SAVANNAH FOODS & INDUSTRIES INC, 10-K, 1996-01-02

SAVANNAH FOODS & INDUSTRIES INC
10-K, 1996-01-02
SUGAR & CONFECTIONERY PRODUCTS

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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 (FEE REQUIRED)

For the fiscal year ended October 1, 1995
---------------------------------------------------
or

( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

For the transition period from to
--------------------- ----------------------

Commission file number 1-11420
------------------------------------------------------
SAVANNAH FOODS & INDUSTRIES, INC.
------------------------------------------------------
(Exact name of Registrant as specified in its Charter)

<TABLE>
<S> <C>
Delaware 58-1089367
- ------------------------------------- ----------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification No.)

P. O. Box 339, Savannah, Georgia 31402
- ----------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
</TABLE>

Registrant's telephone number, including area code (912) 234-1261
-------------------------
Securities registered pursuant to Section 12(b) of the Act:

Common Stock - Par Value: $.25 per share
- ----------------------------------------------------------------------------
(Title of Class)

Securities registered pursuant to Section 12(g) of the Act:

None
- ----------------------------------------------------------------------------
(Title of Class)

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 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 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. ( )

At November 30, 1995, there were 26,238,196 shares of Common Stock outstanding.
The aggregate market value of the voting stock held by non-affiliates of the
Registrant on November 30, 1995 was $324,697,676.

DOCUMENTS INCORPORATED BY REFERENCE: Portions of the Registrant's Proxy
Statement for the Annual Meeting of Stockholders to be held on February 15,
1996 are incorporated by reference in Part III hereof.

The exhibit index is located on page 35 of this filing.

Page 1 of 176 pages.
<PAGE> 2

PART I

Item 1. Business

Savannah Foods & Industries, Inc. ("Registrant") was incorporated in
Delaware on February 19, 1969, as the successor to Savannah Sugar Refining
Corporation, which was originally incorporated in New York in 1916.

Registrant and its subsidiaries collectively comprise one business
segment and are engaged in the production, marketing, and distribution of food
products, primarily refined sugar.

Effective October 2, 1995, the first day of fiscal 1996, Registrant
reorganized the business structure of several of its subsidiaries. This
reorganization did not affect the overall business of Registrant, but was done
primarily for internal management purposes.

Registrant and its wholly-owned subsidiaries, Savannah Foods
Industrial, Inc. and Dixie Crystals (R) Brands, Inc., are engaged in the
refining and marketing of a complete line of bulk and liquid sugars and sugar
products, including edible molasses, liquid animal feeds and corn syrup blends.
They also produce and market a complete line of packaged sugars and portion
control items consisting of sugar envelopes, artificial sweeteners, salt,
pepper, non-dairy creamer, and certain other products. Industrial and grocery
products are marketed primarily in the southeastern portion of the United
States, Louisiana, and Texas, but are also widely distributed into other states
generally east of the Mississippi and south of New England. Foodservice
products are marketed throughout the United States. Products are marketed
under the trade names Dixie Crystals(R), Colonial(R), Evercane(R), and Savannah
Gold(R), but are also sold under Registrant's other controlled labels and under
customers' private label brands. Registrants saccharin-based sweetener is
marketed under the trade name Sweet Thing(R) and its aspartame-based sweetener
is marketed under the trade name Sweet Thing II(R). These products are
marketed both by means of direct sales and through brokers and are primarily
distributed directly to the customer by common carrier truck or railcar.

Michigan Sugar Company, a wholly-owned subsidiary of Registrant, and
its wholly-owned subsidiary, Great Lakes Sugar Company, are engaged in the
processing of sugar beets into refined sugar and the production of beet pulp
and molasses. The refined sugar is marketed primarily in the states of
Michigan and Ohio, but is also distributed in the midwestern and eastern parts
of the United States. Packaged sugar is marketed under the trade name
PIONEER(R) , but is also sold under customers' private label brands. These
products are marketed both by means of direct sales and through brokers and are
primarily distributed directly to the

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<PAGE> 3

customer by common carrier truck or railcar. Most of the beet pulp is
pelletized and sold for export. The balance is sold in the domestic market.
The majority of the molasses is sold to Registrant's beet molasses
desugarization facility for further processing to recover additional sugar.

King Packaging Company, Inc. a wholly-owned subsidiary of Dixie
Crystals (R) Brands, Inc., packs custom made meal kits for the food service
industry and provides complementary products to the portion control products
manufactured at Registrant's other locations. These products are marketed to
the food service trade through-out the United States both by means of direct
sales and through brokers and are primarily shipped directly to customers by
common carrier truck.

Raceland Sugars, Inc., a wholly-owned subsidiary of Savannah Foods
Industrial, Inc., operates a raw sugar mill and is engaged in the business of
producing raw sugar which is marketed in the Louisiana area. Additionally, the
by-products, molasses and bagasse, are currently sold in the domestic market.

Raw Materials. A large portion of the raw sugar for Registrant's Port
Wentworth, GA refinery, and all the raw sugar for the Clewiston, FL refinery,
is normally supplied by cane sugar producers in the state of Florida. A large
portion of the raw sugar for Registrant's Gramercy, LA refinery is normally
supplied by cane sugar producers in the state of Louisiana. In the case of the
Savannah and Gramercy refineries, the remaining raw sugar requirements are
purchased on the open market, and consist of off-shore cargoes purchased
directly and through raw sugar trade houses. Registrant uses the futures
market as a hedging and purchasing mechanism, as circumstances warrant.

Michigan Sugar Company and its subsidiary, Great Lakes Sugar Company,
process sugar beets under annual contracts from Michigan and Ohio farmers. The
land around the processing plants of the company is well suited to growing
sugar beets, and the company has not experienced difficulty in obtaining a
sufficient quantity of beets to support successful operation of its plants.
Under the contracts with the farmers, certain sales expenses and other non-
processing expenses are first deducted from the proceeds of refined sugar,
pulp, and molasses sales after which the balance is divided between the company
and the farmers.

Competition. All phases of the refined sugar business and all
geographic markets of the business engaged in by Registrant and its
subsidiaries are highly competitive. This competition is not only with other
cane sugar refiners and beet sugar processors, but also with corn sweeteners,
artificial sweeteners, and with resellers who purchase all of these sweeteners.
Competing cane sugar refineries are located in Florida, Louisiana, Maryland,
New York, Texas, and

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<PAGE> 4

California. Competing beet sugar processors are located in California,
Colorado, Idaho, Michigan, Minnesota, Montana, Nebraska, North Dakota, Oregon,
Texas, and Wyoming.

Competition is primarily based upon price, but is also based upon
product quality and customer service. At times, the cane sugar refiners are at
a competitive disadvantage to the beet sugar producers due to differing methods
by which raw materials are purchased. In the beet industry, the beet farmers
participate in any increase or decrease in the selling price of refined sugar.
However, in the cane industry, refiners purchase raw sugar at prices which are
kept artificially high by United States policy to support sugar farmers, and
which do not fluctuate in tandem with refined sugar selling prices.
Consequently, when competitive pressures reduce refined sugar prices, the
margins of cane sugar refiners are affected more adversely than those of beet
sugar producers.

Number of Employees. At October 1, 1995, Registrant and its
subsidiaries had 2,086 full-time employees. In addition, Michigan Sugar
Company, Great Lakes Sugar Company, and Raceland Sugars, Inc. employ a number
of seasonal workers during the beet and cane processing campaigns.

Item 2. Properties.

Registrant and its wholly-owned subsidiaries own and operate three
cane sugar refineries, two sugar melt and transfer facilities, five sugar beet
processing plants, a beet molasses desugarization facility, a raw sugar mill,
and four foodservice production facilities.

The three cane sugar refineries are located in Port Wentworth,
Georgia; Gramercy, Louisiana and Clewiston, Florida and are owned by Savannah
Foods Industrial, Inc. The Port Wentworth facility borders the Savannah River
and the Gramercy facility borders the Mississippi River. Both of these
locations include a deep water dock with facilities for shipping and receiving
ocean-going vessels.

Savannah Foods Industrial, Inc. also owns sugar melt and transfer
facilities in St. Louis, Missouri and Ludlow, Kentucky. The St. Louis facility
borders on the Mississippi River and has a dock for receiving sugar and
molasses shipments.

Michigan Sugar Company owns and operates four sugar beet processing
plants which are located in Caro, Carrollton, Sebewaing, and Croswell,
Michigan. Great Lakes Sugar Company owns and operates a sugar beet processing
plant in Fremont, Ohio and a storage facility in Findlay, Ohio. The beet
molasses desugarization facility, which is owned by Registrant, is located in
Fremont, Ohio.

4
<PAGE> 5

Dixie Crystals(R) Brands, Inc. owns production facilities in
Perrysburg, Ohio; Visalia, California and Savannah, Georgia. Also, King
Packaging Company, Inc. owns and operates a packaging facility in Bremen,
Georgia.

Raceland Sugars, Inc. owns and operates a raw sugar mill in Raceland,
Louisiana. In addition to its milling operations, Raceland produces and
harvests sugar cane for use at its mill. These farming operations are done on
leased land.

The facilities listed above provide Registrant with sufficient
productive capacity to meet the demands of its current markets.

Item 3. Legal Proceedings.

Not applicable.

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

No matters were submitted to a vote of security holders during the
fourth quarter of fiscal 1995.

5
<PAGE> 6

PART II

Item 5. Market for Registrant's Common Stock and Related
Stockholder Matters.

Registrant's common stock, par value $.25 per share ("Common Stock"),
is listed and traded on the New York Stock Exchange ("NYSE") under the symbol
"SFI". The following table sets forth for the periods indicated the high and
low sales prices on the NYSE composite tape. The information provided has been
adjusted to the nearest 1/8 and was compiled from quotations furnished by the
New York Stock Exchange. Registrant has paid cash dividends on its Common
Stock every year since 1924. The following information is for the twelve-month
periods ended October 2, 1994 and October 1, 1995:

<TABLE>
<CAPTION>
Quarter Dividends
Ended High Low Paid
-------- -------- ------- ---------
<S> <C> <C> <C>
01/02/94 $16.500 $13.000 $.135
04/03/94 15.375 10.500 .135
07/03/94 12.250 10.000 .135
10/02/94 12.750 10.375 .135
-----
$.540
=====

01/01/95 $14.750 $10.750 $.135
04/02/95 14.625 10.375 .135
07/02/95 11.875 9.000 .025
10/01/95 14.125 10.375 .025
-----
$.320
=====
</TABLE>

As of October 1, 1995, the following indicates the number of holders
of record of equity securities:

Title of Class Number of Record Holders
-------------- ------------------------

Common Stock 3,167

Item 6. Selected Financial Data.

See following pages.

6
<PAGE> 7

SAVANNAH FOODS & INDUSTRIES, INC.
SUMMARY OF OPERATIONS

(In thousands except for per share amounts and ratios)

<TABLE>
<CAPTION>
Fiscal Period Ended
---------------------------------------------------------------------------
October 1, October 2, October 3, January 3, December 29,
1995 1994 1993 (1) 1993 1991
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
OPERATIONS FOR THE FISCAL PERIOD
Net sales........................................ $1,098,544 $1,074,367 $818,116 $1,138,114 $1,199,710
Income from operations (excludes other income
and expenses, taxes and change in accounting
principle)..................................... 7,386 20,297 11,839 49,143 66,884
(Loss) income before change in accounting
principle...................................... (3,493) 5,743 1,986 27,340 38,260
Net (loss) income (2)............................ (3,493) 5,743 2,586 9,170 38,260
Other income statement information:
Depreciation and amortization expense.......... 28,314 28,972 19,362 23,705 20,510
Interest expense............................... 14,847 13,380 10,226 10,526 9,820
Benefit from (provision for) income taxes...... 2,585 (2,863) (1,155) (13,628) (21,798)
Cash dividends declared.......................... 8,396 14,169 10,627 13,890 13,116
Capital expenditures (3)......................... 17,303 22,218 39,877 45,301 55,661
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL POSITION AT THE END OF THE FISCAL PERIOD
Current assets................................... $ 197,802 $ 198,880 $269,990 $ 371,387 $ 356,769
Current liabilities.............................. 114,740 85,140 154,760 233,519 223,104
Working capital.................................. 83,062 113,740 115,230 137,868 133,665
Property, plant and equipment - gross............ 436,991 421,312 407,924 355,435 318,391
Accumulated depreciation......................... 206,100 180,810 159,111 129,306 112,092
Total assets..................................... 476,507 486,127 567,852 635,755 581,819
Long-term debt................................... 106,864 140,224 142,078 126,464 94,364
Stockholders' equity............................. 169,649 188,174 194,714 210,620 224,275
- --------------------------------------------------------------------------------------------------------------------------------
PER SHARE
Weighted average shares outstanding.............. 26,238 26,238 26,238 26,491 26,782
Shares outstanding at end of fiscal period....... 26,238 26,238 26,238 26,238 26,723
(Loss) income before change in accounting
principle per weighted average share
outstanding.................................... $ (.13) $ .22 $ .08 $ 1.03 $ 1.43
Net (loss) income per weighted average share
outstanding (2)................................ (.13) .22 .10 .35 1.43
Dividends declared per share..................... .32 .54 .405 .525 .49
Stockholders' equity per share (4)............... 6.47 7.17 7.42 8.03 8.39
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS
Current assets divided by current liabilities.... 1.72 2.34 1.74 1.59 1.60
Long-term debt divided by long-term debt
and stockholders' equity....................... .39 .43 .42 .38 .30
Tax benefit (expense) divided by pre-tax
(loss) income.................................. .43 .33 .37 .33 .36
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) On July 21, 1993, the Company changed its fiscal year end from the
Sunday closest to December 31 to the Sunday closest to September 30.
As a result, the fiscal period ended October 3, 1993 represents a
39 week period. For further information, see Note 2 to the
accompanying consolidated financial statements.

