         separate from those of each Originator and any Affiliate thereof and
         otherwise readily identifiable as its own assets rather than assets of
         such Originator and any Affiliate thereof;

                                    (I) prepare its financial statements
         separately from those of each Originator and Morningstar and insure
         that any consolidated financial statements of such Originator or any
         Affiliate thereof that include such Seller and that are filed with the
         Securities and Exchange Commission or any other governmental agency
         have notes clearly stating that such Seller is a separate corporate
         entity and that its


                                       30


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

         assets will be available first and foremost to satisfy the claims of
         the creditors of such Seller;

                                    (J) except as herein specifically otherwise
         provided, maintain the funds or other assets of such Seller separate
         from, and not commingled with, those of any Originator or any Affiliate
         thereof and only maintain bank accounts or other depository accounts to
         which such Seller alone is the account party and from which such Seller
         alone (or the Agent hereunder) has the sole power to make withdrawals;

                                    (K) pay all of such Seller's operating
         expenses from such Seller's own assets (except for certain payments by
         the Originators or other Persons pursuant to allocation arrangements
         that comply with the requirements of this Section 7.1(i));

                                    (L) operate its business and activities such
         that: it does not engage in any business or activity of any kind, or
         enter into any transaction or indenture, mortgage, instrument,
         agreement, contract, lease or other undertaking, other than the
         transactions contemplated and authorized by this Agreement and the
         Receivables Sale Agreement to which it is a party (it being understood
         that Dairy Group, Dairy Group Ii and Specialty Group may enter into the
         transactions contemplated by the respective Demand Notes); and does not
         create, incur, guarantee, assume or suffer to exist any indebtedness or
         other liabilities, whether direct or contingent, other than (1) as a
         result of the endorsement of negotiable instruments for deposit or
         collection or similar transactions in the ordinary course of business,
         (2) the incurrence of obligations under this Agreement, (3) the
         incurrence of obligations, as expressly contemplated in the Receivables
         Sale Agreement to which it is a party, to make payment to each
         Originator thereunder for the purchase of Receivables from any
         Originator under such Receivables Sale Agreement, and (4) the
         incurrence of operating expenses in the ordinary course of business of
         the type otherwise contemplated by this Agreement;

                                    (M) maintain its limited partnership
         agreement in conformity with this Agreement, such that it does not
         amend, restate, supplement or otherwise modify its limited partnership
         agreement in any respect that would impair its ability to comply with
         the terms or provisions of any of the Transaction Documents, including,
         without limitation, Section 7.1(i) of this Agreement;


                                       31


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

                                    (N) maintain the effectiveness of, and
         continue to perform under the Receivables Sale Agreement to which it is
         a party (and, in the case of Dairy Group, Dairy Group II and Specialty
         Group, the respective Demand Notes), such that it does not amend,
         restate, supplement, cancel, terminate or otherwise modify such
         Receivables Sale Agreement or the Demand Notes, or give any consent,
         waiver, directive or approval under such Receivables Sale Agreement or
         the Demand Notes, or waive any default, action, omission or breach
         under such Receivables Sale Agreement or under the Demand Notes, or
         otherwise grant any indulgence under such Receivables Sale Agreement or
         the Demand Notes, without (in each case) the prior written consent of
         the Agent and the Required Purchasers;

                                    (O) maintain its limited partnership
         separateness such that it does not merge or consolidate with or into,
         or convey, transfer, lease or otherwise dispose of (whether in one
         transaction or in a series of transactions, and except as otherwise
         contemplated herein) all or substantially all of its assets (whether
         now owned or hereafter acquired) to, or acquire all or substantially
         all of the assets of, any Person, nor at any time create, have,
         acquire, maintain or hold any interest in any Subsidiary;

                                    (P) maintain at all times the Required
         Capital Amount (as defined in the Receivables Sale Agreement to which
         it is a party) and refrain from making any dividend, distribution,
         redemption of capital stock or partnership interest or payment of any
         subordinated indebtedness that would cause such Required Capital Amount
         to cease to be so maintained;

                                    (Q) take such other actions as are necessary
         on its part to ensure that the facts and assumptions set forth in the
         opinion issued by Locke & Liddell & Sapp LLP, as counsel for such
         Seller, in connection with the closing or initial Incremental Purchase
         or initial Reinvestment under this Agreement and relating to
         substantive consolidation issues, and in the certificates accompanying
         such opinion, remain true and correct in all material respects at all
         times.


                  (j) Collections. Such Seller Party will cause (1) all proceeds
from all Lock-Boxes to be directly deposited by a Collection Bank into a
Collection Account and (2) each Lock-Box and Collection Account


                                       32


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

to be subject at all times to a Collection Account Agreement that is in full
force and effect. In the event any payments relating to Receivables are remitted
directly to any Seller or any Affiliate of any Seller, such Seller will (except
as otherwise specified in Section 8.2(b)) remit (or will cause all such payments
to be remitted) directly to a Collection Bank and deposited into a Collection
Account within two (2) Business Days following receipt thereof, and, at all
times prior to such remittance, such Seller will itself hold or, if applicable,
will cause such payments to be held in trust for the exclusive benefit of the
Agent and the Purchasers. Each Seller will maintain exclusive ownership,
dominion and control (subject to the terms of this Agreement) of each applicable
Lock-Box and Collection Account and shall not grant the right to take dominion
and control or grant "control" (within the meaning of Section 9-104 of the UCC
of all applicable jurisdictions) of any such Lock-Box or Collection Account at a
future time or upon the occurrence of a future event to any Person, except to
the Agent as contemplated by this Agreement.

                  (k) Taxes. Such Seller Party will file all tax returns and
reports required by law to be filed by it and will promptly pay all taxes and
governmental charges at any time owing except, in the case of each Seller Party
other than the Sellers, for taxes not yet due or that are being diligently
contested in good faith by appropriate proceedings and that have been adequately
reserved against in accordance with GAAP. Each Seller will pay when due any
taxes payable in connection with the Receivables, exclusive of taxes on or
measured by income or gross receipts of any Company, the Agent or any Financial
Institution.

                  (l) Payment to Originators and Morningstar. With respect to
any Receivable purchased by any Seller from any Originator, such sale shall be
effected under, and in strict compliance with the terms of, the Receivables Sale
Agreement to which such Seller is a party, including, without limitation, the
terms relating to the amount and timing of payments to be made to such
Originator in respect of the purchase price for such Receivable. With respect to
any Receivable purchased by MRC from Morningstar, such sale shall be effected
under, and in strict compliance with the terms of, the Transfer Agreement,
including, without limitation, the terms relating to the amount and timing of
payments to be made to MRC in respect of the purchase price for such Receivable.

         Section 7.2 Negative Covenants of The Seller Parties. Until the date on
which the Aggregate Unpaids have been indefeasibly paid in full and this
Agreement terminates in accordance with its terms, each Seller Party hereby
covenants, as to itself, that:

                  (a) Name Change, Jurisdiction of Organization, Offices,
Records and Books of Accounts. Such Seller Party will not change its name,
identity, corporate or other organizational structure or jurisdiction of
organization (within the meaning of Sections 9-503 and/or 9-507 of the UCC of
all applicable jurisdictions) or relocate its chief executive


                                       33


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

office, principal place of business or any office where Records are kept unless
it shall have: (i) given the Agent at least thirty (30) days' prior written
notice thereof and (ii) delivered to the Agent all financing statements,
instruments and other documents requested by the Agent in connection with such
change or relocation.

                  (b) Change in Payment Instructions to Obligors. Except as may
be required by Section 7.1(m) or by the Agent pursuant to Section 8.2(b), such
Seller Party will not add or terminate any bank as a Collection Bank, or make
any change in the instructions to Obligors regarding payments to be made to any
Lock-Box or Collection Account, unless the Agent shall have received, at least
ten (10) days before the proposed effective date therefor, (i) written notice of
such addition, termination or change and (ii) with respect to the addition of a
Collection Bank or a Collection Account or Lock-Box, an executed Collection
Account Agreement acceptable to the Agent with respect to the new Collection
Account or Lock-Box; provided, however, that the Servicers may make changes in
instructions to Obligors regarding payments if such new instructions require
such Obligor to make payments to another existing Collection Account.

                  (c) Modifications to Writings, Contracts and Credit and
Collection Policies. Such Seller Party will not, and will not permit any
Originator or Morningstar to, make any change to such Originator's or
Morningstar's Credit and Collection Policy that could materially (either
individually or in the aggregate) adversely affect the collectibility of the
Receivables or materially (either individually or in the aggregate) decrease the
credit quality of any newly created Receivables. Except as provided in Section
8.2(d), the Servicers will not, and will not permit any Originator or
Morningstar to, extend, amend or otherwise modify the terms of any Receivable or
the Writing or Contract related thereto other than in accordance with such
Originator's or Morningstar's Credit and Collection Policy.

                  (d) Sales, Liens. No Seller will sell, assign (by operation of
law or otherwise) or otherwise dispose of, or grant any option with respect to,
or create or suffer to exist any Adverse Claim upon (including, without
limitation, the filing of any financing statement) or with respect to, any
Receivable, Related Security or Collections, or upon or with respect to the
Writing or Contract under which any Receivable arises, or any Lock-Box or
Collection Account, or assign any right to receive income with respect thereto
(other than, in each case, the creation of the interests therein in favor of the
Agent and the Purchasers provided for herein), and each Seller will defend the
right, title and interest of the Agent and the Purchasers in, to and under any
of the foregoing property, against all claims of third parties claiming through
or under such Seller or any Originator or Morningstar. No Seller will create or
suffer to exist any mortgage, pledge, security interest, encumbrance, lien,
charge or other similar arrangement on any of its inventory, the financing or
lease of which gives rise to any Receivable. Notwithstanding this Section
7.2(d), so


                                       34


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

long as no Amortization Event or Potential Amortization Event exists, the
Sellers collectively may, at their discretion and in a single transaction
occurring on a single day, sell all of the Fleming Receivables to White Wave,
Inc., a Delaware corporation ("White Wave"); provided that no later than 3
Business Days after such sale, each Seller shall deliver to the Agent a
certificate executed by an Authorized Officer of such Seller (A) stating that,
with respect to all Fleming Receivables sold in such sale, (I) neither Seller
nor any Servicer (in its capacity as Servicer hereunder) has made, and neither
Seller nor the Servicer (in its capacity as Servicer hereunder) will make, any
representations or warranties in connection with such sale of Fleming
Receivables, (II) both before and after giving effect to such sale, no
Amortization Event or Potential Amortization Event exists, (III) White Wave has,
and will have, no recourse to the Seller or the assets of the Seller (other than
the Fleming Receivables subject to such sale), (IV) such sale is solely to (x)
enable White Wave to further sell such Fleming Receivables through an
arm's-length, fair market transaction to a purchaser that is not an Affiliate of
any Seller Party, Morningstar or Provider and (y) to receive advertising trade
credits in exchange for such Fleming Receivables, (V) such Fleming Receivables
have been or will be included as Charged-Off Receivables in at least one Monthly
Report and (VI) White Wave has given fair consideration and reasonably
equivalent value to each Seller in consideration of such sale of the Fleming
Receivables, the cash purchase price for such Fleming Receivables is no less
than the fair market value to be paid to White Wave upon White Wave's subsequent
transfer of such Fleming Receivables and the sale of such Fleming Receivables to
White Wave was not made for or on account of an antecedent debt, (B) setting
forth the aggregate Outstanding Balance of all such Fleming Receivables and (C)
setting forth the aggregate purchase price paid for all such Fleming
Receivables. Upon any such sale of the Fleming Receivables in accordance with
the terms of this Section 7.2(d) and the Sellers' receipt of the purchase price
therefor in immediately available funds in a Collection Account and Agent's
receipt of the certificate described above, such Fleming Receivables shall be
automatically released without any further action by any party hereto from the
security interest granted to the Agent for the ratable benefit of the Purchasers
pursuant to Section 14.14(b). For the avoidance of doubt, each party hereto
agrees that the purchase price paid upon any such sale of Fleming Receivables
shall constitute Collections hereunder and shall be applied in accordance with
the terms hereof, including, without limitation, Article II.

                  (e) Net Receivables Balance. At no time prior to the
Amortization Date shall any Seller permit the Net Receivables Balance to be less
than an amount equal to the sum of (i) the Aggregate Capital plus (ii) the
Aggregate Reserves.

                  (f) Termination Date Determination. No Seller will designate
the Termination Date (as defined in each Receivables Sale Agreement) under the
Receivables Sale Agreement to which it is a party, or send any written notice to
any Originator in respect thereof, without the prior written consent of the
Agent and the Required Purchasers, except


                                       35


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

with respect to the occurrence of such Termination Date arising pursuant to
Section 5.1(d) of such Receivables Sale Agreement.

                  (g) Restricted Junior Payments. From and after the occurrence
of any Amortization Event, no Seller will make any Restricted Junior Payment if,
after giving effect thereto, such Seller would fail to meet its obligations set
forth in Section 7.2(e).

                  (h) Demand Notes. At no time shall (i) Dairy Group cause or
permit the aggregate outstanding principal balance of its Demand Note to exceed
$21,325,653, (ii) Dairy Group II cause or permit the aggregate outstanding
principal balance of its Demand Note to exceed $13,181,876, and (iii) Specialty
Group cause or permit the aggregate outstanding principal balance of its Demand
Note to exceed $3,000,000.


                                  ARTICLE VIII
                          ADMINISTRATION AND COLLECTION

         Section 8.1 Designation of Servicers. (a) The servicing, administration
and collection of the Receivables shall be conducted by such Person or Persons
(each such Person, a "Servicer") so designated from time to time in accordance
with this Section 8.1. Each of Morningstar, Country Fresh, Land-O-Sun, Southern
Foods, GTL, Tuscan Dairies, each Dean Entity and each New Entity is hereby
designated as, and hereby agrees to perform the duties and obligations of,
Servicer pursuant to the terms of this Agreement with respect to the Receivables
originated by such entity. The Agent may, and at the direction of the Required
Purchasers shall, at any time following an Amortization Event, designate as
Servicer any Person to succeed Morningstar, Country Fresh, Land-O-Sun, Southern
Foods, GTL, Tuscan Dairies, any Dean Entity or any New Entity, or any successor
Servicer.


                  (b) Without the prior written consent of the Agent and the
Required Purchasers, neither Morningstar, Country Fresh, Land-O-Sun, Southern
Foods, GTL, Tuscan Dairies, any Dean Entity nor any New Entity shall be
permitted to delegate any of its duties or responsibilities as Servicer to any
Person other than (i) a Seller and (ii) with respect to certain Charged-Off
Receivables, outside collection agencies in accordance with its customary
practices. No Seller shall be permitted to further delegate to any other Person
any of the duties or responsibilities of a Servicer delegated to it by
Morningstar, Country Fresh, Land-O-Sun, Southern Foods, GTL, Tuscan Dairies, any
Dean Entity or any New Entity. If at any time following an Amortization Event
the Agent shall designate as Servicer any Person other than Morningstar, Country
Fresh, Land-O-Sun, Southern Foods, GTL, Tuscan Dairies, any Dean Entity or any
New Entity, all duties and responsibilities theretofore delegated by
Morningstar, Country Fresh, Land-O-Sun, Southern Foods, GTL, Tuscan Dairies, any
Dean Entity or any New Entity to any Seller may, at the discretion of the


                                       36


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

Agent, be terminated forthwith on notice given by the Agent to Morningstar,
Country Fresh, Land-O-Sun, Southern Foods, GTL, Tuscan Dairies, any Dean Entity
or any New Entity, as applicable, and to the Administrative Seller.

                  (c) Notwithstanding the foregoing subsection (b), (i) each of
Morningstar, Country Fresh, Land-O-Sun, Southern Foods, GTL, Tuscan Dairies,
each Dean Entity and each New Entity shall be and remain primarily liable to the
Agent and the Purchasers for the full and prompt performance of all of its
duties and responsibilities as a Servicer hereunder and (ii) the Agent and the
Purchasers shall be entitled to deal exclusively with Morningstar, Country
Fresh, Land-O-Sun, Southern Foods, GTL, Tuscan Dairies, each Dean Entity and
each New Entity in matters relating to the discharge by a Servicer of its duties
and responsibilities hereunder. The Agent and the Purchasers shall not be
required to give notice, demand or other communication to any Person other than
Morningstar, Country Fresh, Land-O-Sun, Southern Foods, GTL, Tuscan Dairies,
each Dean Entity or each New Entity in order for communication to a Servicer and
its sub-servicer or other delegate with respect thereto to be accomplished. Each
of Morningstar, Country Fresh, Land-O-Sun, Southern Foods, GTL, Tuscan Dairies,
each Dean Entity and each New Entity, at all times that it is a Servicer, shall
be responsible for providing any sub-servicer or other delegate of a Servicer
with any notice given to a Servicer under this Agreement.

         Section 8.2 Duties of Servicer. (a) Each Servicer shall take or cause
to be taken all such actions as may be necessary or advisable to collect each
Receivable originated by such entity from time to time, all in accordance in all
material respects with applicable laws, rules and regulations, with reasonable
care and diligence, and in accordance in all material respects with the
applicable Originator's or Morningstar's Credit and Collection Policy.

                  (b) Each Servicer will instruct all Obligors to pay all
Collections with respect to the Receivables originated by such entity directly
to a Lock-Box or Collection Account; provided, however, that to the extent that
the Originator (other than a Local Originator) of the Receivable giving rise to
such Collections or Morningstar, as applicable, currently permits the Obligor of
such Receivable to pay such Collections to a local employee of such Originator
or Morningstar, as applicable, such Servicer will insure that such local
employees remit such Collections to a local depository account no less
frequently than weekly, and within two (2) Business Days of such local
employee's deposit of such Collections, such Servicer will cause such
Collections to be deposited directly to a Lock-Box or Collection Account. With
respect to payments relating to Receivables that are remitted directly to any
Servicer, such Servicer will remit such payments (or will cause all such
payments to be remitted) directly to a Collection Bank and deposited into a
Collection Account within two (2) Business Days following receipt thereof, and,
at all times prior to


                                       37


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

such remittance, such Servicer will itself hold or, if applicable, will cause
such payments to be held in trust for the exclusive benefit of the Agent and the
Purchasers. Each Servicer shall effect a Collection Account Agreement
substantially in the form of Exhibit VI with each bank party to a Collection
Account at any time. Prior to the delivery of any Collection Notice to any
Collection Bank, in the case of any remittances received in any Lock-Box or
Collection Account that shall have been identified, to the satisfaction of the
applicable Servicer, to not constitute Collections or other proceeds of the
Receivables or the Related Security (which identification shall occur no later
than two (2) Business Days after such amounts are received therein), such
Servicer shall promptly (and, in any event, no later than one (1) Business Day
after such identification) remit such items to the Person identified to it as
being the owner of such remittances and cause such amounts to be removed from
such Lock-Box or Collection Account. From and after the date the Agent delivers
to any Collection Bank a Collection Notice pursuant to Section 8.3, the Agent
may request that the Servicers, and the Servicers thereupon promptly shall
instruct all Obligors with respect to the Receivables, to remit all payments
thereon to a new depositary account specified by the Agent and, at all times
thereafter, each Seller and the Servicers shall not deposit or otherwise credit,
and shall not permit any other Person to deposit or otherwise credit to such new
depositary account any cash or payment item other than Collections.

                  (c) The Servicers shall administer the Collections with
respect to the Receivables originated by each such entity in accordance with the
procedures described herein and in Article II. The Servicers shall set aside and
hold in trust for the account of Seller and the Purchasers their respective
shares of the Collections in accordance with Article II. The Servicers shall,
upon the request of the Agent, segregate, in a manner acceptable to the Agent,
all cash, checks and other instruments received by it from time to time
constituting Collections from the general funds of each of the Servicers or the
Sellers prior to the remittance thereof in accordance with Article II. If the
Servicers shall be required to segregate Collections pursuant to the preceding
sentence, the Servicers shall segregate and deposit with a bank designated by
the Agent such allocable share of Collections of Receivables set aside for the
Purchasers on the second Business Day following receipt by any Servicer of such
Collections, duly endorsed or with duly executed instruments of transfer.

                  (d) The Servicers may, in accordance with the applicable
Originator's or Morningstar's Credit and Collection Policy, extend the maturity
of any Receivable or adjust the Outstanding Balance of any Receivable as the
Servicers determine to be appropriate to maximize Collections thereof; provided,
however, that such extension or adjustment shall not alter the status of such
Receivable as a Delinquent Receivable or Charged-Off Receivable or limit the
rights of the Agent or the Purchasers under this Agreement. Notwithstanding
anything to the contrary contained herein, upon the occurrence and during the
continuance of an Amortization Event and until such time as the Aggregate
Unpaids


                                       38


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

have been indefeasibly paid in full, the Agent shall have the absolute and
unlimited right to direct the Servicers to commence or settle any legal action
with respect to any Receivable or to foreclose upon or repossess any Related
Security.

                  (e) The Servicers shall hold in trust for the Sellers and the
Purchasers all Records that (i) evidence or relate to the Receivables, the
related Writings and Contracts and Related Security or (ii) are otherwise
necessary or desirable to collect the Receivables and shall, as soon as
reasonably practicable upon demand of the Agent, deliver or make available to
the Agent all such Records, at a place selected by the Agent. The Servicers
shall, as soon as reasonably practicable following receipt thereof turn over to
the Sellers any cash collections or other cash proceeds received with respect to
Indebtedness not constituting Receivables. The Servicers shall, from time to
time at the request of any Purchaser, furnish to the Purchasers (promptly after
any such request) a calculation of the amounts set aside for the Purchasers
pursuant to Article II.

                  (f) Any payment by an Obligor in respect of any indebtedness
owed by it to any Originator or Morningstar or any Seller shall, except as
otherwise specified by such Obligor or otherwise required by contract or law and
unless otherwise instructed by the Agent, be applied as a Collection of any
Receivable of such Obligor (starting with the oldest such Receivable) to the
extent of any amounts then due and payable thereunder before being applied to
any other receivable or other obligation of such Obligor.

         Section 8.3 Collection Notices. The Agent is authorized at any time to
date and to deliver to the Collection Banks the Collection Notices. Each Seller
hereby agrees that, effective when the Agent delivers such notice, the Agent
(for the benefit of the Purchasers) shall have exclusive ownership and sole
"control" (within the meaning of Section 9-104 of the UCC of all applicable
jurisdictions) of each Lock-Box, the Collection Accounts and the amounts on
deposit therein. In case any authorized signatory of any Seller whose signature
appears on a Collection Account Agreement shall cease to have such authority
before the delivery of such notice, such Collection Notice shall nevertheless be
valid as if such authority had remained in force. Each Seller hereby authorizes
the Agent, and agrees that the Agent shall be entitled to (i) endorse such
Seller's name on checks and other instruments representing Collections, (ii)
enforce the Receivables, the related Writings and Contracts and the Related
Security and (iii) take such action as shall be necessary or desirable to cause
all cash, checks and other instruments constituting Collections of Receivables
to come into the possession of the Agent rather than the Sellers or any
Servicer.

         Section 8.4 Responsibilities of the Sellers. Anything herein to the
contrary notwithstanding, the exercise by the Agent and the Purchasers of their
rights hereunder shall not release the Servicers, the Originators, Morningstar
or any Seller from any of their duties or obligations with respect to any
Receivables or under the related Writings or Contracts.


                                       39


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

The Purchasers shall have no obligation or liability with respect to any
Receivables or related Writings or Contracts, nor shall any of them be obligated
to perform the obligations of any Seller.

