UNITED FOODS INC, 10-K, 1997-05-09

UNITED FOODS INC
10-K, 1997-05-09
CANNED, FROZEN & PRESERVD FRUIT, VEG & FOOD SPECIALTIES

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<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

-----------

FORM 10-K

-----------

(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED FEBRUARY 28, 1997
OR
[ ] 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 1-8574

UNITED FOODS, INC.

(Exact name of registrant as specified in its charter)

DELAWARE 74-1264568
(State of Incorporation) (I.R.S. Employer Identification No.)

TEN PICTSWEET DRIVE, BELLS, TN 38006
(Address of Principal Executive Offices) (Zip Code)

Registrant's telephone number, including area code: (901) 422-7600

SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED

- --------------------------------------- -------------------------------------

CLASS A COMMON STOCK AMERICAN STOCK EXCHANGE
AND CLASS B COMMON STOCK AND PACIFIC 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 X No
----- -----

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (Section 229.405 of this Chapter) 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. [ ]

On May 6, 1997, 5,116,075 shares of Class A Common Stock and 5,693,854
shares of Class B Common Stock of United Foods, Inc. were outstanding and the
aggregate market value of such Common Stock held by nonaffiliates (based on its
closing transaction price on such date) was approximately $10,200,000, assuming
for purposes of this report that all executive officers and directors of the
registrant are affiliates.

<PAGE> 2

PART I

ITEM 1. BUSINESS

GENERAL

United Foods, Inc. (the "Company") was incorporated under the laws of
Texas on March 9, 1956 and became a Delaware Corporation on September 30, 1983.
The Company is principally engaged in the production, marketing and
distribution of food products.

PRODUCTS

The Company's primary food products include asparagus, black-eyed peas,
broccoli, Brussels sprouts, carrots, cauliflower, corn, green beans, green
peas, green peppers, lima beans, mushrooms, onions, okra, southern greens,
spinach, squash, strawberries, turnips, and various vegetable mixes and blends.

MARKETING

The Company's food products are primarily sold directly to large national
grocery chains and through food brokers to numerous independent food stores
located throughout the United States for resale in the retail market. These
products are sold both under the Company's brand names and under buyers'
labels, and to military commissaries in the United States and overseas under
the Company's brand names. Such sales represented approximately 73% of the
Company's revenue for the year ended February 28, 1997. Since such a large part
of the Company's sales are made in the retail market and since a significant
proportion of the retail grocery trade in the United States is concentrated in
the hands of national grocery chains, a large part of the Company's revenue is
derived from sales to these chains. The Company's five largest customers are
Albertson's, Inc., the Defense Personnel Support Center, Food Lion, Inc., The
Kroger Company and Kenneth O. Lester Co., Inc. Sales to these five customers
represented approximately 34% of the Company's revenue for the year ended
February 28, 1997. Due to competition, the Company's mix of customers changes
over time. Therefore, it is possible that the Company will lose one or more of
its largest customers over time, and it is possible its operations will suffer
materially as a result.

The Company's principal brand name is "Pictsweet," which is used
throughout the United States and in military commissaries overseas.

The Company also sells certain of its food products, directly and through
food brokers, to institutions located throughout the United States, such as
restaurants, schools, hospitals, hotels, and federal and state government
agencies. Such sales represented approximately 18% of the Company's revenue for
the year ended February 28, 1997.

In addition, the Company sells certain of its food products directly to
other food companies. Such sales represented approximately 7% of the Company's
revenue for the year ended February 28, 1997.

The Company's food brokers are compensated on a commission basis.

The Company does not consider backlog at year end to be material to an
understanding of its business.

Sales are somewhat seasonal. Historically, sales have been lower during
the Company's second quarter (summer months) when fresh vegetables are more
available to the consumer.

The Company operates a truck fleet which transports a substantial portion
of the Company's products. Transportation services are also provided to
customers other than the Company and accounted for approximately 1% of the
Company's revenues for the year ended February 28, 1997.

Rental and miscellaneous income accounted for approximately 1% of the
Company's revenue for the year ended February 28, 1997.

<PAGE> 3

TRADEMARKS

Approximately 68% of the Company's revenues are derived from sales under
the "Pictsweet" brand and other registered trademarks. These renewable
trademarks expire over the next 20 years.

OPERATIONS

Mushrooms and some vegetables processed in the Company's Tennessee plant
are grown on Company operated farms. Procurement of the remaining raw
vegetables is generally either by contract with growers or from vegetable
assemblers. Crops have seasonal features and availability is subject to
unpredictable changes in growing conditions that are inherent in the
agriculture industry. The Company bears part of the growing risks and all of
the processing and marketing risks associated with its agricultural products.
Weather abnormalities and other adverse growing conditions sometimes result in
substantial reductions in the annual volumes processed in the Company's plants.
When this occurs, the Company may have to procure raw and processed vegetables
from alternative sources at higher than expected costs and the reduced volume
of vegetables processed in the Company's plants results in increased unit
costs. When growing conditions result in yields that exceed expectations, the
Company will generally pack only volumes required by anticipated demand through
the next pack season. Additionally, selling prices are impacted by
industry-wide production and inventory levels. Bumper crops and resulting
increased inventory levels will tend to decrease average selling prices, while
crop shortages will generally result in increased selling prices.

The Company farms approximately 7,200 acres of leased land in West
Tennessee. These farm operations supply part of the vegetables required for the
Company's Tennessee plant.

The Company has entered into two multi-year reciprocal supply agreements
with other food processing companies. Through these agreements the Company
procures frozen vegetables to meet production and inventory requirements. The
Company also sells frozen vegetables processed at the Company's Tennessee and
California facilities to the other food processors.

The time and duration of processing seasons vary considerably according to
the specific product. For example, the annual requirement for white acre peas
is processed in a short period of approximately two weeks, while broccoli is
processed during approximately ten months of each year. Thus, substantial
inventories are required for long periods of time to support the consumer
demand for frozen vegetables throughout the year. Mushrooms are grown twelve
months of each year.

Working capital requirements follow inventory levels and the Company looks
to its lenders to meet working capital requirements. Interest rates on the
Company's working capital loans fluctuate with the prime rate and the Term
Federal Funds rate.

COMPETITION

The Company is faced with substantial competition in all aspects of its
business. The food industry is highly competitive and competition has increased
in recent years as a result of the efforts by the "Birds Eye" and "Green Giant"
brands to increase market share. The principal methods of competition in the
food industry involve price and service. The Company has developed the
"Pictsweet" brand into a national brand for fresh and frozen vegetables which
enables it to differentiate its products on a basis other than price. In
addition, the Company has a broad-based national distribution system for frozen
vegetables and a western regional distribution system for fresh mushrooms which
give it a competitive advantage in the area of customer service. Over the past
several years, imports of frozen vegetables have increased substantially and
significant new processing capacity has been constructed in the United States.
As a result, the total production capacity of frozen vegetables is now
substantially in excess of current requirements.

EMPLOYEES

At February 28, 1997, the Company had approximately 1,830 full-time
employees, of whom approximately 1,700 were engaged in farming, manufacturing
and service activities and 130 in sales and administration. In addition,
because of the seasonal nature of its production activities, the Company has
numerous additional temporary employees. Peak employment during the year was
approximately 2,350 employees of whom approximately 1,850 were full time
employees and approximately 500 were temporary employees.

<PAGE> 4

One union has intermittently claimed bargaining rights at the Company's
Ventura, California mushroom farm. Currently, there are no such negotiations
underway.

The Company's on-going efforts to achieve the lowest possible costs
include analyzing its operations and selling, administrative and general
expenses to identify areas in which costs can be reduced. These efforts
resulted in reductions in the number of full time employees during fiscal 1997.

ITEM 2. PROPERTIES

OPERATING PLANTS

The Company owns and is currently operating six facilities in California,
Oregon, Tennessee and Utah. Although production varies with the seasons at the
frozen vegetable plants, all the facilities operate during a substantial part
of the year. Set forth in the table below is a list of the six facilities with
various information concerning each:

<TABLE>
<CAPTION>
APPROXIMATE SQUARE
LOCATION SPACE DEVOTED TO FOOTAGE
- -------- ---------------- ------------------
<S> <C> <C>
Bells, Tennessee Processing Plant 212,000

Cold Storage Warehouse 239,000

Ogden, Utah Processing Plant 68,000

Cold Storage Warehouse 150,000

Santa Maria, California Processing Plant 150,000

Cold Storage Warehouse 42,000

Fillmore, Utah Mushroom Farm 284,000

Salem, Oregon Mushroom Farm 348,000

Ventura, California Mushroom Farm 279,000
</TABLE>

Substantially all land, buildings and equipment are pledged as collateral
for outstanding debt (See Note 3 - Notes to the Financial Statements).

The Company farms approximately 7,200 acres of leased farmland in West
Tennessee to supply part of the vegetables required for the Bells, Tennessee
plant. The Company owns or leases the machinery and equipment located at all of
its facilities. Although utilization of production capacity varies from
facility to facility, overall utilization is approximately 75% for vegetable
processing facilities and near 100% for mushroom farm facilities.

<PAGE> 5

ITEM 3. LEGAL PROCEEDINGS

On December 13, 1993, the Company entered into an agreement with the
United States Environmental Protection Agency ("USEPA") in settlement of
alleged violations of the Clean Water Act in clearing land in Rossville,
Tennessee for use as a vegetable farm. The agreement provides that the Company
will restore certain wetlands, plant hardwood trees and construct a levee on
sections of the property, monitor the site for five years and make periodic
reports to the USEPA and Army Corps of Engineers. The Company has maintained
compliance with the agreement and the agreement is not expected to adversely
affect the Company's financial position or results of its operations.

With the exception of the USEPA matter, there are no legal proceedings
required to be reported pursuant to Item 103 of Regulation S-K. (See Note 9.C -
Notes to Financial Statements).

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The Company did not submit any matters to a vote of security holders
during the quarter ended February 28, 1997.

<PAGE> 6

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS

PRICE RANGE OF COMMON STOCK AND DIVIDENDS

The Class A and B Common Stocks of the Company are both traded on the
American and Pacific Stock Exchanges. Ticker Symbols: UFD A and UFD B.

<TABLE>
<CAPTION>
CLASS A CLASS B
--------------------------- ---------------------------
SALE PRICE SALE PRICE
-------------- ---------------
QUARTER ENDED HIGH LOW DIVIDEND(1) HIGH LOW DIVIDEND(1)
- ------------- ---- ----- ----------- ----- ------- -----------
<S> <C> <C> <C> <C> <C> <C>
May 31, 1995 2 5/8 2 - 2 3/4 2 1/8 -

August 31, 1995 2 9/16 1 5/8 - 2 9/16 1 3/4 -

November 30, 1995 2 5/16 1 3/4 - 2 1/2 1 3/4 -

February 29, 1996 2 1/8 1 5/8 - 2 1/8 1 5/8 -

May 31, 1996 2 1/8 1 3/4 - 2 1/8 1 3/4 -

August 31, 1996 2 1/4 1 5/8 - 2 1/4 1 3/4 -

November 30, 1996 11 5/16 1 5/8 - 2 1 5/8 -

February 28, 1997 1 7/8 1 1/2 - 1 7/8 1 1/2 -

</TABLE>
- ------------
(1) Restrictive covenants in various loan agreements limit retained earnings
available for payment of dividends to $6,881,000 at February 28, 1997 (See
Note 3- Notes to Financial Statements).

APPROXIMATE NUMBER OF COMMON EQUITY SECURITY HOLDERS

<TABLE>
<CAPTION>
APPROXIMATE NUMBER OF
TITLE OF CLASS RECORD HOLDERS AS OF FEBRUARY 28, 1997
- -------------------------- --------------------------------------
<S> <C>
Common Stock, $1 par value
Class A 2,300
Class B 1,800
</TABLE>

<PAGE> 7

ITEM 6. SELECTED FINANCIAL DATA

The following selected financial data of the Company should be read in
conjunction with the financial statements and notes thereto and Management's
Discussion and Analysis of Financial Condition and Results of Operations,
included elsewhere herein. The financial information has been derived from
audited financial statements of the Company.

<TABLE>
<CAPTION>
YEAR ENDED FEBRUARY 28 OR 29,
-----------------------------------------------------------------------------------
1997 1996 1995 1994 1993
--------------- -------------- --------------- --------------- ---------------
(THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA)
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Sales and service revenues.............. 195,820 191,714 190,256 175,796 156,318
Operating income........................ 4,672 2,914 6,984 3,286 2,914
Income (loss) before cumulative effect
of change in accounting............... 922 (660) 2,402 90 (221)
Cumulative effect on prior years of
change in accounting for income
taxes(1).............................. - - - - (1,895)
Net income (loss)....................... 922 (660) 2,402 90 (2,116)
Earnings (loss) per share of common
stock and common stock equivalents:(2)
Income (loss) before cumulative
effect of change in accounting........ .08 (.06) .19 .01 (.02)
Cumulative effect of accounting change - - - - (.14)
Net income (loss)..................... .08 (0.06) .19 .01 (.16)
Long-term debt.......................... 36,244 46,650 30,076 27,148 37,882
Total assets............................ 119,108 128,188 114,157 109,516 119,960
Cash dividends per common share:
Class A................................ - - - - -
Class B................................ - - - - -
</TABLE>

- ---------------------------------
(1) Effective March 1, 1992, the Company adopted FAS 109, "Accounting for
Income Taxes."
(2) Earnings per share of common stock and common stock equivalents have been
computed using the average number of shares required to be recognized
during the respective periods. Earnings per share are the same for primary
and fully diluted computations.

<PAGE> 8

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

FINANCIAL CONDITION

LIQUIDITY AND CAPITAL RESOURCES

The Company's primary sources of cash are operations and external
committed credit facilities. At February 28, 1997 the Company's revolving
credit facilities totaled $21,000,000, all of which was currently available
(See Note 3- Notes to Financial Statements). One of the Company's revolving
credit facilities was reduced from $23,000,000 to $18,000,000 upon the closing
of two term loans during the fourth quarter of fiscal 1997. In January 1997,
the Company closed on a $6,000,000, ten-year term loan, which provides for
principal and interest payments based on a fifteen-year amortization, with
interest at 8.98%. This loan is secured by the Company's Ogden, Utah
facility. In February 1997, the Company entered into an agreement to increase
the term loan secured by its Bells, Tennessee facility to its original
$15,000,000 amount. This loan has a 9.10% interest rate and a ten-year term
with monthly principal and interest payments of $194,000 during the first year
and $148,000 thereafter. The proceeds from these loans were used to reduce
outstanding revolving credit borrowings.

The Company's sources of liquidity are expected to adequately meet
requirements for the upcoming year and the foreseeable future; however, new
financing alternatives are constantly evaluated to determine their practicality
and availability in order to provide the Company with sufficient and timely
funding at the least possible cost. The Company's $3,000,000 and $18,000,000
revolving credit facilities currently mature in fiscal 2000. One-year
extensions of maturity dates of the revolving credit facilities will be
considered by the lenders annually. If annual extensions are not granted, the
Company will then investigate revolving credit facilities with other lenders
and believes it can replace any current revolving credit facility within its
remaining 24-month term.

Operating activities provided net cash of $12,839,000 in fiscal 1997, as
compared with $5,890,000 provided in fiscal 1996. The increase from 1996 to
1997 results primarily from increased earnings and decreased inventories, the
effects of which were partially offset by an increase in accounts receivable.
The decrease in inventories resulted from weather related pack delays for
certain vegetables and the timing of certain purchases. The increase in
accounts receivable resulted primarily from the timing of sales and cash
receipts near year end. Operations provided net cash of $5,890,000 in fiscal
1996, as compared with $6,747,000 in fiscal 1995. Increased inventories in
1996 were offset in part by increased accounts payable and accruals as the
result of timing factors. In fiscal 1995, the $4,957,000 increase in
inventories generally represented a build-up to normal levels following weather
related shortages of raw product experienced in fiscal 1994.

Investing activities provided cash of $205,000 in fiscal 1997 and used
cash of $12,006,000 and $10,588,000 in 1996 and 1995, respectively. The change
from 1997 to 1996 results primarily from a decrease in capital expenditures
from $12,064,000 in 1996 to $693,000 in 1997. Proceeds from the sale of
property and equipment totaled $898,000 in fiscal 1997, as compared with
$58,000 in 1996 and $443,000 in 1995.

Financing activities used cash of $10,301,000 in fiscal 1997 and provided
cash of $6,693,000 and $297,000 in fiscal 1996 and 1995, respectively. In
fiscal 1997, cash provided by operations and proceeds from the previously
mentioned term loans were used primarily to reduce borrowings under the
Company's revolving credit agreements. Borrowings in fiscal years 1996 and
1995 were used primarily to fund capital expenditures and treasury stock
purchases. Purchases of treasury stock totaled $2,284,000 and $2,588,000 in
fiscal years 1996 and 1995, respectively.

Working capital at February 28, 1997 amounted to $40,738,000, compared to
working capital of $42,164,000 at February 29, 1996. The decrease in working
capital in fiscal 1997 resulted primarily from the changes in inventory and
accounts receivable previously mentioned.

The Company's ratio of debt to equity was 1.15 to 1 at February 28, 1997,
a decrease from 1.35 to 1 at

February 28, 1996. The reduction results primarily from repayments of
long-term debt with cash provided by opertions

<PAGE> 9

CAPITAL EXPENDITURES

Capital expenditures, on an accrual basis, amounted to $533,000 in fiscal
1997 as compared with $19,914,000 and $9,874,000 in fiscal 1996 and 1995,
respectively. Fiscal 1996 capital expenditures include the purchase of the
previously leased Santa Maria, California facility, which was financed with
$8,000,000 in mortgage notes (See Note 3-Notes to Financial Statements).
Capital expenditures for fiscal 1998 are estimated to be $4,000,000, which is
approximately $4,000,000 less than deprecation expense projected for fiscal
1998. Capital expenditures are expected to be for normal replacement of older
equipment with more efficient and energy saving equipment.

IMPACT OF INFLATION

Whether current selling prices will be maintained or future selling price
increases will be sufficient to match any future cost increases is not
determinable at the present time due to the highly competitive conditions which
exist in the food industry.

RESULTS OF OPERATIONS

OVERVIEW AND TRENDS

The Company's product line is made up of agricultural products which are
subject to the cyclical conditions and risks inherent in the agricultural
industry. The Company bears part of the growing risks and all of the processing
and marketing risks of these agricultural products. Weather abnormalities and
excess inventories sometimes cause substantial reductions in the annual volume
of product processed in the Company's facilities. When this happens, the unit
cost of that year's production will increase substantially, resulting in
reduced profit margins for one or more years. On the other hand, when bumper
crops occur unit costs will decrease but selling prices will, in general, be
depressed.

The Company has always been faced with very strong competition in the
marketplace from large brand name competitors, private regional U.S. vegetable
processors, and privately-owned Mexican vegetable processors. These competitive
pressures, coupled with low overall growth, have led to weak market pricing.
The Company anticipates that this condition will continue for several years.

In addition to general inflation and the growing, processing and marketing
risks described above, the Company is facing the significant costs associated
with increasing governmental regulation, the loss of land and water available
for agriculture in California and the increasing competition due to world wide
facilitation of trade. As a result of these factors, the Company's earnings
history is cyclical and will continue to be so in the future.

The effect on the Company's operations and its ability to withstand the
costs of developing healthcare, labeling, OSHA, EPA, taxation and other
governmental regulations is unknown.

The Annual Report on Form 10-K and documents that incorporate it by
reference may include forward-looking information in reliance on the safe
harbor provided by the Private Litigation Reform Act of 1995. These
forward-looking statements are subject to substantial risks, including those
discussed above, and actual results may differ from those predicted in any such
forward-looking statement.

SERVICE REVENUES

Service revenues consist primarily of outside revenue from the Company's
trucking operations used in the distribution of frozen vegetables, rental and
miscellaneous income.

SUPPLY AGREEMENTS

<PAGE> 10

RECENT ACCOUNTING PRONOUNCEMENT

In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings Per Share" ("FAS
128"). This statement simplifies the standards for computing earnings per
share ("EPS") previously found in APB Opinion No. 15, "Earnings Per Share," as
the presentation of primary and fully-diluted EPS is replaced with Basic and
Diluted EPS. Basic EPS excludes dilution and is computed by dividing income
available to common stockholders by the weighted-average number of common
shares outstanding for the period. Diluted EPS reflects the potential dilution
that could occur if securities or other contracts to issue common stock were
exercised or converted into common stock or resulted in the issuance of common
stock that then shared in the earnings of the entity.

FAS 128 is effective for financial statements issued for periods ending
after December 15, 1997. The Company will adopt FAS 128 in financial
statements issued for the year ending February 28, 1998. If the provisions of
FAS 128 had been applied to the year ended February 28, 1997, estimated Basic
EPS and Diluted EPS would have been $.08.

<PAGE> 11

FISCAL 1997 COMPARED TO FISCAL 1996

NET SALES AND SERVICE REVENUES

Net sales and service revenues increased $4,106,000 or 2.1% for fiscal
1997 as compared with fiscal 1996 as follows:

<TABLE>
<CAPTION>
YEAR ENDED FEBRUARY 28 OR 29,
-----------------------------
1997 1996
------------ ------------

<S> <C> <C>
Gross Sales Revenues:
Food Product......................... $227,192,000 $221,991,000
Services............................. 3,173,000 3,192,000
------------ ------------
Total Gross Revenues.................. 230,365,000 225,183,000
Less Sales Allowances on Food Products (34,545,000) (33,469,000)
------------ ------------
Net Sales and Service Revenues....... $195,820,000 $191,714,000
============ ============
</TABLE>

Food product gross sales increased $5,201,000 or 2.3% in fiscal 1997 as
compared with fiscal 1996 and included sales volume increases of 2.9%. The
average selling price of food products decreased .6%, primarily as the result
of an increase in sales to other food processing companies in connection with
the previously mentioned multi-year reciprocal supply agreements in the amount
of $2,492,000 (29%). The average selling price of food product sales,
excluding the effect of sales to other food processing companies, increased .6%
from 1996 to 1997. Sales allowances increased $1,076,000 or 3.2% from the prior
year primarily as the result of the Company's change from deferring and
amortizing product introduction and related costs to expensing such costs as
incurred. This change was made in February 1997 due to the increasingly
competitive nature of the industry which has resulted in the inability to
reasonably estimate the period benefitted by these costs. The effect of this
change was to decrease income before income taxes by approximately $897,000
(See Summary of Accounting Policies). Service revenues were substantially
unchanged, decreasing $19,000 from 1996 to 1997.

COST OF SALES AND SERVICES

Cost of sales and services increased $3,777,000 or 2.4% in fiscal 1997 as
compared with the previous year primarily as the result of the sales volume
increase of 2.9% previously noted, partially offset by the effect of improved
yields and production efficiencies in 1997. Gross profit increased $329,000 in
fiscal 1997 as compared with the previous year and the gross profit margin was
18.7% for fiscal 1997 as compared with 19.0% for fiscal 1996. The increase in
gross profit results primarily from increased sales volume in 1997 as compared
with 1996 and the decrease in the gross margin percentage results primarily
from the decrease in the overall average selling price and increased sales
allowances previously mentioned.

Operating results for fiscal 1997 include a charge to operations of
approximately $1,000,000, as compared with approximately $500,000 in fiscal
1996, as the result of a repair and maintenance program to restore the
throughput of the Company's plants to their approximate original capacity. It
is expected that repair and maintenance expenditures under this program will
continue to be significant for some time.

SELLING, ADMINISTRATIVE AND GENERAL EXPENSES

Selling, administrative and general expenses decreased $1,429,000 (4.3%),
primarily as the result of decreased storage expenses of $512,000 (resulting
from lower average inventories), decreased pension and incentive compensation
of $530,000 and decreased brokerage and other direct selling expenses of
$337,000. Additionally, administrative and general expense in fiscal 1997
includes a charge to income before income taxes of approximately $829,000
resulting from the Company's adoption in February 1997 of a non-contributory,
unqualified supplemental retirement plan for management employees (See Note 8
- - Notes to Financial Statements). The effect of adopting this plan was
mitigated by the rationalization of general and administrative functions during
fiscal 1997, which resulted in an overall decrease in administrative and
general expenses of approximately $50,000 as compared with the prior year.

<PAGE> 12

INTEREST EXPENSE

Interest expense decreased $105,000 (2.6%) due to lower average borrowings
related primarily to reductions in revolving credit borrowings which were
partially attributable to lower average inventories.

MISCELLANEOUS INCOME

Miscellaneous Income - Net in the amount of $707,000 for fiscal 1997
includes $314,000 resulting from net gains realized on disposal of property,
plant and equipment, and $212,000 to restore the carrying value of certain
property held for disposal to its original cost, based on its current fair
market value. Further, miscellaneous income includes the realization of a
claim in the amount of $167,000 related to operations which were discontinued
in 1992.

TAXES ON INCOME

Taxes on income consist of current and deferred income taxes required to
be recognized for fiscal 1997.

FISCAL 1996 COMPARED TO FISCAL 1995

NET SALES AND SERVICE REVENUES

Net sales and service revenues increased $1,458,000 or .8% for fiscal 1996
as compared with fiscal 1995 as follows:

<TABLE>
<CAPTION>
YEAR ENDED FEBRUARY 29 OR 28,
-------------------------------
1996 1995
-------------- --------------
<S> <C> <C>
Gross Sales Revenues:
Food Products......................... $221,991,000 $222,285,000
Services............................. 3,192,000 2,820,000
-------------- --------------
Total Gross Revenues.................. 225,183,000 225,105,000
Less Sales Allowances on Food Products (33,469,000) (34,849,000)
-------------- --------------
Net Sales and Service Revenues....... $191,714,000 $190,256,000
============== ==============
</TABLE>

Food product gross sales decreased $294,000 or .1% in fiscal 1996 as
compared with fiscal 1995 and included sales volume increases of .3% . Sales
to other food processing companies in connection with multi-year reciprocal
supply agreements (previously mentioned) decreased $2,555,000 (23%). Average
selling prices of other food product sales decreased 2.2% from 1995 to 1996 as
the result of continuing competitive pricing pressures. Sales allowances
decreased $1,380,000 or 4.0%, primarily as the result of lower promotional
expenses resulting from changes in the sales of the Company's various marketing
programs which promote at differing rates. Service revenues increased $372,000
or 13.2%, primarily as the result of an increase in rental and miscellaneous
income of $667,000 (51.2%), the effect of which offset by decreased revenue of
$295,000 (19.4%) for the Company's owner-operated truck fleet.

COST OF SALES AND SERVICES

Cost of sales and services increased $6,583,000 or 4.4%, in fiscal 1996 as
compared with the previous year, primarily as the result of less than expected
raw product growing yields which resulted in increased unit production costs.
Gross profit decreased $5,125,000 in fiscal 1996 as compared with the previous
year and the gross profit margin was 19.0% for fiscal 1996 as compared with
21.8% for fiscal 1995. The decreases in gross profit and gross profit margin
primarily resulted from increased unit costs and decreased average selling
prices previously mentioned.

<PAGE> 13

Operating results for fiscal 1996 include a charge to operations of
approximately $500,000 as the result of a repair and maintenance program to
restore the throughput of the Company's plants to their approximate original
capacity.

SELLING, ADMINISTRATIVE AND GENERAL EXPENSES

Selling, administrative and general expenses decreased $1,055,000 (3.1%)
primarily as the result of decreased pension and incentive compensation of
$1,682,000 ($1,006,000 of which was related to decreased production incentive
compensation), increased brokerage expense of $96,000 (attributable to the
increase in brokered gross food products sales, increased administrative,
general selling and other expenses of $395,000, and increased storage costs of
$136,000 due to an increase in average frozen inventory.

INTEREST EXPENSE

Interest expense increased $1,145,000 (40.4%) due to higher average
borrowings related to higher average inventories, capital expenditures, the
purchase of treasury stock, and to an overall increase in average interest
rates.

MISCELLANEOUS INCOME

Miscellaneous Income - Net in the amount of $28,000 for fiscal 1996,
reflects net gains realized on disposal of property, plant and equipment of
$34,000 offset by miscellaneous expenses of $6,000.

TAXES ON INCOME

Taxes on income consist of current and deferred income taxes required to
be recognized for fiscal 1996 and 1995.

<PAGE> 14

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Stockholders and
Board of Directors of
United Foods, Inc.

We have audited the accompanying balance sheets of United Foods, Inc. as
of February 28, 1997 and February 29, 1996, and the related statements of
operations, stockholders' equity and cash flows for each of the three years in
the period ended February 29, 1996. These 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 generally accepted auditing
standards. Those standards require that we plan and perform the audits 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 financial statements referred to above present fairly,
in all material respects, the financial position of United Foods, Inc. at
February 28, 1997 and February 29, 1996, and the results of its operations and
its cash flows for each of the three years in the period ended February 28,
1997 in conformity with generally accepted accounting principles.

S/ BDO Seidman, LLP

Memphis, Tennessee
April 4, 1997

<PAGE> 15

UNITED FOODS, INC.
BALANCE SHEETS

<TABLE>
<CAPTION>
FEBRUARY 28 OR 29,
---------------------------
ASSETS 1997 1996
- -------------------------------------------------- ------------ ------------
<S> <C> <C>
CURRENT:
Cash and cash equivalents......................... $ 3,772,000 $ 1,029,000
Trade accounts receivable, less allowance of
$308,000 and $260,000 for possible losses (Notes
1 and 3)........................................ 17,533,000 14,502,000

Inventories (Notes 2 and 3)....................... 36,694,000 43,099,000

Prepaid expenses and miscellaneous................ 3,871,000 4,592,000

Deferred income taxes (Note 5).................... 1,255,000 777,000
------------ ------------

TOTAL CURRENT ASSETS............................ 63,125,000 63,999,000
------------ ------------
PROPERTY AND EQUIPMENT (Notes 3 and 7):
Land and land improvements........................ 8,846,000 8,965,000

Buildings......................................... 21,060,000 21,039,000

Machinery and equipment........................... 91,942,000 92,536,000
------------ ------------

121,848,000 122,540,000

Less accumulated depreciation and amortization.... (67,210,000) (60,204,000)
------------ ------------

NET PROPERTY AND EQUIPMENT...................... 54,638,000 62,336,000
------------ ------------

OTHER ASSETS...................................... 1,345,000 1,853,000
------------ ------------

$119,108,000 $128,188,000
============ ============
</TABLE>

See accompanying summary of accounting policies

<PAGE> 16

<TABLE>
<CAPTION>
FEBRUARY 28 OR 29,
---------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY 1997 1996
- ---------------------------------------------------------------- --------------- -----------

<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable............................................... $11,982,000 $11,092,000
Accruals:
Compensation and related taxes............................... 2,656,000 2,816,000
Pension contributions (Note 8)............................... 726,000 550,000
Income taxes (Note 5)........................................ 328,000 206,000
Workers' compensation claims (Note 9)........................ 849,000 1,144,000
Interest..................................................... 437,000 665,000
Miscellaneous................................................ 637,000 695,000
Current maturities of long-term debt (Notes 3 and 8)........... 4,772,000 4,667,000
--------------- ----------------

TOTAL CURRENT LIABILITIES................................. 22,387,000 21,835,000

LONG-TERM DEBT, less current maturities (Notes 3 and 8)......... 36,244,000 46,650,000
DEFERRED INCOME TAXES (Note 5).................................. 5,021,000 5,169,000
--------------- ----------------
TOTAL LIABILITIES......................................... 63,652,000 73,654,000
--------------- ----------------
COMMITMENTS AND CONTINGENCIES (Notes 4, 8, and 9)

STOCKHOLDERS' EQUITY (Notes 4 and 6):
Preferred stock, $1 par - shares authorized, 10,000,000........ - -
Common stock, Class A, $1 par (one-tenth vote per share when
Class A and B vote together, elects 25% of Board), shares
authorized 12,000,000 and 25,000,000; issued 5,116,075 and
7,649,457.................................................... 5,116,000 7,650,000
Common stock, Class B, $1 par, convertible into Class A on a
share for share basis (elects 75% of Board) - shares authorized
6,000,000 and 10,000,000; issued 5,693,854 and 7,096,180..... 5,694,000 7,096,000
Additional paid-in capital..................................... 2,463,000 8,644,000

Retained earnings (Note 3)..................................... 42,183,000 41,261,000
--------------- ----------------

55,456,000 64,651,000

Treasury stock, at cost, 3,935,708 shares at February 29, 1996. - (10,117,000)
--------------- ----------------

TOTAL STOCKHOLDERS' EQUITY................................ 55,456,000 54,534,000
--------------- ----------------

$119,108,000 $128,188,000
=============== ================
</TABLE>

and notes to financial statements.