(2) The Company adopted FAS 109, "Accounting for Income Taxes" during the
fiscal period ended October 3, 1993 and adopted FAS 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions" during the
fiscal period ended January 3, 1993. For more information on the
adoption of FAS 109, see Note 7 to the accompanying consolidated
financial statements.

(3) Capital expenditures include $1,000,000 for the acquisition of certain
fixed asets of Reckitt and Colman, Inc. in January 1995, $4,757,000 for
the acquisition of King Packaging Company, Inc. fixed assets in July
1993 and $15,798,000 for the acquisition of Raceland Sugars, Inc. fixed
assets in October 1991.

(4) Based on shares outstanding at end of fiscal period.

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Item 7. Management's Discussion and Analysis of the Company's
Financial Position and Results of Operations.

Change in fiscal year end:

The Company changed its fiscal year end from the Sunday closest to
December 31 to the Sunday closest to September 30, beginning with the fiscal
period ended October 3, 1993. The decision to change the fiscal year end was
made to conform the Company's financial reporting year to the natural business
year of the sugar industry. This is further discussed in Notes 1 and 2 to the
consolidated financial statements.

Liquidity

Operating working capital, defined as non-cash assets and non-interest
bearing liabilities excluding dividends payable, increased by $10,255,000
during fiscal 1995. This increase, funded through short-term borrowings,
resulted from a decision to increase inventory levels to take advantage of
certain sales opportunities. The Company expects to liquidate this inventory
in fiscal 1996 and to repay the related short-term debt. In the absence of the
decision by management to temporarily increase inventory, operating working
capital would have decreased by approximately $12,000,000 during fiscal 1995.

The Company maintains revolving credit facilities, as discussed below,
to provide liquidity for short-term operating needs. The Company also has the
ability to fund seasonal increases in inventory through borrowings from the
Commodity Credit Corporation. Maximum short-term borrowings during fiscal 1995
were $68,500,000. These two sources of short-term funds provide ample
liquidity to the Company to meet its operating cash requirements. See Note 6
to the Company's financial statements for a discussion of the covenants related
to the Company's revolving credit facilities.

Capital Resources

Long-term debt, including the current portion, decreased $28,703,000
as a result of debt payments during fiscal 1995. $20,000,000 of the debt
payments were funded with excess cash generated through working capital
reductions achieved during fiscal 1994. Changes in debt and equity resulted in
a decrease from 43% to 39% in the ratio of long-term debt to total capital.

During August, 1995, the Company entered into revolving credit
agreements aggregating $140,000,000, of which $10,000,000 was outstanding as
long-term debt and $22,300,000 was outstanding as short-term debt at year end.
The remaining available balance of $107,700,000 is intended to meet working
capital and other cash needs as they arise. All of the $140,000,000 of
available facilities are committed through January 1, 1999.

The Company's most restrictive loan covenants are included in its
Senior Notes as discussed in Note 6 to the financial statements. Both the
Senior Notes and the Company's revolving credit facilities include

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<PAGE> 9

requirements to maintain certain levels of income or operating cash flow in
relation to interest expense, and to maintain a minimum net worth. As
discussed in Note 6, at October 1, 1995, the Company was not in compliance with
the covenants contained in the Senior Notes agreement, but has obtained
amendments through December, 1995 which allow the Company to comply with the
amended terms of the agreement. Discussions between the Company and the Senior
Note lenders are continuing to further amend the terms of this debt.
Additionally, under the terms of the Company's revolving credit facilities, the
Company has the ability to refinance the Senior Notes if it is in compliance
with the covenants contained in the revolving credit agreements. The Company
was in compliance with the terms of the revolving credit facilities at the end
of fiscal 1995. In the event that the Company is not in compliance with the
terms of the covenants in its revolving credit facilities, the Company believes
it will be able to obtain appropriate waivers. In the event that waivers are
not obtained related to the revolving credit facilities, the agreements would
likely be modified. If not modified, the agreements also provide an option to
the revolving credit lenders to accelerate the repayment of this indebtedness.

At October 1, 1995, stockholders' equity was $169,649,000 compared to
equity at October 2, 1994, of $188,174,000. Equity decreased as a result of a
net loss of $3,493,000 for the year ended October 1, 1995, dividends of
$8,396,000, an increase in the minimum pension liability adjustment of
$6,632,000, and a currency translation adjustment of $425,000. Equity
increased through a $421,000 reduction in the note receivable from the employee
stock ownership plan.

In January 1995, the Company purchased the disposable salt and pepper
shaker business of Reckitt & Colman for approximately $7,000,000. This product
line is projected to add about $5,000,000 in sales to Dixie Crystals(R) Brands
and complement the current non-sugar product line. The Company is continually
searching for similar opportunities to expand into higher value-added products
outside of sugar.

Fixed asset additions during fiscal 1995, excluding Reckitt & Colman,
were $16,303,000 compared to depreciation and amortization for the same period
of $28,314,000. The capital expenditures were primarily made to upgrade and
install packaging and production equipment. These projects are expected to
benefit the Company through increased efficiency, improved quality control, and
expanded operational capabilities. The Company expects that expenditures for
fixed assets in fiscal 1996 will approximate $10,000,000 and that depreciation
and amortization for fiscal 1996 will approximate that of 1995.

During fiscal 1996 the Company expects to generate approximately
$12,000,000 through the liquidation of Company-owned life insurance. This
liquidation will also eliminate the need to fund over $3,000,000 of additional
whole-life insurance premiums during fiscal 1996. Over a five year time
period, this decision will eliminate the need to fund a total of more than
$10,000,000 in whole-life insurance premiums (including the $3,000,000 not
expended in fiscal 1996). The $12,000,000 cash received and the $3,000,000 not
expended in fiscal 1996 are expected to be used to reduce long-term debt during
fiscal 1996. This insurance

9
<PAGE> 10

is being liquidated because its return did not exceed the Company's cost of
capital and because the Company wants to utilize these funds in its business.

On November 17, 1995, the Board of Directors approved the formation of
a grantor trust which is expected to purchase approximately 2,500,000 shares of
Company common stock from the Company. It is intended that over an extended
period of time the trust will use such shares or the proceeds from the sale of
such shares to satisfy obligations of the Company under various employee
benefit plans, including the Company's qualified defined benefit pension plans,
its supplemental pension plan, and obligations under deferred compensation
contracts for employees and directors, all of which are discussed in Notes 9
and 10 to the Company's financial statements.

Results of Operations

Year ended October 1, 1995 and year ended October 2, 1994

The Company's results of operations for the fiscal year ended October
1, 1995 was a net loss of ($3,493,000), or ($.13) per share, on sales of
$1,098,544,000, compared to income of $5,743,000, or $.22 per share, on sales
of $1,074,367,000 for the fiscal year ended October 2, 1994. Sugar sales
volume was flat compared to fiscal 1994 while sugar sales prices increased
slightly. Average raw sugar costs increased dramatically in fiscal 1995, from
$22.07 per cwt. in fiscal 1994, to $23.03 per cwt. in fiscal 1995. Raw sugar
shortages in the summer of 1995 pushed raw sugar costs as high as $25.70 per
cwt. in late July 1995.

This rise in raw sugar costs primarily affected the cane refineries
which, as a result, reported an operating loss for fiscal 1995. The net loss
also included a $1,600,000 charge for the settlement of litigation, a
$1,500,000 charge for a work force reduction, and a $1,200,000 charge related
to capital projects which will not be pursued because of changing business
circumstances. Fiscal 1994 included a $2,950,000 charge related to the same
litigation mentioned above.

Michigan Sugar's sales volume decreased 3% in fiscal 1995 due to
marketing allotments imposed by the U. S. Department of Agriculture (USDA)
which restricted the amount of sugar sold. However, higher sugar content in
the beets resulted in lower processing costs per cwt., and operating income in
this division increased substantially over fiscal 1994. Higher molasses and
beet pulp prices also contributed to the increased earnings.

Operating income for our Foodservice division increased from fiscal
1994 despite higher sugar costs and competitive pricing pressures. The
increase was achieved through focused selling of higher value-added sugar and
non-sugar products along with lower operating costs.

Raceland Sugars, Inc.'s operating income decreased slightly from
fiscal 1994 as increased operating costs offset higher sales prices and a
larger crop.

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<PAGE> 11

Selling, general and administrative expenses increased 7% in fiscal
1995 from fiscal 1994 primarily due to higher advertising and selling costs.

Interest expense increased as a result of higher interest rates on
short-term borrowings for working capital.

The fiscal 1996 national beet crop is estimated to be 4.1 million tons
compared to 4.5 million tons in fiscal 1995. A smaller beet crop usually means
higher refined sugar selling prices, increased cane refining throughput and
lower per unit refining costs. This should improve operating income for the
Company's cane based operations in fiscal 1996.

The Company's beet sugar division, Michigan Sugar, will have lower
earnings in fiscal 1996 due to a summer drought and insect problems which
reduced both sugar beet yields and sugar content significantly from fiscal
1995.

Raceland should benefit from a larger crop and higher raw sugar prices
in fiscal 1996 and operating income should improve over fiscal 1995.

The sugar portion of the 1995 Farm Bill has yet to be finalized in
Congress. The Company believes that the sugar program needs reform. The
outcome of the bill will not be known until next year and it is impossible to
predict the results.

Year ended October 2, 1994 and nine months ended October 3, 1993

The Company's net income for the fiscal year ended October 2, 1994 was
$5,743,000, or $.22 per share, compared to income of $2,586,000, or $.10 per
share, for the nine months ended October 3, 1993. Income for fiscal 1993
includes a $3,030,000 charge to net income (a $4,900,000 increase in cost of
sales, net of the associated $1,870,000 income tax benefit) related to a LIFO
inventory liquidation at Michigan Sugar as further discussed in Note 2 to the
consolidated financial statements and a $600,000 cumulative effect credit due
to adopting FAS 109. Income for fiscal 1993 before the cumulative effect of
adopting FAS 109 was $1,986,000, or $.08 per share. Average weekly sales
volume and prices were down in fiscal 1994 compared to fiscal 1993 due to
competitive pressure from beet sugar producers marketing a larger beet crop
along with additional sugar carried over from the previous year.

Productivity increased in fiscal 1994 at the cane refineries.
However, higher raw sugar costs caused by a low raw sugar quota reduced average
weekly operating income in this division compared to fiscal 1993.

Michigan Sugar's average weekly sales volume increased 4% in fiscal
1994 due to a larger crop in Michigan and a carry over from the previous crop.
However, average weekly operating income dropped from fiscal 1993 due to lower
beet pulp prices and a smaller beet crop in Ohio.

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<PAGE> 12

Dixie Crystals(R) Foodservice's average weekly operating income
decreased from fiscal 1993 due to higher sugar costs and competitive pricing
pressures. Cost cutting programs which lowered manufacturing costs helped
minimize the impact of these negative factors.

Raceland Sugars, Inc. showed a significant increase in average weekly
operating income in fiscal 1994 compared to fiscal 1993 as a result of higher
raw sugar prices in 1994.

Selling, general and administrative expenses decreased 7% on an
average weekly basis in fiscal 1994 from fiscal 1993 primarily due to a
reduction in storage costs achieved through a production optimization program.

Interest expense decreased slightly on an average weekly basis in
fiscal 1994 due to lower short-term borrowings.

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<PAGE> 13

Item 8. Financial Statements and Supplementary Data.