         Section 1.32 Reports. The Servicers shall prepare and forward to the
Agent and each Financial Institution (i) on the 20th calendar day of each month
and at such times as the Agent or the Required Purchasers shall request, a
Monthly Report and (ii) at such times as the Agent or the Required Purchasers
shall request, a listing by Obligor of all Receivables together with an aging of
such Receivables. In addition, during any time when the long-term debt rating of
Provider is rated Ba3 or lower by Moody's Investors Service, Inc. and BB- or
lower by Standard & Poor's Ratings Group, the Servicers shall prepare and
forward to the Agent and each Financial Institution on Wednesday of each
calendar week, an abbreviated Monthly Report in a form acceptable to the Agent
(each such report, a "Weekly Report") with respect to and as of the end of the
immediately preceding calendar week.

         Section 8.6 Servicing Fees. In consideration of each of Morningstar's,
Country Fresh's, Land-O-Sun's, Southern Foods', GTL's, Tuscan Dairies', each
Dean Entity's and each New Entity's agreement to each act as a Servicer
hereunder, the Purchasers hereby agree that, so long as each of Morningstar,
Country Fresh, Land-O-Sun, Southern Foods, GTL, Tuscan Dairies, each Dean Entity
and each New Entity shall continue to perform as a Servicer hereunder, Seller
shall pay over to Morningstar, Country Fresh, Land-O-Sun, Southern Foods, GTL,
Tuscan Dairies, each Dean Entity and each New Entity collectively, a fee (the
"Servicing Fee") on each Settlement Date (other than a Settlement Date relating
to a CP (Tranche) Accrual Period) for the immediately preceding Settlement
Period equal to 1% (one percent) of the lesser of the (a) the average Net
Receivables Balance during such Settlement Period and (b) the average Capital of
all Receivables during such period, as compensation for its servicing
activities. Such Servicing Fee shall be allocated among Morningstar, Country
Fresh, Land-O-Sun, Southern Foods, GTL, Tuscan Dairies, each Dean Entity and
each New Entity as such parties shall mutually determine.


                                   ARTICLE IX
                               AMORTIZATION EVENTS

         Section 9.1 Amortization Events. The occurrence of any one or more of
the following events shall constitute an Amortization Event:

                  (a) Any Seller Party shall fail (i) to make any payment or
deposit of any amount consisting of Capital required hereunder when due, or (ii)
to make any payment or deposit of any other amount required hereunder when due
and such failure shall continue for two (2) consecutive Business Days, or (iii)
to perform or observe any term, covenant or

                                       40


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

agreement set forth in Section 7.2 hereof, or (iv) to perform or observe any
term, covenant or agreement set forth in Section 7.1(a)(iv), (a)(v), (a)(viii)
or (c)(second sentence only), and such failure shall continue for thirty (30)
consecutive days or (v) to perform or observe any other term, covenant or
agreement hereunder (other than as referred to in clauses (i), (ii), (iii) or
(iv) of this paragraph (a)) and such failure shall continue for five (5)
consecutive Business Days.

                  (b) Any representation, warranty, certification or statement
made by any Seller Party in this Agreement, any other Transaction Document or in
any other document delivered pursuant hereto or thereto shall prove to have been
incorrect when made or deemed made.

                  (c) Failure of any Seller to pay any Indebtedness when due or
the failure of any other Seller Party to pay Indebtedness when due in excess of
$50,000,000 or the default by any Seller Party in the performance of any term,
provision or condition contained in any agreement under which any such
Indebtedness was created or is governed, the effect of which is to cause, or to
permit the holder or holders of such Indebtedness to cause, such Indebtedness to
become due prior to its stated maturity or any such Indebtedness of any Seller
Party shall be declared to be due and payable or required to be prepaid (other
than by a regularly scheduled payment) prior to the date of maturity thereof.

                  (d) (i) Any Seller Party or Provider shall generally not pay
its debts as such debts become due or shall admit in writing its inability to
pay its debts generally or shall make a general assignment for the benefit of
creditors, or (ii) any proceeding shall be instituted by or against any Seller
Party or Provider seeking to adjudicate it bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee or other similar
official for it or any substantial part of its property or (iii) any Seller
Party or Provider shall take any corporate action to authorize any of the
actions set forth in clauses (i) or (ii) above in this subsection (d).

                  (e) Any Seller shall fail to comply with the terms of Section
2.6 hereof and such failure shall not have been remedied within one Business
Day.

                  (f) (i) As at the end of any calendar month, the average of
the Default Ratios for the three most recently-ended calendar months shall
exceed 7.75%, or (ii) as at the end of any calendar month, the average of the
Dilution Ratios for the three most recently-ended calendar months shall exceed
4%, or (iii) as at the end of any calendar month, the average of the Delinquency
Ratios for the three most recently-ended calendar months shall exceed 3.00%.


                                       41


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

                  (g) A Change of Control shall occur.

                  (h) (i) One or more final judgments for the payment of money
shall be entered against any Seller or (ii) one or more final judgments for the
payment of money in an amount in excess of $50,000,000, individually or in the
aggregate, shall be entered against any Servicer on claims not covered by
insurance or as to which the insurance carrier has denied its responsibility,
and such judgment shall continue unsatisfied and in effect for thirty (30)
consecutive days without a stay of execution.

                  (i) The "Termination Date" under and as defined in any
Receivables Sale Agreement shall occur under any such Receivables Sale Agreement
or any Seller or any Originator shall fail to observe any term or condition of
any Receivables Sale Agreement or shall waive its right to enforce the terms and
conditions of any Receivables Sale Agreement, or any Originator shall for any
reason cease to transfer, or cease to have the legal capacity to transfer, or
otherwise be incapable of transferring Receivables to any Seller under any
Receivables Sale Agreement (other than an Immaterial Originator which ceases to
transfer Receivables subject to and in accordance with Section 1.7 of any
Receivables Sale Agreement).

                  (j) This Agreement shall terminate in whole or in part (except
in accordance with its terms), or shall cease to be effective or to be the
legally valid, binding and enforceable obligation of any Seller, or any Obligor
shall directly or indirectly contest in any manner such effectiveness, validity,
binding nature or enforceability, or the Agent for the benefit of the Purchasers
shall cease to have a valid and perfected first priority security interest in
the Receivables, the Related Security and the Collections with respect thereto
and the Collection Accounts.

                  (k) Provider shall fail to perform or observe any term,
covenant or agreement required to be performed by it under any Performance
Undertaking, or any Performance Undertaking shall cease to be effective or to be
the legally valid, binding and enforceable obligation of Provider, or Provider
shall directly or indirectly contest in any manner such effectiveness, validity,
binding nature or enforceability.

                  (l) The Agreement of General Partner shall terminate in whole
or in part or shall cease to be effective or to be the legally valid, binding
and enforceable obligation of the general partner of Dairy Group or Dairy Group
shall directly or indirectly contest in any manner such effectiveness, validity,
binding nature or enforceability, or the general partner of Dairy Group shall
fail in any respect to perform its obligations under the Agreement of General
Partner.


                                       42


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

                  (m) (i) Provider shall fail to own, free and clear of any
Adverse Claims, in the aggregate, either directly or indirectly, 100% of the
limited partnership interests of Dairy Group and 99.9% of the partnership
interests of Dairy Group, or Dairy Group Receivables GP, LLC (f/k/a Suiza
Receivables GP, LLC) shall fail to own, free and clear of any Adverse Claims
(except any Adverse Claim in favor of the Collateral Agent in accordance with
the Dean Credit Agreement), 100% of the general partnership interests of Dairy
Group and 0.1% of the partnership interests of Dairy Group, or Provider and
Suiza Dairy Group, L.P. shall fail to own, free and clear of any Adverse Claims
(except any Adverse Claim in favor of the Collateral Agent in accordance with
the Dean Credit Agreement), in the aggregate, either directly or indirectly,
100% of the membership interests of Dairy Group Receivables GP, LLC.

                           (ii)  Provider shall fail to own, free and clear of
any Adverse Claims, in the aggregate, either directly or indirectly, 100% of the
limited partnership interests of Dairy Group II and 99.9% of the partnership
interests of Dairy Group II, or Dairy Group Receivables GP II, LLC shall fail to
own, free and clear of any Adverse Claims (except any Adverse Claim in favor of
the Collateral Agent in accordance with the Dean Credit Agreement), 100% of the
general partnership interests of Dairy Group II and 0.1% of the partnership
interests of Dairy Group II, or Provider and Dean Holding Company shall fail to
own, free and clear of any Adverse Claims (except any Adverse Claim in favor of
the Collateral Agent in accordance with the Dean Credit Agreement), in the
aggregate, either directly or indirectly, 100% of the membership interests of
Dairy Group Receivables GP II, LLC.

                           (iii)  Provider shall fail to own, free and clear of
any Adverse Claims, in the aggregate, either directly or indirectly, 100% of the
limited partnership interests of Specialty Group and 99.9% of the partnership
interests of Specialty Group, or Specialty Group Receivables GP, LLC shall fail
to own, free and clear of any Adverse Claims (except any Adverse Claim in favor
of the Collateral Agent in accordance with the Dean Credit Agreement), 100% of
the general partnership interests of Specialty Group and 0.1% of the partnership
interests of Specialty Group, or Provider and Dean Holding Company shall fail to
own, free and clear of any Adverse Claims (except any Adverse Claim in favor of
the Collateral Agent in accordance with the Dean Credit Agreement), in the
aggregate, either directly or indirectly, 100% of the membership interests of
Specialty Group Receivables GP, LLC.

                  (n) Provider shall fail to comply with the Dean Financial
Covenants.


                                       43


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

         Section 9.2 Remedies. Upon the occurrence and during the continuation
of an Amortization Event, the Agent may, or upon the direction of the Required
Purchasers shall, take any of the following actions: (i) replace any Person then
acting as Servicer, (ii) declare the Amortization Date to have occurred,
whereupon the Amortization Date shall forthwith occur, without demand, protest
or further notice of any kind, all of which are hereby expressly waived by each
Seller Party; provided, however, that (A) upon the occurrence of an Amortization
Event described in Section 9.1(d)(ii), or of an actual or deemed entry of an
order for relief with respect to any Seller Party under the Federal Bankruptcy
Code, the Amortization Date shall automatically occur, without demand, protest
or any notice of any kind, all of which are hereby expressly waived by each
Seller Party and (B) upon the occurrence of an Amortization Event described in
Section 9.1(a), 9.1(d) or 9.1(e), by three (3) Business Days' notice to the
Agent, each other Purchaser and the Administrative Seller, the affected
Financial Institution in the case of a Section 9.1(a) Amortization Event and any
Financial Institution in the case of a Section 9.1(d) or 9.1(e) Amortization
Event may terminate its Commitment hereunder, whereupon such Financial
Institution shall be deemed to be a "Terminating Financial Institution" for all
purposes hereof, (iii) to the fullest extent permitted by applicable law,
declare that the Default Fee shall accrue with respect to any of the Aggregate
Unpaids outstanding at such time, (iv) deliver the Collection Notices to the
Collection Banks, (v) notify Obligors of the Purchasers' interest in the
Receivables, and (vi) notify Provider of the Purchaser's interest in the Demand
Notes, make demand for any and all payments due thereunder and direct that such
payments be made directly to the Agent or its designee. the aforementioned
rights and remedies shall be without limitation, and shall be in addition to all
other rights and remedies of the Agent and the Purchasers otherwise available
under any other provision of this Agreement, by operation of law, at equity or
otherwise, all of which are hereby expressly preserved, including, without
limitation, all rights and remedies provided under the UCC, all of which rights
shall be cumulative.


                                    ARTICLE X
                                 INDEMNIFICATION

         Section 10.1 Indemnities by the Seller Parties. Without limiting any
other rights that the Agent, any Purchaser, any Funding Source or any of their
respective Affiliates may have hereunder or under applicable law, (A) each
Seller hereby agrees to indemnify (and pay upon demand to) the Agent, each
Purchaser, each Funding Source and their respective Affiliates, assigns,
officers, directors and employees (each an "Indemnified Party") from and against
any and all damages, losses, claims, taxes, liabilities, costs, expenses and for
all other amounts payable, including reasonable attorneys' fees (which attorneys
may be employees of any Indemnified Party) and disbursements (all of the
foregoing being collectively referred to as "Indemnified Amounts") awarded
against or incurred by any of them arising out of or as a result of this
Agreement, or the use of the proceeds of any

                                       44


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

purchase hereunder, or the acquisition, funding or ownership, either directly or
indirectly, by a Purchaser or a Funding Source of a Purchaser Interest or of an
interest in the Receivables, or any Receivable or any Contract or any Writing,
or any action of any Seller Party, any Originator, Morningstar or any Affiliate
of any of the foregoing and (B) the Servicers hereby agree to indemnify (and pay
upon demand to) each Indemnified Party for Indemnified Amounts awarded against
or incurred by any of them arising out of any Servicer's activities as Servicer
hereunder excluding, however, in all of the foregoing instances under the
preceding clauses (A) and (B):

                           (i) Indemnified Amounts to the extent a final
         judgment of a court of competent jurisdiction holds that such
         Indemnified Amounts resulted from gross negligence or willful
         misconduct on the part of the Indemnified Party seeking
         indemnification;

                           (ii) Indemnified Amounts to the extent the same
         includes losses in respect of Receivables that are uncollectible on
         account of the insolvency, bankruptcy or lack of creditworthiness of
         the related Obligor; or

                           (iii) franchise taxes and taxes imposed by the
         jurisdiction in which such Indemnified Party's principal executive
         office is located, on or measured by the overall net income of such
         Indemnified Party to the extent that the computation of such taxes is
         consistent with the characterization for income tax purposes of the
         acquisition by the Purchasers of Purchaser Interests as a loan or loans
         by the Purchasers to the Sellers secured by the Receivables, the
         Related Security, the Collection Accounts and the Collections;

provided, however, that nothing contained in this sentence shall limit the
liability of any Seller Party or limit the recourse of the Purchasers to any
Seller Party for amounts otherwise specifically provided to be paid by such
Seller Party under the terms of this Agreement. Without limiting the generality
of the foregoing indemnification, each Seller shall indemnify each Indemnified
Party for Indemnified Amounts (including, without limitation, losses in respect
of uncollectible receivables, regardless of whether reimbursement therefor would
constitute recourse to any Seller or any Servicer) relating to or resulting
from:

                           (i) any representation or warranty made by any Seller
         Party or any Originator or Morningstar in its capacity as seller under
         any Receivables Sale Agreement or the Transfer Agreement, as applicable
         (or any officers of any such Person) under or in connection with this
         Agreement, any other Transaction Document or any other information


                                       45


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

         or report delivered by any such Person pursuant hereto or thereto,
         which shall have been false or incorrect when made or deemed made;

                           (ii) the failure by any Seller, any Servicer, any
         Originator or Morningstar to comply with any applicable law, rule or
         regulation with respect to any Receivable or Writing or Contract
         related thereto, or the nonconformity of any Receivable or Writing or
         Contract included therein with any such applicable law, rule or
         regulation or any failure of any Originator or Morningstar to keep or
         perform any of its obligations, express or implied, with respect to the
         Writing or Contract;

                           (iii) any failure of any Seller, any Servicer, any
         Originator or Morningstar to perform its duties, covenants or other
         obligations in accordance with the provisions of this Agreement or any
         other Transaction Document;

                           (iv) any products liability, personal injury or
         damage suit, or other similar claim arising out of or in connection
         with merchandise, insurance or services that are the subject of any
         Writing or Contract or any Receivable;

                           (v) any dispute, claim, offset or defense (other than
         discharge in bankruptcy of the Obligor) of the Obligor to the payment
         of any Receivable (including, without limitation, a defense based on
         such Receivable or the related Writing or Contract not being a legal,
         valid and binding obligation of such Obligor enforceable against it in
         accordance with its terms), or any other claim resulting from the sale
         of the merchandise or service related to such Receivable or the
         furnishing or failure to furnish such merchandise or services;

                           (vi) the commingling of Collections of Receivables at
         any time with other funds;

                           (vii) any investigation, litigation or proceeding
         related to or arising from this Agreement or any other Transaction
         Document, the transactions contemplated hereby, the use of the proceeds
         of an Incremental Purchase or a Reinvestment, the ownership of the
         Purchaser Interests or any other investigation, litigation or
         proceeding relating to any Seller, any Servicer, any Originator or
         Morningstar in which any Indemnified Party becomes involved as a result
         of any of the transactions contemplated hereby;


                                       46


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

                           (viii) any inability to litigate any claim against
         any Obligor in respect of any Receivable as a result of such Obligor
         being immune from civil and commercial law and suit on the grounds of
         sovereignty or otherwise from any legal action, suit or proceeding;

                           (ix) any Amortization Event described in Section
         9.1(d);

                           (x) any failure of any Seller to acquire and maintain
         legal and equitable title to, and ownership of any Receivable and the
         Related Security and Collections with respect thereto from the
         applicable Originator or Morningstar, free and clear of any Adverse
         Claim (other than as created hereunder); or any failure of any Seller
         to give reasonably equivalent value to applicable Originator under the
         Receivables Sale Agreement to which it is a party in consideration of
         the transfer thereunder by such Originator of any Receivable, or any
         failure of MRC to give reasonably equivalent value to Morningstar under
         the Transfer Agreement in consideration of the transfer by MRC of any
         Receivable thereunder or any attempt by any Person to void such
         transfer under statutory provisions or common law or equitable action;

                           (xi) any failure to vest and maintain vested in the
         Agent for the benefit of the Purchasers, or to transfer to the Agent
         for the benefit of the Purchasers, legal and equitable title to, and
         ownership of, a first priority perfected undivided percentage ownership
         interest (to the extent of the Purchaser Interests contemplated
         hereunder) or security interest in the Receivables, the Related
         Security and the Collections, free and clear of any Adverse Claim
         (except as created by the Transaction Documents);

                           (xii) the failure to have filed, or any delay in
         filing, financing statements or other similar instruments or documents
         under the UCC of any applicable jurisdiction or other applicable laws
         with respect to any Receivable, the Related Security and Collections
         with respect thereto, and the proceeds of any thereof, whether at the
         time of any Incremental Purchase or Reinvestment or at any subsequent
         time;

                           (xiii) any action or omission by any Seller Party
         that reduces or impairs the rights of the Agent or the Purchasers with
         respect to any Receivable or the value of any such Receivable;


                                       47


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT


                           (xiv) any attempt by any Person to void any
         Incremental Purchase or Reinvestment hereunder under statutory
         provisions or common law or equitable action; and

                           (xv) the failure of any Receivable included in the
         calculation of the Net Receivables Balance as an Eligible Receivable to
         be an Eligible Receivable at the time so included.

         Section 10.2 Increased Cost and Reduced Return.

                  (a) If after June 30, 2000 with respect to any Funding Source
relating to the Bank One Company, after the Original Closing Date with respect
to any Funding Source relating to the CL Company, or after the date hereof with
respect to any Funding Source relating to the Rabo Company, the Wachovia Company
or any other Funding Source, any such Funding Source shall be charged any fee,
expense or increased cost on account of the adoption of any applicable law, rule
or regulation (including any applicable law, rule or regulation regarding
capital adequacy), any accounting principles or any change in any of the
foregoing, or any change in the interpretation or administration thereof by the
Financial Accounting Standards Board ("FASB"), any governmental authority, any
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance with any request or directive (whether or
not having the force of law) of any such authority or agency (a "Regulatory
Change"): (i) that subjects any Funding Source to any charge or withholding on
or with respect to any Funding Agreement or a Funding Source's obligations under
a Funding Agreement, or on or with respect to the Receivables, or changes the
basis of taxation of payments to any Funding Source of any amounts payable under
any Funding Agreement (except for changes in the rate of tax on the overall net
income of a Funding Source or taxes excluded by Section 10.1) or (ii) that
imposes, modifies or deems applicable any reserve, assessment, insurance charge,
special deposit or similar requirement against assets of, deposits with or for
the account of a Funding Source, or credit extended by a Funding Source pursuant
to a Funding Agreement or (iii) that imposes any other condition the result of
which is to increase the cost to a Funding Source of performing its obligations
under a Funding Agreement, or to reduce the rate of return on a Funding Source's
capital as a consequence of its obligations under a Funding Agreement, or to
reduce the amount of any sum received or receivable by a Funding Source under a
Funding Agreement or to require any payment calculated by reference to the
amount of interests or loans held or interest received by it, then, upon demand
by the Agent, each Seller shall pay to the Agent, for the benefit of the
relevant Funding Source, such amounts charged to such Funding Source or such
amounts to otherwise compensate such Funding Source for such increased cost or
such reduction. For the avoidance of doubt, if the issuance of FASB
Interpretation No. 46, or any other change in accounting standards or the


                                       48


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

issuance of any other pronouncement, release or interpretation, causes or
requires the consolidation of all or a portion of the assets and liabilities of
any Company or any Seller with the assets and liabilities of the Agent, any
Financial Institution or any other Funding Source, such event shall constitute a
circumstance on which such Funding Source may base a claim for reimbursement
under this Section.

                  (b) If less than all of the Financial Institutions are subject
to any Regulatory Change giving rise to a demand by the Agent pursuant to
Section 10.2(a), each Financial Institution so subject, at the request of the
Administrative Seller, the Company in such Financial Institution's Purchaser
Group or the Agent, shall assign all of its rights and obligations hereunder to
(i) another Financial Institution in such Financial Institution's Purchaser
Group or (ii) another funding entity nominated by the Administrative Seller or
the Agent that is acceptable to the Company in such Financial Institution's
Purchaser Group and willing to participate in this Agreement through the
Liquidity Termination Date in the place of such notifying Financial Institution
and that is not so subject; provided that (i) the subject Financial Institution
receives payment in full, pursuant to an Assignment Agreement, of an amount
equal to such notifying Financial Institution's Pro Rata Share of the Capital
and Yield owing to all of the Financial Institutions in such Financial
Institution's Purchaser Group and all accrued but unpaid fees and other costs
and expenses payable in respect of its Pro Rata Share of the Purchaser Interests
of the Financial Institutions in such Financial Institution's Purchaser Group,
and (ii) the replacement Financial Institution otherwise satisfies the
requirements of Section 12.1(b).

         Section 10.3 Other Costs and Expenses. Each Seller shall reimburse the
Agent and each Purchaser on demand for all costs and out-of-pocket expenses in
connection with the preparation, execution, delivery and administration of this
Agreement, the transactions contemplated hereby and the other documents to be
delivered hereunder, including without limitation, the cost of any Purchaser's
auditors auditing the books, records and procedures of any Seller Party,
reasonable fees and out-of-pocket expenses of legal counsel for each Purchaser
and the Agent (which such counsel may be employees of any Purchaser or the
Agent) with respect thereto and with respect to advising any Purchaser or the
Agent as to their respective rights and remedies under this Agreement. Each
Seller shall reimburse the Agent on demand for any and all costs and expenses of
the Agent and the Purchasers, if any, including reasonable counsel fees and
expenses in connection with the enforcement of this Agreement and the other
documents delivered hereunder and in connection with any restructuring or
workout of this Agreement or such documents, or the administration of this
Agreement following an Amortization Event. Each Seller shall reimburse each
Company on demand for all other costs and expenses incurred by such Company
("Other Costs"), including, without limitation, the cost of auditing such
Company's books by certified public accountants, the cost of rating the
Commercial Paper by independent financial rating agencies, and the reasonable
fees and out-of-pocket expenses of counsel for such Company


                                       49


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

or any counsel for any shareholder of such Company with respect to advising such
Company or such shareholder as to matters relating to such Company's operations.

         Section 10.4 Allocations. Each Company shall allocate the liability for
Other Costs among the Sellers and other Persons with whom such Company has
entered into agreements to purchase interests in receivables ("Other Sellers").
If any Other Costs are attributable to the Sellers and not attributable to any
Other Seller, the Sellers shall be solely liable for such Other Costs. However,
if Other Costs are attributable to Other Sellers and not attributable to the
Sellers, such Other Sellers shall be solely liable for such Other Costs. All
allocations to be made pursuant to the foregoing provisions of this Article X
shall be made by the applicable Company in its sole discretion and shall be
binding on the Sellers and the Servicers.