<PAGE> 17

UNITED FOODS, INC.
STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEAR ENDED FEBRUARY 28 OR 29,
------------------------------------------
1997 1996 1995
------------ ------------ ------------

<S> <C> <C> <C>
NET SALES AND SERVICE REVENUES................. $195,820,000 $191,714,000 $190,256,000
COST OF SALES AND SERVICES..................... 159,120,000 155,343,000 148,760,000
------------ ------------ ------------

Gross profit................................. 36,700,000 36,371,000 41,496,000

SELLING, ADMINISTRATIVE AND GENERAL............ 32,028,000 33,457,000 34,512,000
EXPENSES ------------ ------------ ------------

Operating income............................. 4,672,000 2,914,000 6,984,000
------------ ------------ ------------
OTHER INCOME (EXPENSE):
Interest expense............................. (3,871,000) (3,976,000) (2,831,000)
Miscellaneous income (expense), net.......... 707,000 28,000 (176,000)
------------ ------------ ------------

Total other income (expense), net........... (3,164,000) (3,948,000) (3,007,000)
------------ ------------ ------------

Income (loss) before taxes on income (benefit) 1,508,000 (1,034,000) 3,977,000

TAXES ON INCOME (BENEFIT) (Note 5)............ 586,000 (374,000) 1,575,000
------------ ------------ ------------

NET INCOME (LOSS).............................. $ 922,000 $ (660,000) $ 2,402,000
------------ ------------ ------------
EARNINGS (LOSS) PER SHARE (Note 6):
Net income (loss)............................ $ 0.08 $ (0.06) $ 0.19
============ ============ ============
</TABLE>

See accompanying summary of accounting policies and notes to financial
statements

<PAGE> 18

UNITED FOODS, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
COMMON STOCK - CLASS A COMMON STOCK - CLASS B
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ----------- ---------- -----------

<S> <C> <C> <C> <C>
Balance, February 28, 1994......... 7,647,832 $ 7,648,000 7,097,805 $ 7,098,000

Net income for the year............ - - - -

Exchange of Class B common stock
for Class A common stock.......... 100 - (100) -
Purchase of treasury stock (Note 6) - - - -
Exercise of options................ - - - -
---------- ----------- ---------- -----------

Balance, February 28, 1995......... 7,647,932 7,648,000 7,097,705 7,098,000

Net loss for the year.............. - - - -
Exchange of Class B common stock
for Class A common stock.......... 1,525 2,000 (1,525) (2,000)
Purchase of treasury stock (Note 6) - - - -
Exercise of options................ - - - -
---------- ----------- ---------- -----------

Balance, February 29, 1996......... 7,649,457 7,650,000 7,096,180 7,096,000

Net income for the year............ - - - -
Exchange of Class B common stock
for Class A common stock.......... 6,000 6,000 (6,000) (6,000)
Retirement of treasury stock (Note
6)................................ (2,539,382) (2,540,000) (1,396,326) (1,396,000)
---------- ----------- ---------- -----------

Balance, February 28, 1997......... 5,116,075 $ 5,116,000 5,693,854 $ 5,694,000
========== =========== ========== ===========
</TABLE>

18
See accompanying summary of accounting policies

<PAGE> 19

<TABLE>
<CAPTION>
TREASURY STOCK
-------------------------
ADDITIONAL RETAINED
PAID-IN CAPITAL EARNINGS SHARES AMOUNT TOTAL
- --------------- ----------- ---------- ------------ -----------
<S> <C> <C> <C> <C>
$8,693,000 $39,519,000 1,875,062 $ (5,339,000) $57,619,000

- 2,402,000 - - 2,402,000

- - - - -
- - 1,083,077 (2,588,000) (2,588,000)
(6,000) - (5,000) 13,000 7,000
- --------------- ----------- ---------- ------------ -----------

8,687,000 41,921,000 2,953,139 (7,914,000) 57,440,000

- (660,000) - - (660,000)

- - - - -
- - 1,012,569 (2,284,000) (2,284,000)
(43,000) - (30,000) 81,000 38,000
- --------------- ----------- ---------- ------------ -----------

8,644,000 41,261,000 3,935,708 (10,117,000) 54,534,000

- 922,000 - - 922,000

- - - - -
(6,181,000) - (3,935,708) 10,117,000 -
- --------------- ----------- ---------- ------------ -----------

$2,463,000 $42,183,000 - $ - $55,456,000
=============== =========== ========== ============ ===========
</TABLE>

and notes to financial statements.

<PAGE> 20

UNITED FOODS, INC.
STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED FEBRUARY 28 OR 29,
--------------------------------------
1997 1996 1995
---------- ----------- -----------

<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)............................... $ 922,000 $ (660,000) $ 2,402,000
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation................................... 7,859,000 7,362,000 6,637,000
Provision for losses on accounts receivable.... 60,000 43,000 20,000
Loss (gain) on disposal of property and
equipment..................................... (314,000) (34,000) 475,000
Loss (recovery) of write down on property held

for disposal.................................. (212,000) - 300,000
Deferred income taxes.......................... (626,000) (943,000) (292,000)

Change in operating assets and liabilities:
Accounts and notes receivable................. (3,091,000) 783,000 (1,378,000)
Inventories................................... 6,405,000 (2,735,000) (4,957,000)
Refundable income taxes....................... - - 959,000
Prepaid expenses and miscellaneous............ 721,000 469,000 (695,000)
Other assets.................................. 508,000 716,000 228,000
Income taxes payable.......................... 122,000 (536,000) 600,000
Accounts payable and accruals................. 485,000 1,407,000 2,237,000
Changes in net assets of discontinued operations - 18,000 211,000
---------- ----------- -----------

Net cash provided by operating activities... 12,839,000 5,890,000 6,747,000
---------- ----------- -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures........................... (693,000) (12,064,000) (11,031,000)
Proceeds from sale of property and equipment... 898,000 58,000 443,000
---------- ----------- -----------
Net cash provided (used) by investing
activities................................. 205,000 (12,006,000) (10,588,000)
========== =========== ===========
</TABLE>

20
See accompanying summary of accounting policies and notes to financial
statements.

<PAGE> 21

UNITED FOODS, INC.
STATEMENTS OF CASH FLOWS
(CONCLUDED)

<TABLE>
<CAPTION>
YEAR ENDED FEBRUARY 28 OR 29,
------------------------------------------
1997 1996 1995
------------ ------------ ------------
<S> <C> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term borrowings......... $ 14,884,000 $ 1,169,000 $ 1,073,000
Exercise of stock options.................. - 38,000 7,000
Net (repayments) borrowings under line of
credit agreement.......................... (20,095,000) 12,209,000 6,386,000
Reduction of long-term debt................ (5,090,000) (4,439,000) (4,581,000)
Purchase of treasury stock................. - (2,284,000) (2,588,000)
------------ ------------ ------------
Net cash provided (used) by financing
activities.............................. (10,301,000) 6,693,000 297,000
------------ ------------ ------------

NET INCREASE (DECREASE) IN CASH FOR THE YEAR 2,743,000 577,000 (3,544,000)

CASH AND CASH EQUIVALENTS, beginning of year 1,029,000 452,000 3,996,000
------------ ------------ ------------
CASH AND CASH EQUIVALENTS, end of year...... $ 3,772,000 $ 1,029,000 $ 452,000
------------ ----------- -----------

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Cash paid during the year for:

Interest................................... $ 3,690,000 $ 3,452,000 $ 2,706,000

Income taxes............................... $ 1,084,000 $ 1,157,000 $ 1,169,000

Non-cash investing and financing activities:

In September 1995, the Company purchased the facility it was previously leasing in Santa
Maria, California for $8,000,000, financed with mortgage notes (Note 3).

Capital expenditures of $160,000 and $310,000 are included in accounts payable at
February 29 or 28, 1996 and 1995, respectively.
</TABLE>

21
See accompanying summary of accounting policies and notes to financial
statements.

<PAGE> 22

UNITED FOODS, INC.
SUMMARY OF ACCOUNTING POLICIES

LINES OF BUSINESS

The Company is principally engaged in the growing, processing, marketing
and distribution of food products, primarily frozen vegetables and fresh
mushrooms.

Food products are distributed for resale in the retail market directly to
large national grocery chains and through food brokers to numerous independent
food stores located throughout the United States, both under the Company's
brand name and under buyers' labels, and to military commissaries in the United
States and overseas under the Company's brand name.

The Company is currently operating six owned facilities in California,
Oregon, Tennessee and Utah. Although production varies with the seasons at the
respective frozen vegetable plants, all the facilities operate during a
substantial part of the year. In addition, the Company purchases and sells
certain products under reciprocal supply agreements with other food processors.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS

For purposes of the statements of cash flows, the Company classifies cash
on hand, savings and checking accounts and short-term investments with initial
maturities of less than 90 days as cash equivalents.

INVENTORY VALUATION

Substantially all of the Company's inventories are valued at the lower of
cost (first-in, first-out) or market. Market for finished goods is based on
net realizable value; raw materials and growing crops are based on replacement
cost.

PROPERTY, EQUIPMENT, DEPRECIATION AND AMORTIZATION

Property and equipment are stated at cost. Depreciation and amortization
on property and equipment are computed principally on the straight-line method
for financial reporting purposes over the following estimated useful lives:

<TABLE>
<CAPTION>
DESCRIPTION YEARS
- ------------ -----
<S> <C>
Buildings................................... 5-60
Machinery and equipment..................... 3-13
</TABLE>

For income tax purposes, depreciation on property and equipment is
computed primarily on accelerated methods.

The Company continually reviews plant and equipment to determine that the
carrying values have not been impaired.

<PAGE> 23

UNITED FOODS, INC.
SUMMARY OF ACCOUNTING POLICIES
(CONTINUED)

REVENUE RECOGNITION

Sales and related cost of sales are recognized primarily upon shipment of
products.

PRODUCT INTRODUCTION AND MARKETING COSTS

In connection with the introduction of new product lines or the expansion
of its market position in the United States, the Company historically deferred
and amortized product introduction and related costs over a twelve-month
period. In February 1997, the Company began expensing such costs in the period
incurred due to the increasingly competitive nature of the industry which has
resulted in the inability to reasonably estimate the period benefited by these
costs. The effect of this change was to decrease after-tax net income for the
year ended February 28, 1997, by $551,000.

PENSION PLANS

The Company has separate defined contribution pension plans for hourly
non-clerical employees and for salaried and hourly clerical employees. The
Company funds pension costs as accrued. See Note 8 - Other Benefit Plans.

TAXES ON INCOME

The Company provides for estimated income taxes payable or refundable on
current year income tax returns and for the estimated future tax effects
attributable to temporary differences and carryforwards. Measurement of
deferred income taxes is based on enacted tax laws and tax rates, with the
measurement of deferred income tax assets being reduced by estimated amounts of
tax benefits not likely to be realized.

STOCK OPTIONS

Stock options have been granted to certain key employees at the prevailing
market price on the date of the grant. Proceeds from the sale of unissued
common stock under these options are credited to common stock and additional
paid-in capital at the time the options are exercised. If treasury stock is
issued, the Company credits cost of treasury stock and charges additional
paid-in capital for the excess of cost over the option price. The Company
makes no charge to earnings with respect to these options. See Note 8 - Other
Benefit Plans.

EARNINGS PER SHARE

Earnings per share are based on the weighted average number of common
shares outstanding during each year. Common stock equivalents in the form of
stock options are also considered in the computation when the effect is
dilutive.

23
<PAGE> 24

UNITED FOODS, INC.
SUMMARY OF ACCOUNTING POLICIES
(CONCLUDED)

NEW ACCOUNTING PRONOUNCEMENT

In February 1997, the Financial Accounting Standards Board issued
Financial Accounting Standards No. 128, "Earnings Per Share" ("FAS 128"). This
statement simplifies the standards for computing earnings per share ("EPS")
previously found in APB Opinion No. 15, "Earnings Per Share," as the
presentation of primary and fully-diluted EPS is replaced with Basic and
Diluted EPS. Basic EPS excludes dilution and is computed by dividing income
available to common stockholders by the weighted-average number of common
shares outstanding for the period. Diluted EPS reflects the potential dilution
that could occur if securities or other contracts to issue common stock were
exercised or converted into common stock or resulted in the issuance of common
stock that then shared in the earnings of the entity.

<PAGE> 25

UNITED FOODS, INC.
NOTES TO FINANCIAL STATEMENTS

NOTE 1. RECEIVABLES

Activity in the allowance for possible losses is summarized as follows:

<TABLE>
<CAPTION>
YEAR ENDED FEBRUARY 28 OR 29,
---------------------------------
1997 1996 1995
--------- --------- ---------

<S> <C> <C> <C>
Balance at beginning of year........... $260,000 $235,000 $215,000
Charged to expense..................... 60,000 43,000 21,565
Balances written off, net of recoveries (12,000) (18,000) (1,565)
--------- --------- ---------

Balance at end of year................. $308,000 $260,000 $235,000
========= ========= =========
</TABLE>

NOTE 2. INVENTORIES

Inventories are summarized as follows:

<TABLE>
<CAPTION>
FEBRUARY 28 OR 29,
--------------------------
1997 1996
------------ ------------
<S> <C> <C>
Finished products....... $30,807,000 $36,863,000
Raw materials........... 2,525,000 3,129,000
Growing crops........... 2,111,000 1,948,000
Merchandise and supplies 1,251,000 1,159,000
------------ ------------

$36,694,000 $43,099,000
============ ============
</TABLE>

<PAGE> 26

UNITED FOODS, INC.
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)

NOTE 3. LONG-TERM DEBT

Long-term debt is summarized as follows:

<TABLE>
<CAPTION>
FEBRUARY 28 OR 29,
--------------------------
1997 1996
----------- ------------
<S> <C> <C>
6.97% term note, payable in quarterly installments
of $643,000, plus interest, through July 1999,
collateralized by certain trade receivables,
inventory, farms and equipment located in
California, Oregon and Utah (approximate carrying
value of $8,000,000)............................... $ 6,429,000 $ 9,000,000

9.10% term note, payable in monthly installments of
$194,000 through March 1998, and $148,000
thereafter, including interest, through March 2007,
collateralized by certain real estate and equipment
located in Bells, Tennessee (approximate carrying
value of $27,100,000).............................. 15,000,000 8,965,000

9.25% term notes, payable in monthly installments
of $82,000, including interest, through October
2010, collateralized by certain real estate and
equipment located in California (approximate
carrying value of $7,300,000)...................... 7,649,000 7,916,000

8.98% term note, payable in monthly installments of
$61,000, including interest, through January 2007,
collateralized by certain real estate and equipment
located in Ogden, Utah (approximate carrying value
of $1,900,000)..................................... 6,000,000 -

6.48% term note, payable in quarterly installments
of $179,000, plus interest, through October 1999,
collateralized by certain real estate and equipment
located in West Tennessee (approximate carrying
value of $1,300,000)............................... 1,403,000 2,427,000

$18 million revolving credit note payable to bank
($23,000,000 in 1996), collateralized by certain
trade receivables and inventories; borrowing limit
$18,000,000, due June 1999, with interest at the
bank's prime rate (8.25% at February 28, 1997)
(approximate carrying value of $45,400,000)........ - 17,095,000

$3 million revolving credit note payable to bank,
collateralized by certain trade receivables,
inventory, farms and equipment located in
California, Oregon and Utah, due August 1999, with
interest at 1.3% over the Term Federal Funds rate
(6.3% at February 28, 1997) (approximate carrying
value of $7,400,000)............................... - 3,000,000

Deferred compensation agreements and miscellaneous
notes, with interest at prime (8.25% at February
28, 1997) (Note 8)................................. 4,535,000 2,914,000
----------- -----------

Totals............................................... 41,016,000 51,317,000

Less current maturities.............................. (4,772,000) (4,667,000)
----------- -----------

Long-term debt, less current maturities.............. $36,244,000 $46,650,000
=========== ===========
</TABLE>

<PAGE> 27

UNITED FOODS, INC.
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)

NOTE 3. LONG-TERM DEBT (CONTINUED)

Principal payments required to be made for each of the next five fiscal
years and thereafter are summarized as follows:

<TABLE>
<S> <C>
1998............................................ $ 4,772,000
1999............................................ 4,427,000
2000............................................ 2,508,000
2001............................................ 1,333,000
2002............................................ 1,454,000
After 2002...................................... 26,522,000
------------

Total........................................... $41,016,000
</TABLE>

In January 1997, the Company modified the 9.10% term loan. The
modification lowered the interest rate from 10.00%, extended the term to March
2007, and increased the principal amount of the note to $15,000,000.

The terms of various notes include certain negative covenants which
provide for, among other things, restrictions relating to the maintenance of
minimum levels of working capital and equity, payment of dividends and the
incurrence of additional indebtedness. Under the most restrictive of these
provisions, retained earnings of $35,302,000 is restricted at February 28,
1997.

NOTE 4. COMMON STOCK

Each Class B common share is convertible into one share of Class A common
stock at the holders' election. Holders of the Class A common stock are
entitled to a preference dividend of $.025 per share for any quarter and each
preceding quarter of the Company's fiscal year before the holders of the Class
B common stock are entitled to any regular cash dividend. With respect to
election of directors, holders of Class A common stock are entitled to elect
25% of the directors, and holders of Class B common stock are entitled to elect
the remaining directors. On matters requiring the classes to vote together,
the Class A holders are entitled to 1/10 vote per share and holders of Class B
common stock are entitled to one vote per share.

The Company has an incentive stock option plan for granting key employees
options to purchase shares of the Company's Class A common stock. The exercise
price of the incentive stock options is the fair market value of the Class A
common stock on the date the option is granted. Options are exercisable upon
issuance and expire up to ten years from the date granted. See Note 8 - Other
Benefit Plans.

<PAGE> 28

UNITED FOODS, INC.
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)

NOTE 4. COMMON STOCK (CONTINUED)

Class A common shares reserved for issuance of options and unexercised
outstanding options were as follows:

<TABLE>
<CAPTION>
NUMBER OF OPTION PRICE
SHARES PER SHARE
--------- ------------
<S> <C> <C>
Outstanding, February 28, 1994 924,384 $1.25

Exercised..................... (5,000) 1.25
--------
Outstanding, February 28, 1995 919,384 1.25

Exercised..................... (30,000) 1.25
--------
Outstanding, February 29, 1996 889,384 1.25

Cancelled..................... (10,000) 1.25
--------
Outstanding, February 28, 1997 879,384 1.25
========
</TABLE>

All of the options outstanding expire in December 1997. The holders of
the 829,384 options agreed not to exercise their options and the remaining
50,000 options will expire in April 1997 if not exercised by a former employee.

At February 28, 1997, 77,616 options are available for grant under the
incentive stock option plan.

NOTE 5. TAXES ON INCOME

The components of income tax expense (benefit) are as follows:

<TABLE>
<CAPTION>
YEAR ENDED FEBRUARY 28 OR 29,
------------------------------------
1997 1996 1995
---------- ---------- ----------
<S> <C> <C> <C>
Current:
Federal.................... $1,006,000 $ 498,000 $1,625,000
State...................... 206,000 71,000 242,000
---------- ---------- ----------
1,212,000 569,000 1,867,000
---------- ---------- ----------
Deferred:
Federal.................... (502,000) (868,000) (261,000)
State...................... (124,000) (75,000) (31,000)
---------- ---------- ----------
(626,000) (943,000) (292,000)
---------- ---------- ----------
Income tax expense (benefit) $ 586,000 $(374,000) $1,575,000
========== ========== ==========
</TABLE>

<PAGE> 29

UNITED FOODS, INC.
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)

NOTE 5. TAXES ON INCOME (CONTINUED)

The components of the net deferred income tax assets and liabilities
consist of the following:

<TABLE>
<CAPTION>
FEBRUARY 28 OR 29,
---------------------------
1997 1996
------------ ------------

<S> <C> <C>
Deferred tax assets:
Net operating loss carryforwards.......... $ - $ 766,000
Jobs and other tax credit carryforwards... 3,399,000 3,445,000
Inventory overhead adjustment............. 466,000 659,000
Accrued vacation.......................... 458,000 475,000
Deferred compensation..................... 1,699,000 1,072,000
Other..................................... 661,000 799,000
------------ ------------

Total deferred income tax assets........... 6,683,000 7,216,000
------------ ------------

Deferred income tax liabilities:
Fixed asset basis difference.............. (10,334,000) (10,873,000)
LIFO spread adjustment.................... - (313,000)
Product introduction allowances........... - (254,000)
Other..................................... (115,000) (168,000)
------------ ------------

Total deferred income tax liabilities...... (10,449,000) (11,608,000)
------------ ------------

Net deferred income tax liabilities........ (3,766,000) (4,392,000)
Current deferred income tax asset.......... 1,255,000 777,000
------------ ------------

Net long-term deferred income tax liability $ (5,021,000) $ (5,169,000)
============ ============
</TABLE>

<PAGE> 30

UNITED FOODS, INC.
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)

NOTE 5. TAXES ON INCOME (CONTINUED)

The effective tax rate on income before taxes on income is different from
the federal statutory tax rate. The following summary reconciles taxes at the
federal statutory tax rate with the effective rate:

<TABLE>
<CAPTION>
YEAR ENDED FEBRUARY 28 OR 29,
---------------------------------
1997 1996 1995
PERCENT PERCENT PERCENT
--------- --------- ---------
<S> <C> <C> <C>
Taxes on income at statutory rate.................. 34.0 34.0 34.0
Increase (reduction) resulting from:
State income taxes, net of federal tax benefit 2.2 0.3 3.5
Fuels and jobs tax credits....................... (3.3) 3.2 (1.0)
Other items...................................... 5.9 (1.3) 3.1
--------- --------- ---------

Taxes on income (benefit) at effective rate........ 38.8 36.2 39.6
========= ========= =========
</TABLE>

NOTE 6. EARNINGS PER SHARE AND CAPITAL STOCK

Earnings per share of common stock and common stock equivalents have been
computed using 11,077,372 shares in 1997, 11,470,173 shares in 1996, and
12,480,161 shares in 1995, which represent the weighted average number of
shares of Class A and Class B common stock required to be recognized during the
respective periods. The effect of shares issuable under the stock option plan
was excluded for 1996 as the effect would be anti-dilutive, and were included
in computing the weighted average number of shares for 1995 and 1997. The
effect was included in 1997 due to the fact that the agreements to allow
options to expire were not signed until late February 1997.

In August 1996, the Company amended its certificate of incorporation to
reduce the number of authorized shares of Class A and Class B Common Stock to
12,000,000 and 6,000,000 shares, respectively. As a result of this amendment,
the Company retired 2,539,382 and 1,396,326 Treasury shares of the Company's
Class A and Class B Common Stock, respectively.

In May 1994, the Company commenced a tender offer, which was completed in
June 1994, to repurchase 956,401 shares of Class A and 126,674 shares of Class
B common stock at a cost of $2.25 per share, plus expenses of approximately
$150,000. In November 1995, the Company purchased 831,169 shares of Class A
and 181,400 shares of Class B common stock at a cost of $2.25 per share, plus
expenses of approximately $5,000. The Company funded the purchases of these
shares from borrowings under a $23,000,000 revolving credit facility, which was
reduced to $18,000,000 effective February 1997.

<PAGE> 31

UNITED FOODS, INC.
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)

NOTE 7. LEASES

The Company leases certain property, including land used in farming
operations, and equipment under noncancellable leases which expire at various
dates to 2013. In most cases, management expects that in the normal course of
business, leases that expire will be renewed or replaced by other leases.

The future minimum lease payments required under operating leases that
have initial or remaining noncancellable terms in excess of one year were as
follows:

<TABLE>
<CAPTION>
YEAR ENDING FEBRUARY 28 OR 29,
- ------------------------------
<S> <C>
1998.......................... $ 2,638,000
1999.......................... 2,350,000
2000.......................... 2,241,000
2001.......................... 2,173,000
2002.......................... 1,391,000
After 2002.................... 3,068,000
------------
Total minimum lease payments.. $13,861,000
</TABLE>

Rent expense under operating leases amounted to $3,552,000, $4,066,000 and
$4,212,000 for the years ended February 28, 1997, February 29, 1996 and
February 28, 1995, respectively.

Certain leases contain renewal options and some have purchase options, and
generally provide that the Company shall pay for insurance, taxes and
maintenance.

NOTE 8. EMPLOYEE BENEFIT PLANS

PENSION PLANS

The Company has a defined contribution pension plan for hourly
non-clerical employees. Contributions to the plan are based upon hours worked
during the plan year and participants may make voluntary contributions to the
plan of up to 10% of their compensation (as defined). The Company pays all
administrative expenses related to the plan. Costs of the plan charged to
operations for fiscal 1997, 1996 and 1995 amounted to approximately $463,000,
$492,000, and $445,000, respectively.

The Company also provides either an unfunded management retirement
compensation plan or a funded defined contribution pension plan for salary and
hourly clerical employees. Company contributions to the plans are discretionary
but may not exceed 15% of participants' compensation. Participants may make
voluntary contributions up to 10% and 25% of their compensation (as defined) to
the funded and unfunded plans, respectively. Costs of these plans charged to
operations for fiscal 1997 and 1995 amounted to approximately $94,000 and
$317,000, respectively. No costs were charged to operations for fiscal 1996.

INCENTIVE PLANS

The Company has an incentive compensation plan which covers 37 key
employees. The costs of the plan are computed in accordance with a formula
which incorporates return on average assets and return on equity. Costs of the
plan charged to operations for fiscal 1997, 1996 and 1995 were approximately
$241,000, $126,000 and $484,000, respectively.

<PAGE> 32

UNITED FOODS, INC.
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)

NOTE 8. EMPLOYEE BENEFIT PLANS (CONTINUED)

OTHER BENEFIT PLANS

The Company also has two deferred compensation plans which permit
directors and certain management employees to defer portions of their
compensation and earn a guaranteed interest rate on the deferred amounts. The
salaries, which have been deferred since the inception of the plans, have been
accrued and the primary expense, other than salaries, related to these plans is
interest on the deferred amounts. Interest is calculated at prime (8.25% at
February 28, 1997). Interest expense during fiscal 1997, 1996 and 1995
includes $175,500, $139,700 and $69,900, respectively, related to these plans.

In February 1997, the Company adopted a non-contributory, unqualified
supplemental retirement plan for management employees, whereby an amount
specified by the board of directors is held in a deferred compensation account
for each covered employee to be paid either in a lump sum or in approximate
equal installments over ten years at the date of such employee's retirement
from the Company. The board of directors specified that each management
employee currently holding the Company's incentive stock options be offered the
alternative of receiving deferred compensation under the plan in an amount
equal to $1 for each unexercised stock option currently held. Any employee
electing to so participate was required to agree not to exercise the related
options through the option expiration date in December 1997. As of February
28, 1997, employees holding 829,384 options had elected to participate in this
new deferred compensation plan, resulting in a charge to operations of
$829,384.

During fiscal 1995, the Company approved a non-contributory, unqualified
supplemental retirement plan for eight officers whereby a calculated amount is
held in a deferred salary account for each covered officer. The calculation
provides an amount sufficient to adjust the officers' annual United Foods,
Inc.-sourced after income tax earnings for 1993 and each year thereafter to the
level it would have been using 1992 federal tax rates, assuming standard
deductions and no other income. The deferred salary will be paid in
approximate equal installments over ten years at the later of such officer's
date of disability as defined, termination from the Company, or 65th birthday.
The expense for this plan in fiscal 1997, 1996 and 1995 was $330,000, $378,400
and $522,900, respectively.

The Company has included $4,435,000 and $2,780,000 in long-term debt at
February 28, 1997 and February 29, 1996, respectively, to reflect its liability
under these unfunded plans.

NOTE 9. COMMITMENTS AND CONTINGENCIES

A. SALES AND MAJOR CUSTOMER

A large part of the Company's sales are made in the retail market and a
significant proportion of the retail grocery trade in the United States is
concentrated in the hands of national grocery chains. As such, a large part of
the Company's revenue is derived from sales to these chains. Sales to one of
the Company's customers totaled $22,328,000, $20,977,000 and $21,370,000,
representing 11.4%, 10.9% and 11.2% of total Company revenues in 1997, 1996 and
1995, respectively. Competition results in changes in the Company's customer
base over time and it is, therefore, possible that the Company may lose one or
more of its largest customers over time and, as a result, operations could be
materially impacted.

<PAGE> 33

UNITED FOODS, INC.
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)

NOTE 9. COMMITMENTS AND CONTINGENCIES (CONTINUED)

B. PRODUCT PROCUREMENT AND AVAILABILITY

Crops have seasonal features and availability is subject to unpredictable
changes in growing conditions that are inherent in the agriculture industry.
The Company bears part of the growing risks and all of the processing and
marketing risks associated with its agricultural products. Weather
abnormalities and other adverse growing conditions sometimes result in
substantial reductions in the annual volumes processed in the Company's plants.
When this occurs, the Company may have to procure raw and processed vegetables
from alternative sources at higher than expected costs and the reduced volume
of vegetables processed in the Company's plants results in increased unit
costs. When growing conditions result in yields that exceed expectations, the
Company will generally pack only volumes required by anticipated demand through
the next pack season. Additionally, selling prices are impacted by
industry-wide production and inventory levels. Bumper crops and resulting
increased inventory levels will tend to decrease average selling prices, while
crop shortages will generally result in increased selling prices.

C. LEGAL PROCEEDINGS

There are several lawsuits against the Company on a variety of matters.
While it is not feasible to predict the ultimate outcome of these matters with
certainty, based on evaluations of the facts and on advice of counsel handling
the defense of these matters, the Company does not believe their outcome will,
in the aggregate, have a material adverse effect on its financial position or
its results of operations.

D. SUPPLY AGREEMENTS

The Company has entered into two multi-year reciprocal supply agreements
with other food processing companies. Through these agreements the Company
procures frozen vegetables to meet production and inventory requirements.
Also, the Company sells frozen vegetables processed at the Company's Tennessee
and California facilities to the other food processors.

E. WORKERS' COMPENSATION

The Company is self-insured for workers' compensation claims up to
$300,000 each. Provisions for expected future payments are accrued based on
the Company's estimate of its aggregate liability for all open claims. The
Company has secured its liability for potential workers' compensation claims in
the states where they are self-insured by obtaining bonds totaling
approximately $2,700,000.

NOTE 10. ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS

For financial instruments bearing a variable interest rate, it is presumed
that recorded book values are reasonable estimates of fair value. For all
other financial instruments, the following methods and assumptions are used to
estimate fair values:

Cash and cash equivalents, receivables, accounts payable and accruals -
Recorded book values are a reasonable estimate of fair value.

<PAGE> 34

UNITED FOODS, INC.
NOTES TO FINANCIAL STATEMENTS
(CONCLUDED)

NOTE 10. ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

Long-term debt - Current market values for debt instruments with fixed
interest rates are estimated based on borrowing rates currently available to
the Company for loans with similar terms. At February 28, 1997, the estimated
fair value of debt instruments with fixed interest rates was approximately
$37,353,000 as compared with the carrying value of such instruments of
$36,481,000.

The remaining assets and liabilities of the Company are not considered
financial instruments and have not been valued differently than is customary
under historical cost accounting.

NOTE 11. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

<TABLE>
<CAPTION>
(THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA)
-----------------------------------------------------
YEAR ENDED FEBRUARY 28, 1997: 1ST 2ND 3RD 4TH
- ------------------------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues........................... $48,708,000 $42,628,000 $52,669,000 $51,815,000
Gross profit....................... 8,867,000 7,819,000 10,013,000 10,001,000
Income from operations before
taxes on income.................. 159,000 42,000 925,000 382,000
Net income......................... 98,000 26,000 570,000 228,000
EARNINGS PER SHARE OF COMMON
STOCK AND COMMON STOCK
EQUIVALENTS:
Net income....................... .01 .00 .05 .02

YEAR ENDED FEBRUARY 29, 1996:
- ------------------------------
Revenues........................... $44,819,000 $39,885,000 $52,847,000 $54,163,000
Gross profit....................... 9,176,000 7,396,000 8,483,000 11,316,000
Income (loss) from operations
before taxes on income
(benefit)........................ 523,000 (914,000) (1,147,000) 504,000
Net income (loss).................. 316,000 (552,000) (712,000) 288,000
EARNINGS (LOSS) PER SHARE OF
COMMON STOCK AND COMMON STOCK
EQUIVALENTS:
Net income (loss).................. .03 (.05) (.06) .03
</TABLE>

As discussed in Note 8, the Company recorded a charge to operations of
$829,000 ($507,000, or $.05 per share, effect on after-tax net income) in the
fourth quarter of 1997 related to a new unqualified supplemental retirement
plan.

In addition, as discussed under "Product Introduction and Marketing Costs"
in the Summary of Accounting Policies, the Company began expensing such costs
in February 1997, the effect of which was to decrease after-tax net income for
fiscal 1997 by $551,000, or $.05 per share.

<PAGE> 35

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS

DIRECTORS
DIRECTORS WHOSE TERMS EXPIRE IN 1999

DANIEL B. TANKERSLEY (AGE 50), CLASS A DIRECTOR

Vice Chairman of the Board since 1992 and Secretary of the Company since
1978. Mr. Tankersley was Executive Vice President and General Counsel of the
Company from 1989 to 1992 and Vice President of the Company from 1979 to 1989.
He has been associated with the Company since 1973 and has been a Director of
the Company since 1979.

CARL W. GRUENEWALD, II (AGE 63), CLASS B DIRECTOR

Senior Vice President-Finance of the Company since 1982 and Treasurer of
the Company since 1977. Mr. Gruenewald has been associated with the Company
since 1966 and has been a Director of the Company since 1981.

JULIA T. WELLS (AGE 58), CLASS B DIRECTOR

Director of Marketing Services for the Company's Pictsweet Frozen Foods
Division since 1986. Mrs. Wells has been associated with the Company since 1964
and has been a Director of the Company since 1990.

DIRECTORS WHOSE TERMS EXPIRE IN 1998

DR. JOSEPH A. GEARY (AGE 44), CLASS A DIRECTOR

Minister, St. Paul United Methodist Church, Memphis, Tennessee since 1996.
He has been a Director of the Company since 1991.

B. M. ENNIS (AGE 59), CLASS B DIRECTOR

President of the Company since 1989. Mr. Ennis has been associated with
the Company since 1968 and has been a Director of the Company since 1978.

JAMES I. TANKERSLEY (AGE 55), CLASS B DIRECTOR

Chairman of the Board of the Company since 1986. Mr. Tankersley has been
the Chief Executive Officer of the Company since 1983 and served as President
of the Company from 1977 to 1989. He has been associated with the Company since
1964 and has been a Director of the Company since 1972.