<TABLE>
<CAPTION>
(a) Financial Statements: Page
-------------------- ----
<S> <C> <C>
Report of Independent Accountants 14

Consolidated Balance Sheets at October 1, 1995
and October 2, 1994 15

Consolidated Statements of Operations for the
fiscal periods ended October 1, 1995,
October 2, 1994 and October 3, 1993 16

Consolidated Statements of Changes in Stockholders'
Equity for the fiscal periods ended October 1, 1995,
October 2, 1994 and October 3, 1993 17

Consolidated Statements of Cash Flows for the
fiscal periods ended October 1, 1995, October 2, 1994
and October 3, 1993 18

Notes to Consolidated Financial Statements 19

(b) Financial Statement Schedules for the fiscal
periods ended October 1, 1995, October 2, 1994
and October 3, 1993:
</TABLE>

Schedules are omitted because they are not applicable, or the
required information is shown in the financial statements or notes thereto.

13
<PAGE> 14

Report of Independent Accountants

November 17, 1995

To the Stockholders and Board of Directors of
Savannah Foods & Industries, Inc.

In our opinion, the consolidated financial statements listed in the
accompanying index present fairly, in all material respects, the financial
position of Savannah Foods & Industries, Inc. and its subsidiaries at October
1, 1995 and October 2, 1994, and the results of their operations and their cash
flows for the fifty-two weeks ended October 1, 1995, the fifty-two weeks ended
October 2, 1994 and the thirty-nine weeks ended October 3, 1993, in conformity
with generally accepted accounting principles. 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 of these statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above.

As discussed in Note 7 to the financial statements, the Company changed its
method of accounting for income taxes during the thirty-nine weeks ended
October 3, 1993.

PRICE WATERHOUSE LLP
Savannah, Georgia

14
<PAGE> 15

SAVANNAH FOODS & INDUSTRIES, INC.
Consolidated Balance Sheets
(In thousands except for shares and per share amounts)

<TABLE>
<CAPTION>
October 1, October 2,
1995 1994
---------- ----------
<S> <C> <C>
Assets
- ------

Current assets:
Cash and cash equivalents (Note 1) $ 11,574 $ 28,436
Accounts receivable 66,991 75,776
Inventories (net of LIFO reserve of $10,460 in
1995 and $8,889 in 1994) (Notes 1 and 4) 103,121 85,340
Other current assets (Notes 1 and 7) 16,116 9,328
-------- --------
Total current assets 197,802 198,880
Property, plant and equipment (net of accumulated
depreciation of $206,100 in 1995 and
$180,810 in 1994) (Notes 1 and 5) 230,891 240,502
Other assets (Notes 1, 7 and 9) 47,814 46,745
-------- --------
$476,507 $486,127
======== ========
Liabilities and Stockholders' Equity
- ------------------------------------

Current liabilities:
Short-term borrowings (Note 6) $ 22,300 $ -
Current portion of long-term debt (Note 6) 6,300 1,643
Trade accounts payable 63,259 56,953
Dividends payable 656 3,542
Other liabilities and accrued expenses 22,225 23,002
-------- --------
Total current liabilities 114,740 85,140
-------- --------
Long-term debt (Note 6) 106,864 140,224
-------- --------
Deferred employee benefits (Notes 9 and 10) 85,254 72,589
-------- --------
Stockholders' equity (Notes 6 and 8):
Common stock $.25 par value; $.55 stated value;
64,000,000 shares authorized; 31,306,800 shares issued 17,365 17,365
Capital in excess of stated value 12,190 12,190
Retained earnings 190,176 202,065
Minimum pension liability adjustment (Note 9) (14,842) (8,210)
Cumulative translation adjustment (425) -
-------- --------
204,464 223,410
Less - Treasury stock, at cost (5,068,604 shares) 31,275 31,275
- Note receivable from employee stock ownership
plan 3,540 3,961
-------- --------
Total stockholders' equity 169,649 188,174
Commitments and contingencies (Note 11) - -
-------- --------
$476,507 $486,127
======== ========
</TABLE>

(The accompanying notes are an integral part of the financial statements.)

15
<PAGE> 16

SAVANNAH FOODS & INDUSTRIES, INC.
Consolidated Statements of Operations
(In thousands except for shares and per share amounts)

<TABLE>
<CAPTION>
Fiscal Period Ended (Notes 1 and 2)
--------------------------------------------
October 1, October 2, October 3,
1995 1994 1993
(52 weeks) (52 weeks) (39 weeks)
---------- ---------- ----------

<S> <C> <C> <C>
Net sales $1,098,544 $1,074,367 $ 818,116
---------- ---------- ----------
Operating expenses:
Cost of sales and operating
expenses 1,005,914 971,706 743,731
Selling, general and
administrative expenses 56,930 53,392 43,184
Depreciation and amortization
(Note 1) 28,314 28,972 19,362
---------- ---------- ----------
1,091,158 1,054,070 806,277
---------- ---------- ----------
Income from operations 7,386 20,297 11,839
---------- ---------- ----------
Other income and (expenses):
Interest and other investment
income 1,258 2,170 1,412
Interest expense (Note 6) (14,847) (13,380) (10,226)
Other income (expense) 125 (481) 116
---------- ---------- ----------
(13,464) (11,691) (8,698)
---------- ---------- ----------
(Loss) income before income
taxes and change in
accounting principle (6,078) 8,606 3,141
Benefit from (provision for)
income taxes (Notes 1 and 7) 2,585 (2,863) (1,155)
---------- ---------- ----------
(Loss) income before change in
accounting principle (3,493) 5,743 1,986
Cumulative effect of change in
accounting principle
(Notes 1 and 7) - - 600
---------- ---------- ----------
Net (loss) income $ (3,493) $ 5,743 $ 2,586
========== ========== ==========

(Loss) income per weighted
average share outstanding:
(Loss) income before change
in accounting principle $ (.13) $ .22 $ .08
Cumulative effect of change
in accounting principle - - .02
---------- ---------- ----------
Net (loss) income $ (.13) $ .22 $ .10
========== ========== ==========

Weighted average shares
outstanding 26,238,196 26,238,196 26,238,196
========== ========== ==========
</TABLE>

(The accompanying notes are an integral part of the financial statements.)

16
<PAGE> 17

SAVANNAH FOODS & INDUSTRIES, INC.
Consolidated Statements of Changes in Stockholders' Equity
(In thousands except for per share amounts)

<TABLE>
<CAPTION>
Note
Receivable
from
Capital in Minimum Employee
Excess of Pension Cumulative Stock
Common Stated Retained Liability Translation Treasury Ownership
Stock Value Earnings Adjustment Adjustment Stock Plan Total
------- ---------- -------- ---------- ----------- --------- ---------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at January 3, 1993 $17,365 $12,190 $218,532 $ (1,437) $ - $(31,275) $(4,755) $210,620
Net income 2,586 2,586
Cash dividends declared
($.405 per share) (10,627) (10,627)
Increase in minimum pension
liability adjustment (8,016) (8,016)
Decrease in note receivable from
employee stock ownership plan 151 151
------- ------- -------- -------- ------- -------- ------- --------
Balance at October 3, 1993 17,365 12,190 210,491 (9,453) - (31,275) (4,604) 194,714
Net income 5,743 5,743
Cash dividends declared
($.54 per share) (14,169) (14,169)
Decrease in minimum pension
liability adjustment 1,243 1,243
Decrease in note receivable from
employee stock ownership plan 643 643
------- ------- -------- -------- ------- -------- ------- --------
Balance at October 2, 1994 17,365 12,190 202,065 (8,210) - (31,275) (3,961) 188,174
Net loss (3,493) (3,493)
Cash dividends declared
($.32 per share) (8,396) (8,396)
Increase in minimum pension
liability adjustment (6,632) (6,632)
Increase in cumulative
translation adjustment (425) (425)
Decrease in note receivable from
employee stock ownership plan 421 421
------- ------- -------- -------- ------- -------- ------- --------
Balance at October 1, 1995 $17,365 $12,190 $190,176 $(14,842) $ (425) $(31,275) $(3,540) $169,649
======= ======= ======== ======== ======= ======== ======= ========
</TABLE>

(The accompanying notes are an integral part of the financial statements.)

17
<PAGE> 18

SAVANNAH FOODS & INDUSTRIES, INC.
Consolidated Statements of Cash Flows
(In thousands of dollars)

<TABLE>
<CAPTION>
Fiscal Period Ended (Notes 1 and 2)
----------------------------------------------
October 1, October 2, October 3,
1995 1994 1993
(52 weeks) (52 weeks) (39 weeks)
---------- ---------- ----------
<S> <C> <C> <C>
Cash flows from operations:
Net (loss) income $(3,493) $ 5,743 $ 2,586
Adjustments to reconcile net (loss) income
to net cash provided by operations -
Depreciation and amortization 28,314 28,972 19,362
Cumulative effect of change in
accounting principle - - (600)
Provision for deferred income taxes (207) (5,283) 6,986
Net loss on disposal of assets 674 460 204
Changes in balance sheet accounts -
Accounts receivable 8,785 11,254 (25,347)
Inventories (17,781) 60,299 133,498
Other current assets (6,952) 2,657 (1,092)
Trade accounts payable 6,306 (49,457) (39,441)
Income taxes accrued - - (17,593)
Accrued expenses related to beet operations - - (22,884)
Other liabilities and accrued expense (777) 3,373 (1,951)
Other 1,122 1,431 1,547
------- ------- -------
Cash provided by operations 15,991 59,449 55,275
------- ------- -------
Cash flows from investing activities:
Additions to property, plant and equipment (16,303) (22,218) (35,120)
Proceeds from sale of property, plant
and equipment 784 3,309 2,342
Use of escrow balances related to industrial
revenue bonds for additions to property,
plant and equipment - 3,669 460
Liquidation (acquisition) of investments 3,615 18,559 (7,691)
Acquisition of businesses (7,050) - (8,925)
Other (2,182) (2,930) 198
------- ------- -------
Cash used for investing activities (21,136) 389 (48,736)
------- ------- -------
Cash flows from financing activities:
Increase (decrease) in short-term borrowings 22,300 (26,300) (3,700)
Increase in long-term debt - - 10,111
Payments of long-term debt (28,703) (2,632) (1,337)
Liquidation of unused industrial revenue
bond escrow balances 5,742 - -
Dividends paid (11,282) (10,627) (10,627)
Other 226 676 (1,484)
------- ------- -------
Cash used for financing activities (11,717) (38,883) (7,037)
------- ------- -------
Cash flows for period (16,862) 20,955 (498)
Cash and cash equivalents, beginning of period 28,436 7,481 7,979
------- ------- -------
Cash and cash equivalents, end of period $11,574 $28,436 $ 7,481
======= ======= =======
</TABLE>

(The accompanying notes are an integral part of the financial statements.)

18
<PAGE> 19

SAVANNAH FOODS & INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - Summary of Significant Accounting Policies:

Fiscal year - As described in Note 2, the Company changed its fiscal year
end from the Sunday closest to December 31 to the Sunday closest to September
30. The fiscal periods ended October 1, 1995, October 2, 1994 and October 3,
1993 include 52 weeks, 52 weeks and 39 weeks, respectively.

Principles of consolidation and business segments - The consolidated
financial statements include the accounts of the Company and its wholly owned
subsidiaries. Business entities in which the Company owns 50% or less are
accounted for using the equity method. The Company has one primary business
segment - Sugar Products.

Changes in accounting principles - As discussed in Note 7, Statement of
Financial Accounting Standards No. 109 - Accounting for Income Taxes (FAS 109)
was prospectively adopted effective January 4, 1993, the first day of the
fiscal period ended October 3, 1993.

Cash and cash equivalents - Cash and cash equivalents include all
investments purchased with an original maturity of 90 days or less which have
virtually no risk of loss of value of the principal amount of the investment.

Inventories - Inventories are valued at the lower of cost or market. Cost
is determined by the last-in, first-out (LIFO) method for sugar, packaging
materials, and certain other items. Costs for maintenance parts, sugar cane
and other non-sugar products are determined using the first-in, first-out
(FIFO) and moving average methods.

Futures transactions and interest rate swaps - The Company uses futures,
options and interest rate swaps as hedges in its inventory purchasing and cash
management programs. Gains and losses on such transactions related to
inventory are matched to specific inventory purchases and charged or credited
to cost of sales as such inventory is sold. Gains and losses on transactions
related to loans are included in interest expense during the period in which
the related instruments are outstanding. In connection with the Company's
futures trading activity, the Company maintains deposits with futures brokers.
These deposits are included in "Other current assets".