                                   ARTICLE XI
                                    THE AGENT

         Section 11.1 Authorization and Action. Each Purchaser hereby designates
and appoints Bank One to act as its agent hereunder and under each other
Transaction Document, and authorizes the Agent to take such actions as agent on
its behalf and to exercise such powers as are delegated to the Agent by the
terms of this Agreement and the other Transaction Documents together with such
powers as are reasonably incidental thereto. The Agent shall not have any duties
or responsibilities, except those expressly set forth herein or in any other
Transaction Document, or any fiduciary relationship with any Purchaser, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities on the part of the Agent shall be read into this Agreement or any
other Transaction Document or otherwise exist for the Agent. In performing its
functions and duties hereunder and under the other Transaction Documents, the
Agent shall act solely as agent for the Purchasers and does not assume nor shall
be deemed to have assumed any obligation or relationship of trust or agency with
or for any Seller Party or any of such Seller Party's successors or assigns. The
Agent shall not be required to take any action that exposes the Agent to
personal liability or that is contrary to this Agreement, any other Transaction
Document or applicable law. The appointment and authority of the Agent hereunder
shall terminate upon the indefeasible payment in full of all Aggregate Unpaids.
Each Purchaser hereby authorizes the Agent to execute each of the Uniform
Commercial Code financing statements on behalf of such Purchaser (the terms of
which shall be binding on such Purchaser).

         Section 11.2 Delegation of Duties. The Agent may execute any of its
duties under this Agreement and each other Transaction Document by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining


                                       50


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

to such duties. The Agent shall not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by it with reasonable
care.

         Section 11.3 Exculpatory Provisions. Neither the Agent nor any of its
directors, officers, agents or employees shall be (i) liable for any action
lawfully taken or omitted to be taken by it or them under or in connection with
this Agreement or any other Transaction Document (except for its, their or such
Person's own gross negligence or willful misconduct), or (ii) responsible in any
manner to any of the Purchasers for any recitals, statements, representations or
warranties made by any Seller Party contained in this Agreement, any other
Transaction Document or any certificate, report, statement or other document
referred to or provided for in, or received under or in connection with, this
Agreement, or any other Transaction Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement, or
any other Transaction Document or any other document furnished in connection
herewith or therewith, or for any failure of any Seller Party to perform its
obligations hereunder or thereunder, or for the satisfaction of any condition
specified in Article VI, or for the perfection, priority, condition, value or
sufficiency of any collateral pledged in connection herewith. The Agent shall
not be under any obligation to any Purchaser to ascertain or to inquire as to
the observance or performance of any of the agreements or covenants contained
in, or conditions of, this Agreement or any other Transaction Document, or to
inspect the properties, books or records of the Seller Parties. The Agent shall
not be deemed to have knowledge of any Amortization Event or Potential
Amortization Event unless the Agent has received notice from a Seller or a
Purchaser.

         Section 11.4 Reliance by Agent. The Agent shall in all cases be
entitled to rely, and shall be fully protected in relying, upon any document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to the Sellers),
independent accountants and other experts selected by the Agent. The Agent shall
in all cases be fully justified in failing or refusing to take any action under
this Agreement or any other Transaction Document unless it shall first receive
such advice or concurrence of the Required Purchasers or all of the Purchasers,
as applicable, as it deems appropriate and it shall first be indemnified to its
satisfaction by the Financial Institutions, provided that unless and until the
Agent shall have received such advice, the Agent may take or refrain from taking
any action, as the Agent shall deem advisable and in the best interests of the
Purchasers. The Agent shall in all cases be fully protected in acting, or in
refraining from acting, in accordance with a request of the Required Purchasers
or all of the Purchasers, as applicable, and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Purchasers.


                                       51


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

         Section 11.5 Non-Reliance on Agent and Other Purchasers. Each Purchaser
expressly acknowledges that neither the Agent, nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates has made any
representations or warranties to it and that no act by the Agent hereafter
taken, including, without limitation, any review of the affairs of any Seller
Party, shall be deemed to constitute any representation or warranty by the
Agent. Each Purchaser represents and warrants to the Agent that it has and will,
independently and without reliance upon the Agent or any other Purchaser and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, operations, property,
prospects, financial and other conditions and creditworthiness of any Seller and
made its own decision to enter into this Agreement, the other Transaction
Documents and all other documents related hereto or thereto.

         Section 11.6 Reimbursement and Indemnification. The Financial
Institutions agree to reimburse and indemnify the Agent and its officers,
directors, employees, representatives and agents, ratably based on the ratio of
each Financial Institution's Commitment to the aggregate Commitment, to the
extent not paid or reimbursed by the Seller Parties (i) for any amounts for
which the Agent, acting in its capacity as Agent, is entitled to reimbursement
by the Seller Parties hereunder and (ii) for any other expenses incurred by the
Agent, in its capacity as Agent and acting on behalf of the Purchasers, in
connection with the administration and enforcement of this Agreement and the
other Transaction Documents; provided that the Agent shall not be entitled to
any indemnity or reimbursement under this Section 11.6 for any expenses
resulting from the gross negligence or willful misconduct of the Agent, as
determined by a final and non-appealable judgment rendered by a court of
competent jurisdiction.

         Section 11.7 Agent in Its Individual Capacity. The Agent and its
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with any Seller or any Affiliate of any Seller as though the
Agent were not the Agent hereunder. With respect to the acquisition of Purchaser
Interests pursuant to this Agreement, the Agent shall have the same rights and
powers under this Agreement in its individual capacity as any Purchaser and may
exercise the same as though it were not the Agent, and the terms "Financial
Institution," "Related Financial Institution," "Purchaser," "Financial
Institutions," "Related Financial Institutions," and "Purchasers" shall include
the Agent in its individual capacity.

         Section 11.8 Successor Agent. The Agent may, upon five days' notice to
the Administrative Seller and the Purchasers, and the Agent will, upon the
direction of all of the Purchasers (other than the Agent, in its individual
capacity) resign as Agent. If the Agent shall resign, then the Required
Purchasers during such five-day period shall appoint, with the consent of the
Administrative Seller, such consent not to be unreasonably withheld or


                                       52


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

delayed, from among the Purchasers a successor agent. If for any reason no
successor Agent is appointed by the Required Purchasers during such five-day
period, then effective upon the termination of such five day period, the
Purchasers shall perform all of the duties of the Agent hereunder and under the
other Transaction Documents and the Sellers and the Servicers (as applicable)
shall make all payments in respect of the Aggregate Unpaids directly to the
applicable Purchasers and for all purposes shall deal directly with the
Purchasers. After the effectiveness of any retiring Agent's resignation
hereunder as Agent, the retiring Agent shall be discharged from its duties and
obligations hereunder and under the other Transaction Documents and the
provisions of this Article XI and Article X shall continue in effect for its
benefit with respect to any actions taken or omitted to be taken by it while it
was Agent under this Agreement and under the other Transaction Documents.


                                   ARTICLE XII
                           ASSIGNMENTS; PARTICIPATIONS

         Section 12.1 Assignments. (a) Each Seller Party, the Agent and each
Purchaser hereby agree and consent to the complete or partial assignment by any
Company of all or any portion of its rights under, interest in, title to and
obligations under this Agreement to any Funding Source pursuant to any Funding
Agreement or to any other Person, and upon such assignment, such Company shall
be released from its obligations so assigned. Further, each Seller Party, the
Agent and each Purchaser hereby agree that any assignee of any Company of this
Agreement or of all or any of the Purchaser Interests of any Company shall have
all of the rights and benefits under this Agreement as if the term "Company"
explicitly referred to and included such party (provided that (i) the Purchaser
Interests of any such assignee that is a Company or a commercial paper conduit
shall accrue CP Costs based on such Company's Company Costs or on such
commercial paper conduit's cost of funds, respectively, and (ii) the Purchaser
Interests of any other such assignee shall accrue Yield pursuant to Section
4.1), and no such assignment shall in any way impair the rights and benefits of
any Company hereunder. Neither any Seller nor any Servicer shall have the right
to assign its rights or obligations under this Agreement.

                  (b) Any Financial Institution may at any time and from time to
time assign to one or more Persons ("Purchasing Financial Institutions") all or
any part of its rights and obligations under this Agreement pursuant to an
assignment agreement, substantially in the form set forth in Exhibit VII hereto
(the "Assignment Agreement") executed by such Purchasing Financial Institution
and such selling Financial Institution. The consent of the Company in such
selling Financial Institution's Purchaser Group and the consent of the
Administrative Seller shall be required prior to the effectiveness of any such
assignment; provided, however, that in the event the Administrative Seller fails
to consent to any proposed Purchasing Financial Institution during the thirty
(30) day period following the


                                       53


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

Administrative Seller's initial receipt of a request for its consent to any such
assignment, only the consent of the Company in such selling Financial
Institution's Purchaser Group shall thereafter be required with respect to any
such assignment. Each assignee of a Financial Institution must (i) have a
short-term debt rating of A-1 or better by Standard & Poor's Ratings Group and
P-1 by Moody's Investor Service, Inc. and (ii) agree to deliver to the Agent,
promptly following any request therefor by the Agent or the Company in such
selling Financial Institution's Purchaser Group, an enforceability opinion in
form and substance satisfactory to the Agent and such Company (such opinion may
be delivered by in-house counsel of such assignee). Upon delivery of the
executed Assignment Agreement to the Agent, such selling Financial Institution
shall be released from its obligations hereunder to the extent of such
assignment. Thereafter the Purchasing Financial Institution shall for all
purposes be a Financial Institution party to this Agreement and shall have all
the rights and obligations of a Financial Institution (including, without
limitation, the applicable obligations of a Related Financial Institution) under
this Agreement to the same extent as if it were an original party hereto and no
further consent or action by any Seller, the Purchasers or the Agent shall be
required.

                  (c) Each of the Financial Institutions agrees that in the
event that it shall cease to have a short-term debt rating of A-1 or better by
Standard & Poor's Ratings Group and P-1 by Moody's Investor Service, Inc. (or,
solely in the case of CLNY, a short-term debt rating of A-2 or better by
Standard & Poor's Ratings Group and P-2 by Moody's Investor Service, Inc.) (an
"Affected Financial Institution"), such Affected Financial Institution shall be
obliged, at the request of the Company in such Affected Financial Institution's
Purchaser Group or the Agent, to assign all of its rights and obligations
hereunder to (x) another Financial Institution in such Affected Financial
Institution's Purchaser Group or (y) another funding entity nominated by the
Agent and acceptable to the Company in such Affected Financial Institution's
Purchaser Group, and willing to participate in this Agreement through the
Liquidity Termination Date in the place of such Affected Financial Institution;
provided that the Affected Financial Institution receives payment in full,
pursuant to an Assignment Agreement, of an amount equal to such Financial
Institution's Pro Rata Share of the Aggregate Capital and Yield owing to the
Financial Institutions in such Affected Financial Institution's Purchaser Group
and all accrued but unpaid fees and other costs and expenses payable in respect
of its Pro Rata Share of the Purchaser Interests of the Financial Institutions
in such Affected Financial Institution's Purchaser Group.

         Section 12.2 Participations. Any Financial Institution may, in the
ordinary course of its business at any time sell to one or more Persons (each a
"Participant") participating interests in its Pro Rata Share of the Purchaser
Interests of the Financial Institutions in such Financial Institution's
Purchaser Group or any other interest of such Financial Institution hereunder.
Notwithstanding any such sale by a Financial Institution of a participating
interest to a Participant, such Financial Institution's rights and obligations



                                       54


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

under this Agreement shall remain unchanged, such Financial Institution shall
remain solely responsible for the performance of its obligations hereunder, and
each Seller, each Company and the Agent shall continue to deal solely and
directly with such Financial Institution in connection with such Financial
Institution's rights and obligations under this Agreement. Each Financial
Institution agrees that any agreement between such Financial Institution and any
such Participant in respect of such participating interest shall not restrict
such Financial Institution's right to agree to any amendment, supplement, waiver
or modification to this Agreement, except for any amendment, supplement, waiver
or modification described in Section 14.1(b)(i).


                                  ARTICLE XIII
                              INTENTIONALLY OMITTED


                                   ARTICLE XIV
                                  MISCELLANEOUS

         Section 14.1 Waivers and Amendments. (a) No failure or delay on the
part of the Agent or any Purchaser in exercising any power, right or remedy
under this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power, right or remedy preclude any other further
exercise thereof or the exercise of any other power, right or remedy. The rights
and remedies herein provided shall be cumulative and nonexclusive of any rights
or remedies provided by law. Any waiver of this Agreement shall be effective
only in the specific instance and for the specific purpose for which given.

                  (b) No provision of this Agreement may be amended,
supplemented, modified or waived except in writing in accordance with the
provisions of this Section 14.1(b). Each Company, each Seller and the Agent, at
the direction of the required purchasers, may enter into written modifications
or waivers of any provisions of this agreement, provided, however, that with
respect to any modification or waiver, the Rating Agencies then rating the
commercial paper notes of the Rabo Company and the CL Company shall have
confirmed that the ratings of the commercial paper notes of the Rabo Company and
the CL Company will not be downgraded or withdrawn as a result of such
modification or waiver; and provided, further, that no such modification or
waiver shall:

                           (i) without the consent of each affected Purchaser,
         (A) extend the Liquidity Termination Date or the date of any payment or
         deposit of Collections by any Seller or any Servicer, (B) reduce the
         rate or extend the time of payment of Yield or any CP Costs (or any
         component of Yield or CP Costs), (C) reduce any fee payable to the
         Agent


                                       55


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

         for the benefit of the Purchasers, (D) except pursuant to Article XII
         hereof, change the amount of the Capital of any Purchaser, any
         Financial Institution's Pro Rata Share, any Company's Pro Rata Share,
         any Financial Institution's Commitment or any Company's Company
         Purchase Limit (other than, to the extent applicable, pursuant to
         Section 4.6), (E) amend, modify or waive any provision of the
         definition of Required Purchasers or this Section 14.1(b), (F) consent
         to or permit the assignment or transfer by any Seller of any of its
         rights and obligations under this Agreement, (G) change the definition
         of "Eligible Receivable,""Loss Reserve," Yield and Servicer Reserve,"
         "Default Ratio," "Delinquency Ratio," "Dilution Reserve," or "Dilution
         Ratio" or amend or modify Section 9.1(f) or (H) amend or modify any
         defined term (or any defined term used directly or indirectly in such
         defined term) used in clauses (A) through (G) above in a manner that
         would circumvent the intention of the restrictions set forth in such
         clauses; or

                           (ii) without the written consent of the then Agent,
         amend, modify or waive any provision of this Agreement if the effect
         thereof is to affect the rights or duties of such Agent.

Notwithstanding the foregoing, (i) without the consent of the Financial
Institutions, but with the consent of the Administrative Seller, the Agent may
amend this Agreement solely to add additional Persons as Financial Institutions
hereunder and (ii) the Agent, the Required Purchasers and each Company may enter
into amendments to modify any of the terms or provisions of Article XI, Article
XII, Section 14.13 or any other provision of this Agreement without the consent
of any Seller Party, provided that such amendment has no negative impact upon
such seller party and provided further that the Rating Agencies then rating the
commercial paper notes of the Rabo Company and the CL Company shall have
confirmed that the ratings of the commercial paper notes of the Rabo Company and
the CL Company will not be downgraded or withdrawn as a result of such
amendments. any modification or waiver made in accordance with this section 14.1
shall apply to each of the purchasers equally and shall be binding upon each
Seller Party, the Purchasers and the Agent.

         Section 14.2 Notices. Except as provided in this Section 14.2, all
communications and notices provided for hereunder shall be in writing (including
bank wire, telecopy or electronic facsimile transmission or similar writing) and
shall be given to the other parties hereto at their respective addresses or
telecopy numbers set forth on Schedule E hereto or at such other address or
telecopy number as such Person may hereafter specify for the purpose of notice
to each of the other parties hereto. Each such notice or other communication
shall be effective (i) if given by telecopy, upon the receipt thereof, (ii) if
given by mail, three (3) Business Days after the time such communication is
deposited in the mail with first class postage prepaid or (iii) if given by any
other means, when received at the

                                       56


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

address specified in this Section 14.2. Each Seller hereby authorizes the Agent
and the Purchasers to effect purchases and, selections of CP (Tranche) Accrual
Periods, Tranche Periods and Discount Rates based on telephonic notices made by
any Person whom the Agent or applicable Purchaser in good faith believes to be
acting on behalf of such Seller. Each Seller agrees to deliver promptly to the
Agent and each applicable Purchaser a written confirmation of each telephonic
notice signed by an authorized officer of such Seller; provided, however, the
absence of such confirmation shall not affect the validity of such notice. If
the written confirmation differs from the action taken by the Agent or
applicable Purchaser, the records of the Agent or applicable Purchaser shall
govern absent manifest error.

         Section 14.3 Ratable Payments. If any Purchaser, whether by setoff or
otherwise, has payment made to it with respect to any portion of the Aggregate
Unpaids owing to such Purchaser (other than payments received pursuant to
Section 10.2 or 10.3) in a greater proportion than that received by any other
Purchaser entitled to receive a ratable share of such Aggregate Unpaids, such
Purchaser agrees, promptly upon demand, to purchase for cash without recourse or
warranty a portion of such Aggregate Unpaids held by the other Purchasers so
that after such purchase each Purchaser will hold its ratable proportion of such
Aggregate Unpaids; provided that if all or any portion of such excess amount is
thereafter recovered from such Purchaser, such purchase shall be rescinded and
the purchase price restored to the extent of such recovery, but without
interest.

         Section 14.4 Protection of Ownership Interests of the Purchasers. (a)
Each Seller agrees that from time to time, at its expense, it will promptly
execute and deliver all instruments and documents, and take all actions, that
may be necessary or reasonably desirable, or that the Agent may request, to
perfect, protect or more fully evidence the Purchaser Interests, or to enable
the Agent or the Purchasers to exercise and enforce their rights and remedies
hereunder. Without limiting the foregoing, each Seller will, upon the request of
the Agent or the Required Purchasers, execute and file such financing or
continuation statements, or amendments thereto or assignments thereof, and such
other instruments and documents, that may be necessary or desirable, or that the
Agent may reasonably request, to perfect, protect or evidence such Purchaser
Interests. At any time after the occurrence and during the continuation of an
Amortization Event, the Agent may, or the Agent may direct any Seller or any
Servicer to, notify the Obligors of Receivables, at the Sellers' expense, of the
ownership or security interests of the Purchasers under this Agreement and may
also direct that payments of all amounts due or that become due under any or all
Receivables be made directly to the Agent or its designee. The Sellers or the
Servicers (as applicable) shall, at any Purchaser's request, withhold the
identity of such Purchaser in any such notification.



                                       57


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

                  (b) If any Seller Party fails to perform any of its
obligations hereunder, the Agent or any Purchaser may (but shall not be required
to) perform, or cause performance of, such obligations, and the Agent's or such
Purchaser's costs and expenses incurred in connection therewith shall be payable
by the Sellers as provided in Section 10.3. Each Seller Party irrevocably
authorizes the Agent at any time and from time to time in the sole discretion of
the Agent, and appoints the Agent as its attorney-in-fact, to act on behalf of
such Seller Party (i) to execute on behalf of any Seller as debtor and to file
financing or continuation statements (and amendments thereto and assignments
thereof) necessary or desirable in the Agent's sole discretion to perfect and to
maintain the perfection and priority of the interest of the Purchasers in the
Receivables and (ii) to file a carbon, photographic or other reproduction of
this Agreement or any financing statement with respect to the Receivables as a
financing statement in such offices as the Agent in its sole discretion deems
necessary or desirable to perfect and to maintain the perfection and priority of
the interests of the Purchasers in the Receivables. The financing statements
described in this Section 14.4(b) may describe the collateral in the same manner
as described herein or may contain an indication or description of collateral
that describes such property in any other manner as the Agent may determine, in
its sole and absolute discretion, is necessary, advisable or prudent to ensure
the perfection and priority of the interests of the Purchasers in the
Receivables, the Related Security and the Collections, and of the security
interest granted hereunder, including, without limitation, describing such
property as "all assets" or "all personal property" or "all assets, whether now
owned or hereafter acquired" or "all personal property of the debtor, whether
now owned or hereafter acquired".This appointment is coupled with an interest
and is irrevocable. The authorization set forth in the second sentence of this
Section 14.4(b) is intended to meet all requirements for authorization by a
debtor under Article 9 of any applicable enactment of the UCC, including,
without limitation, Section 9-509 thereof.

         Section 14.5 Confidentiality. (a) Each Seller Party and each Purchaser
shall maintain and shall cause each of its employees and officers to maintain
the confidentiality of this Agreement and the other confidential or proprietary
information with respect to the Agent and each Purchaser and their respective
businesses obtained by it or them in connection with the structuring,
negotiating and execution of the transactions contemplated herein, except that
such Seller Party and such Purchaser and its officers and employees may disclose
such information to such Seller Party's and such Purchaser's external
accountants and attorneys and as required by any applicable law or order of any
judicial or administrative proceeding. Anything herein to the contrary
notwithstanding, each Seller Party, each Purchaser, the Agent, each Indemnified
Party and any successor or assign of any of the forgoing (and each employee,
representative or other agent of any of the foregoing) may disclose to any and
all Persons, without limitation of any kind, the "tax treatment" and "tax
structure" (in each case, within the meaning of Treasury Regulation Section
1.6011-4) of the transactions contemplated herein and all materials of any kind
(including opinions or

                                       58


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

other tax analyses) that are or have been provided to any of the foregoing
relating to such tax treatment or tax structure, and it is hereby confirmed that
each of the foregoing have been so authorized since the commencement of
discussions regarding the transactions.

                  (b) Anything herein to the contrary notwithstanding, each
Seller Party hereby consents to the disclosure of any nonpublic information with
respect to it (i) to the Agent, the Financial Institutions or the Companies by
each other, (ii) by the Agent or the Purchasers to any prospective or actual
assignee or participant of any of them and (iii) by the Agent or any Purchaser
to any rating agency, Funding Source, Commercial Paper dealer or provider of a
surety, guaranty or credit or liquidity enhancement to any Company or any entity
organized for the purpose of purchasing, or making loans secured by, financial
assets for which Bank One, Rabobank, Wachovia, Wachovia Capital Markets, LLC or
CLNY acts as the administrative agent and to any officers, directors, employees,
outside accountants and attorneys of any of the foregoing. In addition, the
Purchasers and the Agent may disclose any such nonpublic information pursuant to
any law, rule, regulation, direction, request or order of any judicial,
administrative or regulatory authority or proceedings (whether or not having the
force or effect of law).

         Section 14.6 Bankruptcy Petition. Each Seller, the Servicers, the
Agent, each Financial Institution and each Company (except with respect to
itself) hereby covenants and agrees that, prior to the date that is one year and
one day after the payment in full of all outstanding senior indebtedness of any
Funding Source that is a special purpose bankruptcy remote entity or of any
Company, it will not institute against, or join any other Person in instituting
against, any such entity or any Company any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar proceeding
under the laws of the United States or any state of the United States.

         Section 14.7 Limitation of Liability. Except with respect to any claim
arising out of the willful misconduct or gross negligence of any Company, the
Agent or any Financial Institution, no claim may be made by any Seller Party or
any other Person against any Company, the Agent or any Financial Institution or
their respective Affiliates, directors, officers, employees, attorneys or agents
for any special, indirect, consequential or punitive damages in respect of any
claim for breach of contract or any other theory of liability arising out of or
related to the transactions contemplated by this Agreement, or any act, omission
or event occurring in connection therewith; and each Seller Party hereby waives,
releases, and agrees not to sue upon any claim for any such damages, whether or
not accrued and whether or not known or suspected to exist in its favor.


                                       59


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

         Section 14.8 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS.