DIRECTORS WHOSE TERMS EXPIRE IN 1997

JOHN S. WILDER (AGE 75), CLASS A DIRECTOR

<PAGE> 36

Speaker of the Senate and Lieutenant Governor of the State of Tennessee
since 1970 and has served continuously in the Tennessee State Legislature since
1968, having served two year terms in 1959 and 1966. Governor Wilder is an
attorney with John S. Wilder and Associates, an Association of Attorneys, in
Somerville, Tennessee and is also a director of The Somerville Bank and Trust
Co., Chairman of the Board of Cumberland Bancorp, Inc., a director of
Cumberland Bank of Carthage, Tennessee, Chairman of the Board of First Federal
Bankshares, Inc., a director of First Federal Bank, FSB of Collierville,
Tennessee and a director of the Bank of Green Hills of Nashville, Tennessee. He
is a director and Vice-President of the Longtown Supply Company, Inc. of
Longtown, Tennessee, a farming, cotton-ginning and merchandise business, a
partner in Longtown Farms, a partnership engaged in the business of farming and
a director of Health Management, Inc., a pathological waste disposal company.
He has been a Director of the Company since 1979.

DARLA T. DARNALL (AGE 34), CLASS B DIRECTOR

Marketing Analyst for the Company's Pictsweet Frozen Foods Division from
1985 to 1990. Mrs. Darnall has been associated with the Company since 1981 and
has been a Director of the Company since 1990.

KELLE T. NORTHERN (AGE 30), CLASS B DIRECTOR

Manager - Human Resources for the Company's Pictsweet Frozen Foods
Division from 1990 to 1996. Mrs. Northern has been associated with the Company
since 1982 and has been a Director of the Company since 1991.

EXECUTIVE OFFICERS

The names and positions of all the executive officers of the Company are
listed below along with their business experience during the past five years.
Officers are appointed annually by the Board of Directors at the meeting of
directors immediately following the annual meeting of stockholders. There are
no arrangements or understandings between any officer and any other person
pursuant to which the officer was appointed.

<TABLE>
<CAPTION>
NAME, AGE AND POSITION BUSINESS EXPERIENCE DURING PAST FIVE YEARS
- ---------------------- ------------------------------------------
<S> <C>
James I. Tankersley, 55 Chairman of the Board since 1986; Chief
Chairman of the Board and Executive Officer since 1983; President from
Chief Executive Officer 1977 to 1989; joined the Company in 1964.

Daniel B. Tankersley, 50 Vice Chairman since 1992 and Secretary since
Vice Chairman and Secretary 1978; Executive Vice President and General
Counsel from 1989 to 1992; Vice President
from 1979 to 1989; joined the Company in
1973.

B. M. Ennis, 59 President since 1989; Vice Chairman from 1989
President to 1990; Senior Vice President from 1982 to
1989; joined the Company in 1968.

Carl W. Gruenewald, II, 63 Senior Vice President and Chief Financial
Senior Vice President, Chief Officer since 1982 and Treasurer since 1977;
Financial Officer and joined the Company in 1966.
Treasurer

W. Donald Dresser, 49 Executive Vice President and Director of
Executive Vice President and Development since 1989. Vice
Director of Development President-Business Development and General
Counsel from joining the Company in 1985 to
1989.

Mason A. Leonard, 52 Division President since 1989; Vice President
Division President from 1985 to 1989; joined the Company in
Pictsweet Frozen Foods 1982.

John D. Haltom, 49 Division President since 1990;
Division President Director-Inventory, Purchasing and
Pictsweet Mushroom Farms Distribution for the Pictsweet Frozen Foods
Division from 1979 to 1990; joined the
Company in 1974.
</TABLE>

<PAGE> 37

FAMILY RELATIONSHIPS

James I. Tankersley, Daniel B. Tankersley and Julia T. Wells are brothers
and sister. Darla T. Darnall and Kelle T. Northern are the daughters of James
I. Tankersley. These are the only family relationships between any director or
executive officer and any other director or executive officer of the Company.

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

Based solely on a review of the reports furnished to the Company or
written representations from the Company's directors and executive officers,
the Company believes that none of its directors, officers, or ten percent
shareholders failed to file on a timely basis reports required by Section 16
(a) of the Exchange Act during the most recent fiscal year, with the exception
of Dr. Joseph A. Geary who failed to file timely one Form 4 reflecting a single
securities transaction.

ITEM 11. EXECUTIVE COMPENSATION

COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

GENERAL

The following table sets forth the total annual compensation paid or
accrued by the Company during the three years ended February 28, 1997 for the
account of each of the five most highly compensated executive officers of the
Company whose total cash compensation exceeded $100,000:

SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
- ---------------------------------------------------------------------
All Other
Compen-
Salary Bonus sation
Name and Principal Position Year ($) ($) ($)(1)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
James I. Tankersley 1997 750,000 51,417 220,299
Chairman & CEO 1996 750,000 21,015 234,062
1995 724,817 103,596 339,351
Daniel B. Tankersley 1997 500,000 33,873 161,010
Vice Chairman & Secretary 1996 500,000 13,843 169,843
1995 490,073 68,934 239,265
B. M. Ennis 1997 250,000 16,080 290,709
President 1996 250,000 6,604 95,057
1995 245,337 31,649 114,806
Carl W. Gruenewald, II 1997 235,000 15,177 199,821
Senior VP, CFO & Treasurer 1996 235,000 6,218 98,571
1995 230,337 29,803 118,193
W. Donald Dresser 1997 235,000 14,957 275,502
Executive VP & Director of Development 1996 235,000 6,150 80,919
1995 230,337 29,261 98,647
</TABLE>

<PAGE> 38

(1) ALL OTHER COMPENSATION CONSISTS OF THE FOLLOWING:

<TABLE>
<CAPTION>
Unfunded Group Life
Committee Retirement Insurance
Board Fees Fees Plans Premiums
Name and Principal Position Year ($) ($) ($) ($)
- ----------------------------- ---------------------------------------------------
<S> <C> <C> <C> <C> <C>
James I. Tankersley 1997 52,000 30,000 118,150 20,149
Chairman & CEO 1996 52,000 30,000 133,627 18,435
1995 50,750 30,000 241,496 17,105
Daniel B. Tankersley 1997 52,000 30,000 71,931 7,079
Vice Chairman & Secretary 1996 52,000 30,000 81,917 5,926
1995 50,750 30,000 152,918 5,597
B. M. Ennis 1997 52,000 - 221,499 17,210
President 1996 52,000 - 27,381 15,676
1995 50,750 - 49,874 14,182
Carl W. Gruenewald, II 1997 52,000 - 127,127 20,694
Senior VP, CFO & Treasurer 1996 52,000 - 26,215 20,356
1995 50,750 - 47,659 19,784
W. Donald Dresser 1997 - 52,000 217,549 5,953
Executive VP & Director of 1996 20,500 31,500 23,296 5,623
Development 1995 50,750 - 42,600 5,297
</TABLE>

OPTIONS/SAR GRANTS

The Company did not grant stock options or stock appreciation rights to
any of the officers named in the Summary Compensation Table during the last
fiscal year. The following table sets forth the options and/or stock
appreciation rights exercised during the last fiscal year by each named
officer, the aggregate number of options held by each named officer, and the
value realized from exercised options and inherent in unexercised options:

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES

<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs at
at FY-End (#) FY-End ($)
--------------------------------------
Shares Acquired on Value Exercisable/ Exercisable/
Exercise Realized Unexercisable(1) Unexercisable
Name and Principal Position (#) ($) (#) ($)
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
James I. Tankersley
Chairman & CEO -0- -0- -0-/-0- -0-/-0-
Daniel B. Tankersley
Vice Chairman & Secretary -0- -0- -0-/-0- -0-/-0-
B. M. Ennis
President -0- -0- 200,000/-0- 125,000/-0-
Carl W. Gruenewald, II
Senior VP, CFO & Treasurer -0- -0- 105,884/-0- 66,178/-0-
W. Donald Dresser
Executive VP & Director of
Development -0- -0- 200,000/-0- 125,000/-0-
</TABLE>

- ----------------------

<PAGE> 39

(1) In February 1997, the Company adopted a non-contributory, unqualified
supplemental retirement plan for management employees. The Board of Directors
specified that each management employee currently holding the Company's
Incentive Stock Options be offered the alternative of receiving deferred
compensation under the plan in an amount equal to $1 for each unexecised stock
option currently held. Any employee electing to so participate was required to
agree not to exercise the related options through the option expiration date in
December 1997. As of February 28, 1997, the above named officers had elected
to participate in this new deferred compensation plan and, accordingly, had
agreed to not exercise their respective options.

COMPENSATION OF DIRECTORS

All directors of the Company receive an annual fee of $45,000 for service
on the Board and $1,750 for each meeting of the Board of Directors attended
(not including telephone meetings). Each member of the Executive Committee
receives an annual fee of $30,000 for service on the Committee. In addition,
any director subject to self-employment tax is reimbursed for one-half of the
self-employment taxes payable with respect to director or committee fees, plus
an amount equal to the additional taxes resulting from such reimbursement. Dr.
Geary, a non-employee director, receives additional compensation in the form of
personal travel expense reimbursement and Mrs. Darnall and Mrs. Northern,
non-employee directors, receive additional compensation in the form of personal
travel expense reimbursement and use of a Company car, but in no case does the
value of such compensation exceed $15,000.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

SECURITY OWNERSHIP

PRINCIPAL STOCKHOLDERS

The following table sets forth as of February 28, 1997 the number of
shares of Common Stock of the Company which are, to the best of management's
belief, controlled or beneficially owned, directly or indirectly, by the
holders of five percent or more of the voting stock of the Company.

<PAGE> 40

<TABLE>
<CAPTION>
Beneficial Stock Ownership
-----------------------------------------------
Percent Percent
Owner's Name and Address Class A(1) of Class(2) Class B of Class
- ---------------------------------- ---------- ----------- ------- ---------
<S> <C> <C> <C> <C>
Dimensional Fund Advisors, Inc.(4)
1299 Ocean Avenue, Suite 650
Santa Monica, California 440,000 8.0% 402,100 7.1%
Donald Dresser (7)
206 Normandy Place
Jackson, Tennessee 38305 345,300 6.4% 56,800 1.0%
Tankersley Group(5)
Ten Pictsweet Drive
Bells, Tennessee 38006 3,265,591 40.9% 2,866,198 50.3%
Tweedy, Browne Company L.P.(3)
52 Vanderbilt Ave.
New York, NY 10017 330,087 6.5% - -
</TABLE>

MANAGEMENT

The following table sets forth as of February 28, 1997 the number of
shares of Common Stock of the Company which are, to the best of management's
belief, controlled or beneficially owned, directly or indirectly, by each of
the present directors and nominees and by all directors and officers of the
Company, as a group.

<TABLE>
<CAPTION>
Beneficial Stock Ownership
-------------------------------------------------
Percent of Percent
Name of Director or Nominee Class A(1) Class(2)(6) Class B of Class(6)
- ---------------------------------- ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C>

Darla T. Darnall 440,871 7.9% 440,871 7.7%
B. M. Ennis(7) 200,400 3.8% 300 (*)
Dr. Joseph A. Geary 750 (*) - -
Carl W. Gruenewald, II(7) 105,884 2.0% - -
Kelle T. Northern 440,871 7.9% 440,871 7.7%
Daniel B. Tankersley 712,176 13.1% 312,783 5.5%
James I. Tankersley(5) 2,553,415 33.3% 2,553,415 44.8%
Julia T. Wells(7) 337,770 6.6% - -
John S. Wilder 1,000 (*) 1,000 (*)
All Directors and Officers of the
Company as a Group(14 Persons) (7) 4,412,395 50.7% 2,928,798 51.4%
</TABLE>

(1) The following table shows shares of Class A Common Stock, included in the
number of shares beneficially owned, which may be acquired upon the conversion
of Class B Common Stock.

<TABLE>
<CAPTION>
Number of Number of
Name Shares Name Shares
- ------------------------------- --------- --------------------------------- ---------
<S> <C> <C> <C>

Darla T. Darnall 440,871 Kelle T. Northern 440,871
Dimensional Fund Advisors, Inc. 402,100 Daniel B. Tankersley 312,783
W. Donald Dresser 56,800 James I. Tankersley 2,553,415
B. M. Ennis 300 All Directors and Officers of the
Company as a Group (14 persons) 2,928,798

</TABLE>

- -----------------------

<PAGE> 41

(2) Total Class A shares used to calculate percent of class includes shares of
Class A Common Stock underlying Incentive Stock Options and the shares of Class
A Common Stock which may be acquired by the beneficial owner upon the
conversion of Class B Common Stock. See Notes (1) and (7).

(3) Based on the Schedule 13D filed by Tweedy, Browne Company L.P. on March 27,
1996.

(4) Based on the Schedule 13G filed by Dimensional Fund Advisors, Inc. on
February 13, 1997.

(5) The Tankersley Group consists of the following shares beneficially owned by
Darla T. Darnall, Kelle T. Northern, Daniel B. Tankersley, Edna W. Tankersley,
James I. Tankersley and James W. Tankersley:

<TABLE>
<CAPTION>
Percent of Percent
Name Class A(1) Class(2)(6) Class B of Class(6)
- -------------------- ----------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Darla T. Darnall 440,871 7.9% 440,871 7.7%
Kelle T. Northern 440,871 7.9% 440,871 7.7%
Daniel B. Tankersley 712,176 13.1% 312,783 5.5%
Edna W. Tankersley 9,474 * 9,474 *
James I. Tankersley 1,221,328 19.3% 1,221,328 21.4%
James W. Tankersley 440,871 7.9% 440,871 7.7%
</TABLE>

James I. Tankersley has no power to vote or dispose of and disclaims beneficial
ownership of the 9,474 shares of Class B Common Stock owned by his spouse, Edna
W. Tankersley. All members of the above group may be reached at Ten Pictsweet
Drive, Bells, Tennessee 38006.

(6) (*) Indicates less than one percent of class.

(7) The following table shows shares of Class A Common Stock, included in the
number of shares beneficially owned, which may be purchased upon exercise of a
stock option within 60 days of the Record Date. However, each of these
Directors and Officers has agreed to not exercise the options through the
option expiration date in December 1997 (See Note 8 - Notes to Financial
Statements).

<TABLE>
<CAPTION>
Number of Number of
Name of Option Holder Shares Name of Option Holder Shares
- --------------------------------- --------- --------------------- ---------
<S> <C> <C> <C>
W. Donald Dresser 200,000 Carl W. Gruenewald, II 105,884
B. M. Ennis 200,000 Julia T. Wells 10,000
All Directors and Officers of the
Company as a group 665,884
</TABLE>

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In 1991 the Company guaranteed a $225,000 bank loan to the Senior Vice
President - Finance of the Company. The purpose of this guarantee was to allow
him to refinance a loan he had with another bank and to meet certain family
financial obligations which he felt obliged to assume. On July 12, 1991 the
Board of Directors determined that the loan guarantee was reasonably expected
to benefit the Company and authorized the guarantee. The largest amount
outstanding of such indebtedness during the year ended February 28, 1997 was
$71,387 and the amount outstanding on May 2, 1997 was $28,009.

<PAGE> 42

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

FINANCIAL STATEMENTS INCLUDED IN PART II OF THIS REPORT

Report of Independent Certified Public Accountants.

Balance Sheets at February 28, 1997 and February 29, 1996.

Statements of Operations for the years ended February 28 or 29, 1997, 1996
and 1995.

Statements of Stockholder's Equity for the years ended February 28 or 29,
1997, 1996 and 1995.

Statements of Cash Flows for the years ended February 28 or 29, 1997, 1996
and 1995.

Summary of Accounting Policies

Notes to Financial Statements

FINANCIAL STATEMENT SCHEDULES INCLUDED IN PART IV OF THIS REPORT

Schedules have not been filed because the conditions requiring the
filing do not exist or the required information is given in the financial
statements, including the notes thereto.

<PAGE> 43

EXHIBITS INCLUDED IN PART IV OF THIS REPORT

<TABLE>
<S> <C>
3.1 Certificate of Incorporation of United Foods, Inc., as amended, Exhibit 3.1 to the
Annual Report on form 10-K of United Foods, Inc., filed for the fiscal year ended
February 28, 1994, is incorporated by reference herein..

3.2 By-Laws of United Foods, Inc., as amended, Exhibit 3.2 to the Annual Report on Form
10-K of United Foods, Inc. Filed for the fiscal year ended February 28, 1993, is
incorporated by reference herein.

3.3 Amendment to the Certificate of Incorporation of United Foods, Inc. dated July 10, 1996.

3.4 Amendment dated May 23, 1996 to Article V of By-Laws of United Foods, Inc.

10.1* The 1987 Incentive Stock Option Plan of United Foods, Inc. Exhibit 10.1 to the Annual
Report on Form 10-K of United Foods, Inc., filed for the fiscal year ended February 28,
1994, is incorporated by reference herein.

10.2 Revolving Credit Agreement between United Foods, Inc. and Cooperatieve Centrale
Raiffeisen-Boerenleenbank B. A., "Rabobank Nederland", dated August 20, 1992, Exhibit
10.2 to the Annual Report on Form 10-K of United Foods, Inc. filed for the fiscal year
ended February 28, 1993, is incorporated by reference herein.

10.4 Loan Agreement, Term Loan Note and Security Agreement between First American National
Bank and United Foods, Inc., all dated December 3, 1992, Exhibit 10.4 to the Annual
Report on Form 10-K of United Foods, Inc. filed for the fiscal year ended February 28,
1993, is incorporated by reference herein.

10.6 Loan Agreement, Revolving Credit Note and Security Agreement between First American
National Bank and United Foods, Inc., all dated April 7, 1993, Exhibit 10.6 to the
Annual Report on Form 10-K of United Foods, Inc. filed for the fiscal year ended
February 28, 1993, is incorporated by reference herein.

10.7 Second Amendment, dated October 4, 1993, to each of that certain Term Loan Agreement
and that certain Revolving Credit Agreement, each dated August 20, 1992 between United
Foods, Inc. and Cooperatieve Centrale Raiffeisen-Boerenleenbank B. A., "Rabobank
Nederland", Exhibit 10.7 to the Annual Report on Form 10-K of United Foods, Inc. filed
for the fiscal year ended February 28, 1994, is incorporated by reference herein.

10.8 Third Amendment, dated February 14, 1994, to each of that certain Term Loan Agreement
and that certain Revolving Credit Agreement, each dated August 20, 1992 between United
Foods, Inc. and Cooperatieve Centrale Raiffeisen-Boerenleenbank B. A., "Rabobank
Nederland", Exhibit 10.8 to the Annual Report on Form 10-K of United Foods, Inc. filed
for the fiscal year ended February 28, 1994, is incorporated by reference herein.

10.9 First Amendment, dated June 29, 1994, to that certain Term Loan Agreement between First
American National Bank and United Foods, Inc., dated December 3, 1992 Exhibit 10.9 to
the Annual Report on Form 10-K of United Foods, Inc. filed for the fiscal year ended
February 28, 1995, is incorporated by reference herein.
</TABLE>

<PAGE> 44

EXHIBITS INCLUDED IN PART IV OF THIS REPORT - CONTINUED

<TABLE>
<S> <C>
10.10 First Amendment dated June 29, 1994, to that certain Revolving Loan
Agreement between First American National Bank and United Foods, Inc.,
dated April 7, 1993 Exhibit 10.10 to the Annual Report on Form 10-K of
United Foods, Inc. filed for the fiscal year ended February 28, 1995, is
incorporated by reference herein.

10.11 Fourth Amendment, dated August 19, 1994, to that certain Revolving
Credit Agreement, between United Foods, Inc. and Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland", dated August 29,
1992 Exhibit 10.11 to the Annual Report on Form 10-K of United Foods,
Inc. filed for the fiscal year ended February 28, 1995, is incorporated
by reference herein.

10.12 Second Amendment dated June 1, 1995, to that certain Revolving Loan
Agreement between First American National Bank and United Foods, Inc.,
dated April 7, 1993, Exhibit 10.12 to the Annual Report on Form 10-K of
United Foods, Inc. filed for the fiscal year ended February 29, 1996, is
incorporated by reference herein.

10.13 Modification dated June 21, 1995, to that certain Revolving Loan
Agreement between First American National Bank and United Foods, Inc.,
dated April 7, 1993, Exhibit 10.13 to the Annual Report on Form 10-K of
United Foods, Inc. filed for the fiscal year ended February 29, 1996, is
incorporated by reference herein.

10.14 Third Amendment dated September 1, 1995, to that certain Revolving Loan
Agreement between First American National Bank and United Foods, Inc.,
dated April 7, 1993, Exhibit 10.14 to the Annual Report on Form 10-K of
United Foods, Inc. filed for the fiscal year ended February 29, 1996, is
incorporated by reference herein.

10.15 Modification dated December 31, 1995, to that certain Revolving Loan
Agreement between First American National Bank and United Foods, Inc.,
dated April 7, 1993, Exhibit 10.15 to the Annual Report on Form 10-K of
United Foods, Inc. filed for the fiscal year ended February 29, 1996, is
incorporated by reference herein.

10.16 Fifth Amendment, dated June 29, 1995, to that certain Revolving Credit
Agreement, between United Foods, Inc. and Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland", dated August 29,
1992, Exhibit 10.16 to the Annual Report on Form 10-K of United Foods,
Inc. filed for the fiscal year ended February 29, 1996, is incorporated
by reference herein.

10.17 Amendment, dated August 1, 1995, to each of that certain Term Loan
Agreement and that certain Revolving Credit Agreement, each dated August
20, 1992 between United Foods, Inc. and Cooperatieve Centrale
Raiffeisen-Boerenleenbank B. A., "Rabobank Nederland" Exhibit 10.17 to
the Annual Report on Form 10-K of United Foods, Inc. filed for the
fiscal year ended February 29, 1996, is incorporated by reference
herein.

10.18 Note Purchase Agreement between United Foods, Inc. and Northwest
National Life Insurance Company, Northern Life Insurance Company, The
North Atlantic Life Insurance Company, Washington Square Capital, Inc.,
Commercial Union Life Insurance Company of America, Minnesota Mutual
Life Insurance Company and Commercial Union Life Insurance Company of
New York dated September 29, 1995, Exhibit 10.18 to the Annual Report on
Form 10-K of United Foods, Inc. filed for the fiscal year ended February
29, 1996, is incorporated by reference herein.

10.19 Fourth Amendment, dated February 7, 1997, to that certain Revolving Loan
Agreement between First American National Bank and United Foods, Inc.,
dated April 7, 1993.

10.20 Sixth Amendment, dated October 31, 1996, to that certain Revolving
Credit Agreement, between United Foods, Inc. and Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland", dated August 29,
1992.
</TABLE>

<PAGE> 45

EXHIBITS INCLUDED IN PART IV OF THIS REPORT - CONCLUDED

<TABLE>
<S> <C>
10.21 Seventh Amendment, dated February 19, 1997, to each of that certain Term
Loan Agreement and that certain Revolving Credit Agreement, each dated
August 20, 1992 between United Foods, Inc. and Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A., "Rabobank-Nederland".

10.22 Loan Agreement and Secured Promissory Note between United Foods, Inc. and
Metropolitan Life Insurance Company all dated January 7, 1997.

10.23 Consolidation, Renewal, and Restatement of Deed of Trust and Security
Agreement, and Consolidation, Renewal, and Restatement of Promissory Notes
each between United Foods, Inc. and the Northwestern Mutual Life Insurance
Company all dated January 30, 1997.

10.24* United Foods, Inc. Second Management Retirement Plan dated February 26, 1997.

11 Computation of earnings per share.

27 Financial Data Schedule (For SEC use only)
* Compensatory Plan.
</TABLE>

REPORTS ON FORM 8-K

The Company did not file any reports on Form 8-K during the quarter ended
February 28, 1997.

<PAGE> 46

SIGNATURES

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.

UNITED FOODS, INC.

S/United Foods, Inc.

s/C. W. Gruenewald, II

May 7, 1997 By C. W. Gruenewald, II
Director, Senior Vice President
Chief Financial Officer and Treasurer

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.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------ -------------------------- -----------
<S> <C> <C>

s/James I. Tankersley Chairman of the Board May 7, 1997
- ------------------------
James I. Tankersley

s/Daniel B. Tankersley Vice Chairman of the Board May 6, 1997
- ------------------------
Daniel B. Tankersley and Secretary

s/B. M. Ennis President May 6, 1997
- ------------------------
B. M. Ennis

s/Joseph A. Geary Director May 5, 1997
- ------------------------
Joseph A. Geary

s/Darla T. Darnall Director May 6, 1997
- ------------------------
Darla T. Darnall

s/Julia T. Wells Director May 6, 1997
- ------------------------
Julia T. Wells

s/Kelle T. Northern Director May 6, 1997
- ------------------------
Kelle T. Northern

s/John S. Wilder Director May 1, 1997
- ------------------------
John S. Wilder
</TABLE>

<PAGE> 47

UNITED FOODS, INC.

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT EXHIBIT
NUMBER DESCRIPTION PAGE
- ------- --------------------------------------------------------------------------------------- ----
<S> <C> <C>
3.1 Certificate of Incorporation of United Foods, Inc., as amended, Exhibit 3.1 to the
Annual Report on form 10-K of United Foods, Inc., filed for the fiscal year ended
February 28, 1994, is incorporated by reference herein..

3.3 Amendment to the Certificate of Incorporation of United Foods, Inc. dated July 10, 1996. 52

3.4 Amendment dated May 23, 1996 to Article V of By-Laws of United Foods, Inc. 54

10.3 Term Loan Agreement between United Foods, Inc. and Cooperatieve Centrale
Raiffeisen-Boerenleenbank B. A., "Rabobank Nederland", dated August 20, 1992, Exhibit
10.3 to the Annual Report on Form 10-K of United Foods, Inc. filed for the fiscal year
ended February 28, 1993, is incorporated by reference herein.
10.4 Loan Agreement, Term Loan Note and Security Agreement between First American National
Bank and United Foods, Inc., all dated December 3, 1992, Exhibit 10.4 to the Annual
Report on Form 10-K of United Foods, Inc. filed for the fiscal year ended February 28,
1993, is incorporated by reference herein.

10.5 First Amendment, dated January 11, 1993, to each of that certain Term Loan Agreement
and that certain Revolving Credit Agreement, each dated August 20, 1992 between United
Foods, Inc. and Cooperatieve Centrale Raiffeisen-Boerenleenbank B. A., "Rabobank
Nederland", Exhibit 10.5 to the Annual Report on Form 10-K of United Foods, Inc. filed
for the fiscal year ended February 28, 1993, is incorporated by reference herein.
10.6 Loan Agreement, Revolving Credit Note and Security Agreement between First American
National Bank and United Foods, Inc., all dated April 7, 1993, Exhibit 10.6 to the
Annual Report on Form 10-K of United Foods, Inc. filed for the fiscal year ended
February 28, 1993, is incorporated by reference herein.

<PAGE> 48

UNITED FOODS, INC.

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT EXHIBIT
NUMBER DESCRIPTION PAGE
- ------- ----
<S> <C> <C>
10.9 First Amendment, dated June 29, 1994, to that certain Term Loan
Agreement between First American National Bank and United Foods,
Inc., dated December 3, 1992 Exhibit 10.9 to the Annual Report
on Form 10-K of United Foods, Inc. filed for the fiscal year
ended February 28, 1995, is incorporated by reference herein.

10.10 First Amendment dated June 29, 1994, to that certain Revolving
Loan Agreement between First American National Bank and United
Foods, Inc., dated April 7, 1993 Exhibit 10.10 to the Annual
Report on Form 10-K of United Foods, Inc. filed for the fiscal
year ended February 28, 1995, is incorporated by reference
herein.

10.11 Fourth Amendment, dated August 19, 1994, to that certain
Revolving Credit Agreement, between United Foods, Inc. and
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank
Nederland", dated August 29, 1992 Exhibit 10.11 to the Annual
Report on Form 10-K of United Foods, Inc. filed for the fiscal
year ended February 28, 1995, is incorporated by reference
herein.

10.12 Second Amendment dated June 1, 1995, to that certain Revolving
Loan Agreement between First American National Bank and United
Foods, Inc., dated April 7, 1993, Exhibit 10.12 to the Annual
Report on Form 10-K of United Foods, Inc. filed for the fiscal
year ended February 29, 1996, is incorporated by reference
herein.

10.13 Modification dated June 21, 1995, to that certain Revolving Loan
Agreement between First American National Bank and United Foods,
Inc., dated April 7, 1993, Exhibit 10.13 to the Annual Report on
Form 10-K of United Foods, Inc. filed for the fiscal year ended
February 29, 1996, is incorporated by reference herein.

10.14 Third Amendment dated September 1, 1995, to that certain
Revolving Loan Agreement between First American National Bank
and United Foods, Inc., dated April 7, 1993, Exhibit 10.14 to
the Annual Report on Form 10-K of United Foods, Inc. filed for
the fiscal year ended February 29, 1996, is incorporated by
reference herein.

10.15 Modification dated December 31, 1995, to that certain Revolving
Loan Agreement between First American National Bank and United
Foods, Inc., dated April 7, 1993, Exhibit 10.15 to the Annual
Report on Form 10-K of United Foods, Inc. filed for the fiscal
year ended February 29, 1996, is incorporated by reference
herein.

10.16 Fifth Amendment, dated June 29, 1995, to that certain Revolving
Credit Agreement, between United Foods, Inc. and Cooperatieve
Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland",
dated August 29, 1992, Exhibit 10.16 to the Annual Report on
Form 10-K of United Foods, Inc. filed for the fiscal year ended
February 29, 1996, is incorporated by reference herein.

10.17 Amendment, dated August 1, 1995, to each of that certain Term
Loan Agreement and that certain Revolving Credit Agreement, each
dated August 20, 1992 between United Foods, Inc. and
Cooperatieve Centrale Raiffeisen-Boerenleenbank B. A., "Rabobank
Nederland" Exhibit 10.17 to the Annual Report on Form 10-K of
United Foods, Inc. filed for the fiscal year ended February 29,
1996, is incorporated by reference herein.

10.18 Note Purchase Agreement between United Foods, Inc. and Northwest
National Life Insurance Company, Northern Life Insurance
Company, The North Atlantic Life Insurance Company, Washington
Square Capital, Inc., Commercial Union Life Insurance Company of
America, Minnesota Mutual Life Insurance Company and Commercial
Union Life Insurance Company of New York dated September 29,
1995, Exhibit 10.18 to the Annual Report on Form 10-K of United
Foods, Inc. filed for the fiscal year ended February 29, 1996,
is incorporated by reference herein.

10.19 Fourth Amendment, dated February 7, 1997, to that certain 57
Revolving Loan Agreement between First American National Bank
and United Foods, Inc., dated April 7, 1993.
</TABLE>

<PAGE> 49

UNITED FOODS, INC.

INDEX TO EXHIBITS
(CONCLUDED)

<TABLE>
<CAPTION>
EXHIBIT EXHIBIT
NUMBER DESCRIPTION PAGE
- ------- ------------------------------------------------------------------------ ----
<S> <C> <C>
10.20 Sixth Amendment, dated October 31, 1996, to that certain Revolving Credit 63
Agreement, between United Foods, Inc. and Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland", dated August 29, 1992.

10.21 Seventh Amendment, dated February 19, 1997, to each of that certain Term 67
Loan Agreement and that certain Revolving Credit Agreement, each dated
August 20, 1992 between United Foods, Inc. and Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A., "Rabobank-Nederland".

10.22 Loan Agreement and Secured Promissory Note between United Foods, Inc. and 71
Metropolitan Life Insurance Company all dated January 7, 1997.

10.23 Consolidation, Renewal, and Restatement of Deed of Trust and Security 100
Agreement, and Consolidation, Renewal, and Restatement of Promissory Notes
each between United Foods, Inc. and the Northwestern Mutual Life Insurance
Company all dated January 30, 1997.

10.24* United Foods, Inc. Second Management Retirement Plan dated February 26, 1997. 116

11 Computation of earnings per share. 124

27 Financial Data Schedule (For SEC use only)

* Compensatory Plan.
</TABLE>

<PAGE> 1

EXHIBIT 3.3

AMENDMENT TO THE CERTIFICATE OF INCORPORATION OF UNITED FOODS, INC. DATED JULY
10, 1996.

<PAGE> 2

EXHIBIT 3.3

AMENDMENT
TO THE CERTIFICATE OF INCORPORATION OF UNITED FOODS, INC.

In accordance with the provisions of Section 242 of the Delaware
Corporation Law, Article IV (A) of the Certificate of Incorportaion of United
Foods, Inc. was amended to read as follows:

The total number of shares of all classes of stock which the
Corporation shall have authority to issue is Twenty Eight Million
(28,000,000) shares of capital stock, consisting of Ten Million
(10,000,000) shares of Preferred Stock with a par value of one
dollar ($1.00) per share and Eighteen Million (18,000,000) shares
of Common Stock with a par value of ($1.00) per share, of which
Twelve Million (12,000,000) shares shall be designated "Class A
Common Stock" and Six Million (6,000,000) shares shall be
designated "Class B Common Stock". The number of authorized
shares of Preferred Stock and Common Stock may be increased or
decreased from time to time if approved by the holders of a
majority of the voting power of the stock of the Corporation
entitled to vote thereon.

<PAGE> 1

EXHIBIT 3.4

AMENDMENT DATED MAY 23, 1996 TO ARTICLE V OF BY-LAWS OF UNITED FOODS, INC.

<PAGE> 2

EXHIBIT 3.4

ARTICLE V. INDEMNIFICATION OF OFFICERS AND DIRECTORS

Section 5.1. Actions, Etc. Other Than by or in the Right of the
Corporation. The Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise or as a member of any committee or similar
body, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action or
proceeding, that he had reasonable cause to believe that his conduct was
unlawful.

Section 5.2. Actions, Etc. by or in the Right of the Corporation. The
Corporation shall indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action or suit by or
in the right of the Corporation to procure a judgment in its favor by reason of
the fact that he is or was director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, or as a member of any committee or similar
body, against expenses (including attorney's fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action or
suit if he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interest of the Corporation, except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper.