Amortization of intangibles - The Company has intangible assets included in
"Other assets" aggregating $11,912,000 and $8,031,000 at October 1, 1995 and
October 2, 1994, respectively. Goodwill is being amortized over fifteen years
on a straight-line basis, and other intangible assets are being amortized over
five years on a straight-line basis. Amortization expense was $2,169,000,
$2,617,000 and $1,363,000

19
<PAGE> 20

for the fiscal periods ended October 1, 1995, October 2, 1994 and October 3,
1993, respectively.

Property, plant and equipment - Property, plant and equipment is valued at
cost less accumulated depreciation and amortization. For financial reporting
purposes, depreciation is computed on the straight-line method. Accelerated
depreciation methods are used for tax purposes on $281,162,000 of equipment.

Accrued expenses related to beet and sugar cane operations - The Company's
beet and sugar cane processing plants are generally operated from October
through February and then, from March through September, are repaired for the
next processing cycle. As sugar is processed from October through February,
the Company accrues estimated repair costs and other costs to be incurred in
March through September and includes such costs in inventory and, as the sugar
is sold, in cost of sales. In contrast, some sugar processors capitalize such
costs and include them as prepaid expenses related to the next processing
cycle.

Fair value of financial instruments - For cash, cash equivalents, accounts
receivable, trade accounts payable, dividends payable, accrued expenses and
short-term borrowings, the carrying amounts approximate fair value because of
the short maturities of these instruments.

Revenue recognition - The Company recognizes revenue as product is shipped.

Reclassifications - Certain prior year amounts have been reclassified to
conform to current year presentation.

20
<PAGE> 21

Note 2 - Change in Fiscal Year End:

In July 1993, the Company changed its fiscal year end from the Sunday
closest to December 31 to the Sunday closest to September 30 in order to
conform the Company's financial reporting to the natural business year of the
sugar industry. Inventory quantities are significantly lower at the end of the
new fiscal year than at the end of a calendar year. Therefore, as a
consequence of the change in fiscal year end the Company experienced a LIFO
inventory liquidation in the 1993 fiscal period and recorded a charge to
operations of $3,030,000, net of tax of $1,870,000. To aid comparative
analysis, the Company has presented below results of operations (condensed) for
the nine-month periods ended October 3, 1993 and September 27, 1992 (in
thousands except for shares and per share amounts):

<TABLE>
<CAPTION>
Fiscal Period Ended
---------------------------------------
October 3, September 27,
1993 1992
(Unaudited)
------------------- -----------------
<S> <C> <C>
Net sales $ 818,116 $ 833,341
Operating expenses 806,277 798,974
---------- ----------
Income from operations 11,839 34,367
Other income and (expenses) (8,698) (6,740)
---------- ----------
Income before income taxes and
change in accounting principle 3,141 27,627
Provision for income taxes 1,155 9,903
---------- ----------
Income before change in
accounting principle 1,986 17,724
Cumulative effect of change in
accounting principle 600 (18,170)
---------- ----------
Net income (loss) $ 2,586 $ (446)
========== ==========

Income per weighted average share
outstanding:

Income before change in accounting
principle $ .08 $ .67
Cumulative effect of change in
accounting principle .02 (.69)
---------- ----------

Net income (loss) $ .10 $ (.02)
---------- ----------

Weighted average shares outstanding 26,238,196 26,571,834
========== ==========
</TABLE>

Note 3 - Acquisitions:

On January 31, 1995, the Company acquired certain assets of Reckitt and
Colman, Inc., which are used in the manufacture, sale and distribution of
filled plastic salt and pepper shakers for $7,050,000 in cash.

On July 7, 1993, the Company acquired the outstanding common stock of King
Packaging Company, Inc., a supplier of plastic cutlery and customized meal kits
to the foodservice and healthcare industries. The acquisition was accounted
for as a purchase, and the acquisition costs

21
<PAGE> 22

of the assets acquired and the liabilities assumed are as follows (in thousands
of dollars):

<TABLE>
<S> <C>
Cash $ 7,244
Inventories 1,770
Other current assets 3,086
Property, plant and equipment 4,757
Value of non-compete agreements 8,203
Other assets 290
-------
Assets acquired 25,350
Liabilities assumed (977)
-------
$24,373
=======
</TABLE>

Note 4 - Inventories:

A summary of inventories by method of pricing and class is as follows:

<TABLE>
<CAPTION>
October 1, October 2,
1995 1994
---------- ----------
(In thousands of dollars)
<S> <C> <C>
Last-in, first-out $ 64,642 $46,952
First-in, first-out 9,807 9,350
Moving average 28,672 29,038
-------- -------
$103,121 $85,340
======== =======

Raw materials and work-in-process $ 46,533 $26,924
Packaging materials, parts and
supplies 26,245 27,115
Finished goods 30,343 31,301
-------- -------
$103,121 $85,340
======== =======
</TABLE>

Certain LIFO inventory quantities were reduced during fiscal 1995 and 1994.
These reductions resulted in the liquidation of LIFO inventory quantities
carried at lower costs prevailing in prior years as compared with the cost of
fiscal 1995 and 1994 purchases. The effect of these liquidations decreased
cost of goods sold by $586,000 in fiscal 1995 and $1,762,000 in fiscal 1994,
and increased net income by $364,000, or $.01 per share, in fiscal 1995 and
$1,097,000, or $.04 per share, in fiscal 1994.

The replacement cost of inventories exceeded reported cost by approximately
$11,101,000 at October 1, 1995 and $10,013,000 at October 2, 1994.

22
<PAGE> 23

Note 5 - Property, Plant and Equipment:

Property, plant and equipment is summarized as follows:

<TABLE>
<CAPTION>
October 1, October 2,
1995 1994
---------- ----------
(In thousands of dollars)
<S> <C> <C>
Land $ 8,143 $ 8,417
Buildings 94,670 91,053
Machinery and equipment 326,842 314,530
Leasehold improvements 1,201 1,159
Projects-in-process 6,135 6,153
-------- --------
436,991 421,312
Less - Accumulated depreciation
and amortization (206,100) (180,810)
-------- --------
$230,891 $240,502
======== ========
</TABLE>

Repairs and maintenance expense was $35,241,000, $31,584,000 and
$26,706,000 for the fiscal periods ended October 1, 1995, October 2, 1994 and
October 3, 1993, respectively.

Note 6 - Long-term Debt, Credit Arrangements and Leases:

Long-term debt is summarized as follows:

<TABLE>
<CAPTION>
October 1, October 2,
1995 1994
---------- ----------
(In thousands of dollars)
<S> <C> <C>
Senior notes - $47,857 Series A at 8.35% and
$12,143 Series B at 7.15% $ 60,000 $ 70,000
Long-term debt supported by revolving credit
facilities with banks 10,000 20,000
Notes payable to banks related to the ESOP 14,100 15,500
Industrial revenue bonds 22,500 28,000
Other long-term debt 6,564 8,367
-------- --------
113,164 141,867
Less - Current portion (6,300) (1,643)
-------- --------
$106,864 $140,224
======== ========
</TABLE>

The Senior Notes are payable in amounts of $8,750,000 in fiscal 1999,
$17,304,000 in fiscal 2000, $15,750,000 in fiscal 2001, $13,821,000 in fiscal
2002, and $4,375,000 in fiscal 2003. The market value of the Company's
$60,000,000 fixed rate long-term debt at October 1, 1995 is approximately
$64,087,000 based on a market value based prepayment calculation negotiated
with the lenders.

During August, 1995, the Company entered into revolving credit agreements
aggregating $140,000,000, of which $10,000,000 was outstanding as long-term
debt and $22,300,000 was outstanding as short-term debt at year end. The
revolving credit facilities are committed through January 1, 1999 and, in
general, enable the Company to borrow funds at LIBOR plus 1/2%. The Company
pays an annualized fee of 1/5% on the unused portion of these facilities.

At October 1, 1995, the Company had $14,100,000 in notes payable related to
the Employee Stock Ownership Plan (ESOP) and $22,500,000 of

23
<PAGE> 24

industrial revenue bonds. These notes and bonds carry tax-advantaged variable
rates of interest equal to approximately 4.86% in 1995.

The ESOP loans are payable as follows: $4,285,000 in fiscal 1996,
$6,215,000 in fiscal 1998 and $3,600,000 payable in fiscal 1999 through fiscal
2005.

The $22,500,000 industrial revenue bonds consist of $4,500,000 due in
fiscal 2000, $4,500,000 due in fiscal 2001, $6,000,000 payable in $1,000,000
installments in fiscal 2002 through 2007, $3,500,000 due in fiscal 2004,
$2,500,000 payable in $500,000 installments from fiscal 2001 through 2005 and
$1,500,000 due in 2017. These bonds are secured by financing statements on
project-related equipment, the cost of which approximates the bond amounts.

The Company uses interest rate exchange agreements, more commonly called
interest rate swaps, to manage its interest rate exposure.

The effect of certain of the swap agreements is to fix the rate on the
$10,000,000 long-term debt borrowed under revolving credit agreements, the
$14,100,000 ESOP loans and the $22,500,000 industrial revenue bonds over the
remaining period of these swap contracts. The average fixed interest rate on
this $46,600,000 of debt fixed through these swap agreements is 8.00%. These
swaps were entered into to fix the interest rate on variable debt at rates
which the Company considered attractive at the time the agreements were
consummated. When the Company entered into these agreements, it compared its
anticipated interest costs to other long term borrowing sources such as private
placements and other fixed rate borrowing options. Accordingly, the Company
has realized its desired objectives in the use of these derivatives. If the
Company had canceled these agreements as of October 1, 1995, it would have been
required to pay the counter-parties to the agreements an aggregate amount of
$2,100,000.

The Company has also entered into forward swap agreements for periods
ranging from 1998 to 2004. These swaps, in conjunction with the Company's
existing fixed rate debt, will fix the rate on approximately $80,000,000 of
debt for this time period. The Company entered into these agreements to fix
the rate on variable rated debt intended to be borrowed to refinance fixed rate
debt currently outstanding. The swaps require the Company to pay fixed rates
ranging from 6.5% to 7.0% against 90 day LIBOR. These transactions were
entered into to protect the Company against interest rate increases and to fix
future interest rates at rates the Company considers attractive. If the
Company had canceled these agreements as of October 1, 1995, it would have been
required to pay the counter-parties to the agreements an aggregate amount of
$290,000.

24
<PAGE> 25

Short-term borrowings, including borrowings under the Company's revolving
credit facilities which were for temporary working capital needs, are
summarized as follows:

<TABLE>
<CAPTION>
Fiscal Period Ended
----------------------------------------
October 1, October 2, October 3,
1995 1994 1993
---------- ---------- ----------
(In thousands of dollars)
<S> <C> <C> <C>
Daily average outstanding borrowings $31,373 $27,953 $49,816
Daily weighted average interest rate 6.29% 3.82% 3.42%
Maximum borrowings $68,500 $62,300 $85,500
Amount outstanding at year-end $22,300 $ - $26,300
</TABLE>

The Company's most restrictive loan covenants are included in its Senior
Notes and require maintenance of a minimum net worth and a minimum income level
in relation to interest expense. At October 1, 1995, the Company was not in
compliance with these covenants, but has obtained amendments through December,
1995 which allow the Company to comply with the amended terms of the agreement.
Discussions between the Company and the Senior Note lenders are continuing to
further amend the terms of this debt. Under the terms of the Company's
revolving credit facilities, the Company has the ability to refinance the
Senior Notes if it is in compliance with the covenants contained in the
revolving credit agreements. The Company was in compliance with the terms of
the revolving credit facilities at the end of fiscal 1995. In the event that
the Company is not in compliance with the terms of the covenants in its
revolving credit facilities, the Company believes it will be able to obtain
appropriate waivers. In the event that waivers are not obtained related to the
revolving credit facilities, the agreements would likely be modified. If not
modified, the agreements also provide an option to the revolving credit lenders
to accelerate the repayment of this indebtedness.

Interest expense was $14,847,000 in fiscal 1995, $13,380,000 in fiscal
1994, and $10,226,000 for the 39 week fiscal 1993 period. Cash payments of
interest were $14,634,000 in fiscal 1995, $13,364,000 for fiscal 1994, and
$9,377,000 for the 1993 fiscal 39 week period.

Annual maturities of long-term debt each year for the next five fiscal
years are $6,300,000 in 1996, $2,110,000 in 1997, $7,894,000 in 1998,
$19,440,000 in 1999, $22,494,000 in 2000 and $54,926,000 in subsequent years
through 2017.