         Section 14.9 CONSENT TO JURISDICTION. EACH SELLER PARTY HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED
BY SUCH PERSON PURSUANT TO THIS AGREEMENT AND EACH SELLER PARTY HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY
BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION
IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.
NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR ANY PURCHASER TO BRING
PROCEEDINGS AGAINST ANY SELLER PARTY IN THE COURTS OF ANY OTHER JURISDICTION.
ANY JUDICIAL PROCEEDING BY ANY SELLER PARTY AGAINST THE AGENT OR ANY PURCHASER
OR ANY AFFILIATE OF THE AGENT OR ANY PURCHASER INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH SELLER PARTY PURSUANT TO THIS
AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.

         Section 14.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES
TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT
OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY ANY
SELLER PARTY PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED
HEREUNDER OR THEREUNDER.

         Section 14.11 Integration; Binding Effect; Survival of Terms.

                  (a) This Agreement and each other Transaction Document contain
the final and complete integration of all prior expressions by the parties
hereto with respect to the subject matter hereof and shall constitute the entire
agreement among the parties hereto with respect to the subject matter hereof
superseding all prior oral or written understandings.

                                       60


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

                  (b) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns (including any trustee in bankruptcy). This Agreement shall create and
constitute the continuing obligations of the parties hereto in accordance with
its terms and shall remain in full force and effect until terminated in
accordance with its terms; provided, however, that the rights and remedies with
respect to (i) any breach of any representation and warranty made by any Seller
Party pursuant to Article V, (ii) the indemnification and payment provisions of
Article X, and Sections 14.5 and 14.6 shall be continuing and shall survive any
termination of this Agreement.

         Section 14.12 Counterparts; Severability; Section References. This
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which when taken together shall constitute one and
the same Agreement. Any provisions of this Agreement that are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. Unless otherwise expressly indicated, all references herein
to "Article," "Section," "Schedule" or "Exhibit" shall mean articles and
sections of, and schedules and exhibits to, this Agreement.

         Section 14.13 Bank One Roles. Each of the Purchasers acknowledges that
Bank One acts, or may in the future act, (i) as administrative agent for the
Bank One Company or any Financial Institution in the Bank One Company's
Purchaser Group, (ii) as issuing and paying agent for certain Commercial Paper,
(iii) to provide credit or liquidity enhancement for the timely payment for
certain Commercial Paper and (iv) to provide other services from time to time
for the Bank One Company or any Financial Institution in the Bank One Company's
Purchaser Group (collectively, the "Bank One Roles"). Without limiting the
generality of this Section 14.13, each Purchaser hereby acknowledges and
consents to any and all Bank One Roles and agrees that in connection with any
Bank One Role, Bank One may take, or refrain from taking, any action that it, in
its discretion, deems appropriate, including, without limitation, in its role as
administrative agent for the Bank One Company.

         Section 14.14 Characterization. (a) It is the intention of the parties
hereto that each purchase hereunder shall constitute and be treated as an
absolute and irrevocable sale, which purchase shall provide the applicable
Purchaser with the full benefits of ownership of the applicable Purchaser
Interest. Except as specifically provided in this Agreement, each sale of a
Purchaser Interest hereunder is made without recourse to any Seller; provided,
however, that (i) each Seller shall be liable to each Purchaser and the Agent
for all representations, warranties, covenants and indemnities made by such
Seller pursuant to the terms of


                                       61


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

this Agreement, and (ii) such sale does not constitute and is not intended to
result in an assumption by any Purchaser or the Agent or any assignee thereof of
any obligation of any Seller or any Originator or any other Person arising in
connection with the Receivables, the Related Security, or the related Writings
or Contracts, or any other obligations of any Seller or any Originator.

                  (b) In addition to any ownership interest that the Agent may
from time to time acquire pursuant hereto, each Seller hereby grants to the
Agent for the ratable benefit of the Purchasers a valid and perfected security
interest in all of such Seller's right, title and interest in, to and under all
Receivables now existing or hereafter arising, the Collections, each Lock-Box,
each Collection Account, all Related Security, all other rights and payments
relating to such Receivables, and all proceeds of any thereof prior to all other
liens on and security interests therein to secure the prompt and complete
payment of the Aggregate Unpaids. The Agent and the Purchasers shall have, in
addition to the rights and remedies that they may have under this Agreement, all
other rights and remedies provided to a secured creditor under the UCC and other
applicable law, which rights and remedies shall be cumulative.

         Section 14.15 Withholding. Any Purchaser that is not incorporated under
the laws of the United States of America, or a state thereof, agrees to deliver
to the Agent (with copies to Seller) two duly completed copies of United States
Internal Revenue Service Forms W-8BEN or W-8ECI, certifying in either case that
such Purchaser is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes.

         Section 14.16 Assignment of Interests under the Original Agreement. In
furtherance of, and without limiting any other provision of, this Agreement and
the transactions contemplated hereby, the parties hereto hereby effect the
following assignments and assumptions:

                  (a) Assignment to the Rabo Company. Before 12:00 noon (Chicago
time) on the date hereof, the Rabo Company shall pay to the CL Company, in
immediately available funds, and the CL Company shall have received, an amount
equal to $60,500,000.00, representing 40% of the outstanding Capital of the CL
Company's Purchaser Interests (such amount, being hereinafter referred to as the
"Rabo Capital"); whereupon, the CL Company shall be deemed to have sold,
transferred and assigned to the Rabo Company, without recourse, representation
or warranty, and the Rabo Company shall be deemed to have hereby irrevocably
taken, received and assumed from the CL Company, the Rabo Capital and all
related rights and obligations hereunder, under the Original Agreement and under
the other Transaction Documents.


                                       62

                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

                  (b) Assignment to the Wachovia Company. Before 12:00 noon
(Chicago time) on the date hereof, the Wachovia Company shall pay to the Bank
One Company, in immediately available funds, and the Bank One Company shall have
received, an amount equal to $30,250,000.00, representing 20% of the outstanding
Capital of the Bank One Company's Purchaser Interests (such amount, being
hereinafter referred to as the "First Wachovia Capital"); whereupon, the Bank
One Company shall be deemed to have sold, transferred and assigned to the
Wachovia Company, without recourse, representation or warranty, and the Wachovia
Company shall be deemed to have hereby irrevocably taken, received and assumed
from the Bank One Company, the First Wachovia Capital and all related rights and
obligations hereunder, under the Original Agreement and under the other
Transaction Documents. Before 12:00 noon (Chicago time) on the date hereof, the
Wachovia Company shall pay to the CL Company, in immediately available funds,
and the CL Company shall have received, an amount equal to $30,250,000,
representing 20% of the outstanding Capital of the CL Company's Purchaser
Interests (such amount, being hereinafter referred to as the "Second Wachovia
Capital"); whereupon, the CL Company shall be deemed to have sold, transferred
and assigned to the Wachovia Company, without recourse, representation or
warranty, and the Wachovia Company shall be deemed to have hereby irrevocably
taken, received and assumed from the CL Company, the Second Wachovia Capital and
all related rights and obligations hereunder, under the Original Agreement and
under the other Transaction Documents.

                  (c) Assignment to Rabobank. On the date hereof, Bank One shall
be deemed to have hereby transferred and assigned to Rabobank, without recourse,
representation or warranty, and Rabobank shall be deemed to have hereby
irrevocably taken, received and assumed from Bank One, 10% of Bank One's
Commitment under the Original Agreement representing $20,400,000.00 and all
rights and obligations associated therewith (including, without limitation, the
rights and obligations of a Financial Institution) under the terms hereof and of
the Original Agreement, including, without limitation, Bank One's future funding
obligations under Article I of the Original Agreement; provided that Rabobank
shall be the Rabo Company's Related Financial Institution and not the Bank One
Company's Related Financial Institution; and provided, further, that following
such assignment the Commitment of Rabobank and the Commitment of Bank One shall
be in the applicable amount set forth on Schedule A. On the date hereof, CLNY
shall be deemed to have hereby transferred and assigned to Rabobank, without
recourse, representation or warranty, and Rabobank shall be deemed to have
hereby irrevocably taken, received and assumed from CLNY, 10% of CLNY's
Commitment under the Original Agreement representing $10,200,000.00 and all
rights and obligations associated therewith (including, without limitation, the
rights and obligations of a Financial Institution) under the terms hereof and of
the Original Agreement, including, without limitation, CLNY's future funding
obligations under Article I of the Original Agreement; provided that Rabobank
shall be the Rabo Company's Related Financial Institution and not the CLNY
Company's Related


                                       63


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

Financial Institution; and provided, further, that following such assignment the
Commitment of Rabobank and the Commitment of CLNY shall be in the applicable
amount set forth on Schedule A. On the date hereof, Credit Ag shall be deemed to
have hereby transferred and assigned to Rabobank, without recourse,
representation or warranty, and Rabobank shall be deemed to have hereby
irrevocably taken, received and assumed from Credit Ag, 50% of Credit Ag's
Commitment under the Original Agreement representing $51,000,000 and all rights
and obligations associated therewith (including, without limitation, the rights
and obligations of a Financial Institution) under the terms hereof and of the
Original Agreement, including, without limitation, Credit Ag's future funding
obligations under Article I of the Original Agreement; provided that Rabobank
shall be the Rabo Company's Related Financial Institution and not the CLNY
Company's Related Financial Institution; and provided, further, that following
such assignment the Commitment of Rabobank shall be in the applicable amount set
forth on Schedule A and the Commitment of Credit Ag shall be $0.

                  (d) Assignment to Wachovia. On the date hereof, Bank One shall
be deemed to have hereby transferred and assigned to Wachovia, without recourse,
representation or warranty, and Wachovia shall be deemed to have hereby
irrevocably taken, received and assumed from Bank One, 10% of Bank One's
Commitment under the Original Agreement representing $20,400,000.00 and all
rights and obligations associated therewith (including, without limitation, the
rights and obligations of a Financial Institution) under the terms hereof and of
the Original Agreement, including, without limitation, Bank One's future funding
obligations under Article I of the Original Agreement; provided that Wachovia
shall be the Wachovia Company's Related Financial Institution and not the Bank
One Company's Related Financial Institution; and provided, further, that
following such assignment the Commitment of Wachovia and the Commitment of Bank
One shall be in the applicable amount set forth on Schedule A. On the date
hereof, CLNY shall be deemed to have hereby transferred and assigned to
Wachovia, without recourse, representation or warranty, and Wachovia shall be
deemed to have hereby irrevocably taken, received and assumed from CLNY, 10% of
CLNY's Commitment under the Original Agreement representing $10,200,000.00 and
all rights and obligations associated therewith (including, without limitation,
the rights and obligations of a Financial Institution) under the terms hereof
and of the Original Agreement, including, without limitation, CLNY's future
funding obligations under Article I of the Original Agreement; provided that
Wachovia shall be the Wachovia Company's Related Financial Institution and not
the CLNY Company's Related Financial Institution; and provided, further, that
following such assignment the Commitment of Wachovia and the Commitment of CLNY
shall be in the applicable amount set forth on Schedule A. On the date hereof,
Credit Ag shall be deemed to have hereby transferred and assigned to Wachovia,
without recourse, representation or warranty, and Wachovia shall be deemed to
have hereby irrevocably taken, received and assumed from Credit Ag, 50% of
Credit Ag's Commitment under the Original Agreement representing $51,000,000 and
all



                                       64



                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

rights and obligations associated therewith (including, without limitation, the
rights and obligations of a Financial Institution) under the terms hereof and of
the Original Agreement, including, without limitation, Credit Ag's future
funding obligations under Article I of the Original Agreement; provided that
Wachovia shall be the Wachovia Company's Related Financial Institution and not
the CLNY Company's Related Financial Institution; and provided, further, that
following such assignment the commitment of Wachovia shall be in the applicable
amount set forth on Schedule A and the Commitment of credit Ag shall be $0.

         Section 14.17 Confirmation and Ratification of Terms.

                  (a) Upon the effectiveness of this Agreement, each reference
to the Original Agreement in any other Transaction Document, and any document,
instrument or agreement executed and/or delivered in connection with the
Original Agreement or any other Transaction Document, shall mean and be a
reference to this Agreement.

                  (b) The other Transaction Documents and all agreements,
instruments and documents executed or delivered in connection with the Original
Agreement or any other Transaction Document shall each be deemed to be amended
to the extent necessary, if any, to give effect to the provisions of this
Agreement, as the same may be amended, modified, supplemented or restated from
time to time.

                  (c) The effect of this Agreement is to amend and restate the
Original Agreement in its entirety, and to the extent that any rights, benefits
or provisions in favor of the Agent or any Purchaser existed in the Original
Agreement and continue to exist in this Agreement without any written waiver of
any such rights, benefits or provisions prior to the date hereof, then such
rights, benefits or provisions are acknowledged to be and to continue to be
effective from and after June 30, 2000. This Agreement is not a novation.

                  (d) The parties hereto agree and acknowledge that any and all
rights, remedies and payment provisions under the Original Agreement, including,
without limitation, any and all rights, remedies and payment provisions with
respect to (i) any representation and warranty made or deemed to be made
pursuant to the Original Agreement, or (ii) any indemnification provision, shall
continue and survive the execution and delivery of this Agreement.

                  (e) The parties hereto agree and acknowledge that any and all
amounts owing as or for Capital, Yield, CP Costs, fees, expenses or otherwise
under or pursuant to the Original Agreement, immediately prior to the
effectiveness of this Agreement shall be owing as or for Capital, Yield, CP
Costs, fees, expenses or otherwise, respectively, under or pursuant to this
Agreement.


                                       65


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT


         Section 14.18 Excess Funds. Each of the Sellers, each Servicer, each
Purchaser and the Agent agrees that any Company shall be liable for any claims
that such party may have against such Company only to the extent that such
Company has funds in excess of those funds necessary to pay matured and maturing
Commercial Paper of such Company and to the extent such excess funds are
insufficient to satisfy the obligations of such Company hereunder, such Company
shall have no liability with respect to any amount of such obligations remaining
unpaid and such unpaid amount shall not constitute a claim against such Company.
Any and all claims against any Company shall be subordinate to the claims
against such Company of the holders of such Company's Commercial Paper and any
Person providing liquidity support to such Company.

         Section 14.19 Administrative Seller. Each Seller hereby irrevocably
appoints Dairy Group as its agent and attorney-in-fact (the "Administrative
Seller") which appointment shall remain in full force and effect unless and
until the Agent shall have received prior written notice signed by each of the
Sellers that such appointment has been revoked and that another Seller has been
appointed the Administrative Seller. Each Seller hereby irrevocably appoints and
authorizes the Administrative Seller (i) to provide the Agent with all Purchase
Notices for the benefit of any Seller and all other notices and instructions
under this Agreement, (ii) to receive all notices and instructions from the
Agent or any Purchaser hereunder and (iii) to exercise such other powers as are
reasonably incidental thereto to carry out the purposes of this Agreement.

         Section 14.20 Joint and Several.

                  (a) Each of the Sellers is accepting joint and several
liability hereunder and under the other Transaction Documents in consideration
of the financial accommodations to be provided by the Purchasers under this
Agreement, for the mutual benefit, directly and indirectly, of each of the
Sellers and in consideration of the undertakings of the other Seller to accept
joint and several liability for the Aggregate Unpaids.

                  (b) Each of the Sellers, jointly and severally, hereby
irrevocably and unconditionally accepts, not merely as a surety but also as a
co-debtor, joint and several liability with the other Seller, with respect to
the payment and performance of all of the Aggregate Unpaids, it being the
intention of the parties hereto that all the Aggregate Unpaids shall be the
joint and several obligations of each of the Sellers without preferences or
distinction between them.

                  (c) Except as otherwise expressly provided in this Agreement,
each Seller hereby waives notice of acceptance of its joint and several
liability, notice of the occurrence of any Amortization Event or Potential
Amortization Event, or of any demand


                                       66


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

for any payment under this Agreement, notice of any action at any time taken or
omitted by the Agent or any Purchaser under or in respect of the Aggregate
Unpaids, any requirement of diligence or to mitigate damages and, generally, to
the extent permitted by applicable law, all demands, notices and other
formalities of every kind in connection with this Agreement (except as otherwise
provided in this Agreement). Each Seller hereby assents to, and waives notice
of, any extension or postponement of the time for the payment of any of the
Aggregate Unpaids, the acceptance of any payment of any of the Aggregate
Unpaids, the acceptance of any partial payment thereon, any waiver, consent or
other action or acquiescence by the Agent or any Purchaser at any time or times
in respect of any default by any Seller in the performance or satisfaction of
any term, covenant, condition or provision of this Agreement, any and all other
indulgences whatsoever by the Agent or any Purchaser in respect of any of the
Aggregate Unpaids, and the taking, addition, substitution or release, in whole
or in part, at any time or times, of any security for any of the Aggregate
Unpaids or the addition, substitution or release, in whole or in part, of any
Seller. Without limiting the generality of the foregoing, each Seller assents to
any other action or delay in acting or failure to act on the part of the Agent
or any Purchaser with respect to the failure by any Seller to comply with any of
its respective obligations, it being the intention of each Seller that, so long
as any of the Aggregate Unpaids hereunder remain unsatisfied, the obligations of
such Seller under this Section 14.19 shall not be discharged except by
performance and then only to the extent of such performance. The obligations of
each Seller under this Section 14.19 shall not be diminished or rendered
unenforceable by any winding up, reorganization, arrangement, liquidation,
reconstruction or similar proceeding with respect to any Seller or the Agent or
any Purchaser.

                  (d) Each Seller represents and warrants to the Agent and the
Purchasers that such Seller is currently informed of the financial condition of
the other Seller and of all other circumstances which a diligent inquiry would
reveal and which bear upon the risk of nonpayment of the Aggregate Unpaids. Each
Seller hereby covenants that such Seller will continue to keep informed of the
other Seller's financial condition, the financial condition of other guarantors,
if any, and of all other circumstances which bear upon the risk of nonpayment or
nonperformance of the Aggregate Unpaids.

                  (e) Each Seller agrees that the Agent and the Purchasers may,
in their sole and absolute discretion, select the Receivables of any one of the
Sellers for sale or application to the Aggregate Unpaids, without regard to the
ownership of such Receivables, and shall not be required to make such selection
ratably from the Receivables owned by any of the Sellers.

                  (f) The provisions of this Section 14.19 are made for the
benefit of the Agent, the Purchasers and their respective successors and
assigns, and may be enforced by it or them from time to time against any or all
of the Sellers as often as occasion therefor


                                       67


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

may arise and without requirement on the part of the Agent, any Purchasers or
any such successor or assign first to marshal any of its or their claims or to
exercise any of its or their rights against any of the other Sellers or to
exhaust any remedies available to it or them against any of the other Sellers or
to resort to any other source or means of obtaining payment of any of the
Aggregate Unpaids hereunder or to elect any other remedy. The provisions of this
Section 14.19 shall remain in effect until all of the Aggregate Unpaids shall
have been paid in full or otherwise fully satisfied. If at any time, any
payment, or any part thereof, made in respect of any of the Aggregate Unpaids,
is rescinded or must otherwise be restored or returned by the Agent or any
Purchaser upon the insolvency, bankruptcy or reorganization of any of the
Sellers, or otherwise, the provisions of this Section 14.19 will forthwith be
reinstated in effect, as though such payment had not been made.

                  (g) Each Seller hereby agrees that it will not enforce any of
its rights of contribution or subrogation against the other Seller with respect
to any liability incurred by it hereunder or under any of the other Transaction
Documents, any payments made by it to the Agent or any Purchaser with respect to
any of the Aggregate Unpaids or any collateral security therefor until such time
as all of the Aggregate Unpaids have been paid in full in cash. Any claim which
any Seller may have against any other Seller with respect to any payments to the
Agent or any Purchaser hereunder or under any other Transaction Documents are
hereby expressly made subordinate and junior in right of payment, without
limitation as to any increases in the Aggregate Unpaids arising hereunder or
thereunder, to the prior payment in full in cash of the Aggregate Unpaids and,
in the event of any insolvency, bankruptcy, receivership, liquidation,
reorganization or other similar proceeding under the laws of any jurisdiction
relating to any Seller, its debts or its assets, whether voluntary or
involuntary, all such Aggregate Unpaids shall be paid in full in cash before any
payment or distribution of any character, whether in cash, securities or other
property, shall be made to any other Seller therefor.

                  (h) Each of the Sellers hereby agrees that, after the
occurrence and during the continuance of any Amortization Event or Potential
Amortization Event, the payment of any amounts due with respect to the
indebtedness owing by any Seller to any other Seller is hereby subordinated to
the prior payment in full in cash of the Aggregate Unpaids. Each Seller hereby
agrees that after the occurrence and during the continuance of any Amortization
Event or Potential Amortization Event, such Seller will not demand, sue for or
otherwise attempt to collect any indebtedness of any other Seller owing to such
Seller until the Aggregate Unpaids shall have been paid in full in cash. If,
notwithstanding the foregoing sentence, such Seller shall collect, enforce or
receive any amounts in respect of such indebtedness, such amounts shall be
collected, enforced and received by such Seller as trustee for the Agent and the
Purchasers, and such Seller shall deliver any such amounts to the Agent for
application to the Aggregate Unpaids in accordance with Article II.


                                       68


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

                            (SIGNATURE PAGES FOLLOW)



                                       69



                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT



         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date hereof.