Section 5.3. Determination That Indemnification Is Proper. Any
indemnification under Section 5.1 or Section 5.2 above of these By-laws (unless
ordered by a court) shall be made by the Corporation only as authorized in the
specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met
the applicable standard of conduct set forth in Section 5.1 and 5.2 of these
By-laws. Such determination shall be made (i) by the Board by a majority vote
of the directors who were not parties to such action, suit or proceeding, or
(ii) if there are no such directors, or if such directors so direct, by
independent legal counsel in a written opinion, or (iii) by the stockholders.

Section 5.4. Successful Defense. Notwithstanding the other provisions of
this Article V, to the extent that a director, officer, employee or agent of
the Corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in Section 5.1 or Section 5.2 above
of these By-laws, or in defense of any claim, issue or matter therein, he shall
be indemnified against expenses (including attorney's fees) actually and
reasonably incurred by him in connection therewith.

Section 5.5. Expenses. Expenses (including attorneys' fees) incurred by
an officer or director in defending any civil, criminal, administrative or
investigative action, suit or proceeding may be paid by the corporation in
advance of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such director or officer to repay
such amount if it shall ultimately be determined that he is not entitled to be
indemnified by the corporation as authorized in this Article V. Such expenses
(including attorneys'

<PAGE> 3

fees) incurred by other employees and agents may be so paid upon such terms and
conditions, if any, as the board of directors deems appropriate.

Section 5.6. Nonexclusivity; Continuation. The indemnification or
advancement of expenses provided by this Article V shall not be deemed
exclusive and is declared expressly to be nonexclusive of any other rights to
which those seeking indemnification or advancement of expenses may be entitled
under any By-laws, agreement, vote of stockholders or disinterested directors
or otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office. The indemnification and
advancement of expenses provided by, or granted pursuant to, this Article V
shall, unless otherwise provided when authorized or ratified, continue as to a
person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the heirs, executors and administrators of such a
person.

Section 5.7. Indemnification Insurance. Upon resolution passed by the
Board, the Corporation may purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee or agent of the Corporation,
or is or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise or as a member of any committee or similar body against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Corporation would have
the power to indemnify him against such liability under the provisions of this
Article V.

Section 5.8. Definitions. For the purposes of this Article V, references
to "the Corporation" include in addition to the resulting corporation, any
constituent corporation (including any constituent of a constituent) absorbed
in a consolidation or merger which, if its separate existence had continued,
would have had power and authority to indemnify its directors, officers and
employees or agents, so that any person who is or was a director, officer,
employee or agent of such constituent corporation or is or was serving at the
request of such constituent corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise or as a member of any committee or similar body shall stand in the
same position under the provisions of this Article V with respect to the
resulting or surviving corporation as he would have with respect to such
constituent corporation if its separate existence had continued. For purposes
of this Article V, references to "other enterprises" shall include employee
benefit plans; references to "fines" shall include any excise taxes assessed on
a person with respect to any employee benefit plan; and references to "serving
at the request of the Corporation" shall include any service as a director,
officer, employee or agent of the corporation which imposes duties on, or
involves services by, such director, officer, employee, or agent with respect
to an employee benefit plan, its participants or beneficiaries; and a person
who acted in good faith and in a manner he reasonably believed to be in the
interest of the participants and beneficiaries of an employee benefit plan
shall be deemed to have acted in a manner "not opposed to the best interests of
the Corporation" as referred to in this Article V.

Section 5.9. Amendment or Repeal. Any repeal or modification of any of
the foregoing provisions of this Article V shall not adversely affect any right
or protection hereunder of any person in respect of any act or omission
occurring prior to the time of such repeal or modification.

<PAGE> 1

EXHIBIT 10.19

FOURTH AMENDMENT, DATED FEBRUARY 7, 1997, TO THAT CERTAIN REVOLVING LOAN
AGREEMENT BETWEEN FIRST AMERICAN NATIONAL BANK AND UNITED FOODS, INC., DATED
APRIL 7, 1993.

<PAGE> 2

EXHIBIT 10.19

FOURTH AMENDMENT TO REVOLVING LOAN AGREEMENT

THIS FOURTH AMENDMENT TO REVOLVING LOAN AGREEMENT (the "Agreement") made
and entered into as of February 6, 1997, by and between FIRST AMERICAN NATIONAL
BANK, a national banking association organized and existing under the statutes
of the United States of America (hereinafter "Lender"), and UNITED FOODS, INC.,
a corporation organized and existing under the laws of the State of Delaware
("Borrower").

W I T N E S S E T H:

WHEREAS, Lender and Borrower executed a Loan Agreement dated as of April
7, 1993 (the "Loan Agreement") pursuant to which the Lender made a Twenty-Three
Million Dollar ($23,000,000.00) revolving credit loan to Borrower for the
purpose of providing working capital to the Borrower (the "Revolving Loan");

WHEREAS, the Lender and Borrower have previously amended the Loan
Agreement; and

WHEREAS, the Lender and Borrower desire to further modify the Loan
Agreement as hereinafter set forth;

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants and other good
and valuable consideration the receipt and sufficiency of which is hereby
acknowledged by each of the parties, the parties do mutually agree as follows:

Section 1.1 of the Loan Agreement is hereby deleted in its
entirety and the following paragraph is substituted in lieu thereof:

"1.1 Acceptable Account. 'Acceptable Account' shall mean an
Account Receivable which meets all of the following requirements:
(a) such Receivable is owned by the Borrower and represents a
complete bona fide transaction which requires no further act under
any circumstances on the part of the Borrower to make such
Receivable payable by the Account Debtor; (b) such Receivable is
not past due more than sixty (60) days, or ninety (90) days in the
case of a United States Government Receivable, from the date of
the original invoice; (c) the goods, the sale of which gave rise
to such Receivable, were shipped or delivered to the Account
Debtor on an absolute sale basis and not on a bill and hold sale
basis, a consignment sale basis, a guaranteed sale basis, a sale
or return basis, or on the basis of any other similar
understanding and no material part of such goods has been returned
or rejected; (d) such Receivable is not evidenced by chattel paper
or an 'instrument' (as defined in Article IX of the Tennessee
Uniform Commercial Code) of any kind; (e) the Account Debtor with
respect to such Receivable is not Insolvent or the subject of any
bankruptcy or insolvency proceedings of any kind or of any other
proceeding or action, threatened or pending, which might have a
materially adverse effect on such Account Debtor and is not deemed
ineligible for credit for other reasons; (f) such Receivable is
not owing by an Account Debtor having twenty-five percent (25%) or
more in face value of its then-existing accounts owing to the
Borrower past due more than sixty (60) days, or ninety (90) days
in the case of a United States Government Receivable, from the
date of the original invoice; (g) such Receivable is not owing by
an Account Debtor whose then-existing accounts owing to

<PAGE> 3

the Borrower exceed in face amount twenty percent (20%) of the
Borrower's total Acceptable Accounts; (h) if such Receivable
arises from the performance of services, such services have been
fully rendered; (i) such Receivable is a valid, legally
enforceable obligation of the Account Debtor with respect thereto
and is not subject to any present, and no facts are known which
are the basis for any future, offset, deduction or counterclaim,
dispute or other defense on the part of such Account Debtor, other
than allowances to the Account Debtor in the ordinary course of
the Borrower's business, which allowances shall reduce the face
amount of the Receivable for the purposes of determining its
eligibility; (j) except as provided in the last sentence of this
Section 1.1 with respect to United States Government Receivables,
such Receivable is subject to a perfected security interest
pursuant to the Security Agreement and is subject to no other Lien
whatsoever other than Permitted Exceptions; (k) such Receivable is
evidenced by an invoice or other documentation in form acceptable
to the Lender; (l) such Receivable does not arise out of any
transaction with any Affiliate of the Borrower; (m) the goods and
services giving rise to such Receivable were not, at the time of
the sale or rendering thereof, subject to any Lien, except the
security interest granted hereunder and Permitted Exceptions; (n)
is not a Foreign Receivable; and (o) such Receivable does not
arise from the sale of goods or services to a military
distributor. A United States Government Receivable that otherwise
satisfies the foregoing requirements shall be an Acceptable
Account notwithstanding the failure by the Lender and the Borrower
to comply with the Federal Assignment of Claims Act of 1940, as
amended; provided that the Lender, in its sole and absolute
discretion, may notify the Borrower of the Lender's determination
to comply with such Act, and at the expiration of thirty (30) days
following such notice any United States Government Receivable will
cease to be an Acceptable Account unless and until all steps
necessary under the Act to complete an assignment of such United
States Government Receivable to the Lender have been taken."

Section 1.42 of the Loan Agreement is hereby deleted in its
entirety and the following paragraph is substituted in lieu thereof:

"1.42 Revolving Credit Loan Maturity Date. June 1, 1999;
provided, however, that the Revolving Credit Loan Maturity Date
may be extended by Lender, at the request of the Borrower but in
Lender's sole and absolute discretion, for one (1) additional year
on each anniversary date of this Agreement.

Section 1.7 of the Loan Agreement is hereby deleted in its
entirety and the following paragraph is substituted in lieu thereof:

"1.7 Borrowing Base. The limitation on the aggregate Total
Exposure which may be outstanding at any time during the term of
this Agreement. The Borrowing Base is the sum of (a) eighty-five
percent (85%) of Acceptable Accounts, such amounts to be decreased
by an amount equal to (i) One Hundred Twenty Thousand Dollars
($120,000.00) plus (ii) all amounts due on accounts payable to
growers of agricultural commodities that are outstanding for more
than thirty (30) days from due date plus (b) sixty percent (60%)
of Acceptable Inventory."

Section 4.1 of the Loan Agreement is hereby deleted in its
entirety and the following paragraph is substituted in lieu thereof:

4.1 The Commitment. Subject to the terms and conditions
herein set out, Lender agrees and commits to make loan advances
and issue Letters of Credit to or for the account of the Borrower
from time to time, from the date hereof until the Revolving Credit
Loan Maturity Date, in an aggregate amount of Total Exposure not
to exceed, at any one time outstanding, the lesser of (a) Eighteen
Million Dollars ($18,000,000.00), or (b) the Borrower's Borrowing
Base, as defined in Article I.

<PAGE> 4

Section 6.1(s) of the Loan Agreement is hereby deleted in its entirety and
the following paragraph is substituted in lieu thereof:

(s) Borrowing Base Certificate. Borrower shall furnish on the fifteenth
(15th) day of each calendar month a Borrowing Base Certificate
substantially in the form of EXHIBIT "A" attached hereto, executed by a
Responsible Officer of Borrower stating the Borrowing Base as of the last
day of the immediately preceding calendar month, and having attached
thereto an inventory report, an accounts receivable aging report and a
listing of accounts receivable, listing each account, and an accounts
payable summary aging report, with a detail listing of those accounts
payable due to growers of agricultural commodities, all to be as of the
last day of the immediately preceding calendar month, certified by the
Responsible Officer of Borrower. The inventory report shall specify the
location of all Acceptable Inventory, and shall report the value of such
Inventory at the lower of current year's anticipated cost or market
value. The accounts receivable aging report shall report Borrower's
total accounts receivable and shall segregate such accounts receivable
into categories, according to whether such accounts receivable remain
unpaid for no more than sixty (60) days from the date of invoice, or for
more than sixty (60) days, but no more than ninety (90) days from the
date of invoice, or more than ninety (90) days from the date of invoice,
and according to whether the account debtor is a department, agency or
other instrumentality of the federal government of the United States.

Section 7 of the Loan Agreement is hereby amended by adding the
following:

7.13 Accounts Payable to Growers. Any account payable to a grower
of agricultural commodities shall be outstanding and unpaid for more than
sixty (60) days from the due date of invoice to Borrower, except for good
faith disputes with growers that Borrower is actively attempting to
resolve.

Exhibit "A" is hereby deleted in its entirety and replaced with the new
Exhibit "A" attached hereto and incorporated herein by reference.

As amended hereby, the Loan Agreement, as previously amended, is confirmed
and ratified in all other respects.

IN WITNESS WHEREOF, this Amendment has been executed on the day and year
first above written.

FIRST AMERICAN NATIONAL BANK

By: S/N Mariah G. Lundberg
-----------------------------------
Mariah G. Lundberg
Title: Assistant Vice President

UNITED FOODS, INC.

By: S/N Carl W. Gruenewald, II
------------------------------------
Carl W. Gruenewald, II
Title: Senior Vice President,Chief Financial
Officer & Treasurer

<PAGE> 5

EXHIBIT A

UNITED FOODS, INC.
BELLS, TN

Borrowing Base Certificate
______________________________________________________________________________

Status as of
-----------------.
(Date)

1. Total Accounts Receivable balance $
------------------
2. Less: Mushroom Receivables $
------------------

3. Less: Non-Government Accounts over
60 days from invoice $
------------------

4. Less: Government Accounts
over 90 days $
------------------

5. Less: Other Ineligible Accounts
Receivable (including, but not limited to,
bill and hold and military distributors) $
------------------

6. Less $120,000.00 plus all amounts due on
accounts payable to growers of agricultural commodities
that are outstanding for more than thirty (30) days from due date

$
------------------

7. Total Acceptable Accounts $
------------------

8. Advance rate on Acceptable Accounts 85%
---------

9. Availability from Account Receivable
(Line 6 times Line 7) $
------------------

10. Total Inventory balance $
------------------

11. Less: Mushroom Inventory $
------------------

12. Less: Other ineligible inventory $
------------------

13. Total Acceptable Inventory $
------------------

14. Advance rate on Acceptable Inventory 60%
------------

15. Availability from Acceptable
Inventory (Line 13 times $
Line 14) -------------------

16. Total Availability (Line 8 plus Line 14) $
-------------------

<PAGE> 6

17. Outstanding Letters of Credit $
-------------------

18. Outstanding Loan Balance $
-------------------
19. Excess or (deficit)
(Line 16 minus Line 17 minus Line 18) $
-------------------
Exhibits Attached Hereto:

(a) Aging of Accounts Receivable (and Listing of Accounts Receivable)

(b) Identification of Acceptable Inventory by location.

The undersigned certifies that the information set out herein and the
Exhibits attached hereto is true and correct in all material respects as of the
status date above. The undersigned further certifies that the figures set out
herein pertain only to Acceptable Accounts, and Acceptable Inventory as those
terms are defined in the Loan Agreement between United Foods, Inc. and First
American National Bank. To the best of the undersigned's knowledge, no Account
Debtor is Insolvent.

UNITED FOODS, INC.

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

Title:
-----------------------
60

<PAGE> 1

EXHIBIT 10.20

SIXTH AMENDMENT, DATED OCTOBER 31, 1996, TO THAT CERTAIN REVOLVING CREDIT
AGREEMENT, BETWEEN UNITED FOODS, INC. AND COOPERATIEVE CENTRALE
RAIFFEISEN-BORENLEENBANK B.A., "RABOBANK NEDERLAND", DATED AUGUST 29, 1992.

<PAGE> 2
EXHIBIT 10.20

AMENDMENT NO. 6

Dated as of October 31, 1996

This SIXTH AMENDMENT between UNITED FOODS, INC., a Delaware corporation
(the "Borrower"), and COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND", NEW YORK BRANCH (the "Bank").

PRELIMINARY STATEMENTS. The Borrower and the Bank have entered into a
Revolving Credit Agreement, dated as of August 20, 1992 (as amended prior to
the date hereof and as may be further amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"; the terms defined in the
Credit Agreement being used herein as therein defined). Each of the Borrower
and the Bank wish to amend the Credit Agreement as hereinafter set forth.

NOW, THEREFORE, the Borrower and the Bank hereby agree as follows:

SECTION 1. Amendment to Credit Agreement. Sections 1.01 and 6.09 of the
Credit Agreement are, effective as of the date hereof and subject to the
satisfaction of the conditions precedent set forth in Section 2 hereof, hereby
amended by deleting the date "August 31, 1998" appearing said Sections and
substituting, in lieu thereof, the date "August 31, 1999".

SECTION 2. Conditions of Effectiveness. This Sixth Amendment shall
become effective when, and only when, the Bank shall have received counterparts
of this Sixth Amendment executed by the Borrower.

SECTION 3. Representations and Warranties of the Borrower. The Borrower
represents and warrants as follows:

(a) The representations and warranties contained in Section 3.01 of the
Credit Agreement are true and correct on and as of the date hereof as though
made on and as of the date hereof.

(b) The execution, delivery and performance by the Borrower of this Sixth
Amendment, and the Credit Agreement, as amended hereby, are within the
Borrower's corporate powers, have been duly authorized by all necessary
corporate action and do not contravene (i) the Borrower's charter or by-laws,
or (ii) law or any contractual restriction binding on or affecting the
Borrower, or result in, or require, the creation of any lien, security interest
or other charge, encumbrance or upon or with respect to any of its properties.

(c) No authorization, approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body is required for the
due execution, delivery and performance by the Borrower of this Sixth Amendment
or the Credit Agreement, as amended hereby.

<PAGE> 3

(d) This Sixth Amendment and the Credit Agreement, as amended hereby,
constitute, legal, valid and binding obligations of the Borrower enforceable
against the Borrower in accordance with their respective terms, subject,
however, to the effect on such enforceability of (i) any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally and (ii) general principles of equity (regardless whether such
enforceability is considered in a proceeding in equity or at law).

(e) There is no pending or threatened action or proceeding affecting the
Borrower or any of its subsidiaries before any court, governmental agency or
arbitrator, which may materially adversely affect the condition, financial or
otherwise, or operations of the Borrower.

(f) No event has occurred and is continuing which constitutes an Event of
Default or would constitute an Event of Default but for the requirement that
notice be given or time elapse or both.

SECTION 4. Reference to and Effect on the Credit Agreement. (a) Upon
the effectiveness of Section 1 hereof, on and after the date hereof, each
reference in the Credit Agreement to "this Agreement", "hereunder", "hereof",
"herein" or words of like import shall mean and be a reference to the Credit
Agreement as amended hereby, and each reference in the Note and the other Loan
Documents to the Credit Agreement shall mean and be a reference to the Credit
Agreement as amended hereby.

(b) Except as specifically amended above, the Credit Agreement and the
Note shall remain in full force and effect and are hereby ratified and
confirmed in all respects.

(c) The execution, delivery and effectiveness of this Sixth Amendment
shall not, except as expressly provided herein, operate as a waiver of any
right, power or remedy of the Bank under the Credit Agreement, nor constitute a
waiver of any provision of the Credit Agreement.

SECTION 5. Costs, Expenses and Taxes. The Borrower agrees to pay on
demand all costs and expenses of the Bank in connection with the preparation,
execution and delivery of this Sixth Amendment and the other instruments and
documents to be delivered hereunder, including, without limitation, the
reasonable fees and out-of-pocket expenses of counsel (who may be in-house
counsel) for the Bank with respect thereto and with respect to advising the
Bank as to its rights and responsibilities hereunder and thereunder. In
addition, the Borrower shall pay any and all stamp and other taxes payable or
determined to be payable in connection with the execution and delivery of this
Sixth Amendment and the other instruments and documents to be delivered
hereunder, and agrees to save the Bank harmless from and against any and all
liabilities with respect to or resulting from any delay in paying or omission
to pay such taxes.

SECTION 6. Execution in Counterparts. This Sixth Amendment may be
executed in any number of counterparts, each of which when so executed and
delivered shall be deemed to be an original and all of which taken together
shall constitute but one and the same instrument.

<PAGE> 4

SECTION 7. Governing Law. This Sixth Amendment shall be governed by, and
construed in accordance with, the laws (without giving effect to the conflicts
of laws principles thereof) of the State of New York.

SECTION 8. Final Agreement. This Sixth Amendment represents the final
agreement between you and us as to the subject matter hereof and may not be
contradicted by evidence of prior, contemporaneous or subsequent oral
agreements of the parties. There are no unwritten oral agreements between the
parties.

IN WITNESS WHEREOF, the parties hereto have caused this Sixth Amendment to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.

UNITED FOODS, INC.

By S/N Carl W. Gruenewald, II
------------------------------
Carl W. Gruenewald, II
Title: Senior Vice President, Finance
and Treasurer

COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK
B.A., "RABOBANK NEDERLAND",
NEW YORK BRANCH

By S/N W. Jeffrey Vollack
------------------------------
Authorized Officer Vice President,
Manager

By S/N Dana W. Hemanway
------------------------------
Authorized Officer Vice President

<PAGE> 1

EXHIBIT 10.21

SEVENTH AMENDMENT, DATED FEBRUARY 19, 1997, TO EACH OF THAT CERTAIN TERM LOAN
AGREEMENT AND THAT CERTAIN REVOLVING CREDIT AGREEMENT, EACH DATED AUGUST 20,
1992 BETWEEN UNITED FOODS, INC. AND COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A., "RABOBANK-NEDERLAND".

<PAGE> 2
EXHIBIT 10.21

AMENDMENT NO. 7

Dated as of February 19, 1997

This SEVENTH AMENDMENT is between UNITED FOODS, INC., a Delaware
corporation (the "Borrower"), and COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH (the
"Bank").

PRELIMINARY STATEMENTS. The Borrower and the Bank have entered into (i) a
Revolving Credit Agreement and (ii) a Term Loan Agreement, each dated as of
August 20, 1992 (as amended prior to the date hereof and as may be further
amended, supplemented or otherwise modified from time to time, the "Credit
Agreements"; the terms defined in the Credit Agreements being used herein as
therein defined). Each of the Borrower and the Bank wish to amend the Credit
Agreements as hereinafter set forth.

NOW, THEREFORE, the Borrower and the Bank hereby agree as follows:

SECTION 1. Amendment to Credit Agreements. Subsection 4.01(f) of the
Credit Agreements is, effective as of the date hereof and subject to the
satisfaction of the conditions precedent set forth in Section 2 hereof, hereby
amended by deleting the first sentence of such subsection in its entirety and
substituting, in lieu therefore, the following:

"Maintain on a consolidated basis, as of the last day of each of its
fiscal years, a ratio of Total Liabilities (as defined below) to Tangible
Net Worth of not more than 2.0 to 1.0."

SECTION 2. Conditions of Effectiveness. This Seventh Amendment shall
become effective when, and only when, the Bank shall have received counterparts
of this Seventh Amendment executed by the Borrower.

SECTION 3. Representations and Warranties of the Borrower. The Borrower
represents and warrants as follows:

(a) The representations and warranties contained in Section 3.01 of each
Credit Agreement are true and correct on and as of the date hereof as though
made on and as of the date hereof.

(b) The execution, delivery and performance by the Borrower of this
Seventh Amendment, and each Credit Agreement, as amended hereby, are within the
Borrower's corporate powers, have been duly authorized by all necessary
corporate action and do not contravene (i) the Borrower's charter or by-laws,
or (ii) law or any contractual restriction binding on or affecting the
Borrower, or result in, or require, the creation of any lien, security interest
or other charge, encumbrance or upon or with respect to any of its properties.

<PAGE> 3

(c) No authorization, approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body is required for the
due execution, delivery and performance by the Borrower of this Seventh
Amendment or the Credit Agreements, as amended hereby.

(d) This Seventh Amendment and each Credit Agreement, as amended hereby,
constitute, legal, valid and binding obligations of the Borrower enforceable
against the Borrower in accordance with their respective terms, subject,
however, to the effect on such enforceability of (i) any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally and (ii) general principles of equity (regardless whether such
enforceability is considered in a proceeding in equity or at law).

(f) No event has occurred and is continuing which constitutes an Event of
Default or would constitute an Event of Default but for the requirement that
notice be given or time elapse or both.

SECTION 4. Reference to and Effect on the Credit Agreement. (a) Upon
the effectiveness of Section 1 hereof, on and after the date hereof, each
reference in each Credit Agreement to "this Agreement", "hereunder", "hereof",
"herein" or words of like import shall mean and be a reference to such Credit
Agreement as amended hereby, and each reference in either the Revolving Credit
Note or the Term Note (together, the "Notes") and the other Loan Documents to a
Credit Agreement shall mean and be a reference to such Credit Agreement as
amended hereby.

(b) Except as specifically amended above, each Credit Agreement and the
Notes shall remain in full force and effect and are hereby ratified and
confirmed in all respects.

(c) The execution, delivery and effectiveness of this Seventh Amendment
shall not, except as expressly provided herein, operate as a waiver of any
right, power or remedy of the Bank under the Credit Agreements, nor constitute
a waiver of any provision of the Credit Agreements.

SECTION 5. Costs, Expenses and Taxes. The Borrower agrees to pay on
demand all costs and expenses of the Bank in connection with the preparation,
execution and delivery of this Seventh Amendment and the other instruments and
documents to be delivered hereunder, including, without limitation, the
reasonable fees and out-of-pocket expenses of counsel (who may be in-house
counsel) for the Bank with respect thereto and with respect to advising the
Bank as to its rights and responsibilities hereunder and thereunder. In
addition, the Borrower shall pay any and all stamp and other taxes payable or
determined to be payable in connection with the execution and delivery of this
Seventh Amendment and the other instruments and documents to

<PAGE> 4

be delivered hereunder, and agrees to save the Bank harmless from and against
any and all liabilities with respect to or resulting from any delay in paying
or omission to pay such taxes.

SECTION 6. Execution in Counterparts. This Seventh Amendment may be
executed in any number of counterparts, each of which when so executed and
delivered shall be deemed to be an original and all of which taken together
shall constitute but one and the same instrument.

SECTION 7. Governing Law. This Seventh Amendment shall be governed by,
and construed in accordance with, the laws (without giving effect to the
conflicts of laws principles thereof) of the State of New York.

SECTION 8. Final Agreement. This Seventh Amendment represents the final
agreement between you and us as to the subject matter hereof and may not be
contradicted by evidence of prior, contemporaneous or subsequent oral
agreements of the parties. There are no unwritten oral agreements between the
parties.

IN WITNESS WHEREOF, the parties hereto have caused this Seventh Amendment
to be executed by their respective officers thereunto duly authorized, as of
the date first above written.

UNITED FOODS, INC.

By S/N Carl W. Gruenewald, II
----------------------------------
Title: Senior Vice President,
Finance and Treasurer

COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK
B.A., "RABOBANK NEDERLAND",
NEW YORK BRANCH

By Michel de Konkoly Thege
-----------------------------------
Authorized Officer: Deputy General
Manager

By S/N Angela R. Reily
-----------------------------------
Authorized Officer: Vice President

<PAGE> 1

EXHIBIT 10.22

LOAN AGREEMENT AND SECURED PROMISSORY NOTE BETWEEN UNITED FOODS, INC. AND
METROPOLITAN LIFE INSURANCE COMPANY ALL DATED JANUARY 7, 1997.

<PAGE> 2

Exhibit 10.22

UNITED FOODS, INC.

---------------

LOAN AGREEMENT

Dated as of January 7, 1997

---------------

Secured Promissory Note Due January 1, 2007

70
<PAGE> 3

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----

<S> <C> <C>
SECTION 1. LOAN; ISSUE OF NOTE; SECURITY; INTEREST ........................... 1
1.1. Authorization ..................................................... 1
1.2. Loan; Closing ..................................................... 1
1.3. Security .......................................................... 1
1.4. Interest Rate ..................................................... 2

SECTION 2. REPRESENTATIONS AND WARRANTIES .................................... 2
2.1. Financial Statements .............................................. 2
2.2. No Material Changes ............................................... 3
2.3. Liens ............................................................. 3
2.4. Organization, Authority and Good Standing; Subsidiaries ........... 3
2.5. Title to Properties ............................................... 3
2.6. Leases and Liens .................................................. 4
2.7. Licenses .......................................................... 4
2.8. Litigation ........................................................ 4
2.9. No Burdensome Provisions .......................................... 4
2.10. Compliance with Other Instruments ................................. 5
2.11. Disclosure ........................................................ 5
2.12. ERISA ............................................................. 5
2.13. Regulation G; Use of Proceeds ..................................... 6
2.14. Tax Liability ..................................................... 7
2.15. Governmental Action ............................................... 7
2.16. Offering of Note .................................................. 7
2.17. Hazardous Waste ................................................... 8
2.18. Separate Property; No Flood Zone .................................. 8
2.19. No Affiliation .................................................... 8
2.20. No Foreign Person ................................................. 8
2.21. Title to Property and Collateral .................................. 8
2.22. Additional Representations and Warranties ......................... 9

SECTION 3. CONDITIONS OF THE LOAN ............................................ 9
3.1. Opinion of Company Counsel ........................................ 9
3.2. Legality .......................................................... 9
3.3. Proceedings ....................................................... 9
3.4. Representations True; No Default .................................. 9
3.5. Collateral Documents .............................................. 10
3.6. Opinion of Lender's Counsel ....................................... 10
3.7. Environmental Audit Results ....................................... 10

SECTION 4. REPRESENTATION OF LENDER .......................................... 10
4.1. Acquisition for Investment ........................................ 11

SECTION 5. FINANCIAL STATEMENTS; COMPLIANCE CERTIFICATES; ADDITIONAL
INFORMATION; AND INSPECTION .............................................. 11
5.1. Financial Statements and Reports .................................. 11
5.2. Inspection ........................................................ 14
</TABLE>

71
<PAGE> 4

<TABLE>
<S> <C> <C>
SECTION 6. PRINCIPAL PAYMENT OF NOTE ......................................... 14
6.1. Principal Payments - Mandatory and Optional Prepayment ............ 14
6.2. Prepayment of Note Upon Change of Control ......................... 15
6.3. Interest After Date Fixed for Principal Payment or Prepayment ..... 16

SECTION 7. AFFIRMATIVE COVENANTS ............................................. 17
7.1. To Pay Note ....................................................... 17
7.2. Maintenance of Company Office ..................................... 17
7.3. To Keep Books ..................................................... 17
7.4. Payment of Taxes; Corporate Existence; Maintenance of Properties .. 17
7.5. To Insure ......................................................... 18

SECTION 8. RESTRICTIVE COVENANTS ............................................. 19
8.1. Indebtedness ...................................................... 19
8.2. Working Capital; Lease Obligations ................................ 19
8.3. Tangible Net Worth ................................................ 19
8.4. Restricted Payments; Pledge of Stock .............................. 19
8.5. Merger, Consolidation, Sale or Lease .............................. 20
8.6. Transactions with Affiliates ...................................... 20
8.7. Encumbrances On and Transfers of the Collateral ................... 21

SECTION 9. DEFINITIONS ........................................................ 22

SECTION 10. DEFAULTS AND REMEDIES ............................................. 26
10.1. Events of Default; Acceleration ................................... 27
10.2. Suits for Enforcement ............................................. 29
10.3. Remedies Not Waived ............................................... 30
10.4. Remedies Cumulative ............................................... 30
10.5. Costs and Expenses ................................................ 30

SECTION 11. MISCELLANEOUS ..................................................... 30
11.1. Loss, Theft, Destruction or Mutilation of Note .................... 30
11.2. Expenses .......................................................... 30
11.3. Stamp Taxes, Recording Fees, etc .................................. 31
11.4. Successors and Assigns ............................................ 31
11.5. Payment ........................................................... 31
11.6. Notices ........................................................... 31
11.7. Severability ...................................................... 32
11.8. Law Governing; Modification ....................................... 32
11.9. Headings .......................................................... 32
11.10. Counterparts ...................................................... 32
11.11. FINAL CREDIT AGREEMENT ............................................ 32

EXHIBIT A - FORM OF NOTE

EXHIBIT B - LIENS

EXHIBIT C - OWNERSHIP OF COMPANY AND SUBSIDIARIES
</TABLE>

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UNITED FOODS, INC.

LOAN AGREEMENT

January 7, 1997

Metropolitan Life Insurance Company
Agricultural Investments
8717 West 110th Street
Suite 700
Overland Park, Kansas 66210

Attention: Senior Vice-President

United Foods, Inc., a Delaware corporation (herein called the
"Company"), agrees with you as follows:

SECTION 1. LOAN; ISSUE OF NOTE; SECURITY; INTERESTSECTION 1. LOAN; ISSUE OF
NOTE; SECURITY; INTEREST.

1.1. Authorization1.1. Authorization. The Company has duly authorized
the issuance of a Secured Promissory Note due January 1, 2007 in the principal
amount of $6,000,000.00 (herein called the "Note"), such Note to be in the form
and have terms and provisions substantially as set forth in Exhibit "A" hereto.

1.2. Loan; Closing1.2. Loan; Closing. The Company hereby agrees to
borrow from you, and you, subject to the terms and conditions herein set forth,
hereby agree to lend to the Company, $6,000,000.00 on January 7, 1997 (the
"Closing Date").

The loan will be evidenced by, and subject to all other conditions
precedent having been met, be made against delivery to you at 10 o'clock A.M.
Ogden, Utah time, on the Closing Date, at the offices of First American Title
Company of Utah, 205 - 26th Street, Ogden, Utah 84401, or at such other time and
place as the parties may agree, of a single Note payable to you or assigns,
dated the Closing Date, duly executed by the Company and in the aggregate
principal amount of such loan. Delivery of the Note hereunder shall be made
against payment to the Company or the holders of liens on the Facility (as
hereafter defined) in Federal Reserve or other funds in the aggregate principal
amount of such loan.

1.3. Security1.3. Security. Payment of the Note shall be secured by (i)
a first deed of trust, security agreement and financing statement (the "Deed of
Trust") to be entered into by the Company with respect to, inter alia, the
Company's vegetable processing, cold storage and distribution plant located in
Weber County, Utah as described in said Deed of Trust (the "Facility"), (ii) a
separate security agreement between the Company, as debtor, and you, as secured
party (the "Security Agreement") granting a first priority security interest in,
inter alia, all equipment, fixtures and other personal property utilized in
connection with, or located at, the Facility as described in said Security
Agreement, which security interest will be perfected by one or more financing
statements, and (iii) an assignment of rents and leases (the "Assignment") with
respect to the Company's rights under all leases to which the Company is or may
at any time become a party as lessor pertaining to, inter alia, the Facility or
any interest therein. The Deed of Trust, the Security Agreement and the
Assignment shall each be dated and delivered on the Closing Date and are
collectively referred to herein, along with such other documents and instruments
evidencing, securing or relating to said Note, as the "Collateral Documents".