Lease expense related to operating leases aggregated $1,552,000,
$1,887,000, and $1,553,000 in fiscal 1995, 1994 and 1993, respectively. Lease
commitments on operating leases exceeding one year for fiscal 1996, 1997, 1998,
1999, and 2000 are $1,210,000, $1,190,000, $1,173,000, $805,000 and $662,000,
respectively.

Note 7 - Income Taxes:

The Company prospectively adopted Statement of Financial Accounting
Standards No. 109 - Accounting for Income Taxes (FAS 109) effective January 4,
1993, the first day of the fiscal period ended October 3, 1993. The adoption
of FAS 109 changed the Company's method of

25
<PAGE> 26

accounting for income taxes from the deferred method (Accounting Principles
Board Opinion No. 11) to an asset and liability approach. Previously the
Company deferred the past tax effects of timing differences between financial
reporting and taxable income. The asset and liability approach requires the
recognition of deferred tax assets and liabilities for the expected future tax
consequences of temporary differences between the carrying amounts and the tax
bases of other assets and liabilities.

Under FAS 109, assets and liabilities acquired in business combinations
accounted for under the purchase method are assigned their fair values, and
deferred taxes are provided for lower or higher tax bases. Under APB 11,
values assigned were net-of-tax. In adopting FAS 109, the Company adjusted the
carrying amounts of the Michigan Sugar Company fixed assets and LIFO
inventories acquired in 1984. Pretax income from operations for the fiscal
period ended October 3, 1993 was reduced by $5,600,000 representing additional
cost of sales and depreciation expense resulting from the higher carrying
amounts.

The net adjustments to the January 4, 1993 balance sheet to adopt FAS 109
resulted in a $600,000 credit to net income. This amount is reflected in the
accompanying consolidated statement of operations for the fiscal period ended
October 3, 1993 as a cumulative effect of a change in accounting principle.

Pretax income for all periods presented was taxed exclusively in the United
States. The benefit from (provision for) income taxes is comprised of the
following:

<TABLE>
<CAPTION>
Fiscal Period Ended
----------------------------------------------
October 1, October 2, October 3,
1995 1994 1993
---------- ---------- ----------
(In thousands of dollars)
<S> <C> <C> <C>
Current federal $1,515 $(8,071) $ 3,692
Current state 863 (75) 232
Deferred federal 271 4,794 (4,977)
Deferred state (64) 489 (102)
------ ------- -------
Benefit from
(provision for)
income taxes $2,585 $(2,863) $(1,155)
====== ======= =======

Tax effect of change in:
Minimum pension
liability $4,716 $ (720) $ 5,502
Cumulative translation
adjustment 261 - -
------ ------- -------
$4,977 $ (720) $ 5,502
====== ======= =======
</TABLE>

Cash payments of income taxes amounted to $6,637,000, $7,504,000 and
$11,834,000 for the fiscal periods ended October 1, 1995, October 2, 1994 and
October 3, 1993, respectively.

26
<PAGE> 27

Deferred income tax assets (liabilities) are comprised of the following:

<TABLE>
<CAPTION>
October 1, October 2,
1995 1994
---------- ----------
(In thousands of dollars)
<S> <C> <C>
Depreciation $(22,854) $(22,406)
Other post employment benefits 12,316 11,951
Accrued pension liability 12,769 8,296
Deferred compensation 6,227 5,571
Tax benefit purchases (2,616) (3,335)
Other non-current 659 368
-------- --------
Total net non-current asset 6,501 445
-------- --------

Other accrued expenses 847 2,865
Inventory (411) (410)
Other current 1,226 79
-------- --------
Total net current asset 1,662 2,534
-------- --------

Net deferred asset $ 8,163 $ 2,979
======== ========
</TABLE>

A reconciliation between the benefit from (provision for) income taxes and
the amount computed by applying the U. S. federal income tax rate to income
before income taxes and change in accounting principle is as follows:

<TABLE>
<CAPTION>
Fiscal Period Ended
--------------------------------------------
October 1, October 2, October 3,
1995 1994 1993
---------- ---------- ----------
(In thousands of dollars)
<S> <C> <C> <C>
Computed "expected" tax
benefit (expense) $2,127 $(3,012) $(1,068)
(Increases) reductions in taxes
resulting from:
State income taxes, net of
federal income tax benefit (280) 269 (95)
Tax-free income earned 120 104 107
ESOP dividends 254 506 547
Effect of tax rate increase - - (181)
Other 364 (730) (465)
------ ------ ------
Benefit from (provision for)
income taxes $2,585 $(2,863) $(1,155)
====== ======= =======
</TABLE>

The Company increased its deferred income tax liability in the last quarter
of the fiscal period ended October 3, 1993 as a result of legislation enacted
during 1993 increasing the corporate tax rate from 34% to 35% commencing in
1993.

Note 8 - Stockholders' Equity:

The Certificate of Incorporation of the Company, as amended, authorizes a
class of preferred stock to consist of up to 1,000,000 shares of $.50 par value
stock. The Board of Directors can determine the characteristics of the
preferred stock without further stockholder approval.

On November 17, 1995, the Board of Directors approved the formation of a
grantor trust which is expected to purchase approximately 2,500,000

27
<PAGE> 28

shares of Company common stock from the Company. It is intended that over an
extended period of time the trust will use such shares or the proceeds from the
sale of such shares to satisfy obligations of the Company under various
employee benefit plans, including the Company's qualified defined benefit
pension plans, its supplemental pension plan, and obligations under deferred
compensation contracts for employees and directors, all of which are discussed
in Notes 9 and 10 below.

Note 9 - Pension Plans:

Substantially all employees and retirees of the Company are covered by
noncontributory defined benefit pension plans. The Company also provides
supplemental pension benefits to certain retired employees. The supplemental
pension benefits are determined annually by the Board of Directors.

Benefits under the noncontributory defined benefit pension plans for
bargaining employees are primarily based on years of service; benefits for
other employees are generally based on years of service and the employee's
highest consecutive three-year average earnings. The Company's policy is to
contribute at least the minimum amount required by the Employee Retirement
Income Security Act. At October 1, 1995, the assets of these plans are
invested primarily in cash equivalents, mutual stock and bond funds, and
common stocks including 194,087 shares of the Company's common stock with a
market value of $2,620,000. The plan received $69,000 in dividends from these
shares during the fiscal period ended October 1, 1995.

The following table sets forth the status of the Company's qualified
defined benefit pension plans and the pertinent assumptions used in computing
this information as of the end of each respective period:
<TABLE>
<CAPTION>
October 1, October 2,
1995 1994
---------- ----------
(In thousands of dollars)
<S> <C> <C>
Actuarial present value of
benefit obligation based
on current compensation:
Vested $(78,364) $(65,650)
Nonvested (6,927) (6,370)
-------- --------
Accumulated benefit obligation (85,291) (72,020)
Increase in present value of
benefit obligation to reflect
projected compensation increases (7,524) (7,520)
-------- --------
Projected benefit obligation (92,815) (79,540)
Plan assets at fair value 62,835 57,120
-------- --------
Projected benefit obligation
(in excess of) plan assets (29,980) (22,420)
Unrecognized prior service cost 3,386 3,614
Unrecognized net loss 31,876 22,904
Unrecognized net asset at transition (2,352) (3,428)
Adjustment required to recognize
minimum liability (25,369) (15,570)
-------- --------
Pension liability included
in "Deferred employee benefits" $(22,439) $(14,900)
======== ========
</TABLE>

28
<PAGE> 29

The table above is based on a discount rate of 7.5% for the fiscal period
ended October 1, 1995 and 8.5% for the fiscal period ended October 2, 1994, and
projected salary increases of 4.5% for the fiscal periods ended October 1, 1995
and October 2, 1994.

Pension expense is summarized as follows:

<TABLE>
<CAPTION>
Fiscal Period Ended
----------------------------------------
October 1, October 2, October 3,
1995 1994 1993
---------- ---------- ----------
(In thousands of dollars)
<S> <C> <C> <C>
Costs related to services provided
by employees during the year $2,250 $2,401 $1,573
Interest cost on projected
benefit obligation 6,601 6,274 4,910
Actual gain on plan assets (6,390) (1,172) (2,476)
Net amortization and deferrals 437 (4,564) (2,692)
------ ------ ------
Pension expense related to
defined benefit plans 2,898 2,939 1,315
Supplemental pension benefits 190 126 91
------ ------ ------
Total pension expense $3,088 $3,065 $1,406
====== ====== ======
</TABLE>

The expected long-term rate of return on plan assets used in determining
"Pension expense related to defined benefit plans" as shown above was 9.5%,
9.5% and 10.5% for the fiscal periods ended October 1, 1995, October 2, 1994,
and October 3, 1993, respectively.

The Company sponsors an unqualified Supplemental Executive Retirement Plan
(SERP) to supplement its qualified plan for certain management employees. The
actuarially determined expense related to this plan is summarized as follows:

<TABLE>
<CAPTION>
Fiscal Period Ended
----------------------------------------
October 1, October 2, October 3,
1995 1994 1993
---------- ---------- ----------
(In thousands of dollars)
<S> <C> <C> <C>
Costs related to services provided
by employees during the year $ 283 $ 285 $165
Interest cost on projected
benefit obligation 912 781 569
Net amortization and deferrals 169 189 66
------ ------ ----
Total pension expense related
to SERP plan $1,364 $1,255 $800
====== ====== ====
</TABLE>

29
<PAGE> 30

The table below summarizes the status of the SERP plan at the end of each
respective period:
<TABLE>
<CAPTION>
October 1, October 2,
1995 1994
---------- ----------
(In thousands of dollars)
<S> <C> <C>
Actuarial present value of
benefit obligation based
on current compensation:
Vested $(11,097) $ (9,320)
Nonvested (917) (1,033)
-------- --------
Accumulated benefit obligation (12,014) (10,353)
Increase in present value of
benefit obligation to reflect
projected compensation increases (850) (399)
-------- --------
Projected benefit obligation (12,864) (10,752)
Unrecognized prior service cost 197 209
Unrecognized net loss 2,893 1,502
Unrecognized net obligation
at transition 70 149
Adjustment required to recognize
minimum liability (2,310) (1,461)
-------- --------
Pension liability included
in "Deferred employee benefits" $(12,014) $(10,353)
======== ========
</TABLE>

The table above is based on a discount rate of 7.5% for the fiscal period ended
October 1, 1995 and 8.5% for the fiscal period ended October 2, 1994, and
projected salary increases of 4.5% for the fiscal periods ended October 1, 1995
and October 2, 1994.

In accordance with the provisions of Statement of Financial Accounting
Standards No. 87 - Employers' Accounting for Pensions, the Company has recorded
an additional minimum liability at October 1, 1995 and at October 2, 1994
representing the excess of the accumulated benefit obligation over the fair
value of plan assets and accrued pension liability for its pension and SERP
plans. The additional liability has been offset by an intangible asset which
is included in "Other assets" to the extent of previously unrecognized prior
service cost. Amounts in excess of previously unrecognized prior service cost
are recorded net of the related deferred tax benefit as a reduction of
stockholders' equity of $14,842,000 at October 1, 1995 and $8,210,000 at
October 2, 1994.

Note 10 - Other Retirement and Benefit Plans:

The Company sponsors a deferred compensation program which permits
directors and certain management employees to defer portions of their
compensation and earn a guaranteed interest rate on the deferred amounts. In
effect, such amounts deferred are unsecured loans to the Company. The
salaries, which have been deferred since the program's inception have been
accrued, and the expense, other than salaries, related to this program is
interest on the deferred amounts. Interest expense during the fiscal periods
ended October 1, 1995, October 2, 1994 and October 3, 1993 includes $2,320,000,
$1,915,000 and $1,247,000, respectively, related to this program. The Company
has included in "Deferred employee benefits" $17,694,000 at October 1, 1995 and
$15,176,000 at October 2, 1994 to reflect its liability under this program.
Payments required to be made to participants in this program

30
<PAGE> 31

for the next five fiscal years are $1,455,000 in 1996, $1,459,000 in 1997,
$1,460,000 in 1998, $1,634,000 in 1999, and $2,094,000 in 2000.

The Company sponsors 401(k) plans in which substantially all non-bargaining
employees and certain bargaining unit employees are eligible to participate.
These plans allow eligible employees to save a portion of their salary on a
pre- tax basis. The Company makes monthly contributions to these plans which
aggregated $437,000, $408,000, and $320,000 for the fiscal periods ended
October 1, 1995, October 2, 1994, and October 3, 1993, respectively.

The Company also sponsors an Employee Stock Ownership Plan (ESOP) in which
substantially all non-bargaining employees participate. Contributions may be
made in the form of cash or Company stock. The Company has expensed
contributions to the ESOP of $109,000 in fiscal 1995 and $1,235,000 in fiscal
1993.