                            DAIRY GROUP RECEIVABLES, L.P.,
                            as Seller

                            By:    Dairy Group Receivables GP, LLC,
                            Its:   General Partner


                                   By: /s/ CORY OLSON
                                       -------------------------
                                   Name:  Cory Olson
                                   Title:  Authorized Signatory



                            DAIRY GROUP RECEIVABLES II, L.P.,
                            as Seller

                            By:    Dairy Group Receivables GP II, LLC,
                            Its:   General Partner


                                   By: /s/ CORY OLSON
                                       -------------------------
                                   Name:  Cory Olson
                                   Title:  Authorized Signatory



                            SPECIALTY GROUP RECEIVABLES, L.P.,
                            as Seller

                            By:    Specialty Group Receivables GP, LLC,
                            Its:   General Partner


                                   By: /s/ CORY OLSON
                                       -------------------------
                                   Name:  Cory Olson
                                   Title:  Authorized Signatory


                                       S-1



                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

                            FALCON ASSET SECURITIZATION
                             CORPORATION, as a Company


                            By: /s/ SHERRI GERNER
                                -------------------------
                            Name:  Sherri Gerner
                            Title: Authorized Signer



                            BANK ONE, NA (MAIN OFFICE CHICAGO),
                              as a Financial Institution and as Agent


                            By: /s/ SHERRI GERNER
                                -------------------------
                            Name:  Sherri Gerner
                            Title: Director, Capital Markets



                                      S-2


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT


                            ATLANTIC ASSET SECURITIZATION CORP.,
                            as a Company


                            By:    Credit Lyonnais New York Branch
                            Its:   Attorney-In-Fact


                            By: /s/ ANTHONY M. BROWN JR.
                                ------------------------
                            Name:  Anthony M. Brown Jr.
                            Title:  Vice President



                            CREDIT LYONNAIS NEW YORK BRANCH,
                            as a Financial Institution


                            By: /s/ ANTHONY M. BROWN JR.
                                ------------------------
                            Name:  Anthony M. Brown Jr.
                            Title:  Vice President


                                      S-3


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT


                            NIEUW AMSTERDAM RECEIVABLES CORPORATION,
                            as a Company


                            By: /s/ TONY WONG
                                -------------------------
                            Name:  Tony Wong
                            Title:  Vice President



                            COOPERATIEVE CENTRALE RAIFFEISEN -
                            BOERENLEENBANK B.A. "Rabobank International",
                            New York Branch,
                            as a Financial Institution


                            By: /s/ WING NG
                                -------------------------
                            Name:  Wing Ng
                            Title:  Executive Director


                            By: /s/ BRETT DELFINO
                                -------------------------
                            Name:  Brett Delfino
                            Title:  Executive Director


                                      S-4



                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

                            BLUE RIDGE ASSET FUNDING CORPORATION,
                            as a Company


                            By:    Wachovia Capital Markets, LLC
                            Its:   Attorney-In-Fact


                            By: /s/ DOUGLAS R. WILSON SR.
                                -------------------------
                            Name:   Douglas R. Wilson Sr.
                            Title:  Vice President



                            WACHOVIA BANK, NATIONAL ASSOCIATION,
                            as a Financial Institution


                            By: /s/ RODNEY SANDERS
                                -------------------------
                            Name: Rodney Sanders
                            Title: Director


                                      S-5


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

                            CREDIT AGRICOLE INDOSUEZ,
                            as a Financial Institution


                            By: /s/ ERIC ROBISON
                                -------------------------
                            Name:  Eric Robison
                            Title: Vice President


                            By: /s/ ALAN SCHMELZER
                                -------------------------
                            Name:  Alan Schmelzer
                            Title: Vice President


                                      S-6



                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

                            ALTA-DENA CERTIFIED DAIRY, INC., as a Servicer
                            BARBER MILK, INC., as a Servicer
                            BERKELEY FARMS, INC., as a Servicer
                            BROUGHTON FOODS, LLC, as a Servicer
                            COUNTRY DELITE FARMS, LLC, as a Servicer
                            COUNTRY FRESH, LLC, as a Servicer
                            CREAMLAND DAIRIES, INC., as a Servicer
                            DAIRY FRESH, LLC, as a Servicer
                            DEAN DAIRY PRODUCTS COMPANY, as a Servicer
                            DEAN FOODS COMPANY OF CALIFORNIA, INC., as a
                                Servicer
                            DEAN FOODS COMPANY OF INDIANA, INC., as a Servicer
                            DEAN FOODS NORTH CENTRAL, INC., as a Servicer
                            DEAN MILK COMPANY, INC., as a Servicer
                            DEAN NORTHEAST, LLC (f/k/a SUIZA GTL, LLC), as a
                                Servicer
                            DEAN SOCAL, LLC, as a Servicer
                            DEAN SPECIALTY FOODS GROUP, LLC, as a Servicer
                            GANDY'S DAIRIES, INC., as a Servicer
                            LAND-O-SUN DAIRIES, LLC, as a Servicer
                            LIBERTY DAIRY COMPANY, as a Servicer
                            LOUIS TRAUTH DAIRY, LLC, as a Servicer
                            MAYFIELD DAIRY FARMS, INC., as a Servicer
                            MCARTHUR DAIRY, INC., as a Servicer
                            MEADOW BROOK DAIRY COMPANY, as a Servicer
                            MIDWEST ICE CREAM COMPANY, as a Servicer
                            MODEL DAIRY, LLC, as a Servicer
                            MORNINGSTAR FOODS INC., as a Servicer
                            PURITY DAIRIES, INCORPORATED, as a Servicer
                            REITER DAIRY OF AKRON, INC., as a Servicer


                            By: /s/ CORY OLSON
                                -------------------------
                            Name:  Cory Olson
                            Title: Authorized Signatory of each of the above
                                   named Servicers


                                      S-7



                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

                            ROBINSON DAIRY, LLC, as a Servicer
                            SCHENKEL'S ALL-STAR DAIRY, LLC, as a Servicer
                            SHENANDOAH'S PRIDE, LLC, as a Servicer
                            SULPHUR SPRINGS CULTURED SPECIALTIES, LLC, as a
                                   Servicer
                            T. G. LEE FOODS, INC., as a Servicer
                            TUSCAN/LEHIGH DAIRIES, INC., as a Servicer
                            VERIFINE DAIRY PRODUCTS CORPORATION OF
                                   SHEBOYGAN, INC., as a Servicer


                            By: /s/ CORY OLSON
                                -------------------------
                            Name:  Cory Olson
                            Title: Authorized Signatory of each of the above
                                   named Servicers


                            SOUTHERN FOODS GROUP, L.P.,
                            as a Servicer

                            By:    SFG Management Limited Liability Company
                            Its:   General Partner


                            By: /s/ CORY OLSON
                                -------------------------
                            Name:  Cory Olson
                            Title: Authorized Signatory


                                      S-8


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

                                    EXHIBIT I

                                   DEFINITIONS


         As used in this Agreement, the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined):

         "Additional Servicers" means each of GTL and Tuscan Dairies.

         "Administrative Seller" has the meaning set forth in Section 14.18.

         "Adverse Claim" means a lien, security interest, charge or encumbrance,
or other right or claim in, of or on any Person's assets or properties in favor
of any other Person.

         "Affected Financial Institution" has the meaning specified in Section
12.1(c).

         "Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person or any Subsidiary of such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities of the controlled Person or possesses,
directly or indirectly, the power to direct or cause the direction of the
management or policies of the controlled Person, whether through ownership of
stock, by contract or otherwise.

         "Agent" has the meaning set forth in the preamble to this Agreement.

         "Aggregate Capital" means, on any date of determination, the aggregate
amount of Capital of all Purchaser Interests outstanding on such date.

         "Aggregate Reduction" has the meaning specified in Section 1.3.

         "Aggregate Reserves" means, on any date of determination, the sum of
the Loss Reserve, the Dilution Reserve, and the Yield and Servicer Reserve.

         "Aggregate Unpaids" means, at any time, an amount equal to the sum of
all, Aggregate Capital and all other unpaid Obligations (whether due or accrued)
at such time.


                                    Exh. I-1


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

         "Agreement" means this Third Amended and Restated Receivables Purchase
Agreement, as it may be amended, restated, supplemented or otherwise modified
and in effect from time to time.

         "Agreement of General Partner" means that certain agreement dated as of
June 30, 2000 between the Agent for the benefit of the Purchasers and Dairy
Group Receivables GP, LLC (f/k/a Suiza Receivables GP, LLC), as general partner
of Dairy Group.

         "Amortization Date" means the earliest to occur of (i) the day on which
any of the conditions precedent set forth in Section 6.2 are not satisfied, (ii)
the Business Day immediately prior to the occurrence of an Amortization Event
set forth in Section 9.1(d)(ii), (iii) the Business Day specified in a written
notice from the Agent following the occurrence of any other Amortization Event,
and (iv) the date that is 15 Business Days after the Agent's receipt of written
notice from the Administrative Seller that it wishes to terminate the facility
evidenced by this Agreement.

         "Amortization Event" has the meaning specified in Article IX.

         "Applicable Percentage" means, as of any date of determination, the
Applicable Percentage, under and as defined in the Dean Credit Agreement (as in
effect from time to time notwithstanding any language to the contrary contained
in the definition of "Dean Credit Agreement"), applicable to Revolving-1 Loans
under and as defined in the Dean Credit Agreement (as in effect from time to
time notwithstanding any language to the contrary contained in the definition of
"Dean Credit Agreement"); provided, that, as of any date of determination that
the Dean Credit Agreement is not in effect (whether by reason of termination or
otherwise), the Applicable Percentage hereunder shall be the Applicable
Percentage under and as defined in the Dean Credit Agreement as in effect
immediately prior to such ineffectiveness (notwithstanding any language to the
contrary contained in the definition of "Dean Credit Agreement") applicable to
Revolving-1 Loans under and as defined in the Dean Credit Agreement as in effect
immediately prior to such ineffectiveness (notwithstanding any language to the
contrary contained in the definition of "Dean Credit Agreement").

         "Assignment Agreement" has the meaning set forth in Section 12.1(b).

         "Authorized Officer" means, with respect to any Person, its president,
corporate controller, treasurer or chief financial officer.

         "Bank One" means Bank One, NA (Main Office Chicago) in its individual
capacity and its successors.


                                    Exh. I-2


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

         "Bank One Company" means Falcon Asset Securitization Corporation, a
Delaware Corporation, together with its successors and assigns.

         "Broken Funding Costs" means for any Purchaser Interest that: (i) has
its Capital reduced (A) without compliance by the Administrative Seller with the
notice requirements hereunder or (B) in the case of any Purchaser Interest of
the CL Company or any Purchaser Interest of any Pool Company other than any
Purchaser Interest funded substantially with Pooled Commercial Paper, on any
date other than a Settlement Date hereunder or (ii) does not become subject to
an Aggregate Reduction following the delivery of any Reduction Notice or (iii)
is assigned or funded pursuant to a Funding Agreement or otherwise transferred
or terminated prior to the date on which it was originally scheduled to end; an
amount equal to the excess, if any, of (A) the CP Costs or Yield (as applicable)
that would have accrued during the remainder of the Tranche Periods or the
tranche periods for Commercial Paper determined by the applicable Purchaser to
relate to such Purchaser Interest (as applicable) subsequent to the date of such
reduction, assignment or termination (or in respect of clause (ii) above, the
date such Aggregate Reduction was designated to occur pursuant to the Reduction
Notice) of the Capital of such Purchaser Interest if such reduction, assignment
or termination had not occurred or such Reduction Notice had not been delivered,
over (B) the sum of (x) to the extent all or a portion of such Capital is
allocated to another Purchaser Interest, the amount of CP Costs or Yield
actually accrued during the remainder of such period on such Capital for the new
Purchaser Interest, and (y) to the extent such Capital is not allocated to
another Purchaser Interest, the income, if any, actually received net of any
costs of redeployment of funds during the remainder of such period by the holder
of such Purchaser Interest from investing the portion of such Capital not so
allocated. In the event that the amount referred to in clause (B) exceeds the
amount referred to in clause (A), the relevant Purchaser or Purchasers agree to
pay to the Sellers the amount of such excess. All Broken Funding Costs shall be
due and payable hereunder upon demand.

         "Business Day" means any day on which banks are not authorized or
required to close in New York, New York or Chicago, Illinois or any other city
specified in writing by a Purchaser to the Agent, each other Purchaser and the
Administrative Seller, and The Depository Trust Company of New York is open for
business, and, if the applicable Business Day relates to any computation or
payment to be made with respect to the LIBO Rate, any day on which dealings in
dollar deposits are carried on in the London interbank market.

         "Capital" of any Purchaser Interest means, at any time, (A) the
Purchase Price of such Purchaser Interest, minus (B) the sum of the aggregate
amount of Collections and other payments received by the Agent or the applicable
Purchaser that in each case are applied to reduce such Capital in accordance
with the terms and conditions of this Agreement;


                                    Exh. I-3


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

provided that such Capital shall be restored (in accordance with Section 2.5) in
the amount of any Collections or other payments so received and applied if at
any time the distribution of such Collections or payments are rescinded,
returned or refunded for any reason.

         "Change of Control" means the acquisition by any Person, or two or more
Persons acting in concert, of beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities Exchange
Act of 1934) of 20% or more of the outstanding shares of voting stock or other
equity interest of any Seller Party.

         "Charged-Off Receivable" means a Receivable: (i) as to which the
Obligor thereof has taken any action, or suffered any event to occur, of the
type described in Section 9.1(d) (as if references to Seller Party therein refer
to such Obligor); (ii) as to which the Obligor thereof, if a natural person, is
deceased, (iii) that has been written off a Seller's books as uncollectible,
(iv) that, consistent with the applicable Originator's or Morningstar's Credit
and Collection Policy, would be written off a Seller's books as uncollectible,
(v) that has been identified by a Seller as uncollectible or (vi) as to which
any payment, or part thereof, remains unpaid for 90 days or more from the
original invoice date for such payment.

         "CL Company" means Atlantic Asset Securitization Corp., a Delaware
corporation, together with its successors and assigns.

         "CLNY" means Credit Lyonnais, New York Branch, a French banking
corporation duly licensed under the laws of the State of New York.

         "Collateral Agent" means Wachovia Bank, National Association (formerly
known as First Union National Bank), in its capacity as administrative agent
under the Dean Credit Agreement.

         "Collection Account" means each concentration account, depositary
account, lock-box account or similar account in which any collections are
collected or deposited and that is listed on Exhibit IV.

         "Collection Account Agreement" means each agreement substantially in
the form of Exhibit VI, or such other form as may be acceptable to the Agent,
among the applicable Originator, a Seller, Collection Bank and the Agent.

         "Collection Bank" means, at any time, any of the banks holding one or
more Collection Accounts.


                                    Exh. I-4


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

         "Collection Notice" means a notice, in substantially the form of Annex
A to Exhibit VI, from the Agent to a Collection Bank or any similar or analogous
notice from the Agent to a Collection Bank.

         "Collections" means, with respect to any Receivable, all cash
collections and other cash proceeds in respect of such Receivable, including,
without limitation, all yield, Finance Charges or other related amounts accruing
in respect thereof and all cash proceeds of Related Security with respect to
such Receivable.

         "Commercial Paper" means promissory notes of any Company issued by such
Company in the commercial paper market.

         "Commitment" means, for each Financial Institution, the commitment of
such Financial Institution to purchase Purchaser Interests from the Sellers to
the extent that the Company in such Financial Institution's Purchaser Group
declines to purchase such Purchaser Interest, in an amount not to exceed (i) in
the aggregate, the amount set forth opposite such Financial Institution's name
on Schedule A to this Agreement, as such amount may be modified in accordance
with the terms hereof (including, without limitation, any termination of
Commitments pursuant to Section 4.6 hereof) and (ii) with respect to any
individual purchase hereunder, its Pro Rata Share of the Purchase Price
therefor.

         "Company" has the meaning set forth in the preamble to this Agreement.

         "Company Costs" means:

                  (i) for any Purchaser Interest purchased by the Bank One
Company and funded substantially with Pooled Commercial Paper, for any day, the
sum of (i) discount or yield accrued on Pooled Commercial Paper on such day,
plus (ii) any and all accrued commissions in respect of placement agents and
Commercial Paper dealers, and issuing and paying agent fees incurred, in respect
of such Pooled Commercial Paper for such day, plus (iii) other costs associated
with funding small or odd-lot amounts with respect to all receivable purchase
facilities which are funded by Pooled Commercial Paper for such day, minus (iv)
any accrual of income net of expenses received on such day from investment of
collections received under all receivable purchase facilities funded
substantially with Pooled Commercial Paper, minus (v) any payment received on
such day net of expenses in respect of broken funding costs related to the
prepayment of any purchaser interest of the Bank One Company pursuant to the
terms of any receivable purchase facilities funded substantially with Pooled
Commercial Paper. In addition to the foregoing costs, if the Administrative
Seller shall request any Incremental Purchase during any period of time
determined by the Bank One Company (or by the Bank One Company's agent on its
behalf) in its sole discretion to result in incrementally higher Company Costs
with respect to the


                                    Exh. I-5


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

Bank One Company applicable to such Incremental Purchase by the Bank One
Company, the Capital associated with any such Incremental Purchase shall, during
such period, be deemed to be funded by the Bank One Company in a special pool
(which may include capital associated with other receivable purchase facilities)
for purposes of determining such additional Company Costs applicable only to
such special pool and charged each day during such period against such Capital.
Each Purchaser Interest funded substantially with Pooled Commercial Paper will
accrue Company Costs with respect to the Bank One Company each day on a pro rata
basis, based upon the percentage share the Capital in respect of such Purchaser
Interest represents in relation to all assets held by the Bank One Company and
funded substantially with Pooled Commercial Paper. For each Settlement Period,
the Bank One Company shall calculate its aggregate Company Costs for such
Settlement Period and report such Company Costs to the Administrative Seller
pursuant to Section 3.3 of this Agreement;

                  (ii) for any Purchaser Interest purchased by any Pool Company
other than any Purchaser Interest funded substantially with Pooled Commercial
Paper, an amount equal to the Capital of such Purchaser Interest multiplied by a
per annum rate equivalent to the "weighted average cost" (as defined below)
related to the issuance of Commercial Paper of such Pool Company that is
allocated, in whole or in part, to fund such Pool Company's Pro Rata Share of
Aggregate Capital (and which may also be allocated in part to the funding of
other assets of such Pool Company); provided, however, that if any component of
such rate is a discount rate, in calculating such rate for such Pool Company's
Pro Rata Share of the Aggregate Capital for such date, the rate used to
calculate such component of such rate shall be a rate resulting from converting
such discount rate to an interest bearing equivalent rate per annum. As used in
this definition, the "weighted average cost" shall consist of (x) the actual
interest rate paid to purchasers of Commercial Paper issued by such Pool
Company, (y) the costs associated with the issuance of such Commercial Paper
(including dealer fees and commissions to placement agents), and (z) interest on
other borrowing or funding sources by such Pool Company, including to fund small
or odd dollar amounts that are not easily accommodated in the commercial paper
market;

                  (iii) for any Purchaser Interest purchased by the CL Company,
for any CP (Tranche) Accrual Period, an amount equal to the Capital of such
Purchaser Interest multiplied by a rate per annum equal to the sum of (i) the
rate or, if more than one rate, the weighted average of the rates, determined by
converting to an interest-bearing equivalent rate per annum the discount rate
(or rates) at which Commercial Paper of the CL Company having a term equal to
such CP (Tranche) Accrual Period and to be issued to fund or to maintain such
Purchaser Interest by the CL Company (including, without limitation, the related
Capital and accrued and unpaid interest thereon) may be sold by any placement
agent or commercial paper dealer selected by CLNY (or other agent of the CL
Company) for the CL Company, as agreed between each such placement agent or
dealer and CLNY (or



                                    Exh. I-6


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT


such other agent); plus, (ii) the commissions and charges charged by such
placement agent or dealer with respect to such Commercial Paper of the CL
Company, expressed as a percentage of such face amount, converted to an
interest-bearing equivalent rate per annum;

                  (iv) for any Purchaser Interest purchased by the Rabo Company
and funded substantially with Pooled Commercial Paper, for any day, an amount
equal to the Capital of such Purchaser Interest multiplied by a rate per annum
equal to the weighted average of the per annum rates paid or payable by the Rabo
Company from time to time as interest on Commercial Paper (by means of interest
rate hedges or otherwise and taking into consideration any incremental carrying
costs associated with Commercial Paper issued by the Rabo Company maturing on
dates other than those certain dates on which the Rabo Company is to receive
funds) in respect of Commercial Paper issued by the Rabo Company that are
allocated, in whole or in part, by Rabobank (or other agent of the Rabo Company)
on behalf of the Rabo Company to fund or maintain the Capital of the Rabo
Company during such period, as determined by Rabobank (or other agent of the
Rabo Company) on behalf of the Rabo Company, which rates shall reflect and give
effect to (i) the commissions of placement agents and dealers in respect of such
Commercial Paper, to the extent such commissions are reasonably allocated, in
whole or in part, to such Commercial Paper by Rabobank (or other agent of the
Rabo Company) on behalf of the Rabo Company and (ii) other borrowings by the
Rabo Company, including, without limitation, borrowings to fund small or odd
dollar amounts that are not easily accommodated in the commercial paper market;
provided that if any component of such rate is a discount rate, in calculating
the Company Costs, Rabobank (or other agent of the Rabo Company) shall for such
component use the rate resulting from converting such discount rate to an
interest bearing equivalent rate per annum. In addition to the foregoing costs,
if the Administrative Seller shall request any Purchaser Interest during any
period of time determined by the Rabo Company in its sole discretion to result
in incrementally higher Company Costs with respect to the Rabo Company
applicable to such Purchaser Interest, the Capital associated with any such
Purchaser Interest shall, during such period, be deemed to be funded by the Rabo
Company in a special pool (which may include capital associated with other
receivable purchase or financing facilities) for purposes of determining such
additional Company Costs applicable only to such special pool and charged each
day during such period against such Capital. Each Purchaser Interest funded
substantially with Pooled Commercial Paper will accrue Company Costs with
respect to the Rabo Company each day on a pro rata basis, based upon the
percentage share the Capital in respect of such Purchaser Interest represents in
relation to all assets held by the Rabo Company and funded substantially with
Pooled Commercial Paper. For each Settlement Period, the Rabo Company shall
calculate its aggregate Company Costs for such Settlement Period and report such
Company Costs to the Administrative Seller pursuant to Section 3.3 of this
Agreement; and


                                    Exh. I-7


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

                  (v) for any Purchaser Interest purchased by the Wachovia
Company and funded substantially with Pooled Commercial Paper, for any day, the
sum of (i) discount or yield accrued on Pooled Commercial Paper on such day,
plus (ii) any and all accrued commissions in respect of placement agents and
Commercial Paper dealers, and issuing and paying agent fees incurred, in respect
of such Pooled Commercial Paper for such day, plus (iii) other costs associated
with funding small or odd-lot amounts with respect to all receivable purchase
facilities which are funded by Pooled Commercial Paper for such day, minus (iv)
any accrual of income net of expenses received on such day from investment of
collections received under all receivable purchase facilities funded
substantially with Pooled Commercial Paper, minus (v) any payment received on
such day net of expenses in respect of broken funding costs related to the
prepayment of any purchaser interest of the Wachovia Company pursuant to the
terms of any receivable purchase facilities funded substantially with Pooled
Commercial Paper. In addition to the foregoing costs, if the Administrative
Seller shall request any Incremental Purchase during any period of time
determined by the Wachovia Company (or by the Wachovia Company's agent on its
behalf) in its sole discretion to result in incrementally higher Company Costs
with respect to the Wachovia Company applicable to such Incremental Purchase by
the Wachovia Company, the Capital associated with any such Incremental Purchase
shall, during such period, be deemed to be funded by the Wachovia Company in a
special pool (which may include capital associated with other receivable
purchase facilities) for purposes of determining such additional Company Costs
applicable only to such special pool and charged each day during such period
against such Capital. Each Purchaser Interest funded substantially with Pooled
Commercial Paper will accrue Company Costs with respect to the Wachovia Company
each day on a pro rata basis, based upon the percentage share the Capital in
respect of such Purchaser Interest represents in relation to all assets held by
the Wachovia Company and funded substantially with Pooled Commercial Paper. For
each Settlement Period, the Wachovia Company shall calculate its aggregate
Company Costs for such Settlement Period and report such Company Costs to the
Administrative Seller pursuant to Section 3.3 of this Agreement.

         "Company Purchase Limit" means, for each Company, the purchase limit of
such Company with respect to the purchase of Purchaser Interests from the
Sellers, in an amount not to exceed (i) in the aggregate, the amount set forth
opposite such Company's name on Schedule A to this Agreement, as such amount may
be modified in accordance with the terms hereof (including Section 4.6(b)) and
(ii) with respect to any individual purchase hereunder, its Pro Rata Share of
the Purchase Price therefor.

         "Concentration Limit" means, at any time, (a) for any Obligor other
than an Obligor for which a Special Concentration Limit has been designated, 3%
of the aggregate Outstanding Balance of all Eligible Receivables, or (b) for
Wal-Mart Stores, Inc., 15%, for Albertson's Inc., 7%, and for any other Obligor
designated by Agent, such other percentage


                                    Exh. I-8


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

as Agent may designate (each of the foregoing, a "Special Concentration Limit");
provided, that in the case of an Obligor and any Affiliate of such Obligor, the
Concentration Limit shall be calculated as if such Obligor and such Affiliate
are one Obligor; and provided, further, that the Required Purchasers may, upon
not less than five Business Days' notice to Seller, cancel any Special
Concentration Limit.

         "Consent Notice" has the meaning set forth in Section 4.6(a).

         "Consent Period" has the meaning set forth in Section 4.6(a).

         "Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement, take-or-pay contract or application for a letter of credit.

         "Contract" means, with respect to any Receivable, any and all written
or oral agreements pursuant to which such Receivable arises or that evidences
such Receivable.

         "Country Fresh" means Country Fresh, LLC, a Michigan limited liability
company.

         "CP (Pool) Accrual Period" means, with respect to any Purchaser
Interest held by any Pool Company and funded substantially with Pooled
Commercial Paper, each calendar month, provided that the initial CP (Pool)
Accrual Period hereunder with respect to the Rabo Company and the Wachovia
Company and funded substantially with Pooled Commercial Paper means the period
from (and including) the date hereof to (and including) November 30, 2003.