1.4. Interest Rate1.4. Interest Rate.

A. The interest rate on the Note shall be 8.98% per annum so long as
the Note is not in default.

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<PAGE> 6

B. In the event the interest provisions hereof or any exaction provided
for herein or in the Collateral Documents shall result for any reason and at any
time during the term of this loan in an effective rate of interest which
transcends the limit of the usury or any other law applicable to this loan, all
sums in excess of those lawfully collectible as interest for the period in
question shall, without further agreement or notice between or by any party
hereto, be applied on principal immediately upon receipt and effect as though
the payor had specifically designated such extra sums to be so applied to
principal, and the holder of the Note shall accept such extra payment or
payments as a premium-free prepayment. If any such amounts are in excess of the
principal then outstanding, such excess shall be paid to the Company. In no
event shall any agreed-to or actual exaction as consideration for the Loan
transcend the limits imposed or provided by the law applicable to this
transaction or the Company in the jurisdictions in which the Facility or any
other security for payment of the Note is located for the use or detention of
money or for forbearance in seeking its collection.

SECTION 2. REPRESENTATIONS AND WARRANTIESSECTION 2. REPRESENTATIONS AND
WARRANTIES.

The Company represents and warrants that:

2.1. Financial Statements2.1. Financial Statements. You have been
furnished with copies of consolidated balance sheets of the Company and its
Subsidiaries as of February 28 or 29 in each of the years 1990 to 1996,
inclusive, and the related consolidated statements of operations, statements of
stockholders' equity and statements of cash flows of the Company and its
Subsidiaries for the fiscal years ended on said dates, accompanied in each case
by the opinion of its independent certified public accountants.

Said financial statements, including the related schedules and notes,
are complete and correct and fairly present (a) the financial condition of the
Company and its Subsidiaries as at the respective dates of said balance sheets
and (b) the results of the operations and changes in financial position of the
Company and its Subsidiaries for the fiscal years ended on said dates, all in
conformity with generally accepted accounting principles applied on a consistent
basis (except as otherwise stated therein or in the notes thereto) throughout
the periods involved.

2.2. No Material Changes2.2. No Material Changes. There has been no
material or adverse change in the business, operations, properties, assets,
prospects or condition, financial or other, of the Company and its Subsidiaries
subsequent to February 28, 1996.

2.3. Liens2.3. Liens. Exhibit "B" hereto correctly sets forth all Liens
securing Indebtedness for money borrowed of the Company and its Subsidiaries
existing on the date hereof.

2.4. Organization, Authority and Good Standing; Subsidiaries2.4.
Organization, Authority and Good Standing; Subsidiaries. Exhibit "C" hereto
correctly sets forth a listing of the such members of the Tankersley Family (as
defined in Section 6.2 below). Such aggregate Tankersley Family members'
interest represent voting control of the Company. The shares of stock owned by
the Tankersley Family have been duly issued and are fully paid and
non-assessable. Exhibit C also correctly sets forth (a) the name and
jurisdiction of incorporation of each Subsidiary of the Company, if any
Subsidiary shall exist (as of the date hereof, no such Subsidiary exists), and
(b) a statement of the capitalization of each such Subsidiary and the ownership
of its stock. The shares of stock listed in Exhibit C as owned by the Company
are so owned as of the date of this Agreement, free and clear of all Liens, and
all such shares of stock have been duly issued and are fully paid and
non-assessable. No person has any right, contingent or otherwise, to purchase
any such shares of stock. The Company and each of its Subsidiaries are duly
organized and validly existing corporations in good standing under the laws of
Delaware and have full power and authority to own the properties and assets and
to carry on the business which they now own and carry on. The Company and each
of its Subsidiaries are duly qualified and in good standing as a foreign
corporation in each jurisdiction wherein the nature of the property owned or
leased by them or the nature of the business transacted by them makes such
qualification necessary.

2.5. Title to Properties2.5. Title to Properties. The Company and its
Subsidiaries have good and marketable fee title to all the real properties
(other than leaseholds) and good and marketable title to all other

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<PAGE> 7

material property reflected on the balance sheet of the Company and its
Subsidiaries as of February 29, 1996 referred to in Section 2.1, or purported to
have been acquired by the Company or any of its Subsidiaries after said date,
excepting, however, property sold or otherwise disposed of subsequent to said
date in the ordinary course of business.

2.6. Leases and Liens2.6. Leases and Liens. None of the properties or
assets reflected in the consolidated balance sheet of the Company and its
Subsidiaries as of February 29, 1996 referred to in Section 2.1, or acquired by
the Company or its Subsidiaries after said date, is held by the Company or any
of its Subsidiaries subject to any Lien which would not be permitted by Section
7.4A or which is not disclosed in Exhibit B hereto. The Company and its
Subsidiaries enjoy peaceful and undisturbed possession under all of the leases
under which they are operating as lessees, and all such leases are valid,
including, without limitation, in each instance, good title being vested in the
lessor thereunder, and subsisting and in full force and effect.

2.7. Licenses2.7. Licenses. The Company and its Subsidiaries possess
and shall continue to possess all trademarks, trade names, copyrights, patents,
governmental licenses, bonds, franchises, certificates, consents, permits and
approvals necessary to enable them to carry on their business in all material
respects as now conducted and to own and operate the properties material to
their business as now owned and operated, without known conflict with the rights
of others. All such trademarks, trade names, copyrights, patents, licenses,
bonds, franchises, certificates, consents, permits and approvals which are
material to the operations of the Company and its Subsidiaries, taken as a
whole, are valid and subsisting.

2.8. Litigation2.8. Litigation. There are no actions, suits or
proceedings (whether or not purportedly on behalf of the Company or any of its
Subsidiaries) pending or, to the knowledge of the Company, threatened against or
affecting the Company or any of its Subsidiaries at law or in equity or before
or by any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, or
before any arbitrator of any kind, which involve any of the transactions herein
contemplated or the possibility of any material and adverse change in the
business, operations, properties, assets, prospects or condition, financial or
other, of the Company and its Subsidiaries; and neither the Company nor any of
its Subsidiaries is in default or violation of any law or any rule, regulation,
judgment, order, writ, injunction, decree or award of any court, arbitrator or
federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, which default or
violation might have a material adverse effect on the business, operations,
properties, prospects or condition, financial or other, of the Company and its
Subsidiaries.

2.9. No Burdensome Provisions2.9. No Burdensome Provisions. Neither the
Company nor any of its Subsidiaries is a party to any agreement or instrument or
subject to any charter or other corporate or legislative restriction or any
judgment, order, writ, injunction, decree, award, rule or regulation which
materially and adversely affects or in the future may (so far as the Company can
now reasonably foresee) materially and adversely affect the business,
operations, properties, assets, prospects or condition, financial or other, of
the Company and its Subsidiaries, taken as a whole.

2.10. Compliance with Other Instruments2.10. Compliance with Other
Instruments. Neither the Company nor any of its Subsidiaries is in default in
the performance, observance or fulfillment of any of the obligations, covenants
or conditions contained in any bond, debenture, note or other evidence of
Indebtedness of the Company or such Subsidiary or contained in any instrument
under or pursuant to which any thereof has been issued or made and delivered.
Neither the execution and delivery of this Agreement and the Collateral
Documents by the Company, the consummation by the Company of the transactions
herein and therein contemplated, nor compliance by the Company with the terms,
conditions and provisions hereof and thereof and of the Note will violate any
provision of law or rule or regulation thereunder or any order, injunction or
decree of any court or other governmental body to which the Company or any of
its Subsidiaries is a party or by which any term thereof is bound or conflict
with or result in a breach of any of the terms, conditions or provisions of the
corporate charter or by-laws of the Company or any of its Subsidiaries or of any
agreement or instrument to which the Company or any of its Subsidiaries is a
party or by which the Company or such Subsidiary is bound, or constitute a
default thereunder, or result in the creation or imposition of any Lien of any
nature whatsoever upon any of the properties

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<PAGE> 8

or assets of the Company or any of its Subsidiaries (other than the Liens
created by the Collateral Documents). No consent of the stockholders of the
Company is required for the execution, delivery and performance of this
Agreement, the Collateral Documents or the Note by the Company other than those
delivered to you prior to the Closing, if any.

2.11. Disclosure2.11. Disclosure. Neither this Agreement, the
Collateral Documents nor any of the Exhibits hereto, nor any certificate or
other data furnished to you in writing by or on behalf of the Company in
connection with the transactions contemplated by this Agreement contains any
untrue statement of a material fact or omits a material fact necessary to make
the statements contained herein or therein not misleading. To the best knowledge
of the Company, there is no fact which materially and adversely affects or in
the future may (so far as the Company can now reasonably foresee) materially and
adversely affect the business, operations, properties, assets, prospects or
condition, financial or other, of the Company and its Subsidiaries, taken as a
whole, which has not been disclosed to you in writing.

2.12. ERISA2.12. ERISA.

(i) As of the date hereof, and during the term of this loan, neither
the Company nor any of its Subsidiaries will be an employee benefit
plan as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), which is subject to Title I
of ERISA, nor a plan as defined in Section 4975(e)(1) of the Internal
Revenue Code of 1986, as amended (each of the foregoing hereinafter
referred to collectively as "Plan") and (2) as of the date hereof, and
during the term of the loan, the assets of neither the Company nor any
of its Subsidiaries will constitute "plan assets" of one or more such
Plans within the meaning of Department of Labor ("DOL") Regulation
Section 2510.3-101.

(ii) As of the date hereof, and during the term of the loan, if either
the Company or any of its Subsidiaries is a "governmental plan" within
the meaning of Section 3(32) of ERISA, the loan will not violate state
statutes regulating investments of, and fiduciary obligations with
respect to, governmental plans.

(iii) As of the date hereof, the Company and its Subsidiaries will be
acting on its own behalf and not on account of or for the benefit of
any Plan.

(iv) Neither the Company nor any of its Subsidiaries shall assign its
interest under this loan to any entity, person or Plan, nor use the
proceeds of such Loan to cause a violation of ERISA.

(v) Neither the Company nor any of its Subsidiaries will, during the
term of this loan, lease, sublease or otherwise convey any interest in
or portion of the Property to a Plan, or to an entity whose assets
constitute Plan assets within the meaning of DOL Regulation Section
2510.3-101.

(vi) Neither the Company nor any of its Subsidiaries have incurred any
liability (including any contingent liability) to the Pension Benefit
Guaranty Corporation or to any pension plan and all amounts required to
be paid under any plan have been paid.

2.13. Regulation G; Use of Proceeds2.13. Regulation G; Use of Proceeds.
Neither the Company nor any of its Subsidiaries owns or has any present
intention of acquiring any "margin stock" as defined in Regulation G (12 C.F.R.,
Chapter II, Part 207) of the Board of Governors of the Federal Reserve System
(herein called "margin stock"). The proceeds from the issuance of the Note will
be used by the Company to refinance existing long term indebtedness and to
partially replace an existing revolving line of credit facility of the Company.
None of such proceeds will be used, directly or indirectly, for the purpose of
purchasing or carrying any margin stock or for the purpose of reducing or
retiring any indebtedness which was originally incurred to purchase or carry
margin stock or for any other purpose which might constitute this transaction a
"purpose credit" within the meaning of said Regulation G. Neither the Company
nor any agent acting on its behalf has taken or will take any action which might
cause the transaction contemplated herein to violate said Regulation G,
Regulation T (12 C.F.R., Chapter II,

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Part 220) or Regulation X (12 C.F.R., Chapter II, Part 224) or any other
regulation of the Board of Governors of the Federal Reserve System or to violate
the Securities Exchange Act of 1934, in each case as now in effect or as the
same may hereafter be in effect.

2.14. Tax Liability2.14. Tax Liability. The Company and its
Subsidiaries have filed all tax returns which are required to be filed and have
paid all taxes which have become due pursuant to such returns and all other
taxes, assessments, fees and other governmental charges upon the Company and its
Subsidiaries and upon their properties, assets, income and franchises which have
become due and payable by the Company or any of its Subsidiaries except those
wherein the amount, applicability or validity are being contested by the Company
or any such Subsidiary by appropriate proceedings in good faith and in respect
of which adequate reserves have been established. In the opinion of the Company,
all tax liabilities of the Company and its Subsidiaries were adequately provided
for as of February 29, 1996 and are now so provided for on the books of the
Company and its Subsidiaries.

2.15. Governmental Action2.15. Governmental Action. No action of, or
filing with, any governmental or public body or authority is required to
authorize, or is otherwise required in connection with, the execution, delivery
and performance by the Company of this Agreement, the Collateral Documents or
the Note (other than recordation of the Deed of Trust and the Assignment in the
Office of the Clerk and Recorder of Weber, County, Utah, the filing of financing
statements with respect to the Collateral (as defined in the Security Agreement)
in the Office of the Secretary of State of Utah and in the Office of the Clerk
and Recorder of Weber County, Utah, all of which will have been duly recorded or
filed on or prior to the Closing Date).

2.16. Offering of Note2.16. Offering of Note. Neither the Company nor
any agent acting on its behalf has, either directly or indirectly, sold or
offered for sale or disposed of, or attempted or offered to dispose of, the Note
or any part thereof, or any similar obligation of the Company, to, or has
solicited any offers to buy any thereof from, or has otherwise approached or
negotiated in respect thereof with, any Person or Persons other than you and no
more than six other institutional investors; and the Company agrees that neither
it nor any agent acting on its behalf will sell or offer for sale or dispose of,
or attempt or offer to dispose of, any thereof to, or solicit any offers to buy
any thereof from, or otherwise approach or negotiate in respect thereof with,
any Person or Persons so as thereby to bring the issuance or delivery of the
Note within the provisions of Section 5 of the Securities Act of 1933, as
amended.

2.17. Hazardous Waste2.17. Hazardous Waste. Neither the Facility nor
any portion thereof nor any other property owned or controlled at any time by
the Company or any Subsidiary has been or will be used by the Company, any
Subsidiary of the Company, or any tenant of the Facility or any portion thereof
for the production, release, storage, handling or disposal of hazardous or toxic
wastes or materials other than those agricultural and commercial chemicals
customarily used in operations of the type currently conducted by the Company in
the Facility all of which have been and will be used in accordance with all
applicable laws and regulations.

2.18. Separate Property; No Flood Zone2.18. Separate Property; No Flood
Zone. The Facility is taxed and billed separately from real property not subject
to the Deed of Trust, and no part of the Facility is located within a flood
zone.

2.19. No Affiliation2.19. No Affiliation. To the best knowledge of the
Company, no director or officer of the Company or of any Subsidiary of the
Company, or any member of the Tankersley Family shown on Exhibit "C", is an
officer or director of yours or is a relative of an officer or director of yours
within the following categories: a son, daughter or descendant of either; a
stepson, stepdaughter, stepfather, stepmother; father, mother or ancestor of
either, or a spouse. It is expressly understood that for the purpose of
determining any of the foregoing relationships, a legally adopted child of a
person is considered a child of such person by blood.

2.20. No Foreign Person2.20. No Foreign Person. No member of the
Tankersley Family shown on Exhibit "C" is or will be held, directly or
indirectly, by, a "foreign person" under the International Foreign Investment
Survey Act of 1976, the Agricultural Foreign

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Investment Disclosure Act of 1978, the Foreign Investments in Real Property Tax
Act of 1980, the amendments of such Acts or regulations promulgated pursuant to
such Acts.

2.21. Title to Property and Collateral2.21. Title to Property and
Collateral. The Company has good and marketable title in fee simple to such of
the Property (as defined in the Deed of Trust) as constitutes real property and
good and merchantable title to the Collateral (as defined in the Security
Agreement) subject in each case to no Liens other than the Liens of the
Collateral Documents and Permitted Encumbrances.

2.22. Additional Representations and Warranties2.22. Additional
Representations and Warranties. As of the date hereof, the representations and
warranties contained in the Borrower's Affidavit of even date herewith are true
and correct.

SECTION 3. CONDITIONS OF THE LOANSECTION 3. CONDITIONS OF THE LOAN.

Your obligation to make the loan, as provided in Section 1.2, on the
Closing Date shall be subject to the conditions precedent that you have received
on or before the Closing Date in form and substance of satisfaction to your
counsel, such assurances and evidence as you may require of the performance by
the Company of all its agreements theretofore to be performed hereunder, to the
accuracy of its representations and warranties herein contained and to the
satisfaction, prior thereto or concurrently therewith, of the following further
conditions:

3.1. Opinion of Company Counsel3.1. Opinion of Company Counsel. You
shall have received on the Closing Date from Donald Dresser, counsel for the
Company in connection with the loan, a favorable opinion as to such matters
incident to the transactions contemplated by this Agreement in form and
substance acceptable to you.

3.2. Legality3.2. Legality. You shall have satisfied yourself that the
Note being purchased by you on the Closing Date shall qualify on the Closing
Date as a legal investment for mutual life insurance companies under the New
York Insurance Law (without resort to any provision of such law, such as Section
1405(a)(8) thereof, permitting limited investments by you without restriction as
to the character of the particular investment) and such purchase shall not
subject you to any penalty or other onerous condition under or pursuant to any
applicable law or governmental regulation; and you shall have received such
certificates or other evidence as you may reasonably request to establish
compliance with this condition.

3.3. Proceedings3.3. Proceedings. All proceedings to be taken in
connection with the transactions contemplated by this Agreement and the
Collateral Documents, and all documents incidental thereto, shall be
satisfactory in form and substance to you; and you shall have received copies of
all documents which you may reasonably request in connection with said
transactions and copies of the records of all corporate proceedings in
connection therewith in form and substance satisfactory to you.

3.4. Representations True; No Default3.4. Representations True; No
Default. The representations and warranties of the Company in this Agreement and
in the Collateral Documents shall be true on and as of the Closing Date with the
same effect as though such representations and warranties had been made on and
as of the Closing Date; on the Closing Date no event which is, or with notice or
lapse of time or both would be, an Event of Default shall have occurred and be
continuing; and you shall have received an affidavit, dated the Closing Date, of
the Senior Vice President - Financial of the Company to each such effect.

3.5. Collateral Documents3.5. Collateral Documents. You shall have
received on the Closing Date fully executed original counterparts of each of the
Collateral Documents.

3.6. Opinion of Lender's Counsel3.6. Opinion of Lender's Counsel. You
shall have received on the Closing Date from Stoel Rives LLP, 201 South Main
Street, Suite 1100, Salt Lake City, Utah 84111-4904, counsel for you, a
favorable opinion as to such matters incident to the transactions contemplated
by this Agreement in form and substance acceptable to you.

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3.7. Environmental Audit Results3.7. Environmental Audit Results. The
results of the Phase I Environmental Audit of the Facility, and any remedial
action required to be taken by the Company as a result of such audit, are
complete and satisfactory to you.

3.8 Survey. An ALTA as-built survey of the Facility shall have been
provided to you prior to the Closing Date. The survey shall show as of its date
the: (a) courses and measured distances of exterior property lines of the
Facility, (b) the total number of acres constituting the Facility, (c) the
location of adjoining roads, and (d) the location of setback lines and
easements, identified by the book and page of recording of the instrument of
record, if any, creating same, The Company represents that no other more recent
survey is available and that the matters thereon are in fact as represented on
the date of the survey. The Company further represents that there have been no
material changes in the foregoing items since the date of the survey.

3.9. Title Requirements. You shall be furnished on the Closing Date
with an ALTA Revised 1970 Lender's Policy Form B (Amend. 10/17/70) of mortgagee
title insurance policy issued by a title insurance company acceptable to you
insuring that the Deed of Trust is a first lien and that title to the Facility
is not subject to other liens or assessments except for the Deed of Trust and
the other recorded documents securing the Loan, and such encumbrances as agreed
to in writing by you and the Company and insuring the Deed of Trust for
$6,000,000.00. The title insurance policy shall contain no exceptions other than
those which are approved and accepted by you. The title insurance is to contain
such endorsements as may be required by you and shall be paid for by the
Company. You shall also be furnished with such UCC searches as you may
reasonably request and the Company agrees to cause the termination or amendment
of those reasonably objectionable to you.

SECTION 4. REPRESENTATION OF LENDERSECTION 4. REPRESENTATION OF LENDER.

4.1. Acquisition for Investment4.1. Acquisition for Investment. This
Agreement is made with you in reliance upon your representation to the Company
(which, by your acceptance hereof, you confirm) that you are acquiring the Note
for your own account for the purpose of investment and not with a view to, or
for sale in connection with, the distribution thereto; provided, however, that
the disposition of your property shall at all times be within your control.

SECTION 5. FINANCIAL STATEMENTS; COMPLIANCE CERTIFICATES; ADDITIONAL
INFORMATION; AND INSPECTIONSECTION 5. FINANCIAL STATEMENTS; COMPLIANCE
CERTIFICATES; ADDITIONAL INFORMATION; AND INSPECTION.

5.1. Financial Statements and Reports5.1. Financial Statements and
Reports. From and after the date hereof and so long as you (or a nominee
designated by you) shall hold the Note, the Company will deliver to you in
duplicate:

(a) as soon as practicable after the end of each quarter
in each fiscal year of the Company, and in any event within sixty (60)
days after the end of each quarter in each fiscal year of the Company,
the interim consolidated statements of earnings, stockholders' equity
and cash flows of the Company and its Subsidiaries for such period and
for that part of the fiscal year ended with such period and the
consolidated balance sheet of the Company and its Subsidiaries as at
the end of such period, all in reasonable detail, prepared in
conformity with generally accepted accounting principles applied on a
basis consistent with that of previous years (except as otherwise
stated therein or in the notes thereto) and certified by the Senior
Vice President - Financial or such other senior officer of the Company
as presenting fairly the financial condition and results of operations
of the Company and its Subsidiaries as at the end of and for the fiscal
periods to which they relate, subject to the Company's year-end
adjustments;

(b) as soon as practicable after the end of each fiscal
year, and in any event within one hundred twenty (120) days after the
end of each fiscal year, the consolidated balance sheet and related
consolidated statements of earnings, stockholders' equity and cash
flows of the Company and its Subsidiaries as of the end of and for such
year, setting forth in each case in comparative form the

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corresponding figures of the previous fiscal year, all in reasonable
detail, prepared in conformity with generally accepted accounting
principles applied on a basis consistent with that of previous years
(except as otherwise stated therein or in the notes thereto) and
accompanied by a report or opinion of independent certified public
accountants, selected by the Company and reasonably acceptable to you,
stating that such financial statements present fairly the consolidated
financial condition and results of operations and cash flows of the
Company and its Subsidiaries in accordance with generally accepted
accounting principles consistently applied (except for changes with
which such accountants concur) and that the examination of such
accountants in connection with such financial statements has been made
in accordance with generally accepted auditing standards;

(c) concurrently with the financial statements delivered
pursuant to Section 5.1(b), the written statement of said accountants
that in the ordinary course of making their normal examination
necessary for their report or opinion on said financial statements they
have obtained no knowledge of any Event of Default or event which, with
notice or lapse of time or both, would become an Event of Default or,
if such accountants shall have obtained knowledge of any such Event of
Default or event, they shall disclose in such statement the Event or
Events of Default and/or such event or events and the nature and status
thereof, but such accountants shall not be liable, directly or
indirectly, to anyone for any failure to obtain knowledge of any such
Event of Default or event;

(d) concurrently with the financial statements delivered
pursuant to Section 5.1(b) a certificate of the Senior Vice President -
Financial or such other senior officer of the Company (1) setting
forth, as of the end of the preceding fiscal year, the extent to which
the Company and its Subsidiaries have complied with the requirements of
Sections 8.1 through 8.7, inclusive, including in each case a brief
description, together with all necessary computations, of the manner in
which such compliance was determined and the respective amounts as of
the end of or for such fiscal year of Consolidated Total Liabilities,
Consolidated Current Assets, Consolidated Current Liabilities,
Consolidated Net Tangible Assets, Consolidated Tangible Net Worth,
Consolidated Net Income, lease obligations and the amount available for
dividends pursuant to Section 8.4, (2) stating that a review of the
activities of the Company and its Subsidiaries during the preceding
fiscal year has been made under his supervision to determine whether
the Company has fulfilled all of its obligations under this Agreement,
the Collateral Documents and the Note, (3) stating that, to the best of
his or her knowledge, the Company is not and has not been in default in
the fulfillment of any of the terms, covenants, provisions or
conditions hereof and thereof and no Event of Default or event which,
with notice or lapse of time or both, would become an Event of Default
exists or existed or, if any such default or Event of Default or event
exists or existed, specifying such default, Event of Default or event
and the nature and status thereof, (4) stating that a Change of Control
Date has not occurred or event which, with notice or lapse of time or
both, would become a Change of Control Date, and (5) giving, in the
event of the formation or acquisition of a Subsidiary during the
preceding fiscal year, the name of such Subsidiary, its jurisdiction of
incorporation and a brief description of its business;

(e) as soon as practicable, copies of all financial
statements, proxy statements and reports as the Company or any of its
Subsidiaries shall send or make available generally to its stockholders
or any governmental agency or agencies and regular periodic reports, if
any, which it or any of its Subsidiaries, may file with any
governmental agency or agencies;

(f) immediately upon a responsible officer of the
Company's becoming aware of the existence of a condition, event or act
which constitutes an Event of Default or an event of default under any
other evidence of Indebtedness of the Company or any Subsidiary, or an
event which, with notice or lapse of time or both, would constitute
such an Event of Default or event of default, a written notice
specifying the nature and period of existence thereof and what action
the Company or such Subsidiary, as the case may be, is taking or
proposes to take with respect thereto;

(g) immediately upon a responsible officer of the
Company's becoming aware of the occurrence of any (1) "reportable
event," as defined in Section 4043(b) of ERISA, or (2) non-exempted

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"prohibited transaction," as defined in Sections 406 and 408 of ERISA
and Section 4975 of the Internal Revenue Code of 1986, as amended in
connection with any "employee pension benefit plan," as defined in
Section 3 of ERISA, or any trust created thereunder, a written notice
specifying the nature thereof, what action the Company is taking or
proposes to take with respect thereto and, when known, any action taken
by the Internal Revenue Service or the Pension Benefit Guaranty
Corporation with respect thereto;

(h) promptly upon a responsible officer or manager of the
Company's becoming aware of the occurrence of (1) any surrender of
assets of the Company or any Subsidiary in satisfaction of any
Indebtedness, (2) the dissolution of any operating partnership or real
estate ownership partnership of the Company or any Subsidiary, (3) the
termination or expiration of any lease of real property to which the
Company or any Subsidiary is lessee, or (4) the commencement of any
litigation, including any arbitration or mediation, and of any
proceedings before any governmental agency which could materially and
adversely affect the business, properties, prospects or financial
condition of the Company and its Subsidiaries taken as a whole
(including any such action commenced by counterclaim), written notice
specifying the nature thereof and what action the Company or such
Subsidiary, as the case may be, is taking with respect thereto; and

(i) such other information as to the business and
properties of the Company and of its Subsidiaries, including
consolidating financial statements of the Company and its Subsidiaries,
and financial statements and other reports filed with any governmental
department, bureau, commission or agency, as you may from time to time
reasonably request.

5.2. Inspection5.2. Inspection. From and after the date hereof and so
long as you (or a nominee designated by you) shall hold the Note, you shall have
the right, upon reasonable notice to the Company (i) to visit and inspect, at
your expense, any of the properties, all at such reasonable times and as often
as you may reasonably request, of the Company or of any of its Subsidiaries
(including any property not owned by the Company or any Subsidiary but upon
which any security for the Loan may be located), to examine its books of account
and those of its Subsidiaries and to discuss the affairs, finances and accounts
of the Company and its Subsidiaries with its and their officers and managers and
independent public accountants, and (ii) to contact such third parties doing
business with the Company, and to engage in other auditing procedures as you
deem reasonable to ensure the validity of your security interests or the
accuracy of the Company's representations, warranties and certifications. In
connection with such inspections, you and your engineers, contractors and other
representatives shall have the right to perform such environmental audits and
other environmental examinations of the Facility as you deem necessary or
advisable from time to time.

SECTION 6. PRINCIPAL PAYMENT OF NOTESECTION 6. PRINCIPAL PAYMENT OF NOTE.

6.1. Principal Payments - Mandatory and Optional Prepayment6.1.
Principal Payments - Mandatory and Optional Prepayment.

A. The Company covenants and agrees that it will monthly pay combined
principal and interest in the amount of $61,000.00 (amortized over 15 years) on
the unpaid Note on the first day of each month, commencing on the first day of
the second full month subsequent to the Closing Date to and including December
1, 2006. All principal remaining thereafter shall be paid January 1, 2007. All
mandatory principal payments pursuant to this Section 6.1A shall be made
together with interest as set forth above but without prepayment premium.

B. The Company may, at its option, prepay the Note in whole or in part
(in integral multiples of $10,000) on the due date of a payment due after the
first day of the second full month subsequent to the Closing Date at a price
equal to the Prepayment Price, as hereafter defined, with accrued interest to
the date of prepayment. The Company shall give notice of any such prepayment to
the holder of the Note not less than 30 nor more than 60 days prior to the date
fixed in such notice for prepayment ("Prepayment Date"). Principal shall be
applied to the outstanding principal balance in the inverse order of maturity.

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C. Payments shall be applied to the following, as applicable:
prepayment premiums; any accrued interest; the outstanding principal balance of
the Note; and any other unpaid portion of the Loan, including, without
limitation, for the reimbursement of such costs and expenses provided for in the
Collateral Documents.

6.2. Prepayment of Note Upon Change of Control6.2. Prepayment of Note
Upon Change of Control. In the event that a Change of Control Date (as
hereinafter defined) shall occur, the Company will, within 10 days after such
Change of Control Date, give you written notice thereof and shall describe in
reasonable detail the facts and circumstances giving rise thereto. Upon the
occurrence of a Change of Control Date, the Company will prepay, if you shall so
request, all of the Note which you then hold at the Prepayment Price (as
hereinafter defined) plus interest accrued to the date of prepayment. Said
request (the "Prepayment Notice") shall be made by you in writing not later than
the later of (a) 60 days after the Change of Control Date and (b) 50 days after
you receive notice of the Change of Control Date, and said request shall specify
the date (also referred to as the "Prepayment Date") upon which the Company
shall prepay the Note held by you, which date shall be not less than 30 days nor
more than 60 days from the date of the Prepayment Notice.

The Prepayment Price shall be determined by you in good faith, as of
5:00 p.m., New York time, on the fifth Business Day (as hereinafter defined)
prior to the Prepayment Date. Such Prepayment Price, as calculated by you, will
be binding upon the Company, absent manifest error. Promptly upon such
determination you shall notify the Company in writing of the amount of such
Prepayment Price, setting forth in reasonable detail the computation thereof.

On the Prepayment Date, the Company shall prepay the Note held by you
at the Prepayment Price plus interest accrued thereon to the Prepayment Date.
Payment of the Prepayment Price shall be made as provided in Section 11.5.

The term "Change of Control Date" shall mean the first day on which any
Person, or group of related Persons, (i) shall acquire beneficial ownership
directly or indirectly, or control of the Voting Power (as hereinafter defined)
of the Company; (ii) shall acquire directly or indirectly, or control all or
substantially all of the assets of the Company; or (iii) acquire beneficial
ownership directly or indirectly, or control of the Voting Power of an entity
with or into which the Company has merged or consolidated, whether pursuant to a
statutory merger or consolidation or otherwise. For purposes of this Section 6.2
only, the term "Person" shall not include any of the Tankersley family members
set forth on Exhibit "C" or any of the members of their immediate family, within
the following categories: a son, daughter or spouse or descendant of either;
sister or brother; a stepson, stepdaughter, stepfather or stepmother; father,
mother, or ancestor of either; or a spouse (collectively, the "Tankersley
Family"). It is expressly understood that for the purpose of determining any of
the foregoing relationships, a legally adopted child of a person is considered a
child of such person by blood.

The term "Prepayment Price" shall mean the greater of (x) par, and (y)
the sum of the values of (1) each remaining mandatory principal payment prior to
the next interest rate adjustment date, if any, or maturity, as the case may be,
and (2) the principal payment at maturity (if there is an interest rate
adjustment date, the entire outstanding principal balance as of such date shall
be deemed due and payable solely for purposes of determining the Prepayment
Price) (each such mandatory payment and such payment at maturity being herein
referred to as a "Payment") plus the value of all related scheduled interest
payments on the Note to be prepaid during the period from the Prepayment Date to
the date of each Payment. The value of each Payment and such related scheduled
interest payments shall be determined by discounting, at the applicable Treasury
Rate such Payment plus one hundred fifty (150) basis points, and such related
scheduled interest payments from the respective scheduled payment dates of such
Payment and such related scheduled interest payments to the Prepayment Date. The
Treasury Rate with respect to each Payment and such related scheduled interest
payments is the yield which shall be imputed, by linear interpolation, from the
current weekly yield of those United States Treasury Notes having maturities as
close as practicable to the scheduled payment date of the Payment, as published
in the most recent Federal Reserve Statistical Release H.15 (519) or any
successor publication thereto.

6.3. Interest After Date Fixed for Principal Payment or Prepayment6.3.
Interest After Date Fixed for Principal Payment or Prepayment. In the event the
Company shall fail to pay such Note or any payment owing in

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respect of the Note according to the terms thereof and hereof (inclusive of any
other permitted payments of which the Company has notified you) on the date
fixed for such principal payment or prepayment, in which event such Note or such
portion, as the case may be, shall bear interest at the Overdue Interest Rate
from and after such date until paid and, so far as may be lawful, any overdue
installment of interest shall bear interest at said rate.

SECTION 7. AFFIRMATIVE COVENANTSSECTION 7. AFFIRMATIVE COVENANTS.

The Company covenants and agrees that so long as the Note shall be
outstanding:

7.1. To Pay Note7.1. To Pay Note. The Company will punctually pay or
cause to be paid the principal and interest (and prepayment premium, if any) to
become due in respect of the Note according to the terms thereof and hereof
(inclusive of any other permitted payments of which the Company has notified
you).