The Company also sponsors benefit plans that provide postretirement health
care and life insurance benefits to certain employees who meet the applicable
eligibility requirements. The cost of postretirement health care and life
insurance benefits is summarized as follows:

<TABLE>
<CAPTION>
Fiscal Period Ended
--------------------------------------
October 1, October 2, October 3,
1995 1994 1993
---------- ---------- ----------
(In thousands of dollars)
<S> <C> <C> <C>
Costs related to services provided
by employees during the year $ 476 $ 669 $ 428
Interest cost on accumulated
benefit obligation 2,447 2,369 1,878
------ ------ ------
Total postretirement
benefit expense $2,923 $3,038 $2,306
====== ====== ======
</TABLE>

The actuarial and recorded liabilities for these postretirement benefits,
none of which have been funded, are as follows:

<TABLE>
<CAPTION>
October 1, October 2,
1995 1994
---------- ----------
(In thousands of dollars)
<S> <C> <C>
Accumulated postretirement benefit
obligation:
Retirees $(20,473) $(17,753)
Active participants (11,634) (11,244)
-------- --------
Accumulated benefit obligation (32,107) (28,997)
Unrecognized net gain (1,000) (3,163)
-------- --------
Accrued postretirement benefit
obligation included in
"Deferred employee benefits" $(33,107) $(32,160)
======== ========
</TABLE>

The assumed discount rate was 7.5% for the fiscal period ended October 1,
1995 and 8.5% for the fiscal period ended October 2, 1994. For the fiscal
period ended October 1, 1995, the rate of increase in the per capita costs of
covered health care benefits was assumed to be 7.5% for the first four years,
6% for the next five years, and 5% thereafter. For the fiscal period ended
October 2, 1994, the rate of increase in the per capita costs of covered health
care benefits was assumed to be 8%

31
<PAGE> 32

for the first five years, 6% for the next five years and 5% thereafter.
Increasing the health care cost trend rate assumption by one percentage point
would increase the accumulated postretirement benefit obligation as of October
1, 1995 by approximately $2,064,000 and would increase postretirement benefit
cost by approximately $237,000 for the fiscal period ended October 1, 1995.

Note 11 - Commitments and Contingencies:

The Company has contracted for the purchase of a substantial portion of its
future raw sugar requirements. Prices to be paid for raw sugar under these
contracts are based in some cases on market prices during the anticipated
delivery month. In other cases prices are fixed and, in these instances, the
Company generally obtains commitments from its customers to buy the sugar prior
to fixing the price, or enters into futures transactions to hedge the
commitment.

The Company is exposed to loss in the event of non-performance by the other
party to the interest rate swap agreements discussed in Note 6. However, the
Company does not anticipate non-performance by the counter-parties to the
transactions.

As of the end of fiscal 1995, approximately $2,500,000 of a claim by the
United States Customs Service (Customs) remains unresolved. Customs has
alleged that drawback claims prepared by the Company for certain export
shipments of sugar during the years 1984 to 1988 are technically and/or
substantively deficient and that the Company, therefore, is not entitled to
monies previously received under these drawback claims. The Company disputes
Customs' findings and has been vigorously protesting this matter with Customs.
The ultimate resolution of this matter is not expected to have a materially
adverse effect on the Company's financial position or results of operations.

During the last quarter of fiscal 1995 the Company preliminarily settled a
case between National Utility Service, Inc. (NUS) and the Company in the United
States District Court for the District of New Jersey through a payment by the
Company of approximately $4,550,000 to NUS during the fourth quarter of fiscal
1995. This dispute arose from a contract between the Company and NUS for
energy cost saving recommendations. The Company expensed $1,600,000 in fiscal
1995 and $2,950,000 in fiscal 1994. The Company is pursuing an appeal of this
matter to the U.S. Supreme Court.

32
<PAGE> 33

Note 12 - Quarterly Financial Information (Unaudited):

Unaudited quarterly financial information for the fiscal periods ended
October 1, 1995 and October 2, 1994 is as follows:

<TABLE>
<CAPTION>
First Second Third Fourth
Quarter Quarter Quarter Quarter
------- ------- ------- -------
(In thousands of dollars except for per share amounts)
<S> <C> <C> <C> <C>
Fiscal period
ended October 1, 1995

Net sales $282,477 $253,377 $275,554 $287,136
Gross profit 28,848 20,907 20,472 22,403
Income (loss) from operations 8,460 337 217 (1,628)

Net income (loss) 3,618 (1,927) (2,428) (2,756)
Per share .14 (.07) (.10) (.10)

Fiscal period
ended October 2, 1994

Net sales $280,186 $247,005 $272,891 $274,285
Gross profit 30,979 22,308 23,127 26,247
Income from operations 8,317 1,613 3,197 7,170

Net income (loss) 3,541 (271) 233 2,240
Per share .13 (.01) .01 .09
</TABLE>

33
<PAGE> 34

Item 9. Change in and Disagreements with Accountants on
Accounting and Financial Disclosure.

None.

PART III

Item 10. Directors and Executive Officers of Registrant.

The information relating to the Directors of the Company is
incorporated by reference from the "ELECTION OF DIRECTORS" section, pages 4
through 7, of the Company's Proxy Statement for its Annual Meeting of
Stockholders to be held on February 15, 1996, to be filed pursuant to Section
14 of the Securities Exchange Act of 1934 ("1996 Proxy Statement"). The
information relating to the Executive Officers of the Company is incorporated
by reference from the "MANAGEMENT OF SAVANNAH FOODS & INDUSTRIES, INC."
section, page 8 of the 1996 Proxy Statement. The information relating to
disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is
incorporated by reference from the "COMPLIANCE WITH SECTION 16(a) OF THE
SECURITIES EXCHANGE ACT OF 1934" section, page 15, of the 1996 Proxy Statement.

Item 11. Executive Compensation.

The information relating to executive compensation is incorporated by
reference from the "EXECUTIVE COMPENSATION" section, pages 9 and 10, the "BOARD
OF DIRECTORS AND COMMITTEES OF THE BOARD" section, pages 14 and 15, the
"COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION" section, pages 11 and
12, the "COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION" section,
page 12, and the performance graph, page 13, of the 1996 Proxy Statement.

Item 12. Security Ownership of Certain Beneficial Owners and
Management.

The information relating to the security ownership of certain
beneficial owners and management is incorporated by reference from the "STOCK
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT" section, pages 2 and 3,
of the 1996 Proxy Statement.

Item 13. Certain Relationships and Related Transactions.

The information relating to certain relationships and related
transactions is incorporated by reference from the "CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS" section, page 14, and the "COMPENSATION COMMITTEE
INTERLOCKS AND INSIDER PARTICIPATION" section, page 12, of the 1996 Proxy
Statement.

34
<PAGE> 35

PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K.

(a)(1) and (2): See index of Financial Statements, Item 8(a)
and 8(b), page 13.

(a)(3) Exhibits:

Page Exhibit
No. Number Description
- ---- ------ -----------

3-1 Articles of Incorporation, as amended, is hereby incorporated
by reference to Commission File No. 1-11420 on Form 10-K for
the year ended January 3, 1993 as Exhibit 3-1.

40 3-2 Amendment to By-Laws.

41 3-3 By-Laws, as amended, including amendment in Exhibit 3-2.

54 4-1 Letter Agreements dated August 24, 1995 and Master Credit
Agreement between Savannah Foods & Industries, Inc. and the
bilateral lenders named therein.

4-2 Note Agreement, dated as of September 1, 1992, between
Savannah Foods & Industries, Inc., as borrower, and the
lenders named therein, consisting of $50,000,000 8.35% Series
A Senior Notes due November 1, 2002 and $20,000,000 7.15%
Series B Senior Notes due November 1, 2002 is hereby
incorporated by reference to Commission File No. 1-11420 on
Form 10-K for the year ended October 2, 1994 as Exhibit 4-2.

4-3 In reliance upon Item 601(b) (4) (iii) of Regulation S-K,
various instruments defining the rights of holders of
long-term debt of Registrant are not being filed herewith
because the total of securities authorized under each such
instrument does not exceed 10% of the total assets of
Registrant. Registrant hereby agrees to furnish a copy of any
such instrument to the Commission upon request.

10-1* Profit Sharing and Management Incentive Compensation Plan is
hereby incorporated by reference to Commission File No.
1-11420 on Form 10-K for the year ended January 3, 1993 as
Exhibit 10-1.

10-2* Supplemental Executive Retirement Plan, as amended and
restated, is hereby incorporated by reference to Commission
File No. 1-11420 on Form 10-K for the year ended January 3,
1993 as Exhibit 10-2.

35
<PAGE> 36

Page Exhibit
No. Number Description
- ---- ------- -----------

10-3* Amendment No. 1 to the Supplemental Executive Retirement Plan
is hereby incorporated by reference to Commission File No.
1-11420 on Form 10-K for the year ended January 3, 1993 as
Exhibit 10-3.

10-4* Deferred Compensation Plan for Key Employees, as amended and
restated, is hereby incorporated by reference to Commission
File No. 1-11420 on Form 10-K for the year ended January 3,
1993 as Exhibit 10-4.

10-5* Amendment No. 1 to the Deferred Compensation Plan for Key
Employees is hereby incorporated by reference to Commission
File No. 1-11420 on Form 10-K for the year ended January 3,
1993 as Exhibit 10-5.

10-6* Amendment No. 2 to the Deferred Compensation Plan for Key
Employees is hereby incorporated by reference to Commission
File No. 1-11420 on Form 10-K for the year ended October 2,
1994 as Exhibit 10-6.

10-7* Employment Agreements with all other Executive Officers of the
Company are incorporated by reference to Commission File No.
1-11420 filed on Form 10-K for the year ended January 1, 1989
as Exhibit 10-7.

10-8* Employment Agreement - W. W. Sprague, III is incorporated by
reference to Commission File No. 1-11420 filed on Form 10-K
for the year ended December 29, 1991 as Exhibit 10-8.

161 10-9* Employment Agreement - David H. Roche

174 21-1 Subsidiaries of Registrant

175 23-1 Consent of Independent Accountants

176 27-1 Financial Data Schedules

* Indicates exhibits which are management contracts or compensatory
agreements.

(b) Reports on Form 8-K: None.

(d) Not applicable.

36
<PAGE> 37

UNDERTAKINGS

For the purposes of complying with the amendments to the rules
governing Form S-8 (effective July 13, 1990) under the Securities Act of 1933,
the undersigned Registrant hereby undertakes as follows, which undertaking
shall be incorporated by reference into Registrant's Registration Statements on
Form S-8 Number 2-63448, Monthly Investment Plan for Employees of Savannah
Foods & Industries, Inc. (filed June 19, 1984 as amended on April 3, 1992); and
Number 2-94678, Employee Retirement Savings Account Plan (filed December 22,
1984 as amended on October 18, 1994).

Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to Directors, Officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a Director, Officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such Director, Officer or controlling persons in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

37
<PAGE> 38

SIGNATURE

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

SAVANNAH FOODS & INDUSTRIES, INC.

Dated: December 18, 1995 By: /s/ William W. Sprague, III
----------------------------
William W. Sprague, III
President and
Chief Executive Officer

38
<PAGE> 39
Pursuant to the requirements of the Securities Act of 1934, this report
has been signed by the following persons on behalf of Registrant in the
capacities and on the dates indicated:

<TABLE>
<S> <C> <C>
/s/ William W. Sprague, III President and December 18 , 1995
- -------------------------- Chief Executive Officer
William W. Sprague, III and Director

/s/ Gregory H. Smith Senior Vice President December 18 , 1995
- -------------------------- Chief Financial Officer
Gregory H. Smith and Treasurer (PRINCIPAL
FINANCIAL AND PRINCIPAL
ACCOUNTING OFFICER)

/s/ F. Sprague Exley Senior Vice President - December 18 , 1995
- -------------------------- Human Resources and
F. Sprague Exley Administration
and Assistant Secretary
and Director

/s/ W. Waldo Bradley Director December 18 , 1995
- --------------------------
W. Waldo Bradley

/s/ John D. Carswell Director December 19 , 1995
- --------------------------
John D. Carswell

/s/ Hugh M. Tarbutton Director December 18 , 1995
- --------------------------
Hugh M. Tarbutton

/s/ Arthur Gignilliat, Jr. Director December 18 , 1995
- --------------------------
Arthur Gignilliat, Jr.