         "CP (Tranche) Accrual Period" means (i) with respect to any Purchaser
Interest held by any Pool Company other than any Purchaser Interest funded
substantially with Pooled Commercial Paper, a period of at least 1 day and not
to exceed 90 days as selected by Seller pursuant to Section 3.4 and approved by
the Agent; and (ii) with respect to any Purchaser Interest held by the CL
Company, a period commencing on, and including, the date selected by CLNY (as
agent for the CL Company), or the last day of the immediately preceding CP
(Tranche) Accrual Period for such Purchaser Interest (whichever is latest) and
ending on, but excluding, the date that falls such number of days (of at least
one day and not to exceed 90 days) thereafter as CLNY (as agent for the CL
Company) shall select (provided that not more than 10 CP (Tranche) Accrual
Periods with respect to Purchaser Interests of the CL Company shall be in effect
at any one time); provided, however, that (i)


                                    Exh. I-9


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

any CP (Tranche) Accrual Period (other than of one day) that would otherwise end
on a day that is not a Business Day shall be extended to the next succeeding
Business Day, (ii) in the case of CP (Tranche) Accrual Periods of one day, (A)
the initial CP (Tranche) Accrual Period shall be the day of the related
Incremental Purchase; and (B) any subsequently occurring CP (Tranche) Accrual
Period that is one day shall, if the immediately preceding CP (Tranche) Accrual
Period is more than one day, be the last day of such immediately preceding CP
(Tranche) Accrual Period, and if the immediately preceding CP (Tranche) Accrual
Period is one day, be the day next following such immediately preceding CP
(Tranche) Accrual Period; and (iii) in the case of any CP (Tranche) Accrual
Period that commences before the Amortization Date and would otherwise end on a
date occurring after the Amortization Date, such CP (Tranche) Accrual Period
shall end on the Amortization Date. The duration of each CP (Tranche) Accrual
Period that commences after the Amortization Date shall be of such duration as
selected by the applicable Company.

         "CP Costs" means, for each day, the aggregate discount or yield accrued
with respect to the Purchaser Interests of each respective Company as determined
in accordance with the definition of "Company Costs."

         "Credit Ag" means Credit Agricole Indosuez, a branch of a French
banking corporation.

         "Credit and Collection Policy" means each Originator's and
Morningstar's credit and collection policies and practices relating to Writings,
Contracts and Receivables existing on the date hereof with respect to each New
Entity and on the Original Closing Date with respect to Morningstar and each
other Originator and summarized in Exhibit VIII hereto, as modified from time to
time in accordance with this Agreement.

         "Dean Credit Agreement" means that certain Credit Agreement, dated as
of July 31, 2001, by and among Provider, certain Subsidiaries of Provider, the
financial institutions party thereto as lenders, Bank One, NA, as syndication
agent, Fleet National Bank, Harris Trust and Savings Bank and Suntrust Bank, as
co-documentation agents, and Wachovia Bank, National Association (formerly known
as First Union National Bank), as administrative agent, as amended by the First
Amendment to Credit Agreement, dated as of December 19, 2001, as further amended
by the Second Amendment to Credit Agreement, dated as of April 30, 2002, as
further amended by the Third Amendment to Credit Agreement, dated as of December
13, 2002, and as further amended by the Fourth Amendment to Credit Agreement,
dated as of August 29, 2003, but without giving effect to any further amendment
or other modification thereof.

         "Dean Entity" means each of the entities listed on Schedule C to this
Agreement.


                                   Exh. I-10


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

         "Dean Financial Covenants" means the financial covenants set forth in
Section 5.9 of the Dean Credit Agreement.

         "Dean Receivables Sale Agreement" means the Dean Receivables Sale
Agreement, dated as of May 15, 2002 and effective for all purposes as of March
31, 2002, by and among the Dean Entities and Dairy Group II, as amended by
Amendment No. 1 thereto, dated as of November 20, 2003, and as the same may be
further amended, restated, supplemented or otherwise modified from time to time.

         "Dean Specialty" means Dean Specialty Foods Group, LLC, a Delaware
limited liability company.

         "Deemed Collections" means the aggregate of all amounts the Sellers
shall have been deemed to have received as a Collection of a Receivable. The
Sellers shall be deemed to have received a Collection of a Receivable at any
time (i) to the extent that the Outstanding Balance of any such Receivable is
either (x) reduced as a result of any defective or rejected goods or services,
any discount, rebate or any adjustment or otherwise by any Seller (other than
cash Collections on account of the Receivables and other than Receivables that,
consistent with the applicable Originator's or Morningstar's Credit and
Collection Policy, have been written off a Seller's books as uncollectible other
than as a result of any of the other conditions or events set forth in this
definition) or (y) reduced or canceled as a result of a setoff in respect of any
claim by any Person (whether such claim arises out of the same or a related
transaction or an unrelated transaction) or (ii) any of the representations or
warranties in Article V are no longer true with respect to such Receivable or
(iii) the failure of any Contract with respect to such Receivable to create a
legal, valid and binding obligation of the related Obligor to pay the
Outstanding Balance of the Receivable created thereunder and any accrued
interest thereon or (iv) the failure of any Writing to give rise to a valid and
enforceable Receivable in the amount of the Outstanding Balance thereof.

         "Default Fee" means with respect to any amount due and payable by any
Seller in respect of any Aggregate Unpaids, an amount equal to interest on any
such unpaid Aggregate Unpaids at a rate per annum equal to 2% above the Prime
Rate.

         "Default Ratio" means, as at the end of any calendar month, a
percentage equal to (a) the sum of (i) the Outstanding Balance of all
Receivables as to which any payment, or part thereof, remains unpaid for 90 days
or more from the original invoice date for such payment plus (ii) the
Outstanding Balance of all Receivables that were written off each Seller's books
as uncollectible during such calendar month, divided by (b) the aggregate
Outstanding Balance of all Receivables.



                                   Exh. I-11


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT


         "Defaulted Receivable" means a Receivable as to which any payment, or
part thereof, remains unpaid for 90 days or more from the original invoice date
for such payment.

         "Delinquency Ratio" means, for a calendar month, a percentage equal to
(a) the Outstanding Balance of all Delinquent Receivables as at the end of such
calendar month divided by (b) the Outstanding Balance of all Receivables.

         "Delinquent Receivable" means a Receivable as to which any payment, or
part thereof, remains unpaid for at least 60 days but not more than 90 days from
the original invoice date for such payment.

         "Demand Notes" means each of (i) that certain promissory note, dated as
of December 21, 2001, by Dean Foods Company (as successor-in-interest to Suiza
Foods Corporation) in favor of Dairy Group, in the maximum principal sum of
$21,325,653, as amended, renewed, supplemented or otherwise modified from time
to time, (ii) that certain promissory note, dated as of May 15, 2002 and
effective for all purposes as of March 31, 2002, by Dean Foods Company in favor
of Dairy Group II, in the maximum principal sum of $13,181,876, as amended,
renewed, supplemented or otherwise modified from time to time, and (iii) that
certain promissory note, dated as of November 20, 2003, by Dean Foods Company in
favor of Specialty Group, in the maximum principal sum of $3,000,000, as
amended, renewed, supplemented or otherwise modified from time to time.

         "Dilution Ratio" means, as at the end of any calendar month, a
percentage equal to (i) the aggregate amount of all Dilutions arising during
such calendar month (other than Rebate/Billbacks) with respect to all
Receivables divided by (ii) the aggregate amount of sales by all Originators for
the calendar month ending two months prior to such calendar month.

         "Dilution Reserve" means an amount equal to the result of multiplying
the Net Receivables Balance by the greater of (a) 0.10 and (b) the following:

                  ((2 X ED + ((DS-ED) X (DS/ED))) X DHR) + MRA

         where:

                  ED   =    the average of the Dilution Ratios for the
                            twelve most recently-ended calendar months.


                                   Exh. I-12


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

                  DS   =     the highest of the average Dilution Ratios
                             for any two-calendar-month period occurring
                             during the twelve most recently-ended
                             calendar months.

                  DHR  =     the result of dividing the aggregate
                             amount of all sales by all Originators
                             during the prior one and a half calendar
                             months by the aggregate Outstanding Balance
                             of all Eligible Receivables.

                  MRA  =     0.03 until such time as the Servicers
                             deliver a consolidating Monthly Report
                             pursuant to Section 8.5 in form and
                             substance satisfactory to the Agent, and
                             thereafter, 0.00.

         "Dilutions" means, for each calendar month, the aggregate amount of
reductions or cancellations described in clause (i) of the definition of "Deemed
Collections" during such month (other than Rebate/Billbacks).

         "Discount Rate" means, the LIBO Rate or the Prime Rate, as applicable,
with respect to each Purchaser Interest of the Financial Institutions.

         "Eligible Receivable" means, at any time, a Receivable:

                  (i) the Obligor of which (a) if a natural person, is a
         resident of the United States or, if a corporation or other business
         organization, is organized under the laws of the United States or any
         political subdivision thereof and has its chief executive office in the
         United States; (b) is not an Affiliate of any of the parties hereto;
         and (c) is not a federal or state government or a federal or state
         governmental subdivision or agency, except as permitted by clause (xxi)
         of this definition,

                  (ii) the Obligor of which is not a Top Twenty-Five Obligor or,
         in the case of any Receivable the Obligor of which is a Top Twenty-Five
         Obligor, is not the Obligor of Defaulted Receivables the aggregate
         Outstanding Balance of which constitutes more than 25% of the
         Outstanding Balance of all Receivables of such Obligor,

                  (iii) that is not a Charged-Off Receivable or a Delinquent
         Receivable,

                  (iv) that (a) by its terms is due and payable within 30 days
         of the original billing date therefor and has not had its payment terms
         extended or (b) that by its terms is due and payable within 90 days of
         the original billing date therefor and has not had its payment terms
         extended, the Outstanding Balance of which, when

                                   Exh. I-13

                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

         combined with all other Eligible Receivables that are due and payable
         within 90 days of the original billing date therefor, does not exceed
         an amount equal to 5% of the Outstanding Balance of all Receivables;
         provided, however, that in the case of the foregoing clauses (a) and
         (b), no such Receivable shall be considered an Eligible Receivable to
         the extent of the Outstanding Balance relating to any goods giving rise
         to such Receivable that are provided on a "bill and hold" basis (i.e.,
         are billed but held or stored at a warehouse prior to shipment to the
         Obligor of such Receivable) for so long as such goods are so held are
         stored;

                  (v) that is an "account" or "chattel paper" within the meaning
         of the UCC of all applicable jurisdictions,

                  (vi) that is denominated and payable only in United States
         dollars in the United States,

                  (vii) that arises either (A) under a Contract that, together
         with such Receivable, is in full force and effect and constitutes the
         legal, valid and binding obligation of the related Obligor enforceable
         against such Obligor in accordance with its terms or (B) under a
         Writing to the extent that such Receivable is the legal, valid and
         binding obligation of the related Obligor,

                  (viii) that arises under a Writing or Contract that (A) does
         not require the Obligor under such Writing or Contract to consent to
         the transfer, sale or assignment of the rights and duties of the
         applicable Originator or Morningstar or any of its assignees under such
         Writing or Contract and (B) does not contain a confidentiality
         provision that purports to restrict the ability of any Purchaser to
         exercise its rights under this Agreement, including, without
         limitation, its right to review the Writing or Contract,

                  (ix) that arises under a Contract that contains an obligation
         to pay a specified sum of money, contingent only upon the sale of goods
         or the provision of services by the applicable Originator or
         Morningstar or pursuant to a Writing that evidences the amount to be
         paid,

                  (x) that, together with the Writing or Contract related
         thereto, does not contravene any law, rule or regulation applicable
         thereto (including, without limitation, any law, rule and regulation
         relating to truth in lending, fair credit billing, fair credit
         reporting, equal credit opportunity, fair debt collection practices and
         privacy) and with respect to which no part of the Writing or Contract
         related thereto is in violation of any such law, rule or regulation,


                                   Exh. I-14


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

                  (xi) that satisfies all applicable requirements of the
         applicable Credit and Collection Policy,

                  (xii) that was generated in the ordinary course of the
         applicable Originator's or Morningstar's business,

                  (xiii) that arises solely from the sale of goods or the
         provision of services to the related Obligor by the applicable
         Originator or Morningstar, and not by any other Person (in whole or in
         part),

                  (xiv) as to which the Agent has not notified the
         Administrative Seller that the Agent has determined that such
         Receivable or class of Receivables is not acceptable as an Eligible
         Receivable, including, without limitation, because such Receivable
         arises under a Writing or Contract that is not acceptable to the Agent,

                  (xv) that is not subject to any right of rescission, set-off,
         counterclaim, any other defense (including defenses arising out of
         violations of usury laws) of the applicable Obligor against the
         applicable Originator or Morningstar or any other Adverse Claim, and
         the Obligor thereon holds no right as against such Originator or
         Morningstar to cause such Originator or Morningstar to repurchase the
         goods or merchandise the sale of which shall have given rise to such
         Receivable (except with respect to sale discounts effected pursuant to
         the Writing or Contract, or defective goods returned in accordance with
         the terms of the Writing or Contract); provided, however, that only
         that portion of such Receivable that is subject to any such right of
         rescission, set-off, counterclaim, other defense or Adverse Claim shall
         be considered to be ineligible pursuant to this clause (xv),

                  (xvi) that is not the subject of a Rebate/Billback; provided,
         however, that only that portion of such Receivable that is subject to
         such Rebate/Billback shall be considered to be ineligible pursuant to
         this clause (xvi),

                  (xvii) as to which the applicable Originators or Morningstar
         has satisfied and fully performed all obligations on its part with
         respect to such Receivable required to be fulfilled by it, and no
         further action is required to be performed by any Person with respect
         thereto other than payment thereon by the applicable Obligor,

                  (xviii) all right, title and interest to and in which has been
         validly transferred by the applicable Originators or Morningstar
         directly to a Seller under and in accordance with a Receivables Sale
         Agreement, and such Seller has good and marketable title thereto free
         and clear of any Adverse Claim,


                                   Exh. I-15


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

                  (xix) that represents all or part of the sales price of
         merchandise, insurance and services within the meaning of Section
         3(c)(5) of the Investment Company Act of 1940, as amended,

                  (xx) the Obligor of which is a local municipality that, when
         the Outstanding Balance of which is aggregated with the Outstanding
         Balances of all other Eligible Receivables the Obligors of which are
         local municipalities, does not exceed 10% of the aggregate Outstanding
         Balance of all Eligible Receivables and

                  (xxi) the Obligor of which is a federal or state government or
         a federal or state governmental subdivision or agency that, when the
         Outstanding Balance of which is aggregated with the Outstanding
         Balances of all other Eligible Receivables the Obligors of which are
         federal or state governments or a federal or state governmental
         subdivisions or agencies, does not exceed 3.0% of the aggregate
         Outstanding Balance of all Eligible Receivables.

         "Effective Date" means November 20, 2003.

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

         "Extension Notice" has the meaning set forth in Section 4.6(a).

         "Facility Account" means Dairy Group's Account No. 2000013850892 at
Wachovia Bank, National Association (formerly known as First Union National
Bank), ABA No. 053000219.

         "Facility Termination Date" means the earliest of (i) the Liquidity
Termination Date and (ii) the Amortization Date.

         "Federal Bankruptcy Code" means Title 11 of the United States Code
entitled "Bankruptcy," as amended and any successor statute thereto.

         "Fee Letter" means each of (i) that certain letter agreement dated as
of November 20, 2003 among each Seller, the Bank One Company and Bank One, as it
may be amended, restated, supplemented or otherwise modified and in effect from
time to time, (ii) that certain letter agreement dated as of September 2, 2003
among each Seller, the CL Company and CLNY, as it may be amended, restated,
supplemented or otherwise modified and in effect from time to time, (iii) that
certain letter agreement dated as of November 20, 2003 among each Seller, the
Rabo Company and Rabobank, as it may be amended, restated, supplemented or
otherwise modified and in effect from time to time and (iv) that certain


                                   Exh. I-16


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

letter agreement dated as of November 20, 2003 among each Seller, the Wachovia
Company and Wachovia, as it may be amended, restated, supplemented or otherwise
modified and in effect from time to time.

         "Finance Charges" means, with respect to a Writing or Contract, any
finance, interest, late payment charges or similar charges owing by an Obligor
pursuant to such Writing or Contract.

         "Financial Institutions" has the meaning set forth in the preamble in
this Agreement.

         "Fleming Receivables" means a Receivable (i) the Obligor of which is
Fleming Companies, Inc., an Oklahoma corporation, and (ii) which arose or was
created prior to the date that Fleming Companies, Inc. took any action or
suffered any event to occur, of the type described in Section 9.1(d) (as if
references to Seller Party therein refer to Fleming Companies, Inc.).

         "Funding Agreement" means this Agreement and any agreement or
instrument executed by any Funding Source with or for the benefit of a Company.

         "Funding Source" means with respect to any Company (i) such Company's
Related Financial Institution(s) or (ii) any insurance company, bank or other
funding entity providing liquidity, credit enhancement or back-up purchase
support or facilities to such Company.

         "GAAP" means generally accepted accounting principles in effect in the
United States of America as of the date of this Agreement.

         "GTL" means Dean Northeast, LLC (f/ka/ Suiza GTL, LLC), a Delaware
limited liability company.

         "Immaterial Originator" means any Originator as to which the aggregate
Outstanding Balance of all Receivables sold by such Originator to the applicable
Seller under the applicable Receivables Sale Agreement as of any date of
determination is less than 10% of the aggregate Outstanding Balance of all
Receivables sold by all Originators party thereto to such Seller under such
Receivables Sale Agreement as of such date.

         "Incremental Purchase" means a purchase of one or more Purchaser
Interests that increases the total outstanding Aggregate Capital hereunder.

         "Initial Servicer" means each of Morningstar, Country Fresh, Land-O-Sun
and Southern Foods.


                                   Exh. I-17


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

         "Indebtedness" of a Person means such Person's (i) obligations for
borrowed money, (ii) obligations representing the deferred purchase price of
property or services (other than accounts payable arising in the ordinary course
of such Person's business payable on terms customary in the trade), (iii)
obligations, whether or not assumed, secured by liens or payable out of the
proceeds or production from property now or hereafter owned or acquired by such
Person, (iv) obligations that are evidenced by notes, acceptances, or other
instruments, (v) capitalized lease obligations, (vi) net liabilities under
interest rate swap, exchange or cap agreements, (vii) Contingent Obligations and
(viii) liabilities in respect of unfunded vested benefits under plans covered by
Title IV of ERISA.

         "Independent Manager" means a manager of the limited liability company
that is the general partner of any Seller who is not at such time, and has not
been at any time during the preceding five (5) years, (A) a director, officer,
employee or affiliate of either Seller, any Originator or Morningstar, or any of
their respective Subsidiaries or Affiliates (other than an independent manager
of a special purpose bankruptcy remote entity organized for the purpose of
providing financing to either Seller through the securitization or other similar
transfer, pledge or conveyance of accounts receivable), or (B) the beneficial
owner (at the time of such Person's appointment as an Independent Manager or at
any time thereafter while serving as an Independent Manager) of any of any
partnership interest of either Seller, any Originator or Morningstar, or any of
their respective Subsidiaries or Affiliates, having general voting rights.

         "Intercreditor Agreement" means the Second Amended and Restated
Intercreditor Agreement, dated as of the date hereof, by and among the Agent and
Wachovia Bank, National Association (formerly known as First Union National
Bank), as administrative agent under the Dean Credit Agreement, as amended,
restated, supplemented or otherwise modified from time to time.

         "Land-O-Sun" means Land-O-Sun Dairies, LLC, a Delaware limited
liability company.

         "LIBO Rate" means the rate per annum equal to the sum of (i) (a) the
applicable British Bankers' Association Interest Settlement Rate for deposits in
U.S. dollars appearing on Reuters Screen FRBD as of 11:00 a.m. (London time) two
Business Days prior to the first day of the relevant Tranche Period, and having
a maturity equal to such Tranche Period, provided that, (i) if Reuters Screen
FRBD is not available to the Agent for any reason, the applicable LIBO Rate for
the relevant Tranche Period shall instead be the applicable British Bankers'
Association Interest Settlement Rate for deposits in U.S. dollars as reported by
any other generally recognized financial information service as of 11:00 a.m.
(London time) two Business Days prior to the first day of such Tranche Period,
and having a maturity equal to such Tranche Period, and (ii) if no such British
Bankers' Association


                                   Exh. I-18


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

Interest Settlement Rate is available to the Agent, the applicable LIBO Rate for
the relevant Tranche Period shall instead be the rate determined by the Agent to
be the rate at which Bank One offers to place deposits in U.S. dollars with
first-class banks in the London interbank market at approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such Tranche Period,
in the approximate amount to be funded at the LIBO Rate and having a maturity
equal to such Tranche Period, divided by (b) one minus the maximum aggregate
reserve requirement (including all basic, supplemental, marginal or other
reserves) that is imposed against the Agent in respect of Eurocurrency
liabilities, as defined in Regulation D of the Board of Governors of the Federal
Reserve System as in effect from time to time (expressed as a decimal),
applicable to such Tranche Period plus (ii) the Applicable Percentage. The LIBO
Rate shall be rounded, if necessary, to the next higher 1/16 of 1%.

         "Liquidity Termination Date" means November 18, 2004.

         "Local Originator" means each of Liberty Dairy Company, Mayfield Dairy
Farms, Inc., McArthur Dairy, Inc., Purity Dairies, Incorporated, Reiter Dairy of
Akron, Inc., T.G. Lee Foods, Inc., and Verifine Dairy Products Corporation of
Sheboygan, Inc.

         "Lock-Box" means each locked postal box with respect to which a bank
who has executed a Collection Account Agreement has been granted exclusive
access for the purpose of retrieving and processing payments made on the
Receivables and that is listed on Exhibit IV.

         "Loss Reserve" means the product of (a) the Net Receivables Balance and
(b) 0.09.

         "Loss Reserve Percentage" means, for any Purchaser Interest on any
date, an amount equal to the greater of: (i) 2 times the Loss Ratio multiplied
by the Loss Horizon Ratio and (ii) 0.09,

where:

         Loss Ratio                 =        As at the last day of any calendar
                                             month, the highest three month
                                             rolling average Aged Receivable
                                             Ratio in the most recent twelve
                                             months prior to such month.

         Aged Receivable Ratio      =        As at the last day of any calendar
                                             month, (x) the sum of the
                                             Outstanding Balance of all
                                             Delinquent Receivables as of such
                                             day, plus the Outstanding Balance
                                             of all Charged-Off Receivables
                                             (without


                                   Exh. I-19


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

                                             giving effect to clause (vi) of the
                                             definition of "Charged-Off
                                             Receivable") as of such day,
                                             divided by (y) the aggregate sales
                                             for the calendar month occurring
                                             two months immediately prior to
                                             such month.

         Loss Horizon Ratio         =        As at the last day of any calendar
                                             month, (x) the aggregate amount of
                                             sales of all of the Originators for
                                             the two calendar months ending
                                             immediately prior to such month,
                                             divided by (y) the aggregate
                                             Outstanding Balance of all Eligible
                                             Receivables as of such day.

         "Material Adverse Effect" means a material adverse effect on (i) the
financial condition or operations of any Seller Party and its Subsidiaries taken
as a whole, (ii) the ability of any Seller Party to perform its obligations
under this Agreement or Provider to perform its obligations under any
Performance Undertaking, (iii) the legality, validity or enforceability of this
Agreement or any other Transaction Document, (iv) any Purchaser's interest in
the Receivables generally or in any significant portion of the Receivables, the
Related Security or the Collections with respect thereto, or (v) the
collectibility of the Receivables generally or of any material portion of the
Receivables.

         "Monthly Report" means a report, in substantially the form of Exhibit X
hereto (appropriately completed), furnished by the Servicers to the Agent
pursuant to Section 8.5.