7.2. Maintenance of Company Office7.2. Maintenance of Company Office.
The Company will maintain an office at Ten Pictsweet Drive, Bells, Tennessee
38006-0119 (or such other place in the United States of America as the Company
may designate in writing to the holder of the Note).

7.3. To Keep Books7.3. To Keep Books. The Company will, and will cause
each of its Subsidiaries to, keep proper books of record and account in
accordance with generally accepted accounting principles.

7.4. Payment of Taxes; Corporate Existence; Maintenance of
Properties7.4. Payment of Taxes; Corporate Existence; Maintenance of Properties.
The Company will, and will cause each of its Subsidiaries to,

(a) pay and discharge promptly all taxes, assessments and
governmental charges or levies imposed upon it, its income or profits
or its property before the same shall become in default, as well as all
lawful claims and liabilities of any kind (including claims and
liabilities for labor, materials and supplies) which, if unpaid, might
by law become a Lien upon its property; provided, however, that neither
the Company nor any Subsidiary shall be required to pay any such tax,
assessment, charge, levy or claim if the amount, applicability or
validity thereof shall currently be contested in good faith by
appropriate proceedings and if the Company or any such Subsidiary shall
have set aside on its books reserves in respect thereof (segregated to
the extent required by generally accepted accounting principles) deemed
adequate in the opinion of the Board of Directors;

(b) subject to Section 8.5A, do all things necessary to
preserve and keep in full force and effect its corporate existence,
rights (charter and statutory) and franchises; provided, however, that
neither the Company nor any Subsidiary shall be required to preserve
any right or franchise if the Board of Directors shall reasonably
determine that the preservation thereof is no longer desirable in its
conduct of business; and

(c) maintain and keep all its properties used or useful in the
conduct of its business in good condition, repair and working order and
supplied with all necessary equipment and make all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as
may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times;
provided, however, that nothing in this Section 7.4(c) shall prevent
the Company or any of its Subsidiaries from discontinuing the operation
and maintenance of any of its properties (other than the Collateral),
if such discontinuance is, in the judgment of the Company, desirable in
the conduct of its business.

7.5. To Insure7.5. To Insure. The Company will, and will cause each of
its Subsidiaries to (in addition to the insurance required to be maintained
pursuant to Paragraph 1.05 of the Deed of Trust and Section 2(e) of the Security
Agreement):

(a) keep all of its insurable properties owned by it insured
against all risks usually insured against by persons operating like
properties in the same geographical areas where the properties are

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located, all in amounts sufficient to prevent the Company or such
Subsidiary, as the case may be, from becoming a coinsurer within the
terms of the policies in question, but in any event in amounts not less
than 80% of the then full replacement value thereof;

(b) maintain public liability insurance against claims for
personal injury, death or property damage suffered by others upon or in
or about any premises occupied by it or occurring as a result of its
maintenance or operation of any airplanes, automobiles, trucks or other
vehicles or other facilities (including, but not limited to, any
machinery used therein or thereon) or as the result of the use of
products sold by it or services rendered by it;

(c) maintain such other types of insurance with respect to its
business as is usually carried by persons of comparable size engaged in
the same or similar business and similarly situated; and

(d) maintain all such worker's compensation or similar
insurance as may be required under the laws of any State or
jurisdiction in which it may be engaged in business.

All insurance for which provision has been made in Section 7.5(b) and
Section 7.5(c) shall be maintained in at least such amounts as such insurance is
usually carried by persons of comparable size engaged in the same or a similar
business and similarly situated; and all insurance herein provided for shall be
effected under a valid and enforceable policy or policies issued by insurers of
recognized responsibility, except that the Company or any such Subsidiary may
effect worker's compensation or other similar insurance in respect of operations
in any State or other jurisdiction either through an insurance fund operated by
such State or other jurisdiction or by causing to be maintained a system or
systems of self-insurance which are in accord with applicable laws.

SECTION 8. RESTRICTIVE COVENANTSSECTION 8. RESTRICTIVE COVENANTS.

The Company covenants and agrees that so long as the Note shall be
outstanding:

8.1. Indebtedness8.1. Indebtedness.

Neither the Company nor any Subsidiary will create, assume or incur, or in any
manner be or become liable, contingently or otherwise, in respect of, any
Indebtedness if immediately after giving effect thereto, the ratio of
Consolidated Total Indebtedness to Consolidated Tangible Net Worth would exceed
2.0 to 1.0 at the end of any fiscal year period.

8.2. Working Capital; Lease Obligations28.2. Working Capital; Lease
Obligations.

A. The Company will not at any time permit Consolidated Working Capital
to be less than $10,000,000.00.

B. The Company and its Subsidiaries shall not at any time enter
into any lease or leases of real or personal property with terms in excess of
one year (exclusive of Capital Leases) in which the rentals due in any fiscal
year exceed an aggregate amount equal to twenty percent (20%) of the immediately
preceding fiscal year's Consolidated Tangible Net Worth.

8.3. Tangible Net Worth8.3. Tangible Net Worth.

Subject to the following sentence, the Company and its Subsidiaries will not
permit, at the end of any fiscal quarter or fiscal year period, Consolidated
Tangible Net Worth to be less than $40,000,000.00. During each fiscal year
beginning subsequent to the Closing Date, the Company and its Subsidiaries will
not at any time permit Consolidated Tangible Net Worth to be less than the
greater of, (i) the minimum required Consolidated Tangible Net Worth for the
immediately preceding year, and (ii) the minimum required Consolidated Tangible
Net Worth for the immediately preceding fiscal year plus an amount equal to
twenty five percent (25%) of such immediately preceding fiscal year's
Consolidated Net Income.

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8.4. Restricted Payments; Pledge of Stock8.4. Restricted Payments;
Pledge of Stock.

A. The Company and its Subsidiaries will not, directly or indirectly,
make any Restricted Payments or incur any liability to make any Restricted
Payments unless, immediately after giving effect to such action, there shall not
exist any Event of Default or event which, with notice or lapse of time or both,
would become an Event of Default.

All dividends, distributions, purchases, redemptions, retirements,
acquisitions and payments made pursuant to this Section 8.4 in property other
than cash shall be included for purposes of calculations pursuant to this
Section 8.4 at the fair market value thereof (as determined in good faith by the
Board of Directors) at the time of declaration of such dividend or at the time
of making such distribution, purchase, redemption, retirement, acquisition or
payment.

8.5. Merger, Consolidation, Sale or Lease8.5. Merger, Consolidation,
Sale or Lease.

A. The Company will not consolidate with or merge into any Person, or
permit any Person to merge into it, or sell, transfer or otherwise dispose of
all or substantially all of its properties and assets, unless:

(1) the successor formed by or resulting from such
consolidation or merger (if other than the Company) or the transferee
to which such sale, transfer or other disposition shall be made shall
be a solvent corporation duly organized and existing under the laws of
the United States of America or any State thereof;

(2) the due and punctual performance and observance of all the
obligations, terms, covenants, agreements and conditions of this
Agreement, the Collateral Documents and the Note to be performed or
observed by the Company shall, by written instrument furnished to the
holder of the Note, be expressly assumed by such successor (if other
than the Company) or transferee; and

(3) at the time of such transaction and assumption, and
immediately after giving effect thereto, no Event of Default or event
which, with notice or lapse of time or both, would constitute an Event
of Default shall have occurred and be continuing.

B. Except as permitted in Section 8.5A above, the Company will not, and
will not permit any Subsidiary to, sell, assign, transfer or otherwise dispose
of (other than in the ordinary course of business) any of its properties and
assets to any Person.

8.6. Transactions with Affiliates8.6. Transactions with Affiliates. The
Company will not, and will not permit any Subsidiary to, engage in any
transaction with an Affiliate on terms more favorable to the Affiliate than
would have been obtainable in arm's length dealing in the ordinary course of
business with a Person not an Affiliate. The Company hereby agrees that, to the
extent there are any inter-company loans involving the Company and/or any
Subsidiary on a date on which an Event of Default exists, no payment of any
amounts owing in connection therewith may be made until the earlier of your
waiver of such Event of Default or the repayment in full of all amounts owing to
you in connection with the Loan. To the extent any amounts are received in any
manner whatsoever in connection with such inter-company loans by an obligee
thereof during the period described in the immediately preceding sentence, such
amounts shall be held in trust for and paid over to you until you are in receipt
of all amounts owing to you in connection with the Loan.

8.7. Encumbrances On and Transfers of the Collateral8.7. Encumbrances
On and Transfers of the Collateral.

A. Except for Permitted Encumbrances, the Company and its
Subsidiaries will not create, incur, assume or suffer to exist any Lien on any
of the Collateral or any interest therein. Notwithstanding anything contained in
the foregoing sentence to the contrary, the Company may create, incur, assume or
suffer to exist

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Liens in respect of purchase money financing or leasehold interests, on
furniture, furnishings, equipment, tools, appliances or machinery located at the
Facility, provided, however, that the property so acquired shall constitute in
each case an addition to the Facility and shall not have been acquired to
replace existing portions of the Facility which have become worn out,
undesirable, obsolete, disused or unnecessary for use, operation and maintenance
thereof, not exceeding in value at the time of acquisition thereof Two Hundred
Fifty Thousand and No/100 Dollars ($250,000.00) for any single transaction, or a
total of Five Hundred Thousand and No/100 Dollars ($500,000.00) in any one
fiscal year, which shall forthwith become, without further action, subject to
the lien and security interest of the Collateral Documents.

B. Except as permitted by Sections 8.5A hereof, the Company and
its Subsidiaries will not sell, convey, lease, assign or otherwise transfer all
or any of the Collateral or any interest therein whether voluntarily or by
operation of law. Notwithstanding anything contained in the foregoing sentence
to the contrary, the Company may sell or otherwise dispose of, free from the
lien of the Collateral Documents, furniture, furnishings, equipment, tools,
appliances, machinery, fixtures, or appurtenances subject to the lien thereof,
which may become worn out, undesirable, obsolete, disused or unnecessary for use
in the operation of the Facility, not exceeding in value at the time of
disposition thereof Two Hundred Fifty Thousand and No/100 Dollars ($250,000.00)
for any single transaction, or a total of Five Hundred Thousand and No/100
Dollars ($500,000.00) in any one fiscal year, upon replacing the same by, or
substituting for the same, other furniture, furnishings, equipment, tools,
appliances, machinery, fixtures, or appurtenances not necessarily of the same
character, but of at least equal value to the Company and costing not less than
the amount realized from the property sold or otherwise disposed of, which shall
forthwith become, without further action, subject to the lien and security
interest of the Collateral Documents.

SECTION 9. DEFINITIONSSECTION 9. DEFINITIONS.

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

"Affiliate" means any Person which, directly or indirectly, controls or
is controlled by or is under common control with the Company or a Subsidiary or
which beneficially owns or holds or has the power to direct the voting power of
5% or more of any class of voting stock of the Company or a Subsidiary or which
has 5% or more of its voting stock (or in the case of a Person which is not a
corporation, 5% or more of its equity interest) beneficially owned or held,
directly or indirectly, by the Company or a Subsidiary. For purposes of this
definition, "control" means the power to direct the management and policies of a
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.

"Board of Directors" means either the board of directors of the Company
(or, when so specified or the context so indicates, a Subsidiary) or, if duly
authorized to exercise the power of the Board of Directors, any duly authorized
committee thereof.

"Business Day" shall mean any day on which banks are required to be
open to carry on their normal business in the State of New York.

"Capital Lease" means and includes at any time any lease of property,
real or personal, which in accordance with GAAP would at such time be required
to be capitalized on a balance sheet of the lessee.

"Capital Lease Obligation" means at any time the capitalized amount of
the rental commitment under a Capital Lease which in accordance with GAAP would
at such time be required to be shown on a balance sheet.

"Collateral" means all property and assets, and proceeds thereof,
subjected, or intended to be subjected, at any time to the Liens of any of the
Collateral Documents.

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"Company" means United Foods, Inc., a Delaware corporation, and,
subject to Section 8.5A hereof, its successors and assigns.

"Consolidated Assets" means, as of the date of determination thereof,
the aggregate of all assets which in accordance with GAAP would be so classified
and appear as assets on the consolidated balance sheet of the Company and its
Subsidiaries.

"Consolidated Current Assets" means, as of the date of determination
thereof, the aggregate of all assets which in accordance with GAAP would be so
classified and appear as current assets on the consolidated balance sheet of the
Company and its Subsidiaries.

"Consolidated Current Liabilities" means, as of the date of
determination thereof, the aggregate of all liabilities which in accordance with
GAAP would be so classified and appear as current liabilities on the
consolidated balance sheet of the Company and its Subsidiaries.

"Consolidated Liabilities" means, as of the date of determination
thereof, the aggregate of all liabilities which in accordance with GAAP would be
so classified and appear as liabilities on the consolidated balance sheet of the
Company and the Subsidiaries.

"Consolidated Net Income" means the net income of the Company and its
Subsidiaries, after eliminating inter-company items, all as consolidated and
determined in accordance with GAAP.

"Consolidated Net Worth (Stockholders' Equity)" means, as of the date
of determination thereof, the aggregate amount of the Consolidated Assets less
the Consolidated Liabilities of the Company and its Subsidiaries, in each case
after eliminating inter-company items and as determined in accordance with GAAP.

"Consolidated Tangible Net Worth" means the aggregate amount of total
shareholders' equity as determined from the consolidated balance sheet of the
Company and its Subsidiaries, prepared in accordance with GAAP, less the net
book value of all assets of the Company and its Subsidiaries which would be
treated as intangibles under GAAP, including, without limitation, deferred
charges, franchise rights, non-compete agreements, goodwill, unamortized debt
discount, patents, patent applications, trademarks, tradenames, copyrights,
licenses and premiums on purchased assets.

"Consolidated Total Indebtedness" shall mean the sum of:

(i) any obligation of the Company and its Subsidiaries for borrowed
money, which under generally accepted accounting principles is shown on the
balance sheet as a liability (including, without limitation, Capitalized Lease
Obligations but excluding reserves for deferred income taxes, operating leases,
deferred pension liability and other deferred expenses and reserves);

(ii) Indebtedness of the Company and its Subsidiaries secured by any
Lien existing on property owned subject to such Lien, whether or not the
Indebtedness secured thereby shall have been assumed; and

(iii) guarantees, endorsements (other than guarantees related to grower
and packaging contracts provided in the ordinary course of business and
endorsements of negotiable instruments for collection in the ordinary course of
business) and other contractual commitments of the Company and its Subsidiaries
(whether direct or indirect in connection with obligations, stock or dividends
of any person),

in each case after eliminating inter-company items and as determined in
accordance with GAAP.

"Consolidated Working Capital" means, as of the date of determination
thereof, the excess of Consolidated Current Assets over Consolidated Current
Liabilities.

"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.

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"Events of Default" has the meaning specified in Section 10.1.

"GAAP" means, as to a particular corporation and at a particular time
of determination, such accounting principles as, in the opinion of the
independent public accountants regularly employed by such corporation, conform
at such time of determination to generally accepted accounting principles.

"Indebtedness" means and includes (i) all indebtedness or obligations
for money borrowed or for the purchase price of property (exclusive of orders or
commitments made in the ordinary course of business for future delivery of goods
or services prior to the time the obligation to pay becomes firm) and any notes
payable and drafts accepted representing extensions of credit, whether or not
representing indebtedness or obligations for money borrowed or for the purchase
price of property, (ii) indebtedness or obligations secured by or constituting
any Lien existing on property owned by the Person whose Indebtedness is being
determined, whether or not the indebtedness or obligations secured thereby shall
have been assumed, (iii) Capital Lease Obligations, (iv) guarantees and
endorsements of (other than guarantees related to grower and packaging contracts
provided in the ordinary course of business and endorsements for purposes of
collection in the ordinary course of business), and obligations to purchase
goods or services for the purpose of supplying funds for the purchase or payment
of, or measured by, indebtedness, liabilities or obligations of others (whether
or not representing money borrowed) and other contingent obligations in respect
of, or to purchase or otherwise acquire or service, indebtedness, liabilities or
obligations of others (whether or not representing money borrowed) and (v) all
indebtedness, liabilities or obligations (whether or not representing money
borrowed) in effect guaranteed by an agreement, contingent or otherwise, to make
a loan, advance or capital contribution to or other investment in the debtor for
the purpose of assuring or maintaining a minimum equity, asset base, working
capital or other balance sheet condition for any date, or to provide funds for
the payment of any liability, dividend or stock liquidation payment, or
otherwise to supply funds to or in any manner invest in the debtor for such
purpose. A renewal or extension of any Indebtedness without increase in the
principal amount thereof shall not be deemed to be the incurrence of the
Indebtedness so renewed or extended. In case any corporation shall become a
Subsidiary, such corporation shall be deemed to have incurred at the time it
becomes a Subsidiary all Indebtedness of such corporation outstanding
immediately thereafter.

"Lien" means any mortgage, lien, pledge, security interest, encumbrance
or charge of any kind, whether or not consensual, any conditional sale or other
title retention agreement or any Capital Lease.

"Overdue Interest Rate" means the lesser of (a) five percent (5%) per
annum over the interest rate in effect immediately prior to the time the Overdue
Interest Rate is applicable, and (b) the maximum interest rate provided by law.

"Permitted Encumbrances" means those Liens described on Exhibit "C" to
the Deed of Trust.

"Person" includes an individual, a corporation, a partnership, a joint
venture, a trust, an unincorporated organization or a government or any agency
or political subdivision thereof.

"Restricted Investment" means any investment (other than by
guaranteeing or otherwise becoming liable, contingently or otherwise, in respect
of the Indebtedness of another Person) by the Company or any Subsidiary in any
other Person, whether by acquisition of stock or Indebtedness, or by loan,
advance, transfer of property out of the ordinary course of business, capital
contribution, extension of credit on terms other than those normal in the
business of the Company or such Subsidiary, or otherwise (the foregoing items
being herein collectively called "Investments", and individually, an
"Investment"); provided, however, that the term "Restricted Investment" shall
not include:

(i) marketable obligations issued or guaranteed by the United
States of America or by any agency of the United States of America, and maturing
not later than twelve months from the date of acquisition thereof,

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<PAGE> 21

(ii) commercial paper, issued by a corporation duly organized and
existing under the laws of the United States of America or any State thereof and
having a net worth of not less than $100,000,000, which has one of the two
highest credit ratings by a responsible independent credit agency of recognized
standing,

(iii) Investments, up to an amount insured by the Federal Deposit
Insurance Corporation, in negotiable certificates of deposit or bankers'
acceptances issued by, or drawn on, a United States bank or trust company that
is a member of the Federal Reserve Bank and maturing not later than twelve
months from the date of acquisition thereof, and

(iv) Investments in any Subsidiary or in any corporation which by
reason thereof will immediately after such Investment become a Subsidiary.

"Restricted Payments" means dividends paid on capital stock (in either
cash or property), Restricted Investments, and purchases or redemptions of
capital stock.

"Subsidiary" means any corporation at least a majority of whose
outstanding stock having ordinary voting power for the election of a majority of
the members of the board of directors (or other governing body) of such
corporation (other than stock having such power only by reason of the happening
of a contingency) shall at the time be owned directly or indirectly by the
Company and/or one or more Subsidiaries of the Company.

"Voting Power", as applied to the stock of any corporation, shall refer
to such sufficient stock of any class or classes (however designated), which in
the aggregate, has ordinary voting power for the election of a majority of the
directors of such corporation (other than stock having such power only by reason
of the happening of a contingency).

All accounting terms used herein and not expressly defined in this
Agreement shall have the meanings respectively given to them in accordance with
GAAP as it exists at the date of applicability thereof.

SECTION 10. DEFAULTS AND REMEDIESSECTION 10. DEFAULTS AND REMEDIES.

10.1. Events of Default; Acceleration10.1. Events of Default;
Acceleration. If one or more of the following events (herein called "Events of
Default") shall occur for any reason whatsoever (and whether such occurrence
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):

A. default in the payment of any interest upon the Note when such
interest becomes due and payable, and such default shall have continued for a
period of ten days; or

B. default in the payment of principal of (or prepayment premium,
if any, on) the Note when and as the same shall become due and payable, whether
at maturity or at a date fixed for principal payment or prepayment (including,
without limitation, a principal payment or prepayment as provided in Section 6.1
or Section 6.2), or by acceleration or otherwise, and such default shall have
continued for a period of ten days; or

C. default in the performance or observance of any other
covenant, agreement or condition contained herein, in the Note, the Deed of
Trust, the Assignment or the Security Agreement or any Event of Default under
the Deed of Trust or Assignment or Default under the Security Agreement shall
occur, and such default shall have continued for a period of thirty days after
notice from you; or

D. the Company or a Subsidiary shall not pay when due, whether by
acceleration or otherwise, any evidence of indebtedness of the Company or such
Subsidiary (other than the Note), or any condition or default shall exist under
any such evidence of indebtedness or under any agreement under which the same
may have been issued permitting such evidence of indebtedness to become or be
declared due prior to the stated maturity thereof; or

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<PAGE> 22

E. the Company or any Subsidiary shall file a petition seeking
relief for itself under Title 11 of the United States Code, as now constituted
or hereafter amended, or an answer consenting to, admitting the material
allegations of or otherwise not controverting, or shall fail to timely
controvert, a petition filed against the Company or such Subsidiary seeking
relief under Title 11 of the United States Code, as now constituted or hereafter
amended; or the Company or any Subsidiary shall file such a petition or answer
with respect to relief under the provisions of any other now existing or future
bankruptcy, insolvency or other similar law of the United States of America or
any State thereof or of any other country or jurisdiction providing for the
reorganization, winding-up or liquidation of corporations or an arrangement,
composition, extension or adjustment with creditors; or

F. a court of competent jurisdiction shall enter an order for
relief which is not stayed within 60 days from the date of entry thereof against
the Company or any Subsidiary under Title 11 of the United States Code, as now
constituted or hereafter amended; or there shall be entered an order, judgment
or decree by operation of law or by a court having jurisdiction in the premises
which is not stayed within 60 days from the date of entry thereof adjudging the
Company or any Subsidiary a bankrupt or insolvent, or ordering relief against
the Company or any Subsidiary, or approving as properly filed a petition seeking
relief against the Company or any Subsidiary, under the provisions of any other
now existing or future bankruptcy, insolvency or other similar law of the United
States of America or any State thereof or of any other country or jurisdiction
providing for the reorganization, winding-up or liquidation of corporations or
an arrangement, composition, extension or adjustment with creditors, or
appointing a receiver, liquidator, assignee, sequestrator, trustee, custodian or
similar official of the Company or any Subsidiary or of any substantial part of
its property, or ordering the reorganization, winding-up or liquidation of its
affairs; or any involuntary petition against the Company or any Subsidiary
seeking any of the relief specified in this clause shall not be dismissed within
60 days of its filing; or

G. the Company or any Subsidiary shall make a general assignment
for the benefit of its creditors; or the Company or any Subsidiary shall consent
to the appointment of or taking possession by a receiver, liquidator, assignee,
sequestrator, trustee, custodian or similar official of the Company or such
Subsidiary or of all or any substantial part of its property; or the Company or
any Subsidiary shall have admitted to its insolvency or inability to pay, or
shall have failed to pay, its debts generally as such debts become due; or the
Company or any Subsidiary or its directors or majority members shall take any
action to dissolve or liquidate the Company or such Subsidiary (other than as
contemplated by Section 8.5A); or

H. the rendering against the Company or a Subsidiary of a final
non-appealable judgment, decree or order for the payment of money in excess of
$10,000 and the continuance of such judgment, decree or order unsatisfied and in
effect for any period of 60 consecutive days without a stay of execution; or

I. the Company or any Subsidiary shall (1) engage in any
non-exempted "prohibited transaction," as defined in Sections 406 and 408 of
ERISA and Section 4975 of the Internal Revenue Code of 1986, as amended, (2)
incur any "accumulated funding deficiency," as defined in Section 302 of ERISA,
in an amount in excess of $10,000, whether or not waived, or (3) terminate or
permit the termination of an "employee pension benefit plan," as defined in
Section 3 of ERISA, in a manner which could result in the imposition of a Lien
on any property of the Company or such Subsidiary pursuant to Section 4068 of
ERISA securing an amount in excess of $10,000; or

J. any representation or warranty made by the Company in
Section 2 hereof or in any Collateral Document or in any certificate or
instrument furnished in connection therewith shall prove to have been false or
misleading in any respect as of the date made; or

K. the dissolution of the Company, whether by operation of law or
otherwise;

then an amount equal to the Prepayment Price, computed as provided in Section
6.2 (except that, for purposes of such computation, the Prepayment Date shall be
deemed to be the date upon which the holder of the Note shall have declared the
Note to be due and payable), shall immediately become due and payable without
notice or demand, together with accrued interest thereon at the Overdue Interest
Rate, provided, however, that upon the

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occurrence of an Event of Default described in clauses (E), (F) or (G) of this
Section 10.1, the entire outstanding principal amount of the Note, together with
accrued interest thereon at the Overdue Interest Rate, shall immediately become
due and payable without notice or demand.

The Company hereby expressly acknowledges and agrees (i) that the
prepayment premium provided for herein is reasonable, (ii) that legal counsel of
the Company's own choosing has advised the Company with respect to such
prepayment premium, (iii) that any prepayment made at a time when it is
otherwise restricted under the Note will result in material loss and damage to
the holder of the Note, requiring such holder to secure reinvestments at
additional costs which might not produce the same economic benefit to such
holder as the economic benefits under the Note, (iv) that the foregoing
prepayment premium is a reasonable estimate of such loss and damage, and (v) the
Company shall be stopped hereafter from claiming differently as to any of the
foregoing. The foregoing prepayment premium is not intended to be a penalty, but
instead shall serve as liquidated damages to provide you with the benefit of
your bargain.

10.2. Suits for Enforcement10.2. Suits for Enforcement. In case an
Event of Default shall occur and be continuing, the holder of the Note may
proceed to protect and enforce its rights by suit in equity, action at law or
other appropriate proceeding, whether for the specific performance of any
covenant contained in the Note or in this Agreement or in any Collateral
Document or in aid of the exercise of any power granted in the Note or in this
Agreement or in any Collateral Document or may proceed to enforce the payment of
the Note or to enforce any other legal or equitable right of the holder of the
Note. The Company agrees that its obligations under Section 6 are of the essence
of this Agreement, and upon application to any court of equity having
jurisdiction in the premises, the original holder of the Note shall be entitled
to a decree against the Company requiring specific performance of such
obligations.

10.3. Remedies Not Waived10.3. Remedies Not Waived. No course of
dealing between the holder of the Note and the Company or any delay or failure
on the part of the holder in exercising any rights under the Note or under any
Collateral Document or hereunder shall operate as a waiver of any rights of such
holder.

10.4. Remedies Cumulative10.4. Remedies Cumulative. No remedy herein or
in the Note or in any Collateral Document conferred upon the holder of the Note
is intended to be exclusive of any other remedy and each and every remedy shall
be in addition to every other remedy given hereunder or under the Note or under
any Collateral Document or now or hereafter existing at law or in equity or by
statute or otherwise.

10.5. Costs and Expenses10.5. Costs and Expenses. The Company shall pay
to the holder of the Note, to the extent permitted under applicable law, all
reasonable out-of-pocket expenses incurred by such holder as shall be sufficient
to cover the cost and expense of enforcing such holder's rights under the Note
and any Collateral Document or the collecting and foreclosing upon, or otherwise
dealing with, the Collateral, or participating in any litigation or bankruptcy
proceeding for the protection or enforcement of the holder's collateral or claim
against the Company or any guarantors of the Note or otherwise incurred in
connection with the occurrence of an Event of Default, said expenses to include
reasonable compensation to the attorneys and counsel of such holder for any
services rendered in that connection, upon the Note held by such holder.

SECTION 11. MISCELLANEOUSSECTION 11. MISCELLANEOUS.

11.1. Loss, Theft, Destruction or Mutilation of Note11.1. Loss, Theft,
Destruction or Mutilation of Note. Upon notice to the Company of the loss,
theft, destruction or mutilation of the Note, the Company will make and deliver,
in lieu thereof, a replacement note, identical in form and substance to the Note
and dated as of the date of the Note and upon such execution and delivery all
references in any of the Collateral Documents to the Note shall be deemed to
refer to such replacement note.

11.2. Expenses11.2. Expenses. Whether or not the loan herein
contemplated shall be consummated, the Company shall pay you the total amount of
$35,000.00 as a non-refundable processing fee, all of which has been previously
paid to you and the Company shall pay all costs of executing and closing this
Agreement and the Collateral Documents, including, without limitation,
attorneys' fees, survey costs, appraisal fees, title insurance

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<PAGE> 24

and related expenses, and environmental audit reviews and related expenses. The
Company's obligations under this Section 11.2 shall survive the payment or
prepayment of the Note.

11.3. Stamp Taxes, Recording Fees, etc.11.3. Stamp Taxes, Recording
Fees, etc. The Company will pay, and save you and any subsequent holder of the
Note harmless against, any and all liability (including any interest or penalty
for non-payment or delay in payment) with respect to stamp and other taxes
(other than any such stamp or other taxes incurred upon a transfer of the Note
by you), if any, and all recording and filing fees which may be payable or
determined to be payable in connection with the transactions contemplated by
this Agreement and the Collateral Documents, including, without limitation, the
issuance and delivery of the Note, the execution, delivery, filing and recording
of the Collateral Documents and financing statements related thereto, or any
modification, amendment or alteration thereof. The obligations of the Company
under this Section 11.3 shall survive the payment or prepayment of the Note.

11.4. Successors and Assigns11.4. Successors and Assigns. All
covenants, agreements, representations and warranties made herein, in the
Collateral Documents and in the Note or in certificates delivered in connection
herewith by or on behalf of the Company shall survive the issuance and delivery
of the Note to you, the making of the loan by you as provided in Section 1.2,
and shall bind the successors and assigns of the Company, whether so expressed
or not, and all such covenants, agreements, representations and warranties shall
inure to the benefit of your successors and assigns, including any subsequent
holder of any of the Note.

11.5. Payment11.5. Payment. Notwithstanding any provision to the
contrary in the Note contained, the Company will promptly and punctually pay to
you by wire transfer of immediately available funds pursuant to wiring
instructions from you, or at your request, by check mailed (not later than three
days prior to the date any payment is due) to Metropolitan Life Insurance
Company, Agricultural Investments, Box 27-131, Kansas City, Missouri 64180-0131
or by such other method or to such other address as may be designated in writing
by you, all amounts payable in respect of the principal of, prepayment premium,
if any, and interest on, the Note, without any presentment thereof and without
any notation of such payment being made thereon.

11.6. Notices11.6. Notices. All communications provided for hereunder,
under the Collateral Documents or under the Note (other than payments in respect
thereof which shall be made in accordance with Section 11.5) shall be in
writing, and if to you, mailed (by registered or certified mail, with return
receipt requested, postage prepaid, or by United States Express Mail or other
comparable overnight courier service) or served in person addressed as this
Agreement is addressed with a copy to: Metropolitan Life Insurance Company,
Agricultural Investments, 2203 E. Empire Street, Bloomington, Illinois 61704,
Attention: Regional Manager or if to the Company, mailed (by registered or
certified mail, with return receipt requested, postage prepaid, or by United
States Express Mail or other comparable overnight courier service) or served in
person to United Foods, Inc., Ten Pictsweet Drive, Bells, Tennessee 38006-0119,
Attention: President, or addressed to either party at any other address in the
United States of America that such party may hereafter designate by written
notice to the other party. Communications mailed as aforesaid shall be deemed
sufficiently made upon receipt or refusal to accept delivery as indicated in the
return receipt or in the receipt of such United States Express Mail or courier
service.

11.7. Severability11.7. Severability. If any provision of this
Agreement or the Note or the application thereof to any person or circumstance
shall be invalid or unenforceable to any extent, the remainder of this Agreement
and the Note and the application of such provision to other persons or
circumstances shall not be affected thereby and shall be enforced to the maximum
extent permitted by law.

11.8. Law Governing; Modification11.8. Law Governing; Modification.
This Agreement shall be construed in accordance with and governed by laws of the
State of Utah. No provision of this Agreement may be waived, changed or
modified, or the discharge thereof acknowledged, orally, but only by an
agreement in writing signed by the party against whom the enforcement of any
waiver, change, modification or discharge is sought.

11.9. Headings11.9. Headings. The headings of the sections and
subsections of this Agreement are inserted for convenience only and do not
constitute part of this Agreement.

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11.10. Counterparts11.10. Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one such counterpart.

11.11. FINAL CREDIT AGREEMENT11.11. FINAL CREDIT AGREEMENT. THIS
WRITTEN AGREEMENT, THE NOTE AND THE COLLATERAL DOCUMENTS ARE THE FINAL
EXPRESSION OF THE CREDIT AGREEMENT BETWEEN THE COMPANY AND YOU AND MAY NOT BE
CONTRADICTED AS EVIDENCE OF ANY PRIOR OR CONTEMPORANEOUS ORAL AGREEMENT BETWEEN
THE COMPANY AND YOU. THE COMPANY AND YOU HEREBY AFFIRM THAT THERE IS NO
UNWRITTEN ORAL CREDIT AGREEMENT BETWEEN THE COMPANY AND YOU WITH RESPECT TO THE
SUBJECT MATTER OF THIS WRITTEN CREDIT AGREEMENT, THE NOTE, THE COLLATERAL
DOCUMENTS, AND ANY RELATED LOAN DOCUMENTS.

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If the foregoing is satisfactory to you, please sign the form of
acceptance on the enclosed counterpart of this letter agreement and forward the
same to the Company, whereupon this letter agreement will become a binding
agreement between you and the Company as of the date first above written.

Yours very truly,

UNITED FOODS, INC.