/s/ Robert L. Harrison Director December 18 , 1995
- --------------------------
Robert L. Harrison

/s/ Arnold Tenenbaum Director December 18 , 1995
- --------------------------
Arnold Tenenbaum
</TABLE>

<PAGE> 1

Exhibit 3-2

AMENDMENT TO THE BY-LAWS OF THE CORPORATION

An amendment to the By-Laws of the Corporation was approved by
stockholders at the February 16, 1995 Annual Meeting of Stockholders. Article
III, Section 2 of the By-Laws was amended to increase the maximum number of
Directors from thirteen to fifteen. The first paragraph of Article III,
Section 2, as amended, reads in pertinent part:

The number of Directors shall not be less than three nor more than
fifteen as fixed from time to time resolution of the Board of Directors......

<PAGE> 1
Exhibit 3-3
Page 1

BY-LAWS
OF
SAVANNAH FOODS & INDUSTRIES, INC.
(A DELAWARE CORPORATION)

ARTICLE I.

OFFICES

SECTION 1. Registered Office in Delaware. The registered office of SAVANNAH
FOODS & INDUSTRIES, INC. (hereinafter called the "Corporation") in the State of
Delaware shall be in the City of Wilmington, County of New Castle, and the
registered agent in charge thereof shall be The Corporation Trust Company, 100
West Tenth Street, Wilmington, Delaware 19801.

SECTION 2. Other Offices. The Corporation may have such other office or
offices at such other place or places, either within or without the State of
Delaware, as the Board of Directors may from time to time determine or as shall
be necessary or appropriate for the conduct of the business of the Corporation.

ARTICLE II.

MEETINGS OF STOCKHOLDERS

SECTION 1. Place of Meeting. Meetings of stockholders may be held at such
place or places, either within or without the State of Delaware, as the Board
of Directors may from time to time determine, or as shall be necessary or
appropriate for the conduct of the business of the Corporation.

SECTION 2. Annual Meetings. The annual meeting of stockholders for the
election of directors and the transaction of other business shall be held on
the third Thursday in February in each year commencing with the year 1994. At
each annual meeting the stockholders entitled to vote shall elect a Board of
Directors and may transact such other business as may properly come before the
meeting.
Section 2 Amended 7/21/93

SECTION 3. Special Meetings. A special meeting of the stockholders, or of
any class thereof entitled to vote, for any purpose or purposes, may be called
at any time by the Chairman of the Board, the President, or by order of the
Board of Directors.

SECTION 4. Notice of Meeting. Except as otherwise expressly required by law,
written notice of each meeting of stockholders, whether annual or special,
stating the place, date and hour of the meeting, shall be given not less than
ten days nor more than fifty days before the date on which the meeting is to be
held, to each stockholders of record entitled to vote thereat by delivering a
notice thereof to him personally or by mailing such notice in a postage prepaid

41
<PAGE> 2

Exhibit 3-3
Page 2

envelope directed to him at his address as it appears on the stock ledger of
the Corporation, unless he shall have filed with the Secretary of the
Corporation a written request that notices intended for him be directed to
another address, in which case such notice shall be directed to him at the
address designated in such request. Every notice of a special meeting of the
stockholders, besides stating the time and place of the meeting, shall state
briefly the objects or purposes thereof.

Notices of any meeting of stockholders shall not be required to be
given to any stockholder who shall attend such meeting in person or by proxy
unless such attendance is for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened; and, if any stockholder shall, in
person or by attorney thereunto authorized, in writing or by telegraph, cable
or wireless, waive notice of any meeting of the stockholders, whether prior to
or after such meeting, notice thereof need not be given to him.

If a meeting is adjourned to another time or place and if any announcement
of the adjourned time and place is made at the meeting, it shall not be
necessary to give notice of the adjourned meeting unless the adjournment is for
more than thirty days or the Board of Directors, after adjournment, fixes a new
record date for the adjourned meeting.

SECTION 5. List of Stockholders. It shall be the duty of the Secretary or
other officer of the Corporation who shall have charge of the stock ledger to
prepare and make, at least ten days before every meeting of the stockholders, a
complete list of the stockholders entitled to vote thereat, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in his name. Such list shall be open to the examination of
any stockholder, for any purpose germane to the meeting, during ordinary
business hours, for a period of at least ten days prior to the meeting, either
at a place within the city where the meeting is to be held, which place shall
be specified in the notice of the meeting, or, if not so specified, at the
place where the meeting is to be held. The list shall be kept and produced at
the time and place of the meeting during the whole time thereof and subject to
the inspection of any stockholder who may be present. The original or duplicate
stock ledger shall be the only evidence as to who are the stockholders entitled
to examine such list or the books of the Corporation or to vote in person or by
proxy at such meeting.

SECTION 6. Quorum. At each meeting of the stockholders, the holders of
record of a majority of the issued and outstanding stock of the Corporation
entitled to vote at such meeting, present in person or by proxy, shall
constitute a quorum for the transaction of business, except where otherwise
provided by law, the Certificate of Incorporation or these By-Laws. In the
absence of a quorum, any officer entitled to preside at, or act as Secretary
of, such meeting shall have the power to adjourn the meeting from time to time
until a quorum shall be constituted. At any such adjourned meeting at which a
quorum shall be present any business may be transacted which might have been
transacted at the meeting as originally called, but only those stockholders
entitled to vote at the meeting as originally noticed shall be entitled to vote
at any adjournment or adjournments thereof.

42
<PAGE> 3

Exhibit 3-3
Page 3

SECTION 7. Voting. Except as otherwise provided in the Certificate of
Incorporation, at every meeting of stockholders each holder of record of the
issued and outstanding stock of the Corporation entitled to vote at such
meeting shall be entitled to one vote, in person or by proxy, for each such
share of stock entitled to vote held by such stockholder, but no proxy shall be
voted after three years from its date unless the proxy provides for a longer
period. Shares of its own stock belonging to the Corporation or to another
corporation, if a majority of the shares entitled to vote in the election of
directors of such corporation is held by the corporation, shall neither be
entitled to vote nor counted for quorum purposes. Nothing in this Section shall
be construed as limiting the right of the Corporation to vote its own stock
held by it in a fiduciary capacity. At all meetings of the stockholders, a
quorum being present, all matters shall be decided by majority vote of the
shares of stock entitled to vote held by stockholders present in person or by
proxy, except as otherwise required by the Certificate of Incorporation or the
laws of the State of Delaware.

Unless demanded by a stockholder of the corporation present in person
or by proxy at any meeting of the stockholders and entitled to vote thereat, or
so directed by the Chairman of the meeting or required by the laws of the State
of Delaware, the vote thereat on any question need not be by ballot. On a vote
by ballot, each ballot shall be signed by the stockholder voting, or in his
name by his proxy, if there by such proxy, and shall state the number of shares
voted by him and the number of votes to which each share is entitled.

SECTION 8. Inspectors at Shareholders' Meetings. The Board of Directors, in
advance of any shareholders' meeting may appoint one or more inspectors to act
at the meeting or any adjournment thereof. If inspectors are not so appointed,
the person presiding at the shareholders' meeting may, and on the request of
any shareholder entitled to vote thereat shall, appoint one or more inspectors.
In case any person appointed fails to appear or act, the vacancy may be filled
by appointment made by the Board of Directors in advance of the meeting or at
the meeting by the person presiding thereat. Each inspector, before entering
the discharge of his duties, shall take and sign an oath faithfully to execute
the duties of inspector at such meeting with strict impartiality and according
to the best of his ability.

The inspectors shall determine the number of shares outstanding and the
voting power of each, the shares represented at the meeting, the existence of a
quorum, the validity and effect of proxies, and shall receive votes, ballots or
consents, hear and determine all challenges and questions arising in connection
with the right to vote, count and tabulate all votes, ballots or consents,
determine the result, and do such acts as are proper to conduct the election or
vote with fairness to all shareholders. On request of the person presiding at
the meeting or any shareholder entitled to vote thereat, the inspectors shall
make a report in writing of any challenge, question or matter determined by
them and execute a certificate of any fact found by them. Any report or
certificate made by them shall be prima facia evidence of the facts stated and
the vote as certified by them.

SECTION 9. Nominations of Directors. Only persons who are nominated in
accordance with the following procedures shall be eligible for election as
directors of the Corporation. Nominations of persons for election to the Board
of Directors may be made at any annual meeting

43
<PAGE> 4

Exhibit 3-3
Page 4

of stockholders, or at any special meeting of stockholders called in the manner
set forth in Article II, Section 3 hereof for the purpose of electing
directors, (a) by or at the direction of the Board of Directors (or any duly
authorized committee thereof) or (b) by any stockholder of the Corporation (i)
who is a stockholder of record on the date of the giving of the notice provided
for in this Section 9 and on the record date for the determination of
stockholders entitled to vote at such meeting and (ii) who complies with the
notice procedures set forth in this Section 9.

In addition to any other applicable requirements, for a nomination to be
made by a stockholder, such stockholder must have given timely notice thereof
in proper written form to the Secretary of the Corporation.

To be timely, a stockholder's notice to the Secretary must be delivered to
or mailed and received at the principal executive offices of the Corporation
(a) in the case of an annual meeting, not less than sixty (60) days nor more
than ninety (90) days prior to the anniversary date of the immediately
preceding annual meeting of stockholders; provided, however, that in the event
that the annual meeting is called for a date that is not within thirty (30)
days before or after such anniversary date, notice by the stockholder in order
to be timely must be so received not later than the close of business on the
tenth (10th) day following the day on which such notice of the date of the
annual meeting was mailed or such public disclosure of the date of the annual
meeting was made, whichever first occurs; and (b) in the case of a special
meeting of stockholders called in the manner set forth in Article II, Section 3
hereof for the purpose of electing directors, not later than the close of
business on the tenth (10th) day following the day on which notice of the date
of the special meeting was mailed or public disclosure of the date of the
special meeting was made, whichever first occurs.

To be in proper written form, a stockholder's notice to the Secretary must
set forth (a) as to each person whom the stockholder proposes to nominate for
election as a director (i) the name, age, business address and residence
address of the person, (ii) the principal occupation or employment of the
person, (iii) the class or series and number of shares of capital stock of the
Corporation which are owned beneficially or of record by the person and (iv)
any other information relating to the person that would be required to be
disclosed in a proxy statement or other filings required to be made in
connection with solicitations of proxies for election of directors pursuant to
Section 14 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations promulgated thereunder; and (b) as to the
stockholder giving the notice (i) the name and record address of such
stockholder, (ii) the class or series and number of shares of capital stock of
the Corporation which are owned beneficially or of record by such stockholder,
(iii) a description of all arrangements or understandings between such
stockholder and each proposed nominee and any other person or persons
(including their names) pursuant to which the nomination(s) are to be made by
such stockholder, (iv) a representation that such stockholder intends to appear
in person or by proxy at the meeting to nominate the persons named in its
notice and (v) any other information relating to such stockholder that would be
required to be disclosed in a proxy statement or other filings required to be
made in connection with solicitations of proxies for election of directors
pursuant to Section 14 of the Exchange Act and the rules and regulations
promulgated thereunder. Such notice must be accompanied by a

44
<PAGE> 5

Exhibit 3-3
Page 5

written consent of each proposed nominee to being named as a nominee and to
serve as a director if elected.

No person shall be eligible for election as a director of the Corporation
unless nominated in accordance with the procedures set forth in this Section 9.
If the Chairman of the meeting determines that a nomination was not made in
accordance with the foregoing procedures, the Chairman shall declare to the
meeting that the nomination was defective nomination shall be disregarded.
Section 9 Inserted 12/6/91

SECTION 10. Action at Meetings of Stockholders. No business may be
transacted at an annual meeting of stockholders, other than business that is
either (a) specified in the notice of meeting (or any duly authorized committee
thereof), (b) otherwise properly brought before the annual meeting by or at the
direction of the Board of Directors (or any duly authorized committee thereof)
or (c) otherwise properly brought before the annual meeting by any stockholder
of the Corporation (i) who is a stockholder of record on the date of the giving
of the notice provided for in this Section 10 and on the record date for the
determination of stockholders entitled to vote at such annual meeting and (ii)
who complies with the notice procedures set forth in this Section 10.

In addition to any other applicable requirements, for business to be
properly brought before an annual meeting by a stockholder, such stockholder
must have given timely notice thereof in proper written form to the Secretary
of the Corporation.

To be timely, a stockholder's notice to the Secretary must be delivered to
or mailed and received at the principal executive offices of the Corporation
not less than sixty (60) days nor more than ninety (90) days prior to the
anniversary date of the immediately preceding annual meeting of stockholders;
provided, however, that in the event that the annual meeting is called for a
date that is not within thirty (30) days before or after such anniversary date,
notice by the stockholder in order to be timely must be so received not later
than the close of business on the tenth (10th) day following the day on which
such notice of the date of the annual meeting was mailed or such public
disclosure of the date of the annual meeting was made, whichever first occurs.