         "Morningstar" means Morningstar Foods Inc., a Delaware corporation.

         "MRC" means Morningstar Receivables Corp., a Delaware corporation.

         "Net Receivables Balance" means, at any time, the aggregate Outstanding
Balance of all Eligible Receivables at such time reduced by the aggregate amount
by which the Outstanding Balance of all Eligible Receivables of each Obligor and
its Affiliates exceeds the Concentration Limit for such Obligor.

         "New Entity" means each of the entities listed on Schedule G to this
Agreement.

         "Non-Renewing Financial Institution" has the meaning set forth in
Section 4.6(a).

         "Obligations" shall have the meaning set forth in Section 2.1.


                                   Exh. I-20


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

         "Obligor" means a Person obligated to make payments pursuant to a
Writing or Contract.

         "Original Agreement" has the meaning set forth in the Preliminary
Statements to this Agreement.

         "Original Closing Date" means December 21, 2001.

         "Originator" means each of the entities listed on Schedule D hereto, in
their respective capacities as sellers under the Receivables Sale Agreements.

         "Outstanding Balance" of any Receivable at any time means the then
outstanding principal balance thereof.

         "Participant" has the meaning set forth in Section 12.2.

         "Performance Undertaking" means each of (i) that certain Second Amended
and Restated Performance Undertaking, dated as of November 20, 2003, by Provider
in favor of Dairy Group, (ii) that certain Amended and Restated Dean Performance
Undertaking, dated as of November 20, 2003, by Provider in favor of Dairy Group
II, and (iii) that certain Specialty Performance Undertaking, dated as of
November 20, 2003, by Provider in favor of Specialty, each substantially in the
form of Exhibit XI and as each may be further amended, restated or otherwise
modified from time to time.

         "Periodic Report" means each Monthly Report and Weekly Report.

         "Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.

         "Pool Company" means the Bank One Company, the Rabo Company and the
Wachovia Company.

         "Pooled Commercial Paper" means Commercial Paper notes of any Pool
Company subject to any particular pooling arrangement by such Pool Company, but
excluding Commercial Paper issued by such Pool Company for a tenor and in an
amount specifically requested by any Person in connection with any agreement
effected by such Pool Company.

         "Potential Amortization Event" means an event that, with the passage of
time or the giving of notice, or both, would constitute an Amortization Event.



                                   Exh. I-21

                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT


         "Prime Rate" means a rate per annum equal to the prime rate of interest
announced from time to time by Bank One or its parent (which is not necessarily
the lowest rate charged to any customer), changing when and as said prime rate
changes.

         "Proposed Reduction Date" has the meaning set forth in Section 1.3.

         "Pro Rata Share" means, (a) for each Financial Institution, a
percentage equal to (i) the Commitment of such Financial Institution, divided by
(ii) the aggregate amount of all Commitments of all Financial Institutions in
such Financial Institution's Purchaser Group, adjusted as necessary to give
effect to the application of the terms of Section 4.6 and (b) for each Company,
a percentage equal to (i) the Company Purchase Limit of such Company, divided by
(ii) the aggregate amount of all Company Purchase Limits of all Companies
hereunder.

         "Provider" means Dean Foods Company, a Delaware corporation, together
with its successors and assigns.

         "Purchase Limit" means $500,000,000, as such amount may be modified in
accordance with the terms of Section 4.6(b).

         "Purchase Notice" has the meaning set forth in Section 1.2.

         "Purchase Price" means, with respect to any Incremental Purchase of a
Purchaser Interest, the amount paid to the applicable Seller for such Purchaser
Interest that shall not exceed the least of (i) the amount requested by the
Administrative Seller in the applicable Purchase Notice, (ii) the unused portion
of the Purchase Limit on the applicable purchase date and (iii) the excess, if
any, of the Net Receivables Balance (less the Aggregate Reserves) on the
applicable purchase date over the aggregate outstanding amount of Aggregate
Capital determined as of the date of the most recent Monthly Report, taking into
account such proposed Incremental Purchase.

         "Purchaser Group" means with respect to (i) each Company, a group
consisting of such Company and its Related Financial Institutions and (ii) each
Financial Institution, a group consisting of such Financial Institution, the
Company for which such Financial Institution is a Related Financial Institution
and each other Financial Institution that is a Related Financial Institution for
such Company.

         "Purchasers" means each Company and each Financial Institution.

         "Purchaser Interest" means, at any time, an undivided percentage
ownership interest (computed as set forth below) associated with a designated
amount of Capital, selected


                                   Exh. I-22


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

pursuant to the terms and conditions hereof in (i) each Receivable arising prior
to the time of the most recent computation or recomputation of such undivided
interest, (ii) all Related Security with respect to each such Receivable, and
(iii) all Collections with respect to, and other proceeds of, each such
Receivable. Each such undivided percentage interest shall equal:

                                        C
                                 ---------------
                                    NRB - AR

where:

         C        =        the Capital of such Purchaser Interest.

         AR       =        the Aggregate Reserves.

         NRB      =        the Net Receivables Balance.


Such undivided percentage ownership interest shall be initially computed on its
date of purchase. Thereafter, until the Amortization Date, each Purchaser
Interest shall be automatically recomputed (or deemed to be recomputed) on each
day prior to the Amortization Date. The variable percentage represented by any
Purchaser Interest as computed (or deemed recomputed) as of the close of the
business day immediately preceding the Amortization Date shall remain constant
at all times thereafter.

         "Purchasing Financial Institution" has the meaning set forth in Section
12.1(b).

         "Rabo Company" means Nieuw Amsterdam Receivables Corporation, a
Delaware corporation, together with its successors and assigns.

         "Rabobank" means Cooperatieve Centrale Raiffeisen - Boerenleenbank B.A.
"Rabobank International", New York Branch, a Netherlands banking cooperative
duly licensed under the laws of the State of New York.

         "Rating Agency" means, collectively, the nationally recognized rating
agency or agencies chosen by each of the Rabo Company the CL Company to rate its
respective Commercial Paper notes at any time, including, as of the date hereof,
Moody's Investors Service, Inc., Fitch Ratings and Standard and Poor's Ratings
Group.


                                   Exh. I-23


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

         "Rebate/Billback" means, with respect to any Receivable, any incentives
provided to the Obligor thereof related to volume rebates or price incentives,
the dollar amount of which is known at the time of invoice of such Receivable.

         "Receivable" means all indebtedness and other obligations owed to the
applicable Originator or Morningstar (at the time it arises, and before giving
effect to any transfer or conveyance under the Transfer Agreement, any
Receivables Sale Agreement or hereunder) or owed to any Seller (after giving
effect to any transfer or conveyance under the Transfer Agreement, any
Receivables Sale Agreement or hereunder) or in which any Seller or such
Originator or Morningstar has a security interest or other interest, including,
without limitation, any indebtedness, obligation or interest constituting an
account, chattel paper, instrument or general intangible, arising in connection
with the sale of goods or the rendering of services by such Originator or
Morningstar, as applicable, and further includes, without limitation, the
obligation to pay any Finance Charges with respect thereto. Indebtedness and
other rights and obligations arising from any one transaction, including,
without limitation, indebtedness and other rights and obligations represented by
an individual invoice, shall constitute a Receivable separate from a Receivable
consisting of the indebtedness and other rights and obligations arising from any
other transaction; provided that any indebtedness, rights or obligations
referred to in the immediately preceding sentence shall be a Receivable
regardless of whether the account debtor or any Seller treats such indebtedness,
rights or obligations as a separate payment obligation.

         "Receivables Sale Agreement" means each of the Suiza Receivables Sale
Agreement, the Dean Receivables Sale Agreement and the Specialty Receivables
Sale Agreement.

         "Records" means, with respect to any Receivable, all Writings or
Contracts and other documents, books, records and other information (including,
without limitation, computer programs, tapes, disks, punch cards, data
processing software and related property and rights) relating to such
Receivable, any Related Security therefor and the related Obligor.

         "Reduction Notice" has the meaning set forth in Section 1.3.

         "Regulatory Change" has the meaning set forth in Section 10.2(a).

         "Reinvestment" has the meaning set forth in Section 2.2.

         "Related Financial Institution" means with respect to each Company,
each Financial Institution set forth opposite such Company's name in Schedule A
to this Agreement and/or, in the case of an assignment pursuant to Section 12.1,
set forth in the applicable Assignment Agreement.


                                   Exh. I-24


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

         "Related Security" means, with respect to any Receivable:

                           (i) all security interests or liens and property
         subject thereto from time to time, if any, purporting to secure payment
         of such Receivable, whether pursuant to the Writing or Contract related
         to such Receivable or otherwise, together with all financing statements
         and security agreements describing any collateral securing such
         Receivable,

                           (ii) all guaranties, letters of credit, insurance,
         "supporting obligations" (within the meaning of Section 9-102(a) of the
         UCC of all applicable jurisdictions) and other agreements or
         arrangements of whatever character from time to time supporting or
         securing payment of such Receivable whether pursuant to the Writing or
         Contract related to such Receivable or otherwise,

                           (iii) all service contracts and other contracts and
         agreements associated with such Receivable,

                           (iv) all Records related to such Receivable,

                           (v) all of the applicable Seller's right, title and
         interest in, to and under the Receivables Sale Agreement to which it is
         a party and the Transfer Agreement in respect of such Receivable and
         all of the applicable Seller's right, title and interest in, to and
         under the applicable Performance Undertaking,

                           (vi) all of the applicable Seller's right, title and
         interest in, to and under each Demand Note, and

                           (vii) all proceeds of any of the foregoing.

         "Required Notice Period" means the number of days required notice set
forth below applicable to the Aggregate Reduction indicated below:



               Aggregate Reduction                   Required Notice Period
               -------------------                   ----------------------
                                                  
               < or = $100,000,000                    two Business Days
               > $100,000,000 to $250,000,000         five Business Days
               > or = $250,000,000                    ten Business Days


         "Required Purchasers" means, at any time, collectively, the Financial
Institutions with Commitments in excess of 66-2/3% of the aggregate Commitments
and the Companies


                                   Exh. I-25


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

with Company Purchase Limits in excess of 66-2/3% of the aggregate amount of all
Company Purchase Limits of all Companies hereunder.

         "Restricted Junior Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
capital stock or other equity interest of any Seller now or hereafter
outstanding, except a dividend or distribution payable solely in shares of that
class of stock or equity interest or in any junior class of stock or other
junior equity interest of such Seller, (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 or other equity interest
of any Seller now or hereafter outstanding, (iii) any payment or prepayment of
principal of, premium, if any, or interest, fees or other charges on or with
respect to, and any redemption, purchase, retirement, defeasance, sinking fund
or similar payment and any claim for rescission with respect to the Subordinated
Loans (as defined in the Receivables Sale Agreements), (iv) any payment made to
redeem, purchase, repurchase or retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire shares of any class of
capital stock or other equity interest of any Seller now or hereafter
outstanding, and (v) any payment of management fees by any Seller (except for
reasonable management fees to the Originators or their respective Affiliates in
reimbursement of actual management services performed).

         "Seller" has the meaning set forth in the preamble to this Agreement.

         "Seller Parties" has the meaning set forth in the preamble to this
Agreement.

         "Servicer" means at any time any Person or Persons (which may be the
Agent) then authorized pursuant to Article VIII to service, administer and
collect Receivables.

         "Servicing Fee" has the meaning set forth in Section 8.6.

         "Settlement Date" means (A) the 5th Business Day of each month, (B) the
last day of the relevant CP (Tranche) Accrual Period in respect of each
Purchaser Interest held by the any Pool Company (other than any Purchaser
Interest funded substantially with Pooled Commercial Paper) and in respect of
each Purchaser Interest held by the CL Company and (C) the last day of the
relevant Tranche Period in respect of each Purchaser Interest of the Financial
Institutions.

         "Settlement Period" means (A) in respect of each Purchaser Interest of
each Pool Company that is funded substantially with Pooled Commercial Paper, the
immediately preceding CP (Pool) Accrual Period, (B) in respect of each other
Purchaser Interest of any Pool Company and each Purchaser Interest of the CL
Company, the entire CP (Tranche)


                                   Exh. I-26


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

Accrual Period of such Purchaser Interest and (C) in respect of each Purchaser
Interest of the Financial Institutions, the entire Tranche Period of such
Purchaser Interest.

         "Southern Foods" means Southern Foods Group, L.P., a Delaware limited
partnership.

         "Specialty Receivables Sale Agreement" means the Specialty Receivables
Sale Agreement, dated as of November 20, 2003, by and among Dean Specialty and
Specialty Group, as the same may be amended, restated, supplemented or otherwise
modified from time to time.

         "Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, association, limited liability company, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.

         "Suiza Originator" means each of MRC, Southern Foods, Country Fresh,
GTL, Land-O-Sun and Tuscan Dairies.

         "Suiza Receivables Sale Agreement" means that certain Amended and
Restated Receivables Sale Agreement, dated as of December 21, 2001, among the
Suiza Originators and Dairy Group, as amended by Amendment No. 1 thereto, dated
as of May 15, 2002 and effective for all purposes as of March 31, 2002, and by
Amendment No. 2 thereto, dated as of November 20, 2003, as the same may be
further amended, restated, supplemented or otherwise modified from time to time.

         "Terminating Commitment Amount" means, with respect to any Terminating
Financial Institution, an amount equal to the Commitment (without giving effect
to clause (iii) of the proviso to the penultimate sentence of Section 4.6(a)) of
such Terminating Financial Institution, minus, an amount equal to 2% of such
Commitment.

         "Terminating Commitment Availability" means, with respect to any
Terminating Financial Institution, the positive difference (if any) between (a)
an amount equal to the Commitment (without giving effect to clause (iii) of the
proviso to the penultimate sentence of Section 4.6(a)) of such Terminating
Financial Institution, minus, an amount equal to 2% of such Commitment minus (b)
the Capital of the Purchaser Interests funded by such Terminating Financial
Institution.


                                   Exh. I-27


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

         "Termination Date" means, with respect to a Terminating Financial
Institution and, if applicable, each Company in such Terminating Financial
Institution's Purchaser Group, the date on which such Terminating Financial
Institution became a Non-Renewing Financial Institution or, in the case of
Section 9.2, the date such Financial Institution terminates its Commitment in
accordance therewith.

         "Termination Percentage" has the meaning set forth in Section 2.2.

         "Terminating CP Tranche" has the meaning set forth in Section 3.4(b).

         "Terminating Financial Institution" has the meaning set forth in
Section 4.6(a).

         "Terminating Tranche" has the meaning set forth in Section 4.3(b).

         "Top Twenty-Five Obligors" means, of all Obligors of Receivables, the
twenty-five Obligors having the highest aggregate outstanding balances of all
Receivables as of the immediately preceding November 20, provided that until the
first occurrence of such date after the date hereof, the Top Twenty-Five
Obligors shall be those Obligors listed on Schedule F.

         "Transfer Agreement" has the meaning set forth in the Suiza Receivables
Sale Agreement.

         "Tranche Period" means, with respect to any Purchaser Interest held by
a Financial Institution:

                  (a) if Yield for such Purchaser Interest is calculated on the
         basis of the LIBO Rate, a period of one, two, three or six months, or
         such other period as may be mutually agreeable to the applicable
         Financial Institution and the Administrative Seller, commencing on a
         Business Day selected by the Administrative Seller or the applicable
         Financial Institution pursuant to this Agreement. Such Tranche Period
         shall end on the day in the applicable succeeding calendar month that
         corresponds numerically to the beginning day of such Tranche Period,
         provided, however, that if there is no such numerically corresponding
         day in such succeeding month, such Tranche Period shall end on the last
         Business Day of such succeeding month; or

                  (b) if Yield for such Purchaser Interest is calculated on the
         basis of the Prime Rate, a period commencing on a Business Day selected
         by the Administrative Seller and agreed to by the applicable Financial
         Institution, provided no such period shall exceed one month.


                                   Exh. I-28


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

If any Tranche Period would end on a day that is not a Business Day, such
Tranche Period shall end on the next succeeding Business Day, provided, however,
that in the case of Tranche Periods corresponding to the LIBO Rate, if such next
succeeding Business Day falls in a new month, such Tranche Period shall end on
the immediately preceding Business Day. In the case of any Tranche Period for
any Purchaser Interest that commences before the Amortization Date and would
otherwise end on a date occurring after the Amortization Date, such Tranche
Period shall end on the Amortization Date. The duration of each Tranche Period
that commences after the Amortization Date shall be of such duration as selected
by the applicable Financial Institution.

         "Transaction Documents" means, collectively, this Agreement, each
Purchase Notice, each Receivables Sale Agreement, the Transfer Agreement, each
Collection Account Agreement, each Performance Undertaking, the Intercreditor
Agreement, the Fee Letters, the Agreement of General Partner, the Demand Notes,
the Subordinated Notes (as defined in each Receivables Sale Agreement) and all
other instruments, documents and agreements executed and delivered in connection
herewith.

         "Tuscan Dairies" means Tuscan/Lehigh Dairies, Inc., a Delaware
corporation.

         "UCC" means the Uniform Commercial Code as from time to time in effect
in the specified jurisdiction.

         "Wachovia Company" means Blue Ridge Asset Funding Corporation, a
Delaware corporation, together with its successors and assigns.

         "Wachovia" means Wachovia Bank, National Association, a national
banking corporation.

         "Weekly Report" has the meaning set forth in Section 8.5.

         "White Wave" has the meaning set forth in Section 7.2(d).

         "Writing" means, with respect to any Receivable, any and all
instruments, invoices, purchase orders or other writings (which may be
electronic) (other than Contracts) pursuant to which such Receivable arises or
that evidences such Receivable.

         "Yield" means for each respective Tranche Period relating to Purchaser
Interests of the Financial Institutions, an amount equal to the product of the
applicable Discount Rate for each Purchaser Interest multiplied by the Capital
of such Purchaser Interest for each day elapsed during such Tranche Period,
annualized on a 360 day basis.


                                   Exh. I-29


                                                      THIRD AMENDED AND RESTATED
                                                  RECEIVABLES PURCHASE AGREEMENT

         "Yield and Servicer Reserve" means, on any date, an amount equal to
2.5% of the Net Receivables Balance as of the close of business of the Servicers
on such date.

         All accounting terms not specifically defined herein shall be construed
in accordance with GAAP. All terms used in Article 9 of the UCC in the State of
Illinois, and not specifically defined herein, are used herein as defined in
such Article 9.



                                   Exh. I-30

EX-10.12

                                                                   EXHIBIT 10.12

                 Amendment No. 1 to Third Amended and Restated
                         Receivables Purchase Agreement
                                      and
                   Reaffirmation of Performance Undertakings

                  This Amendment No. 1 to Third Amended and Restated Receivables
Purchase Agreement and Reaffirmation of Performance Undertakings (this
"AMENDMENT") is entered into as of December 31, 2003, among Dairy Group
Receivables, L.P. ("DAIRY I"), Dairy Group Receivables II, L.P. ("DAIRY II") and
Specialty Group Receivables, L.P. ("SPECIALTY" and together with Dairy I and
Dairy II, the "SELLERS" and each a "SELLER"), each entity signatory hereto as a
Financial Institution (each a "FINANCIAL INSTITUTION" and collectively, the
"FINANCIAL INSTITUTIONS"), each entity signatory hereto as a Company (each a
"COMPANY" and collectively, the "COMPANIES"), Bank One, NA (Main Office
Chicago), as Agent (the "AGENT"), and Dean Foods Company, as Provider
("PROVIDER"). Capitalized terms used herein and not otherwise defined shall have
the respective meanings set forth in the Third Amended and Restated Receivables
Purchase Agreement, dated as of November 20, 2003, among the Sellers, the
Servicers party thereto, the Financial Institutions, the Companies, Credit
Agricole Indosuez and the Agent (as amended or otherwise modified, as of the
date hereof, the "RECEIVABLES PURCHASE AGREEMENT").

                                    RECITALS:

                  The Sellers, the Financial Institutions, the Companies, the
Servicers and the Agent are parties to the Receivables Purchase Agreement.

                  In connection with the Receivables Purchase Agreement,
Provider entered into each of (i) that certain Second Amended and Restated
Performance Undertaking, dated as of November 20, 2003, by Provider in favor of
Dairy I, (ii) that certain Amended and Restated Performance Undertaking, dated
as of November 20, 2003, by Provider in favor of Dairy II, and (iii) that
certain Performance Undertaking, dated as of November 20, 2003, by Provider in
favor of Specialty (collectively, the "PERFORMANCE UNDERTAKINGS").

                  The Sellers, the Companies, the Financial Institutions and the
Agent desire to amend the Receivables Purchase Agreement, and Provider desires
to reaffirm its obligations under the Performance Undertakings, all as more
fully described herein.

                  NOW, THEREFORE, in consideration of the premises, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:

                  Section 1. Amendment. Immediately upon the satisfaction of
each of the conditions precedent set forth in Section 3 of this Amendment, the
Receivables Purchase Agreement is hereby amended as follows:



                                   AMENDMENT NO. 1 TO THIRD AMENDED AND RESTATED
                                RECEIVABLES PURCHASE AGREEMENT AND REAFFIRMATION
                                                     OF PERFORMANCE UNDERTAKINGS



                  (a) Exhibit I to the Receivables Purchase Agreement is hereby
amended by amending and restating, in its entirety, the definition of "Dean
Credit Agreement" appearing in such exhibit to read as follows:

                  "Dean Credit Agreement" means that certain Credit Agreement,
         dated as of July 31, 2001, by and among Provider, certain Subsidiaries
         of Provider, the financial institutions party thereto as lenders, Bank
         One, NA, as syndication agent, Fleet National Bank, Harris Trust and
         Savings Bank and Suntrust Bank, as co- documentation agents, and
         Wachovia Bank, National Association (formerly known as First Union
         National Bank), as administrative agent, as amended by the First
         Amendment to Credit Agreement, dated as of December 19, 2001, as
         further amended by the Second Amendment to Credit Agreement, dated as
         of April 30, 2002, as further amended by the Third Amendment to Credit
         Agreement, dated as of December 13, 2002, as further amended by the
         Fourth Amendment to Credit Agreement, dated as of August 29, 2003, and
         as further amended by the Fifth Amendment to Credit Agreement, dated as
         of December 31, 2003, but without giving effect to any further
         amendment or other modification thereof.

                  Section 2. Reaffirmation of Performance Guaranty. Provider (a)
acknowledges the amendment to the Receivables Purchase Agreement effected hereby
and

                       (b) reaffirms that its obligations under each of the
Performance Undertakings and each other Transaction Document to which it is a
party continue in full force and effect with respect to the Receivables Purchase
Agreement.

                  Section 3. Conditions to Effectiveness of Amendment. This
Amendment shall become effective as of the date hereof upon the satisfaction of
the following conditions precedent:

                       (a) Amendment. This Amendment shall have been duly
executed and delivered by each of the parties hereto.

                       (b) Amendment to Credit Agreement. The Agent shall have
received executed counterparts of that certain Fifth Amendment to Credit
Agreement among Provider, certain subsidiaries of Provider party thereto, the
lenders party thereto, Wachovia Bank, National Association, as administrative
agent for the lenders, and Bank One, NA, as syndication agent for the lenders,
duly executed by each of the parties thereto.



                                       2


                                   AMENDMENT NO. 1 TO THIRD AMENDED AND RESTATED
                                RECEIVABLES PURCHASE AGREEMENT AND REAFFIRMATION
                                                     OF PERFORMANCE UNDERTAKINGS


                       (c) Representations and Warranties. As of the date
hereof, both before and after giving effect to this Amendment, all of the
representations and warranties contained in the Receivables Purchase Agreement
and in each other Transaction Document shall be true and correct as though made
on and as of the date hereof (and by its execution hereof, each Seller shall be
deemed to have represented and warranted such).