By: S/N Carl W. Gruenewald, II
--------------------------
Carl W. Gruenewald
Its Senior Vice President
- Financial

ATTEST:

By: S/N Donald Dresser
----------------------------
Donald Dresser
Its Assistant Secretary

The foregoing agreement is
hereby accepted as of the
date first above written.

METROPOLITAN LIFE INSURANCE COMPANY

By: S/N Darrell J. Smith
----------------------------
Darrell J. Smith
Its Vice President

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EXHIBIT "A"

LOAN AGREEMENT

UNITED FOODS, INC.,
a Delaware corporation

Secured Promissory Note

Due January 1, 2007

Ogden, Utah
January ____, 1997

United Foods, Inc., a corporation duly organized and existing under the
laws of the State of Delaware (herein called the "Company"), for value received,
hereby promises to pay to Metropolitan Life Insurance Company ("Metropolitan"),
or assigns, on January 1, 2007 the principal amount of Six Million and No/100
Dollars ($6,000,000.00) or so much thereof as shall not have been theretofore
paid by mandatory principal payments and optional prepayments as required in the
Agreement (as hereinafter defined) in such coin or currency of the United States
of America as at the time of payment shall be legal tender for public and
private debts, at the address provided in Section 11.6 of the Agreement, and to
pay interest only (computed on the basis of a 360-day year) at said address, in
like coin or currency, on the unpaid portion of said principal amount from the
date hereof, on the first day of the first full month subsequent to the Closing
Date, and thereafter, as combined with monthly principal payments, as provided
in the Agreement, on the first day of each month, commencing on the first day of
the second full month following the Closing Date, in each event at the rate of
8.98% per annum, until such unpaid portion of such principal amount shall have
become due and payable and at the Overdue Interest Rate (as defined in the
Agreement) thereafter and, so far as may be lawful, on any overdue installment
of interest at such Overdue Interest Rate.

This Note (herein called the "Note") is issued pursuant to and entitled
to the benefits of the Loan Agreement, dated of even date herewith, between the
Company and Metropolitan (herein called the "Agreement"), the terms and
provisions of which are hereby incorporated by reference and made a part of the
terms of this Note. The Note is secured by and entitled to the benefits of (i) a
first Deed of Trust and Security Agreement, dated of even date herewith, made by
the Company, as grantor, (ii) a separate Security Agreement, dated of even date
herewith, between the Company, as debtor, and Metropolitan, as secured party,
and (iii) an Assignment of Rents and Leases, dated of even date herewith, made
by the Company, as assignor, to each of which reference is hereby made for a
description of the collateral or obligations covered thereby and the rights and
benefits afforded thereby to the holder of the Note.

This Note is subject to mandatory principal payments and optional
prepayment as provided in the Agreement. The unpaid principal balance and all
other amounts owing under this Note may be declared to be due and payable upon
the happening of an Event of Default or Change of Control Date as defined in the
Agreement.

In the event this Note or any of the instruments referred to herein are
placed in the hands of an attorney or attorneys for collection or enforcement or
if the holder of the Note is required to obtain attorneys and incur expenses and
attorney fees by reason of litigation or participation in bankruptcy proceedings
for the protection or enforcement of its collateral and claim against the
Company or any guarantors of this Note, then in all such cases, the holder of
the Note shall be entitled to reasonable attorney fees and expenses from the
Company.

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<PAGE> 28

The Company waives diligence, demand, presentment, notice of nonpayment
and protest, and consents to extensions of the time of payment, surrender or
substitution of security, or forbearance, or other indulgence, without notice.

This Note shall be construed in accordance with and governed by the
laws of the State of Utah.

IN WITNESS WHEREOF, UNITED FOODS, INC. has caused this Note to be
signed in its corporate name by one or more of its officers thereunto duly
authorized, and to be dated as of the day and year first above written.

UNITED FOODS, INC.
By:
--------------------------------------
Its Senior Vice President, Finance

ATTEST:

By:
---------------------------------
Its Assistant Secretary

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<PAGE> 29

UNITED FOODS, INC.,
a Delaware corporation

Secured Promissory Note

Due January 1, 2007

Ogden, Utah
January 7, 1997

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<PAGE> 30

This Note shall be construed in accordance with and governed by the
laws of the State of Utah.

UNITED FOODS, INC.
By: S/N Carl W. Gruenewald, II
------------------------------------
Its Senior Vice President, Finance

ATTEST:

By: S/N Donald Dresser
---------------------------------
Its Assistant Secretary

<PAGE> 1

EXHIBIT 10.23

CONSOLIDATION, RENEWAL, AND RESTATEMENT OF DEED OF TRUST AND SECURITY AGREEMENT,
AND CONSOLIDATION, RENEWAL, AND RESTATEMENT OF PROMISSORY NOTES EACH BETWEEN
UNITED FOODS, INC. AND THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY ALL DATED
JANUARY 30, 1997.

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<PAGE> 2

TENNESSEE EXHIBIT 10.23
RECORDING REQUESTED BY

"Maximum principal indebtedness for
WHEN RECORDED MAIL TO Tennessee recording tax purposes is
$7,121,824.93"

The Northwestern Mutual Life Ins. Co.
720 East Wisconsin Ave. - Rm. N16WC
Milwaukee, WI 53202
Attn: Janet M. Szukalski
LOAN NO. C-332028 SPACE ABOVE THIS LINE FOR RECORDER'S USE

This instrument was prepared by James L. McFarland, Attorney, for The
Northwestern Mutual Life Insurance Company, 720 East Wisconsin Ave., Milwaukee,
WI 53202.

CONSOLIDATION, RENEWAL, AND RESTATEMENT OF
DEED OF TRUST AND SECURITY AGREEMENT

THIS CONSOLIDATION, RENEWAL, AND RESTATEMENT OF DEED OF TRUST and SECURITY
AGREEMENT, Made as of the 30th day of January, 1997 between UNITED FOODS, INC.,
a Delaware corporation, Ten Pictsweet Drive, Bell, Tennessee 38006 herein (said
Grantor/Trustor, whether one or more in number) called "Grantor", and JOHN S.
SHOAF, 850 Ridge Lake Boulevard, Suite 205, Memphis, Tennessee 38120, herein
called "Trustee", and THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY, a
Wisconsin corporation, 720 E. Wisconsin Avenue, Milwaukee, WI 53202, herein
called "Beneficiary".

RECITALS:

A. Beneficiary made a loan to Grantor as evidenced by a Promissory
Note dated July 10, 1987 in favor of Beneficiary and in the original principal
amount of Fifteen Million Dollars ($15,000,000.00) (the "Original Note").

B. In connection with the execution of the Original Note, and as
security therefore, Grantor executed and delivered a Deed of Trust and Security
Agreement in favor of Beneficiary dated July 10, 1987, securing an indebtedness
in the current outstanding principal balance of $7,878,175.07 which was recorded
on July 10, 1987 in Note Book 12, Page 439 of the records of Crockett County,
Tennessee (the "Original Deed of Trust"), which Deed of Trust encumbers the
property described therein.

C. Contemporaneously herewith, Grantor is executing in favor of
Beneficiary that certain Future Advance Promissory Note in the original
principal amount of $7,121,824.93, and as security therefore, Grantor will
execute and deliver a Difference Deed of Trust and Security Agreement
("Difference Deed of Trust") in favor of Beneficiary dated of even date
herewith, which is to be recorded in the records of Crockett County, Tennessee.

D. Contemporaneously herewith, Grantor is executing in favor of
Beneficiary that certain Consolidation, Renewal, and Restatement of Promissory
Notes in the original principal amount of $15,000,000.00, which renews and
consolidates all of the indebtedness evidenced by the Original Note and the
Future Advance Note, hereinafter referred to as the "Note".

E. Grantor and Beneficiary desire to modify, consolidate and restate
the Original Deed of Trust and the Difference Deed of Trust in their entirety as
hereinafter set forth.

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<PAGE> 3

NOW, THEREFORE, for and in consideration of the mutual covenants and conditions
contained herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Grantor and Beneficiary hereby
agrees as follows:

1. The foregoing recitals are true and correct and constitute a
material part of this Deed of Trust.

2. The Original Deed of Trust and the Difference Deed of Trust
(collectively, the "Prior Deed of Trust") are hereby modified, consolidated and
restated as the "Modified Deed of Trust Provisions" which are attached hereto as
Exhibit "A" (the "Modified Deed of Trust"). Grantor hereby ratifies,
acknowledges and confirms the mortgaging and conveyancing of the Property (as
defined in the Modified Deed of Trust) to Beneficiary. In the event of a
conflict between the provisions of the Prior Deed of Trust and the Modified Deed
of Trust, the provisions of the Modified Deed of Trust shall control.

3. Survival of Security. Nothing herein shall invalidate any
security now held by Beneficiary for payment of the indebtedness secured by the
Prior Deed of Trust or the Modified Deed of Trust, nor impair, nor release any
covenant, condition, agreement or stipulation therein, and the same, as herein
modified, shall continue in full force and effect.

3. Effect of Modified Deed of Trust Provisions. It is the intention
of the parties that each of the terms, covenants, and provisions of the Modified
Deed of Trust shall replace in its entirety the terms, covenants and provisions
of the Prior Deed of Trust, to the same extent as though the Modified Deed of
Trust had originally been given by Grantor to Beneficiary to evidence and secure
a single indebtedness.

4. Performance by Grantor. Each and every of the terms, covenants,
conditions and provisions of the Modified Deed of Trust are ratified and
confirmed by and declared to be fully binding upon Grantor. Further, Grantor
does hereby ratify, confirm, and certify that the lien of the Modified Deed of
Trust is continuing and binding and retains its full force, effect and priority
upon the Property (as defined in the Modified Deed of Trust), such priority
being a first lien on said Property.

5. Representations, Acknowledgments and Agreements of Grantor. The
representations, acknowledgments and agreements of Grantor contained in this
paragraph were a condition precedent, and a material inducement, to Beneficiary
agreeing to amend and restate the Original Note and Beneficiary has relied on
each of such representations, acknowledgments and agreements. Grantor hereby
acknowledges, represents and agrees that Grantor has no defenses, setoffs,
claims, counterclaims or causes of action of any kind or nature whatsoever with
respect to (i) the Loan Documents (as defined in the Modified Deed of Trust) or
the indebtedness evidenced and secured thereby; (ii) any other documents or
instruments now or heretofore evidencing, securing or in any way relating to the
loan (the "Loan") evidenced by the said note (as defined in the Modified Deed of
Trust) or the Original Note; (iii) the administration or funding of the Loan;
(iv) the development, operation or financing of the Property (as defined in the
Modified Deed of Trust); (v) any other transaction, matter or occurrence between
Grantor and Beneficiary relating in any way to the Loan, the Loan Documents or
said Property; and (vi) any acts or omissions of Beneficiary relating in any way
to the Loan, the Loan Documents or said Property. Grantor hereby represents and
agrees that there are no oral agreements which modify any of the Loan Documents
and the Loan Documents, as modified herein and in the said note, constitute the
entire agreement between Grantor and Beneficiary with respect to the Loan.

6. Payment of Transaction Taxes. Grantor represents and warrants
that all documentary stamp taxes and intangible taxes required by law on account
of the hereinabove referenced notes, the said note (as defined in the Modified
Deed of Trust), the Prior Deed of Trust, the Modified Deed of Trust and this
Agreement have been paid. If any such tax is levied or assessed now or hereafter
against Beneficiary on account of this transaction or against any of the
documents evidencing or securing the indebtedness described herein, Grantor will
pay the same on demand, together with all interest, penalties and costs incurred
by Beneficiary on account thereof, and reasonable attorneys fees incurred by
Beneficiary in connection therewith. The Modified Deed of Trust shall secure the
payment by Grantor of all of such taxes, interest and penalties, and failure to
pay the same upon demand shall constitute a default under the Modified Deed of
Trust. Notwithstanding the foregoing, Beneficiary agrees not to

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demand payment so long as Grantor is diligently contesting the tax claimed to be
due and has deposited with Beneficiary such security as Beneficiary deems
sufficient to protect its security. Should Beneficiary at any time determine
that the security afforded by or the validity of the documents evidencing and
securing the indebtedness evidenced by the said note (as defined in the Modified
Deed of Trust) is impaired or threatened, Grantor shall pay such taxes forthwith
upon the demand of Beneficiary.

7. Binding Effect. This Agreement shall be binding upon and shall
inure to the benefit of the parties and their respective successors and assigns.

IN WITNESS WHEREOF, this instrument has been executed by the parties as of the
day and year first above written.

UNITED FOODS, INC., a Delaware corporation

By: S/N Carl W. Gruenewald, II
-------------------------------------
Carl W. Gruenewald, II
Its Sr. Vice President, Finance

Attest: S/N Donald Dresser
---------------------------------
Donald Dresser
Its Assistant Secretary
(corporate seal)

THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY, a Wisconsin
corporation

By: Carson D. Keyes
-------------------------------------
Carson D. Keyes
Its Vice President

Attest: S/N Warren L. Smith, Jr.
---------------------------------
Warren L. Smith, Jr.
Its Assistant Secretary
(corporate seal)

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<PAGE> 5

STATE OF TENNESSEE )
)ss.
COUNTY OF CROCKETT )

On this 4th day of January , 1997, before me personally appeared Carl W.
Gruenewald, II and Donald Dresser with whom I am personally acquainted, and who
upon oath acknowledged themselves to be the Senior Vice President and Assistant
Secretary, respectively, of UNITED FOODS, INC., a corporation, and that they as
such Senior Vice President and Assistant Secretary respectively, being
authorized so to do, executed the foregoing instrument for the purposes therein
contained, by signing the name of the corporation by themselves as Senior Vice
President and Assistant Secretary respectively, and by affixing thereto the
common corporate seal of such corporation.

WITNESS WHEREOF, I have hereunto set my hand and official seal.

My commission expires: 7-22-97

S/N Marilyn B. Hendrix
----------------------
Notary Public

STATE OF WISCONSIN )
)ss.
COUNTY OF MILWAUKEE )

On this 3rd day of February, 1997, before me personally appeared Carson D. Keyes
and Warren L. Smith, Jr., with whom I am personally acquainted, and who upon
oath acknowledged themselves to be the Vice President and Assistant Secretary
respectively, of THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY, a Wisconsin
corporation, and that they as such Vice President and Assistant Secretary
respectively, being authorized so to do, executed the foregoing instrument for
the purposes therein contained, by signing the name of the corporation by
themselves as Vice President and Assistant Secretary respectively, and by
affixing thereto the common corporate seal of such corporation.

WITNESS WHEREOF, I have hereunto set my hand and official seal.

My commission expires: May 14, 2000

S/N Janet M. Szukalski
----------------------
Janet M. Szukalski
Notary Public

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<PAGE> 6

Exhibit "A"

Modified Deed of Trust Provisions

WITNESSETH:

WITNESSETH, That Grantor, in consideration of the indebtedness herein mentioned,
does hereby irrevocably bargain, sell, grant, transfer, assign and convey unto
Trustee, in trust, with power of sale and right of entry and possession the
following property (herein referred to as the "Property"):

A. The real estate in the City of Bells, County of Crockett,
State of Tennessee, described in Exhibit "A" attached hereto
and hereby incorporated within this Deed of Trust; and

B. All buildings, improvements and fixtures belonging to Grantor
which are located on or used in connection with the Property
as of the date of the final advance of loan proceeds,
including but not limited to all engines, boilers, elevators,
machinery, heating apparatus, electrical equipment, air
conditioning equipment, water and gas fixtures, refrigeration,
and packaging and processing line equipment: plus all
additional improvements and fixtures that Grantor installs
from time to time thereafter in substitution or replacement
for said improvements and fixtures.

C. All articles of equipment which are located on or used in
connection with the Property as of the date of the final
advance of loan proceeds, including but not limited to
refrigeration, packaging and processing line equipment: plus
all equipment that Grantor installs from time to time
thereafter in substitution or replacement for said equipment.

Grantor agrees not to sell, transfer, assign or remove anything described in B
and C above now or hereafter located on the above described real estate, without
prior written consent from Beneficiary unless such action results in
substitution or replacement with similar items of equal value.

If any of the Property herein conveyed is of a nature so that a security
interest therein can be perfected under the Uniform Commercial Code, this
instrument shall constitute a Security Agreement and Financing Statement if
permitted by applicable law and Grantor agrees to join with Beneficiary in the
execution of any financing statements and to execute any other instruments that
may be required for the perfection or renewal of such security interest under
the Uniform Commercial Code.

TO HAVE AND TO HOLD the same unto Trustee for the purpose of securing:

(a) Payment to the order of Beneficiary of the indebtedness
evidenced by a promissory note (herein referred to as "said note") of even date
herewith (and any extension or renewal thereof) executed by Grantor (if Grantor
includes more than one party, executed by one or more of such parties) for the
principal sum of FIFTEEN MILLION DOLLARS, with final maturity no later than
March 1, 2007 and with interest as therein expressed, it being recognized that
the funds may not have been fully advanced as of the date hereof but may be
advanced in the future in accordance with the terms of a written contract.

(b) Payment of all sums that may become due Beneficiary under the
provisions of this instrument or said note.

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<PAGE> 7

(d) Performance of each agreement of Grantor contained in any
other security or agreement given in connection with the indebtedness, including
but not limited to, assignments of leases and rents.

TO PROTECT THE SECURITY OF THIS DEED OF TRUST, GRANTOR COVENANTS AND AGREES:

PAYMENT OF DEBT. To pay the indebtedness hereby secured promptly and in full
compliance with the terms of said note and this instrument.

OWNERSHIP. That it owns the Property and has good and lawful right to convey the
same; that the Property is free and clear from any and all encumbrances
whatsoever, except as appears in the title evidence accepted by Beneficiary;
that Grantor does hereby forever warrant and shall forever defend the title and
possession thereof against the lawful claims of any and all persons whomsoever.

MAINTENANCE OF PROPERTY AND COMPLIANCE WITH LAWS. To keep the buildings and
other improvements now or hereafter erected on the real estate in good condition
and repair; not to commit or suffer any waste; to comply with all laws, rules
and regulations affecting the Property; and to permit Beneficiary to enter at
all reasonable times for the purpose of inspection.

INSURANCE. To keep the Property insured for the protection of Beneficiary in
such manner, in such amounts and in such companies as Beneficiary may from time
to time approve, and to keep the policies therefor, properly endorsed, on
deposit with Beneficiary; that insurance loss proceeds (less expenses of
collection) (a) in the event of a complete or substantially complete loss of the
building and improvements, described in B, on page 1 hereof, at Beneficiary's
option, shall be applied on said indebtedness, whether due or not, without any
prepayment privilege fee, or to the restoration of the said buildings and
improvements, or be released to Grantor, but such application or release shall
not cure or waive any default; or (b) in the event that the insured loss
involves less than a complete or substantially complete loss, shall be applied
in restoration of the said buildings and improvements (but such application
shall not cure or waive any default) subject to satisfaction of the following
conditions:

(a) There is no existing default hereunder at the time of
casualty, and if there shall occur any default hereunder after
the date of the casualty, Beneficiary shall have no further
obligation to release insurance loss proceeds hereunder.

(b) The casualty insurer has not denied liability for payment of
insurance loss proceeds as a result of any act, neglect, use
or occupancy of the Property by Grantor or any tenant of the
Property.

(c) Beneficiary shall be satisfied that all insurance loss
proceeds so held, together with supplemental funds received
from Grantor, shall be sufficient to complete the restoration
of the Property. Any remaining insurance loss proceeds may, at
the option of Beneficiary, be applied on the indebtedness
evidenced by said note, whether or not due, without any
prepayment privilege fee, or be released to Grantor.

(d) If required by Beneficiary, Beneficiary shall be furnished a
satisfactory report addressed to Beneficiary from an
environmental engineer or other qualified professional
satisfactory to Beneficiary to the effect that no adverse
environmental impact to the Property resulted from the
casualty.

(e) Grantor shall have restored the Property to a condition which
is equal to or better than it was prior to the casualty, and
Beneficiary shall not be required to release any casualty
insurance proceeds until such restoration is completed and
Beneficiary has been furnished satisfactory evidence of the
costs of restoration, and unless, at the time of such release,
there exists no default hereunder with respect to which
Beneficiary shall have given Grantor notice pursuant to the
NOTICE OF DEFAULT provision herein.

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<PAGE> 8

(f) Prior to the release of funds, Grantor shall obtain for the
benefit of Beneficiary an endorsement to Beneficiary's title
insurance policy insuring against any liens arising from the
restoration.

(g) Grantor shall pay all costs and expenses incurred by
Beneficiary, including, but not limited to, outside legal
fees, title insurance costs, third-party disbursement fees,
third-party engineering reports and inspections deemed
necessary by Beneficiary.

(h) All reciprocal easement and operating agreements, if any,
shall remain in full force and effect between the parties
thereto on and after restoration of the Property.

(i) All leases, if any, in effect at the time of the casualty with
tenants who have entered into Beneficiary's form of
Non-Disturbance and Attornment Agreement or similar agreement
shall remain in full force and each tenant thereunder shall be
obligated, or shall elect, to continue the lease term at full
rental (subject only to abatement, if any, during any period
in which the Property or portion thereof shall not be used and
occupied by such tenant as a result of the casualty).

CONDEMNATION. That it hereby assigns to Beneficiary any award and the proceeds
thereof from damage to, or taking of, all or any portion of the Property, by
condemnation proceedings or any power of eminent domain and the proceeds from
any sale or transfer in lieu thereof; that such proceeds (less expenses of
collection) (a) in the event of a complete or substantially complete taking of
the real estate, and the buildings and improvements described in A and B on page
1 hereof, at Beneficiary's option, shall be applied on said indebtedness,
whether due or not, without any prepayment privilege fee, or to the restoration
of the Property, or be released to Grantor, but such application or release
shall not cure or waive any default; or (b) if the condemnation involves less
than a complete or substantially complete taking, and assuming necessary
building and zoning requirements can be complied with, shall be applied in
restoration of said Property (but such application shall not cure or waive any
default) subject to satisfaction of the following conditions:

(a) There is no existing default hereunder at the time of the
taking, and if there shall occur any default hereunder after
the date of the taking, Beneficiary shall have no further
obligation to release condemnation award proceeds hereunder.

(b) Beneficiary shall be satisfied that all condemnation award
proceeds so held, together with supplemental funds received
from Grantor, shall be sufficient to complete the restoration
of the Property. Any remaining condemnation award proceeds
may, at the option of Beneficiary, be applied on the
indebtedness evidenced by said note, whether or not due,
without any prepayment privilege fee, or be released to
Grantor.

(c) If required by Beneficiary, Beneficiary shall be furnished a
satisfactory report addressed to Beneficiary from an
environmental engineer or other qualified professional
satisfactory to Beneficiary to the effect that no adverse
environmental impact to the Property resulted from the taking.

(d) Grantor shall have restored the Property to a condition which
is equal to or better than it was prior to the taking, and
Beneficiary shall not be required to release any condemnation
award proceeds until such restoration is completed and
Beneficiary has been furnished satisfactory evidence of the
costs of restoration, and unless, at the time of such release,
there exists no default hereunder with respect to which
Beneficiary shall have given Grantor notice pursuant to the
NOTICE OF DEFAULT provision herein.

(e) Prior to the release of funds, Grantor shall obtain for the
benefit of Beneficiary an endorsement to Beneficiary's title
insurance policy insuring against any liens arising from the
restoration.

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<PAGE> 9

(f) Grantor shall pay all costs and expenses incurred by
Beneficiary, including, but not limited to, outside legal
fees, title insurance costs, third-party disbursement fees,
third-party engineering reports and inspections deemed
necessary by Beneficiary.

(g) All reciprocal easement and operating agreements, if any,
shall remain in full force and effect between the parties
thereto on and after restoration of the Property.

(h) All leases, if any, in effect at the time of the taking with
tenants who have entered into Beneficiary's form of
Non-Disturbance and Attornment Agreement or similar agreement
shall remain in full force and each tenant thereunder shall be
obligated, or shall elect, to continue the lease term at full
rental (subject only to abatement, if any, during any period
in which the Property or portion thereof shall not be used and
occupied by such tenant as a result of the taking).

TAXES AND SPECIAL ASSESSMENTS. To pay all taxes and special assessments of any
kind that have been or may be levied or assessed against the Property, this
instrument, said note or the indebtedness, or upon the interest of Trustee or
Beneficiary in the Property, this instrument, said note or the indebtedness, and
to procure and deliver to Beneficiary the official receipt of the proper officer
showing timely payment of all such taxes and assessments. Provided, however,
that Grantor shall not be required to pay any such taxes or special assessments
if the amount, applicability or validity thereof shall currently be contested in
good faith by appropriate proceedings and funds sufficient to satisfy the
contested amount have been deposited in an escrow satisfactory to Beneficiary.

OTHER LIENS. That Grantor will neither create nor allow the continuance of any
mortgage, lien, deed of trust or other security interest in the Property without
the consent of the Beneficiary.

LEASES. That there is no assignment or pledge of any leases of, or rentals or
income from, the Property now in effect, and that, until the indebtedness is
fully paid it shall not make any such assignment or pledge to anyone other than
Beneficiary and shall not, without the prior written approval of Beneficiary,
consent to a cancellation or surrender of any of said leases having at the time
an unexpired term of more than two years, or to a release or reduction of the
liability of any party to such a lease.

COSTS, FEES AND EXPENSES. To pay all costs, fees and expenses of this trust; to
appear in and defend any action or proceeding purporting to affect the security
hereof or the rights or powers of Beneficiary or Trustee; to pay all costs and
expenses, including cost of evidence of title and reasonable attorney's fees in
any such action or proceeding in which Beneficiary or Trustee may appear and in
any suit brought by Beneficiary to foreclose this instrument.

FAILURE OF GRANTOR TO ACT. That should it default in making any payment or doing
any act as herein provided, Beneficiary or Trustee, but without obligation so to
do and without notice to or demand upon Grantor and without releasing Grantor
from any obligation hereof, may: make or do the same in such manner and to such
extent as Beneficiary may deem necessary to protect the security hereof,
Beneficiary or Trustee being authorized to enter upon the Property for such
purpose; appear in and defend any action or proceeding purporting to affect the
security hereof, or the rights or powers of Beneficiary or Trustee; pay,
purchase, contest or compromise any encumbrance, charge or lien which in the
judgment of Beneficiary appears to be prior or superior hereto; and, in
exercising any such powers, pay necessary expenses, employ counsel and pay its
reasonable fees. Sums so expended shall be payable by Grantor immediately and
without demand with interest from date of expenditure at the "Default Rate" as
defined in said note. All sums so expended by Beneficiary and the interest
thereon shall be added to the indebtedness and be secured by the lien of this
instrument.

NOTICE OF DEFAULT. Notwithstanding anything contained in this instrument or said
note to the contrary, Beneficiary agrees, as a condition to the exercise of its
remedies of and after acceleration, to give Grantor written notice of any
non-monetary default and to allow Grantor thirty (30) days within which to cure
such default, or in

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the case of such default which cannot reasonably be cured within 30 days, to
diligently pursue efforts to cure said default and to provide Beneficiary with
satisfactory evidence of its ability to cure the default. As used herein,
"non-monetary default" means any default other than a default in payment of
principal and/or interest to Lender.

SUBSTITUTION OF TRUSTEE. That Beneficiary and its successors and assigns may for
any reason and at any time appoint a new or substitute Trustee by written
appointment delivered to such new or substitute Trustee without notice to
Grantor, nor notice to, or resignation or withdrawal by, the existing Trustee
nor recordation thereof unless notice or recordation is required by the laws of
the state in which the Property is located. Upon delivery of such appointment,
the new or substitute Trustee shall be vested with the same title and with the
same powers and duties granted to the original Trustee.

APPOINTMENT OF RECEIVER. That upon commencement of any judicial proceeding to
enforce any right under this instrument after acceleration, including
foreclosure thereof, Beneficiary, and without regard to the solvency or
insolvency, at that time, of any person liable for the payment of the
indebtedness, and without regard to the then value of the Property or whether
the same shall then be occupied by the owner of the equity of redemption as a
homestead, shall have the absolute right to the appointment of a receiver of the
Property and of the revenues, rents, profits and other income therefrom, and
that said receiver shall have (in addition to such other powers as the court
making such appointment may confer) full power to collect all such income and,
after paying all necessary expenses of such receivership and of operation,
maintenance and repair of said Property, to apply the balance to the payment of
any sums then due hereunder, or under said note.

FORECLOSURE. That upon default by it in any required payment of the indebtedness
hereby secured or default in any provision, covenant or agreement contained
herein or in said note, or default in any provision, covenant, agreement or
warranty contained in any other security or agreement given in connection with
the indebtedness or hereunder, the entire unpaid indebtedness shall, at the
option of Beneficiary, become immediately due and payable for all purposes
without any notice or demand, except as required by law (ALL OTHER NOTICE OF THE
EXERCISE OF SUCH OPTION BEING HEREBY EXPRESSLY WAIVED), and Beneficiary may
institute proceedings in any court of competent jurisdiction to foreclose this
instrument as a mortgage, or to enforce any of the covenants hereof, or Trustee
or Beneficiary may, either personally or by agent or attorney in fact, enter
upon and take possession of the Property and may manage, rent or lease the same
or any portion thereof upon such terms as Beneficiary may deem expedient, and
collect, receive and receipt for all rentals and other income therefrom and
apply the sums so received as hereinafter provided in case of sale. Trustee is
hereby further authorized and empowered, either after or without such entry, to
sell and dispose of the Property en masse or in separate parcels (as Trustee may
think best), and all the right, title and interest of Grantor, by advertisement
or in any manner provided by the laws of the state in which the Property is
located, (GRANTOR HEREBY EXPRESSLY WAIVES ANY RIGHT TO A HEARING PRIOR TO SUCH
SALE), and to issue, execute and deliver a deed of conveyance, all as then may
be provided by law; and Trustee shall, out of the proceeds or avails of such
sale, after first paying and retaining all fees, charges, costs of advertising
the Property and of making said sale, and attorney's fees as herein provided,
pay to Beneficiary hereunder or the legal holder of the indebtedness the amount
of such indebtedness, and all sums advanced by Beneficiary or the legal holder
of the indebtedness, with interest from date of expenditure at the "Default
Rate" as defined in said note, rendering the overplus, if any, unto Grantor, its
legal representatives or assigns; such sale or sales and said deed or deeds so
made shall be a perpetual bar, both in law and equity, against Grantor and its
heirs, successors and assigns, and all other persons claiming the Property
aforesaid, or any part thereof by, from, through or under Grantor. The legal
holder of the indebtedness may purchase the Property or any part thereof, and it
shall not be obligatory upon the purchasers at any such sale to see to the
application of the purchase money.

DUE ON SALE. That it shall not convey, nor enter into any contract to convey,
title to all or any part of the Property. Any conveyance or contract to convey
shall constitute a default under the terms of this instrument (and Grantor shall
give prior written notice to Beneficiary of any such default) and the whole
indebtedness may be declared immediately due and payable at the option of
Beneficiary.

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<PAGE> 11

FINANCIAL STATEMENTS. To furnish to Beneficiary, at Grantor's expense, annual
audited financial statements on United Foods, Inc. within 120 days of the close
of each fiscal year, said audited statements to be prepared by BDO Seidman, LLP
or such other Certified Public Accountant chosen by Grantor that is satisfactory
to Beneficiary.

RESTRICTIVE COVENANTS. That beginning February 28, 1997 and until the
indebtedness evidenced by said note has been paid in full, Grantor shall not,
without Beneficiary's consent:

(A) permit the working capital of the Grantor at the end of any
fiscal year to be less than $20 million;

(B) permit the tangible net worth of the Grantor at the end of any
fiscal year to be less than $40 million;

(C) permit the ratio of Grantor's total liabilities to tangible
net worth on the last day of any of the Grantor's fiscal years to be greater
than the ratio of two to one.

(D) seek voluntary liquidation, dissolution or winding-up of
Grantor.

PARTIAL RELEASES. That upon written reasonable request from obligor of said
note, any vacant land, party walls and easements for access that Grantor desires
to utilize in order to construct and operate additional improvements shall be
released from the lien of this instrument, provided there is then no default in
the terms and conditions of said note or this instrument and subject to the
following:

(1) Payment of a release fee in an amount commensurable with the
legal and administrative time involved to process such
release(s).

(2) Payment toward the unpaid principal balance of said note due
at final maturity without prepayment fee of an amount equal to
$1,000 per acre.

SUBSTITUTION OF SECURITY. That in addition to the releases allowed pursuant to
the "PARTIAL RELEASES" provision above, Grantor shall have a one time right to
substitute all or part of the Property with new Property which in Beneficiary's
sole judgment is sufficient to secure all remaining payments of principal and
interest due on said note. Beneficiary shall be paid a fee commensurable to the
time and work involved to effect the substitution.

RIGHT OF FIRST REFUSAL FOR FUTURE FINANCING. That Beneficiary shall have the
right of first refusal for any future mortgage loan or other financing
transaction involving the additional improvements referenced in the "PARTIAL
RELEASES" paragraph, and to be obtained by or for the benefit of Grantor or any
person or entity controlled by, related to or associated with Grantor, in which
Grantor has a continuing business interest. Any proposal for financing in which
Beneficiary has a right of first refusal shall be submitted to Beneficiary at
its nearest Real Estate Investment Office, together with sufficient
documentation to permit evaluation and underwriting, at least thirty days prior
to the date on which Beneficiary must elect to offer or refuse to offer the
financing requested. Grantor agrees to accept any financing offered by
Beneficiary pursuant to its right of first refusal provided that the financing
offered is on competitive terms with commitments received from other sources for
the same financing. Beneficiary's refusal to offer the financing requested shall
not be deemed to be a waiver by Beneficiary of its right of first refusal to
finance other portions of the property described above or to finance the same
property if Grantor is unsuccessful in procuring from another source that
financing which was previously offered to and refused by Beneficiary.

DEPOSITS BY GRANTOR. That in the event of default, Beneficiary shall have the
option to require Grantor to deposit funds with Beneficiary, to be held without
payment of interest on funds so deposited or, at the option of Beneficiary, in a
trust account approved by Beneficiary, in monthly or other periodic installments
in amounts estimated by Beneficiary from time to time sufficient to pay taxes,
special assessments, rents, other charges and fire and other hazard insurance
premiums as they become due. If at any time the funds so held by Beneficiary, or

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in such trust account, shall be insufficient to pay any of said expenses,
Grantor shall, upon receipt of notice thereof, immediately deposit such
additional funds as may be necessary to remove the deficiency. All funds so
deposited shall be irrevocably appropriated to Beneficiary to be applied to the
payment of such taxes, assessments, rents, charges and premiums.

EXERCISE OF OPTIONS. That whenever by the terms of this instrument or of said
note Beneficiary is given any option, such option may be exercised when the
right accrues, or at any time thereafter, and no acceptance by Beneficiary of
payment of indebtedness in default shall constitute a waiver of any default then
existing and continuing or thereafter occurring.

NATURE AND SUCCESSION OF AGREEMENTS. That each of the provisions, covenants and
agreements contained herein are joint and several, and shall inure to the
benefit of, and be binding on, the heirs, executors, administrators, successors,
grantees, lessees and assigns of the parties hereto, respectively, and the term
"Beneficiary" shall include the owner and holder of said note.

LEGAL ENFORCEABILITY. No provision of this instrument or said note shall require
the payment of interest or other obligation in excess of the maximum permitted
by law. If any such excess payment is herein or in said note provided for or
shall be adjudicated to be so provided for in this instrument or in said note,
the provisions of this paragraph shall govern, and Grantor shall not be
obligated to pay the amount of such interest or other obligation to the extent
that it is in excess of the amount permitted by law.

CAPTIONS. The captions contained herein are for convenience and reference only
and in no way define, limit or describe the scope or intent of, nor in any way
affect this instrument.

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TENNESSEE
LOAN NO. C-332028
CONSOLIDATION, RENEWAL, AND RESTATEMENT
OF PROMISSORY NOTES
$15,000,000.00 As of January 30, 1997

THIS CONSOLIDATION, RENEWAL, AND RESTATEMENT OF PROMISSORY NOTE (this
"Note") is made by and between UNITED FOODS, INC., a Delaware corporation,
hereinafter called "Obligor", and THE NORTHWESTERN MUTUAL LIFE INSURANCE
COMPANY, a Wisconsin corporation, 720 East Wisconsin Avenue, Milwaukee,
Wisconsin 53202, hereinafter called "Lender", in substitution for and in
replacement of, but not in repayment of, the following notes of Obligor, all of
which Lender holds (which note are hereinafter referred to as the "Existing
Notes"):

1. Promissory Note dated July 10, 1987 in the original principal
amount of $15,000,000.00 (the "Original Note") by Obligor in
favor of Lender and secured by a lien on certain property
described in a Deed of Trust and Security Agreement dated July
10, 1987, executed by Obligor in favor of Lender, which was
recorded on July 10, 1987 in Note Book 12, page 439 of the
records of Crockett County, Tennessee (the "Original Deed of
Trust"), and

2. Future Advance Promissory Note dated of even date herewith, in
the original principal of $7,121,824.93 (the "Future Advance
Note") made by Obligor in favor of Lender and secured by a
lien on certain property described in a Difference Deed of
Trust and Security Agreement dated of even date herewith to be
recorded in the records of Crockett County, Tennessee (the
"Difference Deed of Trust"). The Original Deed of Trust and
the Difference Deed of Trust are herein collectively referred
to as the "Lien Instrument" and the Original Note secured
thereby, along with the Future Advance Note are herein
collectively referred to as "this note" or the "Note").

The Existing Notes and the respective principal amount of indebtedness evidenced
thereby are hereby renewed, combined and consolidated to constitute one joint
indebtedness in the principal amount of FIFTEEN MILLION DOLLARS
($15,000,000.00). The manner and timing of payment and the other terms,
covenants, agreements and provisions of the Existing Notes are hereby modified,
amended and restated in their entirety so that henceforth the terms, provisions,
covenants and agreements thereof shall be as set forth herein. It is the
intention of the parties that each of the terms, covenants, and provisions set
forth herein shall replace in their entirety the terms, covenants and provisions
of the Existing Notes, to the same extent as though this note had originally
been given by Obligor to Lender to evidence and secure a single indebtedness. In
the event of a conflict between the terms, covenants, agreements and provisions
of the Existing Notes and the terms, covenants, agreements and provisions set
forth herein, the terms, covenants, agreements and provisions set forth herein
shall control. This is not a new obligation to pay money, and the said Existing
Notes, and all of their respective terms, covenants, conditions, agreements and
stipulations, shall remain in full force and effect, as herein amended and
restated.

NOW THEREFORE, For value received, Obligor promises to pay to the
order of Lender, at 720 E. Wisconsin Avenue, Milwaukee, WI 53202 or at such
other place as Lender shall designate in writing, in coin or currency which, at
the time or times of payment, is legal tender for public and private debts in
the United States, the principal sum of FIFTEEN MILLION DOLLARS or so much
thereof as shall have been advanced from time to time plus interest on the
outstanding principal balance at the rate and payable as follows:

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<PAGE> 14

Interest shall accrue from the date of the first advance until
maturity at the rate of nine and ten one-hundredths percent (9.10%) per annum.

Accrued interest only on the amount advanced shall be paid on the first
day of the month following the date of advance. On the first day of April 1,
1997 and on the first day of each and every month thereafter through and
including March 1, 1998, installments of principal and interest shall be paid
in the amount of $193,665. Beginning on the first day of April 1, 1998 and on
the first day of each month thereafter until maturity, installments of
principal and interest shall be paid in the amount of $147,670. All
installments shall be applied first in payment of interest, calculated monthly
on the unpaid principal balance, and the remainder of each installment shall
be applied in payment of principal. The entire unpaid principal balance plus
accrued interest thereon shall be due and payable on March 1, 2007 (the
"Maturity Date").

Obligor shall have the noncumulative privilege, upon 10 days advance
written notice on any interest payment date, of making prepayments of principal,
with a fee equal to Yield Maintenance (as hereinafter defined), provided such
prepayments shall not in any period of twelve months beginning on the date of
said payment or an anniversary thereof exceed ten percent (10%) of the
outstanding principal balance of this note. All such prepayments shall be
applied to principal in the inverse order of maturity.

Obligor shall have the right, upon thirty (30) days advance written
notice, beginning April 1, 2002 of paying this note in full with a prepayment
fee. This fee represents consideration to Lender for loss of yield and
reinvestment costs. The fee shall be the greater of Yield Maintenance or 2% of
the outstanding principal balance of this note.

As used herein, "Yield Maintenance" means the amount, if any, by which

(i) the present value of the Then Remaining Payments (as
hereinafter defined) calculated using a periodic discount rate
(corresponding to the payment frequency under this note)
which, when compounded for such number of payment periods in a
year, equals the sum of .50% and the per annum effective yield
of the Most Recently Auctioned United States Treasury
Obligation having a maturity date equal to the Maturity Date
(or, if there is no such equal maturity date, then the
linearly interpolated per annum effective yield of the two
Most Recently Auctioned United States Treasury Obligations
having maturity dates most nearly equivalent to the Maturity
Date) as reported by The Wall Street Journal five business
days prior to the date of prepayment; exceeds

(ii) the outstanding principal balance of this note (exclusive of
all accrued interest).

If such United States Treasury obligation yields shall not be reported as of
such time or the yields reported as of such time shall not be ascertainable,
then the periodic discount rate shall be equal to the sum of .50% and the
Treasury Constant Maturity Series yields reported, for the latest day for which
such yields shall have been so reported, as of five business days preceding the
prepayment date, in Federal Reserve Statistical Release H.15 (519) (or any
comparable successor publication) for actively traded United States Treasury
obligations having a constant maturity most nearly equivalent to the Maturity
Date.

As used herein, "Then Remaining Payments" means payments in such amounts and at
such times as would have been payable subsequent to the date of such prepayment
in accordance with the terms of this note.

As used herein, "Most Recently Auctioned United States Treasury Obligations"
means the U.S. Treasury bonds, notes and bills with maturities of 30 years, 10
years, 5 years, 3 years, 2 years and 1 year which, as of the date the prepayment
fee is calculated, were most recently auctioned by the United States Treasury.

In the event of default under this note or the Lien Instrument followed by
acceleration of the whole indebtedness prior to April 1, 2002, payment of the
amount necessary to satisfy the entire indebtedness evidenced by this instrument
will constitute an evasion of the prepayment terms hereunder and be deemed to be
a voluntary prepayment hereof and such payment will, therefore, to the extent
permitted by law, include a prepayment

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<PAGE> 15

privilege fee of 10%; after April 1, 2002, the prepayment privilege fee shall be
in accordance with the prepayment in full privilege recited above.

Notwithstanding the foregoing, in the event that insurance proceeds or
condemnation award proceeds are applied against the indebtedness evidenced
hereby pursuant to the Lien Instrument (as defined hereinafter), no prepayment
privilege fee shall be payable.

This note is secured by a Consolidation, Renewal, and Restatement of
Deed of Trust and Security Agreement ("Lien Instrument") of even date herewith
executed by UNITED FOODS, INC., a Delaware corporation, to JOHN S. SHOAF, as
Trustee for THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY which is a lien on
property in City of Bells, County of Crockett, State of Tennessee.

Upon default in any payment herein required, or default in any
provision, covenant or agreement contained herein or in the Lien Instrument, or
default in any provision, covenant, agreement or warranty contained in any other
security or agreement given in connection with the indebtedness evidenced by
this note, the whole unpaid principal and accrued interest shall, at the option
of said holder, to be exercised at any time thereafter, become due and payable
at once without notice, notice of the exercise of such option being hereby
expressly waived.

Notwithstanding anything contained herein or in the Lien Instrument to
the contrary, the holder hereof agrees, as a condition to the exercise of its
remedies, of and after acceleration, to give Obligor written notice of any
non-monetary default, and to allow Obligor thirty (30) days within which to cure
such default or, if such default cannot reasonably be cured within 30 days, to
diligently undertake and continue to pursue the curing of such default and to
provide said holder satisfactory evidence of its ability to cure the default. As
used herein, "non-monetary default" means any default other than a default in
payment of principal and/or interest to Lender.

All persons or corporations now or at any time liable, whether
primarily or secondarily, for payment of indebtedness hereby evidenced, for
themselves, their heirs, legal representatives, successors and assigns,
respectively, expressly waive presentment for payment, notice of dishonor,
protest, notice of protest, and diligence in collection, and consent that the
time of said payments or any part thereof may be extended by said holder and
further consent that the real or collateral security or any part thereof may be
released by said holder, without in any wise modifying, altering, releasing,
affecting, or limiting their respective liability or the lien of said Lien
Instrument, and agree to pay reasonable attorney's fees and expenses of
collection in case this note is placed in the hands of an attorney for
collection or suit is brought thereon.

Any principal, interest or other amounts payable under this note or the
Lien Instrument not paid when due, including principal becoming due by reason of
acceleration of the entire unpaid balance by said holder, shall bear interest
from the due date thereof until paid at the "Default Rate". The term "Default
Rate" is hereby defined as the lower of a rate equal to the interest rate in
effect at the time of default as herein provided plus 5% per annum or the
maximum rate permitted by law.

The accrual of interest on the indebtedness evidenced hereby,
including, without limitation, base interest and interest at the Default Rate
payable hereunder, shall be governed and construed, for purposes of determining
compliance with any law governing the maximum rate of interest that can be
charged on the indebtedness evidenced by this note, by the law of the State of
Wisconsin. For all other purposes, this note and all other instruments and
agreements made in connection therewith, including this instrument, shall be
governed by the laws of the State of Tennessee.

No provision of this note shall require the payment or permit the
collection of interest, including any fees paid which are construed under
applicable law to be interest, in excess of the maximum permitted by the laws of
the State of Wisconsin. If any such excess interest is collected or herein
provided for, or shall be adjudicated to have been collected or be so provided
for herein, the provisions of this paragraph shall govern, and Obligor shall not
be obligated to pay the amount of such interest to the extent that it is in
excess of the amount permitted by law and any such excess collected shall, at
the option of the holder hereof, unless otherwise required by applicable

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<PAGE> 16

law, be immediately refunded to Obligor or credited on the principal of this
note immediately upon said holder's awareness of the collection of such excess.

UNITED FOODS, INC., a Delaware corporation

By: S/N Carl W. Gruenewald, II
-------------------------------
Carl W. Gruenewald, II
Its Sr. Vice President, Treasurer

Attest: S/N Donald Dresser
---------------------------
Donald Dresser
Its Assistant Secretary
(corporate seal)
THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY, a Wisconsin
corporation

By: S/N Carson D. Keyes
-------------------------------
Carson D. Keyes
Its Vice President

Attest: S/N Warren L. Smith, Jr.
---------------------------
Warren L. Smith, Jr.
Its Assistant Secretary

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<PAGE> 1

EXHIBIT 10.24

UNITED FOODS, INC. SECOND MANAGEMENT RETIREMENT PLAN DATED FEBRUARY 26, 1997.

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<PAGE> 2
EXHIBIT 10.24

UNITED FOODS, INC.

SECOND MANAGEMENT RETIREMENT COMPENSATION PLAN

ARTICLE I

PURPOSE

The purpose of this Second Management Retirement Compensation Plan (hereinafter
referred to as the "Plan") is to provide supplemental funds for certain
management employees (and their beneficiaries) of United Foods, Inc.
("Employer"). It is intended that the Plan will aid in retaining and attracting
executives of exceptional ability by providing such individuals with these
benefits.

ARTICLE II

DEFINITIONS

For the purposes of this plan, the following words and phrases shall have the
meanings indicated, unless the context clearly indicates otherwise:

2.1 Beneficiary. "Beneficiary" means the person, persons, or entity
designated by the Participant, or as provided in Article VI, to receive any Plan
benefits payable after the Participant's death.

2.2 Board. "Board" means the Board of Directors of Employer.

2.3 Committee. "Committee" means the Committee appointed to administer the
Plan pursuant to Article VII.

2.4 Deferred Compensation. "Deferred Compensation" means the amount of
compensation directed by the Board to be deferred hereunder.

2.5 Determination Date. "Determination Date" means the last day of each
calendar month.

2.6 Employer. "Employer" means United Foods, Inc., and/or any successor or
successors to the businesses thereof.

2.7 Employment. "Employment" means the period of time that a Participant is
on the Employer's payroll.

2.8 Hardship. "Hardship" means the immediate and heavy financial need of
the Participant as determined by the Committee. Financial needs shall be limited
to the following situations:

(a) Financial obligations incurred by the Participant because of
sickness, accident, death, disability, or other medical need in the
Participant's immediate family which the Participant is not able to pay
out of liquid assets or current cash flow.

(b) Financial requirements to purchase necessary shelter and related
necessities for the Participant and the Participant's immediate family
which the Participant is unable to purchase out of liquid assets or
current cash flow or otherwise reasonably finance.

(c) Financial requirements for education for the Participant or a
member of the Participant's immediate family which the Participant is
unable to pay out of liquid assets or current cash flow.

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<PAGE> 3

For purposes of this definition, the term "immediate family" means (i) the wife,
husband, child, father, or mother of a Participant, (ii) the father or mother of
a spouse of a Participant or (iii) a related dependent residing with the
Participant.

2.9 Interest. "Interest" means that interest rate applicable to a
Retirement Account on each monthly Determination Date which shall be equal to
1/12th of the average rate of interest paid by United Foods, Inc. on its
borrowed revolving loan funds for the preceding calendar quarter as determined
by Employer management and approved by the Committee, compounded quarterly. In
the event United Foods, Inc. has no borrowed revolving loan funds at any time
during the preceding calendar quarter, "Interest" shall be equal to 1/12th of
the sum of (i) the arithmetic average Federal Funds Rate during such quarter and
(ii) 1.25%.

2.10 Participant. "Participant" means any individual who is participating or
has participated in this Plan as provided in Article III.

2.11 Plan Benefit. "Plan Benefit" means the benefit payable to the
Participant as calculated in Article V.

2.12 Retirement. "Retirement" means cessation of Employment for any reason
whatsoever, including but not limited to death, retirement or disability, all as
determined in the sole discretion of the Committee based on evidence
satisfactory to it. Such determination shall be final and binding, except as
otherwise provided in Article VIII hereof. A leave of absence approved by the
Committee shall not be deemed a cessation of Employment for purposes of
determining whether a Retirement has occurred.

2.13 Retirement Account. "Retirement Account" means the Account maintained
by the Employer with respect to each Participant's deferred compensation
pursuant to Article IV. The existence of this Retirement Account shall not
require any segregation of assets by Employer.

2.14 Total Disability. "Total Disability" means total disability as defined
in the Employer's Disability Income Insurance Master Policy, Group Policy No.
8984 or any successor long-term disability policy.

ARTICLE III

PARTICIPATION AND DEFERRAL

3.1 Eligibility. Eligibility to participate in the Plan is limited to those
employees who are designated by the Employer to be management employees. For
this purpose, a management employee shall be an employee of the Employer who has
significant policy-making, supervisory and/or administrative responsibilities in
the conduct of the Employer's business. The Employer's determination of which
employees are in the category of Management Employees shall be binding.

3.2 Deferral. An Amount equal to the Participant's Deferred Compensation
shall be credited to the Participant's Retirement Account.

3.3 Annual Deferred Compensation Schedule For each calendar year for which
the Board directs that compensation be deferred hereunder, a schedule shall be
attached hereto and become a part hereof which describes the amount of
compensation to be deferred and the method by which such amount is determined.

3.4 Participation. A Management Employee shall become a participant at such
time as the Board directs that compensation be deferred hereunder for the
account of such Management Employee.

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<PAGE> 4

ARTICLE IV

RETIREMENT ACCOUNTS

4.2 Retirement Account. For recordkeeping purposes only, a Retirement
Account shall be maintained for each Participant. The amount of the
Participant's Deferred Compensation shall be credited to the Retirement Account.

4.3 Vesting of Retirement Accounts. Each Participant shall be 100% vested
at all times in the amount of Deferred Compensation which is credited to such
Participant's Retirement Account and earnings thereon. Benefits, however, shall
only be payable in accordance with the terms of this Plan.

4.4 Determination of Retirement Accounts. Each Participant's Retirement
Account as of each Determination Date shall consist of the balance of the
Participant's Retirement Account as of the immediately preceding Determination
Date, plus the Participant's Deferred Compensation credited in accordance with
this Article IV, and Interest earned, minus the amount of any distributions made
since the immediately preceding Determination Date. Interest earned shall be
calculated as of each Determination Date based upon the average daily balance of
the account since the preceding Determination Date. Interest earned on the
Retirement Account shall be calculated so as to achieve the annual yield
provided by paragraph 2.9.

4.5 Statement of Retirement Accounts. The Committee shall submit to each
Participant, within one hundred twenty (120) days after the close of each
calendar year and at such other time as determined by the Committee, a statement
setting forth the balance to the credit of the Retirement Account maintained for
the Participant.

ARTICLE V

PLAN BENEFITS

5.1 Retirement Benefit. The Employer shall pay a Retirement Benefit equal
to the amount of the Participant's Retirement Account to each Participant who
has a Retirement as defined herein.

5.2 Hardship Distributions. Upon a finding that the Participant has
suffered a Hardship, the Committee may, in its sole discretion, allow
distributions from the Participant's Retirement Account prior to the time
otherwise specified for payment of benefits under the Plan. The amount of such
distribution shall be limited to the amount reasonably necessary to meet the
Participant's requirements during the Hardship. The amount of such distribution
shall reduce the Retirement Account balance.

5.3 Form of Benefit Payment. The Retirement Benefit shall be paid in one of
the following forms as elected by the Participant:

(a) Installments. Equal monthly installments of the Account and
Interest amortized over a period of 10 years. Interest shall be credited to the
remaining portion of the Retirement Account balance in accordance with paragraph
4.4. During the period the Participant is receiving the Retirement Account
pursuant to this Section 5.3(a), Interest shall be equal to an amount computed
in accordance with paragraph 2.9.

(b) A lump sum payment.

(c) Any other form selected and approved by the Committee in
writing or by the publication of forms to implement this Plan.

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<PAGE> 5

(d) If the Participant fails to elect the form of benefit payment,
the benefits shall be paid in accordance with 5.3(a) over a period of 10 years.

5.4 Withholding; Payroll Taxes. The Employer shall withhold from payments
made hereunder any taxes required to be withheld from the Participant's wages or
fees by the federal government or any state or local government.

5.5 Commencement of Payments. Payment shall commence at the discretion of
the Committee, but no later than sixty (60) days after the end of the month in
which the Participant suffers or requests Retirement.

5.6 Full Payment of Benefits. Notwithstanding any other provision of this
Plan, all benefits shall be paid no later than the date the Participant attains
age eighty-five (85).

5.7 Payment to Guardian. If a Plan Benefit is payable to a minor or a
person declared incompetent or to a person incapable of handling the disposition
of property, the Committee may direct payment of such Plan Benefit to the
guardian, legal representative or person having the care and custody of such
minor or incompetent person. The Committee may require proof of incompetence,
minority, incapacity or guardianship as it may deem appropriate prior to
distribution of the Plan Benefit. Such distribution shall completely discharge
the Committee and the Employer from all liability with respect to such benefit.

ARTICLE VI

BENEFICIARY DESIGNATION

6.1 Beneficiary Designation. Each participant shall have the right, at any
time, to designate any person or persons as his Beneficiary or Beneficiaries
(both principal and contingent) to whom payment under this Plan shall be paid in
the event of his death prior to complete distribution to the Participant of the
benefits due him under the Plan. Each beneficiary designation shall be in a
written form prescribed by the Committee and will be effective only when filed
with the Committee during the Participant's lifetime. If the Participant's
Compensation is community property, any Beneficiary Designation shall be valid
or effective only as permitted under applicable law.

6.2 Amendments. Any Beneficiary designation may be changed by the
Participant without the consent of any designated Beneficiary by the filing of a
new Beneficiary Designation with the Committee. The filing of a new Beneficiary
Designation form will cancel all Beneficiary Designations previously filed.

6.3 No Beneficiary Designation. If any Participant fails to designate a
Beneficiary in the manner provided above, or if the Beneficiary designated by a
deceased Participant dies before the Participant or before complete distribution
of the Participant's benefits, the Employer shall distribute such Participant's
benefits, (or the balance thereof) to the following successive preference
beneficiaries:

(a) The surviving spouse;

(b) The Participant's children, except that if any of the children
predecease the participant but leave issue surviving, then such issue
shall take by right of representation the share the parent would have
taken if living;

6.4 Effect of Payment. The payment to the Beneficiary shall completely
discharge the Employer's obligations under this Plan.

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<PAGE> 6

ARTICLE VII

ADMINISTRATION

7.1 Committee. This Plan shall be administered by the Employer's Employee
Benefits Committee, which shall consist of not less than three (3) individuals
selected by the Board of Directors of Employer. Members of the Committee may be
Participants in this Plan.

7.2 Agents. The Committee shall appoint an individual to be the Committee's
agent with respect to the day-to-day administration of the Plan. In addition,
the Committee may, from time to time, employ other agents and delegate to them
such administrative duties as it sees fit, and may from time to time consult
with counsel who may be counsel to the Employer.

7.3 Binding Effect of Decision. The decision or action of the Committee in
respect of any question arising out of or in connection with the administration,
interpretation and application of the Plan and the rules and regulations
promulgated hereunder shall be final and conclusive and binding upon all persons
having any interest in the Plan.

7.4 Indemnity of Committee. The Employer shall indemnify and hold harmless
the members of the Committee or any agents or employees of the Employer against
any and all claims, loss, damage, expense, or liability arising from any action
or failure to act with respect to this Plan, except in the case of willful
misconduct by the Committee, Committee member, or such agent or employee of the
Employer.

ARTICLE VIII

CLAIMS PROCEDURE

8.1 Claim. Any Participant, former Participant, Beneficiary, or legal
representative thereof, may file a claim for benefits under the Plan by
submitting to the Committee a written statement describing the nature of the
claim and requesting a determination of its validity under the terms of the
Plan. The Committee shall issue a ruling and written notice with respect to the
claim within 30 days after such claim is received. If the claim is wholly or
partially denied, written notice shall be furnished to the claimant, which
notice shall set forth in a manner calculated to be understood by the claimant;

(a) the specific reason or reasons for denial;

(b) specific reference to pertinent Plan provisions on which the denial
is based;

(c) a description of any additional materials or information necessary
for the claimant to perfect the claim and an explanation of why such
material or information is necessary; and

(d) an explanation of the claims review procedures.

8.2 Denial of Claim. Any Participant, former Participant, or Beneficiary
(or their authorized representatives) whose claim for benefits has been denied,
may appeal such denial by resubmitting to the Committee a written statement
requesting a further review of the decision within 60 days of the date the
claimant received notice of such denial. The statement shall set forth the
reasons supporting the claim, the reasons such claim should not have been
denied, and any other issues or comments which the claimant deems appropriate
with respect to the claim. The Committee shall, if requested, make copies of the
Plan documents available for examination by the claimant. The Committee shall
issue a ruling and written notice shall include specific reasons for the
decision, written in a manner calculated to be understood by the claimant, with
specific references to the

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<PAGE> 7

pertinent Plan provisions on which the decision is based. The Committee's
decision of the appeal may be reviewed by the Board, which shall have the right
to overrule the Committee.

ARTICLE IX

AMENDMENT AND TERMINATION OF PLAN

9.1 Amendment.

(a) The Board may at any time amend the Plan in whole or
in part, and may impose different requirements for different Participants,
provided, however, that (i) no amendment shall be effective to decrease or
restrict the amount accrued to that date on any Retirement Account maintained
pursuant to the Plan: and (ii) on amounts that have been credited to Retirement
Accounts up to the date of amendment, no amendment shall be effective to reduce
the amount of interest credited or to be credited to Retirement Accounts until
their payment date as provided in paragraph 2.11, without the consent of all
Participants (or a Beneficiary in case a Participant is then deceased) who may
be affected by such change; and (iii) except as otherwise provided herein, no
amendment shall be effective to alter the form of payment as elected by a
Participant in any Participation Agreement.

(b) The Committee may make administrative amendments to
the Plan including but not limited to amendments to clarify the Plan language
and to simplify and implement various administrative procedures, including
matters relating to the calculation of benefits and payments to Beneficiaries,
which the Committee determines are consistent with the purpose and intent of the
Plan.

9.2 Employer's Right to Terminate Future Deferrals. The Board may
at any time terminate the Plan, and may reject additional Participants in the
Plan, if, in its sole judgment, such termination would be in the best interest
of Employer. Benefits from amounts credited to Retirement Accounts up to the
date of termination shall be paid in accordance with this Plan prior to such
termination, including crediting of interest, until all payments are complete.

ARTICLE X

MISCELLANEOUS

10.1 Unfunded Plan. This Plan is an unfunded plan maintained primarily to
provide Deferred Compensation benefits for a select group of management
employees or highly compensated employees. This Plan is not intended to create
an investment contract. Eligible individuals are select members of management
who, by virtue of their position with the Employer, are uniquely informed as to
the Employer's operations and have the ability to materially affect the
Employer's profitability and operations.

10.2 Unsecured General Creditor. The Participants and their Beneficiaries,
heirs, successors, and assigns shall have no legal or equitable rights,
interest, or claims in any property or assets of the Employer, nor shall they be
Beneficiaries of, or have any rights, claims, or interests in any life insurance
policies, annuity contracts or the proceeds therefrom owned or which may be
acquired by the Employer, if any. The preceding sentence shall not preclude a
Participant, his estate or other Beneficiaries from receiving the proceeds of
life insurance or other benefit therefrom pursuant to the terms of such policies
to the extent such policies are unrelated to this Plan. Such policies, if any,
or other assets of the Employer shall not be held as collateral security for the
fulfilling of the obligation of Employer under this Plan, and shall be the
general, unpledged, unrestricted assets of the Employer, and the Employer may
transfer, assign, sell, or use such policies and any other of its property or
assets without restriction. The Employer's obligation under the Plan shall be
merely that of an unfunded and unsecured promise of the Employer to pay money in
the future. Employer shall have no obligation under this Plan with respect to
any individuals other than Employer's Management Employees, or Beneficiaries
thereof.

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<PAGE> 8

10.3 Non-assignability. Neither the Participant nor any other person shall
have any right to commute, sell assign, transfer, pledge, anticipate, mortgage,
or otherwise encumber, transfer, hypothecate, or convey in advance of actual
receipt the amounts, if any, payable hereunder, or any part thereof, which are,
and all rights to which are, expressly declared to be unassignable and
nontransferable. No part of the amounts payable shall, prior to actual payment,
be subject to seizure or sequestration for the payment of any debts, judgments,
alimony, or separate maintenance owed by the Participant or any other person,
nor be transferable by operation of law in the event of the Participant's or any
other person's bankruptcy or insolvency.

10.4 Not a Contract of Employment. The terms and conditions of this Plan
shall not be deemed to constitute a contract of employment between the Employer
and the Participant, and the Participant (or his Beneficiary) shall have no
rights against the Employer except as may otherwise be specifically provided
herein. Moreover, nothing in this Plan shall be deemed to give the Participant
the right to be retained in the service of the Employer or to interfere with the
right of the Employer to discipline or discharge the Participant at any time.

10.5 Protective Provisions. By participating, under the terms of this Plan,
each Participant thereby agrees to cooperate with the Employer by furnishing any
and all information requested by the Employer in order to facilitate the payment
of benefits hereunder, and to take such other action as may be reasonably
requested by the Employer.

10.6 Terms. Whenever any words are used herein in the masculine, they shall
be construed as though they were used in the feminine in all cases where they
would so apply; and wherever any words are used herein the singular or in the
plural, they shall be construed as though they were used in the plural or the
singular, as the case may be, in all cases where they would so apply.

10.7 Captions. The captions of the articles, sections, and paragraphs of
this Plan are for convenience only and shall not control or affect the meaning
or construction of any of its provisions.

10.8 Governing Law. The provisions of this Plan shall be construed and
interpreted according to the laws of the State of Tennessee.

10.9 Validity. In case any provision of this Plan shall be held illegal or
invalid for any reason, said illegality or invalidity shall not affect the
remaining parts hereof, but this Plan shall be construed and enforced as if such
illegal and invalid provision had never been inserted herein.

10.10 Notice. Any notice or filing required or permitted to be given to the
Committee under the Plan shall be sufficient if in writing and hand delivered,
or sent by registered or certified mail, to any member of the Committee, the
Chief Executive Officer of the Employer, or the Employer's Statutory Agent. Such
notice shall be deemed given as of the date of delivery or, if delivery is made
by mail, as of the date shown on the postmark on the receipt for registration or
certification.

10.11 Successors. The provisions of this Plan shall bind and inure to the
benefit of the Employer and its successors and assigns. The term successors as
used herein shall include any corporate or other business entity which shall,
whether by merger, consolidation, purchase or otherwise acquire all or
substantially all of the business and assets of the Employer and successors of
any such corporation or other business entity.

122
<PAGE> 9

IN WITNESS WHEREOF, and pursuant to resolution of the Board of
Directors of the undersigned corporation, such corporation has caused this
instrument to be executed by its duly authorized officers as of the 26th day of
February, 1997.

UNITED FOODS, INC.

By: S/N B.M. Ennis
--------------
B. M. Ennis
Title: President

Attest: S/N Daniel B. Tankersley
------------------------
Daniel B . Tankersley
Title: Secretary

123

<PAGE> 1

EXHIBIT 11

COMPUTATION OF EARNINGS PER SHARE

124
<PAGE> 2

EXHIBIT 11

COMPUTATION OF EARNINGS PER SHARE

<TABLE>
<CAPTION>
YEAR ENDED FEBRUARY 28 OR 29,
----------------------------------------
1997 1996 1995
----------- ----------- -----------
<S> <C> <C> <C>
SHARES:

Weighted average number of common shares
outstanding .......................................... 10,809,929 11,470,173 12,109,529

Effect of shares issuable under stock option plan
as determined by the treasury stock method ........... 267,443 - 370,632
----------- ----------- -----------

Weighted average number of common shares
outstanding as adjusted .............................. 11,077,372 11,470,173 12,480,161
=========== =========== ===========

EARNINGS (LOSS) PER SHARE OF COMMON
STOCK AND COMMON STOCK
EQUIVALENTS:

Net income (loss) ....................................... $ 08 $ (.06) $ 0.19
=========== =========== ===========
</TABLE>

125

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF UNITED FOODS, INC., FOR 12 MONTHS ENDED FEB. 28, 1997,
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> FEB-28-1997
<PERIOD-END> FEB-28-1997
<CASH> 3,772
<SECURITIES> 0
<RECEIVABLES> 17,841
<ALLOWANCES> 308
<INVENTORY> 36,694
<CURRENT-ASSETS> 63,125
<PP&E> 121,848
<DEPRECIATION> 67,210
<TOTAL-ASSETS> 119,108
<CURRENT-LIABILITIES> 22,387
<BONDS> 41,265
0
0
<COMMON> 10,810
<OTHER-SE> 44,646
<TOTAL-LIABILITY-AND-EQUITY> 119,108
<SALES> 195,820
<TOTAL-REVENUES> 195,820
<CGS> 159,120
<TOTAL-COSTS> 159,120
<OTHER-EXPENSES> 32,735
<LOSS-PROVISION> 60
<INTEREST-EXPENSE> 3,871
<INCOME-PRETAX> 1,508
<INCOME-TAX> 586
<INCOME-CONTINUING> 922
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 922
<EPS-PRIMARY> .08
<EPS-DILUTED> .08

</TABLE>