                       (d) No Amortization Event or Potential Amortization
Event. As of the date hereof, both before and after giving effect to this
Amendment, no Amortization Event or Potential Amortization Event shall have
occurred and be continuing (and by its execution hereof, each Seller shall be
deemed to have represented and warranted such).

               Section 4. Miscellaneous.

                       (a) Effect; Ratification. The amendment set forth herein
is effective solely for the purposes set forth herein and shall be limited
precisely as written, and shall not be deemed to (i) be a consent to any
amendment, waiver or modification of any other term or condition of the
Receivables Purchase Agreement or of any other instrument or agreement referred
to therein; or (ii) prejudice any right or remedy which the Companies, the
Financial Institutions or the Agent may now have or may have in the future under
or in connection with the Receivables Purchase Agreement or any other instrument
or agreement referred to therein. Each reference in the Receivables Purchase
Agreement to "this Agreement," "herein," "hereof" and words of like import and
each reference in the other Transaction Documents to the "Receivables Purchase
Agreement" or to the "Purchase Agreement" or to the Receivables Purchase
Agreement shall mean the Receivables Purchase Agreement as amended hereby. This
Amendment shall be construed in connection with and as part of the Receivables
Purchase Agreement and all terms, conditions, representations, warranties,
covenants and agreements set forth in the Receivables Purchase Agreement and
each other instrument or agreement referred to therein, except as herein
amended, are hereby ratified and confirmed and shall remain in full force and
effect.

                       (b) Transaction Documents. This Amendment is a
Transaction Document executed pursuant to the Receivables Purchase Agreement and
shall be construed, administered and applied in accordance with the terms and
provisions thereof.

                       (c) Costs, Fees and Expenses. Each Seller agrees to
reimburse the Agent and the Purchasers upon demand for all costs, fees and
expenses (including the


                                       3


                                   AMENDMENT NO. 1 TO THIRD AMENDED AND RESTATED
                                RECEIVABLES PURCHASE AGREEMENT AND REAFFIRMATION
                                                     OF PERFORMANCE UNDERTAKINGS

reasonable fees and expenses of counsels to the Agent and the Purchasers)
incurred in connection with the preparation, execution and delivery of this
Amendment.

                       (d) Counterparts. This Amendment may be executed in any
number of counterparts, each such counterpart constituting an original and all
of which when taken together shall constitute one and the same instrument.

                       (e) Severability. Any provision contained in this
Amendment which is held to be inoperative, unenforceable or invalid in any
jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable or
invalid without affecting the remaining provisions of this Amendment in that
jurisdiction or the operation, enforceability or validity of such provision in
any other jurisdiction.

                       (f) GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
ILLINOIS.

                       (g) Funding Agreement Consent. By its execution hereof,
Bank One, NA (Main Office Chicago), in its capacity as a party to any applicable
Funding Agreement with or for the benefit of Falcon Asset Securitization
Corporation ("FALCON"), hereby consents to Falcon's execution of this Amendment
and the transactions contemplated hereby.


                            (Signature Pages Follow)


                                       4


                                   AMENDMENT NO. 1 TO THIRD AMENDED AND RESTATED
                                RECEIVABLES PURCHASE AGREEMENT AND REAFFIRMATION
                                                     OF PERFORMANCE UNDERTAKINGS





               IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the date first written above.

                                   DAIRY GROUP RECEIVABLES, L.P.,
                                   as a Seller

                                   By:    Dairy Group Receivables GP, LLC,
                                   Its:   General Partner

                                          By:  /s/ CORY M. OLSON
                                              ---------------------------------
                                          Name:  Cory M. Olson
                                          Title: Authorized Signatory


                                   DAIRY GROUP RECEIVABLES II, L.P.,
                                   as a Seller

                                   By:    Dairy Group Receivables GP II, LLC,
                                   Its:   General Partner

                                          By:  /s/ CORY M. OLSON
                                              ---------------------------------
                                          Name:  Cory M. Olson
                                          Title: Authorized Signatory


                                   SPECIALTY GROUP RECEIVABLES, L.P.,
                                   as a Seller

                                   By:    Specialty Group Receivables, LLC,
                                   Its:   General Partner

                                          By:  /s/ CORY M. OLSON
                                              ---------------------------------
                                          Name:  Cory M. Olson
                                          Title: Authorized Signatory






                                   AMENDMENT NO. 1 TO THIRD AMENDED AND RESTATED
                                RECEIVABLES PURCHASE AGREEMENT AND REAFFIRMATION
                                                     OF PERFORMANCE UNDERTAKINGS



                                   FALCON ASSET SECURITIZATION
                                   CORPORATION, as a Company

                                   By: /s/ SHERRI GERNER
                                      -----------------------------------------
                                   Name:   Sherri Gerner
                                   Title:  Authorized Signer



                                   BANK ONE, NA (MAIN OFFICE CHICAGO),
                                   as a Financial Institution and as Agent


                                   By: /s/ SHERRI GERNER
                                      -----------------------------------------
                                   Name:   Sherri Gerner
                                   Title:  Director, Capital Markets








                                   AMENDMENT NO. 1 TO THIRD AMENDED AND RESTATED
                                RECEIVABLES PURCHASE AGREEMENT AND REAFFIRMATION
                                                     OF PERFORMANCE UNDERTAKINGS


                                   ATLANTIC ASSET SECURITIZATION CORP.,
                                   as a Company


                                   By:    Credit Lyonnais New York Branch
                                   Its:   Attorney-In-Fact


                                   By: /s/ ANTHONY M. BROWN JR.
                                      -----------------------------------------
                                   Name:   Anthony M. Brown Jr.
                                   Title:  Vice President



                                   CREDIT LYONNAIS NEW YORK BRANCH,
                                   as a Financial Institution


                                   By: /s/ ANTHONY M. BROWN JR.
                                      -----------------------------------------
                                   Name:   Anthony M. Brown Jr.
                                   Title:  Vice President





                                   AMENDMENT NO. 1 TO THIRD AMENDED AND RESTATED
                                RECEIVABLES PURCHASE AGREEMENT AND REAFFIRMATION
                                                     OF PERFORMANCE UNDERTAKINGS





                                   NIEUW AMSTERDAM RECEIVABLES
                                   CORPORATION,
                                   as a Company


                                   By:  /s/ BERNARD J. ANGELO
                                      -----------------------------------------
                                   Name:    Bernard J. Angelo
                                   Title:   Vice President



                                   COOPERATIEVE CENTRALE RAIFFEISEN -
                                   BOERENLEENBANK B.A. "Rabobank International",
                                   New York Branch,
                                   as a Financial Institution


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


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







                                   AMENDMENT NO. 1 TO THIRD AMENDED AND RESTATED
                                RECEIVABLES PURCHASE AGREEMENT AND REAFFIRMATION
                                                     OF PERFORMANCE UNDERTAKINGS





                                   NIEUW AMSTERDAM RECEIVABLES
                                   CORPORATION,
                                   as a Company


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



                                   COOPERATIEVE CENTRALE RAIFFEISEN -
                                   BOERENLEENBANK B.A. "Rabobank International",
                                   New York Branch,
                                   as a Financial Institution


                                   By:    /s/ JAMES HAN
                                      -----------------------------------------
                                   Name:  James Han
                                   Title: Vice President


                                   By:   /s/ BRETT DELFINO
                                      -----------------------------------------
                                   Name:  Brett Delfino
                                   Title: Executive Director



                                   AMENDMENT NO. 1 TO THIRD AMENDED AND RESTATED
                                RECEIVABLES PURCHASE AGREEMENT AND REAFFIRMATION
                                                     OF PERFORMANCE UNDERTAKINGS






                                   BLUE RIDGE ASSET FUNDING CORPORATION,
                                   as a Company


                                   By:    Wachovia Capital Markets, LLC
                                   Its:   Attorney-In-Fact


                                   By:  /s/ DOUGLAS R. WILSON SR.
                                      -----------------------------------------
                                      Name:  Douglas R. Wilson Sr.
                                      Title: Vice President



                                   WACHOVIA BANK, NATIONAL ASSOCIATION,
                                   as a Financial Institution


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






                                   AMENDMENT NO. 1 TO THIRD AMENDED AND RESTATED
                                RECEIVABLES PURCHASE AGREEMENT AND REAFFIRMATION
                                                     OF PERFORMANCE UNDERTAKINGS



                                   BLUE RIDGE ASSET FUNDING CORPORATION,
                                   as a Company


                                   By:    Wachovia Capital Markets, LLC
                                   Its:   Attorney-In-Fact


                                   By:
                                      -----------------------------------------
                                      Name:  Douglas R. Wilson Sr.
                                      Title: Vice President



                                   WACHOVIA BANK, NATIONAL ASSOCIATION,
                                   as a Financial Institution


                                   By:    /s/ RODNEY SANDERS
                                      -----------------------------------------
                                   Name:  Rodney Sanders
                                   Title: Director








                                   AMENDMENT NO. 1 TO THIRD AMENDED AND RESTATED
                                RECEIVABLES PURCHASE AGREEMENT AND REAFFIRMATION
                                                     OF PERFORMANCE UNDERTAKINGS




                                   DEAN FOODS COMPANY,
                                   as Provider


                                   By:  /s/ CORY M. OLSON
                                      -----------------------------------------
                                   Name:  Cory M. Olson
                                   Title: Authorized Signatory

EX-21

                                                                               .
                                                                               .
                                                                               .

                                                                      EXHIBIT 21



          LEGAL NAME                   JURISDICTION OF ORGANIZATION                       OWNER
                                                                          
31 Logistics, Inc.                                    DE                         Dean Southeast II, LLC

Abastecimientos Lacteos Gallegos S.L.               Spain                        Distribucion Lacteos Ganadeva, S.A.

Agrolactur S.L.                                     Spain                        Glicman - Producao e Comercializacao de Leite e
                                                                                 Productos Lacteos, Lda.

Alta-Dena Certified Dairy, Inc.                       DE                         Dean Southwest II, LLC

Azuis Holdings, B.V.                           The Netherlands                   Dean International Holding Company

Barber Ice Cream, LLC                                 DE                         Mayfield Dairy Farms, Inc.

Barber Milk, Inc.                                     DE                         Dean Southeast II, LLC

Berkeley Farms, Inc.                                  CA                         Dean Southwest II, LLC

Broughton Foods, LLC                                  DE                         Dean Southeast, LLC

Carnival Ice Cream, N.V.                     Netherlands Antilles                Dean Holding Company

Central Lechera Gallega, S.L.                       Spain                        Distribucion Lacteos Ganadeva, S.A.

Centronor Produccion y Distribucion                 Spain                        Azuis Holdings, B.V.
S.L.

Colorado ES LLC                                       DE                         Suiza Dairy Group, Inc.

Comerlasa S.L.                                      Spain                        Azuis Holdings, B.V.

Country Delite Farms, LLC                             DE                         Dean Southeast, LLC

Country Fresh, LLC                                    MI                         Dean Midwest II, LLC

Creamland Dairies, Inc.                               NM                         Dean Southwest II, LLC
                                                                                 Gandy's Dairies, Inc.

Curan, LLC                                            DE                         Regan, LLC

Dairy Fresh, LLC                                      DE                         Dean Southeast, LLC

Dairy Group Receivables GP II, LLC                    DE                         Dean Dairy Holdings, LLC

Dairy Group Receivables GP, LLC                       DE                         Suiza Dairy Group, Inc.

Dairy Group Receivables II, L.P.                      DE                         Dean Dairy Holdings, LLC
                                                                                 Dairy Group Receivables GP II, LLC





                                                                     Page 1 of 6





          LEGAL NAME                   JURISDICTION OF ORGANIZATION                       OWNER
                                                                          
Dairy Group Receivables, L.P.                         DE                         Suiza Dairy Group, Inc.
                                                                                 Dairy Group Receivables GP, LLC

Dean Dairy Holdings, LLC                              DE                         Dean Holding Company

Dean Dairy Products Company                           PA                         Dean Northeast II, LLC

Dean Foods Company of California, Inc.                DE                         Dean Southwest II, LLC

Dean Foods Company of Indiana, Inc.                   DE                         Dean Midwest, LLC

Dean Foods Foundation                                 IL                         Dean Holding Company

Dean Foods Germany GmbH & Co. K.G.                 Germany                       Dixie Holding, Inc.

Dean Foods North Central, Inc.                        DE                         Dean Midwest, LLC

Dean Holding Company                                  DE                         Dean Foods Company

Dean Illinois Dairies, LLC                            DE                         Dean Midwest, LLC

Dean Intellectual Property Services                   DE                         DIPS Limited Partner II
II, L.P.                                                                         DIPS GP II, Inc.

Dean Intellectual Property Services,                  DE                         DIPS Limited Partner
L.P.                                                                             DIPS GP, Inc.

Dean International Holding Company                    DE                         Dean Foods Company

Dean Management Corporation                           DE                         Dean Foods Company

Dean Midwest II, LLC                                  DE                         Suiza Dairy Group, Inc.

Dean Midwest, LLC                                     DE                         Dean Dairy Holdings, LLC

Dean Milk Company, Inc.                               KY                         Dean Southeast II, LLC


Dean National Brand Group, Inc.                       DE                         Dean Foods Company


Dean Netherlands B.V.                          The Netherlands                   Dean International Holding Company

Dean Northeast II, LLC                                DE                         Dean Dairy Holdings, LLC

Dean Northeast, LLC                                   DE                         Suiza Dairy Group, Inc.


Dean Pickle and Specialty Products                    WI                         Dean Specialty Foods Group, LLC
Company




                                                                     Page 2 of 6





          LEGAL NAME                   JURISDICTION OF ORGANIZATION                       OWNER
                                                                          
Dean Puerto Rico Holdings, LLC                        DE                         Dean Foods Company

Dean SoCal, LLC                                       DE                         Dean Southwest II, LLC

Dean Southeast II, LLC                                DE                         Dean Dairy Holdings, LLC

Dean Southeast, LLC                                   DE                         Suiza Dairy Group, Inc.

Dean Southwest II, LLC                                DE                         Dean Dairy Holdings, LLC

Dean Southwest, LLC                                   DE                         Suiza Dairy Group, Inc.

Dean Specialty Foods Group, LLC                       DE                         Dean Holding Company

Dean Specialty Intellectual Property                  DE                         DIPS Limited Partner II
Services, L.P.                                                                   DIPS GP II, Inc.

Dean Transportation, Inc.                             OH                         Dean Dairy Holdings, LLC

DIPS GP II, Inc.                                      DE                         Dean Holding Company

DIPS GP, Inc.                                         DE                         Suiza Dairy Group Holdings, Inc.

DIPS Limited Partner                                  DE                         Suiza Dairy Group Holdings, Inc.


DIPS Limited Partner II                               DE                         Dean Holding Company

Distribucion Lacteos Ganadera, S.A.                 Spain                        Leche Celta, S.L.

Dixie Holding, Inc.                                   NY                         Franklin Holdings, Inc.

Elgin Blenders, Incorporated                          IL                         Dean Specialty Foods Group, LLC

Fairmont Dairy, LLC                                   DE                         Dean Northeast II, LLC

Franklin Holdings, Inc.                               DE                         Dean Foods Company

Franklin Plastics, Inc.                               DE                         Franklin Holdings, Inc.
                                                                                 Alan Bernon
                                                                                 Peter Bernon

Gandy's Dairies, Inc.                                 TX                         Dean Southwest II, LLC

Glicman - Producao e Comercializacao               Portugal                      Azuis Holdings, B.V. de Leite e
                                                                                 Productos Lacteos, Lda.

Glicman Espana S.L.                                 Spain                        Glicman - Producao e Comercializacao de Leite e
                                                                                 Productos Lacteos, Lda.



                                                                     Page 3 of 6





          LEGAL NAME                   JURISDICTION OF ORGANIZATION                       OWNER
                                                                          
Hilstad - Producao e Comercializacao               Portugal                      Azuis Holdings, B.V.
de Leite e Productos Lacteos, Lda.

Horizon Organic Dairy, California                     DE                         Horizon Organic Holding Corporation
Farm, Inc.

Horizon Organic Dairy, Idaho Farm,                    CO                         Horizon Organic Holding Corporation
Inc.

Horizon Organic Dairy, Inc.                           CO                         Horizon Organic Holding Corporation

Horizon Organic Dairy, Maryland Farm,                 CO                         Horizon Organic Holding Corporation
Inc.

Horizon Organic Holding Corporation                   DE                         Dean Foods Company

Horizon Organic International, Inc.                   DE                         Horizon Organic Holding Corporation

Horizon Organic Dairy, Limited                     England                       Horizon Organic International, Inc.

Importadora y Distribuidora Dean                    Mexico                       Tenedora Dean Foods International, SA de CV
Foods, S.A. de C.V.                                                              Creamland Dairies, Inc.

International Dairy Holdings, Inc.                    DE                         Dean International Holding Company

Kingsmil - Producao e Comercializacao              Portugal                      Azuis Holdings, B.V.
de Leite e Productos Lacteos, Lda.

Kohler Mix Specialties of Minnesota,                  DE                         Morningstar Foods, LLC
LLC                                                                              Marathon Dairy Investment Corp.


Kohler Mix Specialties, LLC,                          DE                         Morningstar Foods, LLC
                                                                                 Marathon Dairy Investment Corp.

Lacteos de Santander, S.A.                          Spain                        Leche Celta, S.L.

Lacteos Marterra S.L.                               Spain                        Glicman - Producao e Comercializacao de Leite e
                                                                                 Productos Lacteos, Lda.

Land-O-Sun Dairies, LLC                               DE                         Dean Southeast, LLC

Leche Celta, S.L.                                   Spain                        Dean Netherlands B.V.

Liberty Dairy Company                                 MI                         Dean Midwest, LLC

Louis Trauth Dairy, LLC                               DE                         Dean Southeast, LLC

Marathon Dairy Investment Corp.                       MN                         Morningstar Foods Inc.

Mayfield Dairy Farms, Inc.                            DE                         Dean Southeast II, LLC


                                                                     Page 4 of 6





          LEGAL NAME                   JURISDICTION OF ORGANIZATION                       OWNER
                                                                          
McArthur Dairy, Inc.                                  FL                         Dean Southeast II, LLC

Meadow Brook Dairy Company                            PA                         Dean Northeast II, LLC

Meadow Farms Limited                               England                       Horizon Organic Dairy, Limited

Melody Farms, LLC                                     DE                         Dean Midwest II, LLC

Midwest Ice Cream Company                             DE                         Dean Midwest, LLC

Model Dairy, LLC                                      DE                         Dean Southwest, LLC

Morningstar Foods, LLC                                DE                         Suiza Dairy Group, Inc.

Morningstar Frederick, Inc.                           DE                         Morningstar Foods, LLC

Morningstar Receivables Corp.                         DE                         Dean Foods Company
                                                                                 Southern Foods Group, L.P.

Morningstar Services Inc.                             DE                         Morningstar Foods Inc.

New England Dairies, LLC                              DE                         Dean Northeast, LLC

Neptune Colorado LLC                                  DE                         Colorado ES LLC

Old G & Co., Inc.                                Puerto Rico                     Dean Puerto Rico Holdings, LLC

Organic Dairies, Ltd.                              England                       Meadow Farms Limited

Pet O'Fallon, LLC                                     DE                         Dean Midwest II, LLC

Purity Dairies, Incorporated                          DE                         Dean Southwest II, LLC

Rachel's Dairy, Ltd.                               England                       Horizon Organic Dairy, Limited

Red Oak Milk, LLC                                     DE                         Dean Southeast, LLC

Reeves Street, LLC                                    DE                         Dean Management Corporation

Regan, LLC                                            DE                         Suiza Dairy Group, Inc.

Reiter Dairy of Akron, Inc.                           OH                         Dean Northeast II, LLC

Reiter Dairy of Springfield, LLC                      DE                         Dean Midwest, LLC

Renoldy Producao e Comercializacao de              Portugal                      Dean Netherlands B.V.
Leite e Productos Lacteos, Lda.

Robinson Dairy, LLC                                   DE                         Dean Southwest, LLC

Schenkel's All-Star Dairy, LLC                        DE                         Dean Midwest II, LLC


                                                                     Page 5 of 6





          LEGAL NAME                   JURISDICTION OF ORGANIZATION                       OWNER
                                                                          
Schenkel's All-Star Delivery, LLC                     DE                         Dean Midwest II, LLC

SFG Management                                        DE                         Dean Southwest, LLC
Limited Liability Company                                                        Dean Management Corporation

Shenandoah's Pride, LLC                               DE                         Dean Northeast II, LLC

Southern Foods Group, L.P.                            DE                         Southern Foods Holdings
                                                                                 SFG Management Limited Liability Company

Southern Foods Holdings                               DE                         Dean Southwest, LLC

Specialty Group Receivables GP, LLC                   DE                         Dean Specialty Foods Group, LLC

Specialty Group Receivables, L.P.                     DE                         Dean Specialty Foods Group, LLC
                                                                                 Specialty Group Receivables GP, LLC

Suiza Dairy Group, Inc.                               DE                         Dean Management Corporation
Suiza Dairy Group Holdings, Inc.                      DE                         Dean Foods Company

Sulphur Springs Cultured Specialties,                 DE                         Dean Southwest, LLC
LLC

Swiss II, LLC                                         DE                         Dean Southwest II, LLC

T.G. Lee Foods, Inc.                                  FL                         Dean Southwest II, LLC

Tenedora Dean Foods Internacional,                  Mexico                       Dean Southwest II, LLC
S.A. de C.V.                                                                     Dean Holding Company

Terrace Dairy, LLC                                    DE                         New England Dairies, LLC

Tuscan/Lehigh Dairies, Inc.                           DE                         Dean Northeast, LLC

Verifine Dairy Products Corporation                   WI                         Dean Midwest, LLC
of Sheboygan, Inc.

Wengert's Dairy, Inc.                                 DE                         Dean Northeast II, LLC

White Wave, Inc.                                      CO                         Dean Foods Company




                                                                     Page 6 of 6

EX-23.1

exv23w1

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Gregg L. Engles, certify that:

     1. I have reviewed this annual report on Form 10-K of Dean Foods Company;

     2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

     3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

     4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

     (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

     (b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the period covered by this report, based on such evaluation; and

     (c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

     5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal controls over financial reporting , to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

     (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

     (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	/s/ GREGG L. ENGLES
	Gregg L. Engles Chairman of the Board and Chief Executive Officer
Date: March 12, 2004

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Barry A. Fromberg, certify that:

     1. I have reviewed this annual report on Form 10-K of Dean Foods Company;

     2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

     3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

     4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

     (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

     (b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the period covered by this report, based on such evaluation;

     (c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

     5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal controls over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

     (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

     (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	/s/ BARRY A. FROMBERG
	Barry A. Fromberg Chief Financial Officer
Date: March 12, 2004

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Form 10-K of Dean Foods Company (the “Company”) for the year ended December 31, 2004, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Gregg Engles, Chairman of the Board and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended, and the information contained in the Report fairly presents in all material respects, the financial condition and results of operations of the Company.

	/s/ GREGG L. ENGLES
	Gregg L. Engles
	Chairman of the Board and Chief Executive Officer
March 12, 2004

Note: This certification accompanies the Report pursuant to Section 902 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed, except to the extent required by the Sarbanes-Oxley Act of 2002, by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

EX-32.2 15 d13098exv32w2.htm CERTIFICATION OF CFO PURSUANT TO SECTION 906

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Form 10-K of Dean Foods Company (the “Company”) for the year ended December 31, 2004, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Barry A. Fromberg, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended, and the information contained in the Report fairly presents in all material respects, the financial condition and results of operations of the Company.

	/s/ BARRY A. FROMBERG
	Barry A. Fromberg
	Executive Vice President and Chief Financial Officer
March 12, 2004

Note: This certification accompanies the Report pursuant to Section 902 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed, except to the extent required by the Sarbanes-Oxley Act of 2002, by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

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EX-32.2

exv32w2