To be in proper written form, a stockholder's notice to the Secretary must
set forth as to each matter such stockholder proposes to bring before the
annual meeting (i) a brief description of the business desired to be brought
before the annual meeting, (ii) the name and record address of such
stockholder, (iii) the class or series and number of shares of capital stock of
the Corporation which are owned beneficially or of record by such stockholder,
(iv) a description of all arrangements or understandings between such
stockholder and any other person or persons (including their names) in
connection with the proposal of such business by such stockholder and any
material interest of such stockholder in such business and (v) a representation
that such stockholder intends to appear in person or by proxy at the annual
meeting to bring such business before the meeting.

45
<PAGE> 6

Exhibit 3-3
Page 6

No business shall be conducted at the annual meeting of stockholders except
business brought before the annual meeting in accordance with the procedures
set forth in this Section 10, provided, however, that, once business has been
properly brought before the annual meeting in accordance with such procedures,
nothing in this Section 10 shall be deemed to preclude discussion by any
stockholder of any such business. If the Chairman of an annual meeting
determines that business was not properly brought before the annual meeting in
accordance with the foregoing procedures, the Chairman shall declare to the
meeting that the business was not properly brought before the meeting and such
business shall not be transacted.

The business transacted at any special meeting of stockholders called in the
manner set forth in Article II, Section 3 hereof shall be confined to the
business stated in the notice of meeting, as determined by the person or
persons calling such meeting.
Section 10 Inserted 12/6/91

ARTICLE III.

BOARD OF DIRECTORS

SECTION 1. General Powers. The property, business and affairs of the
Corporation shall be managed by the Board of Directors.

SECTION 2. Number, Term of Office, and Qualifications. The number of
Directors shall not be less than three nor more than fifteen as fixed from time
to time by resolution of the Board of Directors; provided however, that the
number of Directors to be elected at the annual meeting in 1987 shall be four,
to be elected for three-year terms expiring in 1990. And, upon approval of this
amendment by the stockholders, the Directors then in office will elect a fifth
member for a three-year term expiring in 1990.
Section 2 amended 2/16/95

Commencing in the year 1988, all Directors to be elected shall be
elected for three-year terms except as hereinafter provided in Section 9 of
Article III of these By-Laws with respect to Directors elected to fill certain
vacancies; provided, however, that the director elected by the Board of
Directors in 1990 to fill the vacancy created by the increase in the number of
Directors to 13 will serve until the annual meeting in 1991. No person shall be
eligible to serve as a Director beyond December 31 of the year in which he
reaches the age of sixty-eight, and no person shall be eligible to serve as a
Director beyond December 31 of the third year following retirement from his
principal occupation of employment at the time he first became a Director. Each
Director shall continue in office until the annual meeting in the year in which
his term expires and until his successor shall have been elected and qualified,
or until his death, resignation, or removal.
Section 2 Amended 2/1/91

46
<PAGE> 7

Exhibit 3-3
Page 7

SECTION 3. Quorum and Manner of Acting. Unless otherwise provided by law,
the presence of one-third of the whole Board of Directors shall be necessary to
constitute a quorum for the transaction of business. In the absence of a
quorum, a majority of the directors present may adjourn the meeting from time
to time until a quorum shall be present. Notice of any adjourned meeting need
not be given. At all meetings of directors, a quorum being present, all matters
shall be decided by the affirmative vote of a majority of the directors
present, except as otherwise required by the laws of the State of Delaware.

SECTION 4. Place of Meetings, etc. The Board of Directors may hold its
meetings and keep the books and records of the Corporation at such place or
places within or without the State of Delaware, as the Board may from time to
time determine.

SECTION 5. Annual Meeting. As promptly as practicable after each annual
meeting of stockholders for the election of directors, the Board of Directors
shall meet in Savannah, Georgia, for the purpose of organization, the election
of officers and the transaction of other business. Notice of such meeting need
not be given. If such meeting is held at any other time, notice thereof must be
given as hereinafter provided for special meetings of the Board of Directors or
a consent and waiver of notice thereof must be signed by all the directors.

SECTION 6. Regular Meetings. The Board of Directors shall hold six regular
meetings annually at such time and place, within or without the State of
Delaware, as determined by the President and specified in the notice of call
thereof. The President shall endeavor to schedule the regular meetings during a
calendar year at approximately even intervals if practicable. Notice of call of
such meetings shall specify the time and date and be given each director in
writing mailed no less than five (5) days nor more than thirty (30) days before
such meeting.
Section 6 Amended 3/4/88

SECTION 7. Special Meetings. Special meetings of the Board of Directors may
be called at any time by the Chairman of the Board, when there is such an
officer, or by the President, and shall be called at the request in writing of
any three directors, on not less than three hours' notice to each director
personally or by telegram, or on not less than three days' written notice to
each director by mail. Notice of call of each special meeting shall state the
date, time and place of the meeting. In lieu of the notice to be given as set
forth above, a waiver thereof in writing, signed by the director or directors
entitled to said notice, whether prior to or after the meeting in question,
shall be deemed equivalent thereto for purposes of this Section 7. No notice to
or waiver by any director with respect to any special meeting shall be required
if such director shall be present at said meeting.

SECTION 8. Resignation. Any director of the Corporation may resign at any
time by giving written notice to the Chairman of the Board, when there is such
an officer, or to the President or the Secretary of the Corporation. The
resignation of any director shall take effect upon receipt of notice thereof or
at such later time as shall be specified in such notice; and, unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective. When one or more directors shall resign from the Board,
effective at a future date, a majority of the directors then in office,
including those who have so resigned, shall have power to fill such

47
<PAGE> 8

Exhibit 3-3
Page 8

vacancy or vacancies, the vote thereon to take effect when such resignation or
resignations shall become effective.

(A). Any director or the entire Board of Directors may be removed, with or
without cause, by an affirmative vote of 75% of the holders of the outstanding
stock of the Corporation entitled to vote in the election of directors,
considered for this purpose as one class, taking such action at an annual
meeting of stockholders or at a special meeting of stockholders duly called for
such purpose. Alternatively, any director may be removed for cause at any time
by the affirmative vote of a majority of the directors then in office.

SECTION 9. Vacancies. Vacancies and newly created directorships resulting
from any increase in the authorized number of directors may be filled by a
majority of the directors then in office, though less than a quorum, unless
otherwise provided by the Certificate of Incorporation or the laws of the State
of Delaware. Each director so chosen shall hold office for the unexpired term
of the director whose place shall be vacant, provided that each director so
chosen to fill the vacancy created by increase in the number of directors shall
be elected for a term to be designated by the Directors at the time of his
election and shall continue in office for such term and until his successor
shall have been elected and qualified, and until his death, resignation or
removal.

SECTION 10. Compensation of Directors. Directors, by resolutions of the
Board, may be appropriately compensated for their work as directors, and for
attendance at each regular or special meeting of the Board, or any Committee
thereof. Nothing herein contained shall be construed to preclude any director
from servicing the Corporation or any subsidiary thereof in any other capacity
and receiving compensation therefore.

SECTION 11. Executive Committee and Other Committees. The Board of
Directors, by resolution adopted by a majority of the entire Board, may
designate from among its members an Executive Committee and other committees to
serve at the pleasure of the Board. Each committee shall consist of three or
more directors. Except as set forth below and as otherwise limited by the
General Corporation Law of the State of Delaware, the Executive Committee shall
have all of the authority of the Board of Directors. Each other committee shall
be empowered to perform such functions as may, by resolution, be delegated to
it by the Board.

The Board of Directors may designate one or more directors as alternate
members of any such committee, who may replace any absent member or members at
any meetings of such committee. Vacancies in any committee, whether caused by
resignation or by increase in the number of members constituting said
committee, shall be filled by a majority of the entire Board of Directors. The
Executive Committee may fix its own quorum and elect its own Chairman. In the
absence or disqualification of any member of such committee, the member or
members thereof present at any meeting and not disqualified from voting,
whether or not he or they constitute a quorum, may unanimously appoint another
member of the Board of Directors to act at the meeting in place of any such
absent or disqualified member.

The Board of Directors shall have power to change the membership of any such
committee at any time and to discharge any such committee, either with or
without cause, at any time. Each

48
<PAGE> 9

Exhibit 3-3
Page 9

member of any such committee shall be paid such fee, if any, as shall be fixed
by the Board of Directors for each meeting of such committee which he shall
attend and, in addition, such transportation and other expenses actually
incurred by him in going to the meeting of such committee and returning
therefrom as the Board of Directors shall approve.

SECTION 12. Action Without Meeting. Any action required or permitted to be
taken at any meeting of the Board of Directors or of any committee thereof may
be taken without a meeting if a written consent thereto is signed by all
members of the Board or of such committee, as the case may be, and such written
consent is filed with the minutes or proceedings of the Board or committee.

ARTICLE IV.

OFFICERS

SECTION 1. Number. The principal officers of the Corporation shall be a
President, one or more Vice Presidents, a Secretary and a Treasurer. The
Corporation may also have, at the discretion of the Board of Directors, a
Chairman of the Board of Directors, an Executive Vice President, and such other
officers as may be appointed in accordance with the provisions of these
By-Laws. The offices of Executive Vice President, or of a Vice President, the
Secretary and the Treasurer or any of them may be held by the same persons in
the discretion of the Board of Directors. The offices of President and
Treasurer may also be held by the same person.

SECTION 2. Election and Term of Office. The principal officers of the
Corporation shall be chosen annually by the Board of Directors at the annual
meeting thereof. Each such officer shall hold office until his successor shall
have been duly chosen and shall qualify, or until his death, or until he shall
resign or shall have been removed in the manner hereinafter provided.

SECTION 3. Subordinate Officers. In addition to the principal officers
enumerated in Section I of this Article IV, the Corporation may have one or
more Assistant Secretaries, one or more Assistant Treasurers, and such other
officers, agents and employees as the Board of Directors may deem necessary,
each of whom shall hold office for such period, have such authority, and
perform such duties as the President or the Board of Directors may from time to
time determine. The Board of Directors may delegate to any principal officer
the power to appoint and to remove any such subordinate officers, agents or
employees.

SECTION 4. Removal. Any officer may be removed, either with or without
cause, at any time, by resolution adopted by the Board of Directors at any
regular meeting of the Board, or at any special meeting of the Board called for
that purpose at which a quorum is present.

SECTION 5. Resignations. Any officer may resign at any time by giving
written notice to the Board of Directors or to the President or to the
Secretary. Any such resignation shall take effect upon receipt of such notice
or at any later time specified therein; and, unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to make it
effective.

49
<PAGE> 10

Exhibit 3-3
Page 10

SECTION 6. Vacancies. A vacancy in any office may be filled for the
unexpired portion of the term in the manner prescribed in these By-Laws for
election or appointment to such office for such term.

SECTION 7. Chairman of the Board. When there is a Chairman of the Board he
shall preside at all meetings of stockholders and at all meetings of the Board
of Directors. He shall perform such other duties and have such other powers as
the Board of Directors may from time to time prescribe.

SECTION 8. President. The President shall be the Chief Executive Officer of
the Corporation, and as such shall have general supervision of the affairs of
the Corporation, subject to the control of the Board of Directors. He shall be
an ex officio member of all standing committees. In the absence of the Chairman
of the Board, or whenever the office is vacant, the President shall preside at
all meetings of stockholders and at all meetings of the Board of Directors.
Subject to the control and direction of the Board of Directors the President
may enter into any contract or execute and deliver any instrument in the name
and on behalf of the Corporation. In general, he shall perform all duties
incident to the office of President, as herein defined, and all such other
duties as from time to time may be assigned to him by the Board of Directors.

SECTION 9. Vice Presidents. When there is an Executive Vice President, he
shall, in the absence or disability of the President, perform the duties and
exercise the powers of the President. He shall perform such other duties and
have such other powers as the President or the Board of Directors may from time
to time prescribe. In the absence or disability of the Executive Vice
President, the Board of Directors shall determine the Vice President or other
officer to perform the duties and exercise the powers of the President.

Vice Presidents shall perform such duties and have such other powers as the
President or the Board of Directors may from time to time prescribe.

SECTION 10. Secretary. The Secretary, if present, shall act as secretary at
all meetings of the Board of Directors and of the stockholders, and keep the
minutes thereof in a book or books to be provided for that purpose; shall see
that all notices required to be given by the Corporation are duly given and
served; shall have charge of the stock records of the Corporation; shall see
that all reports, statements and other documents required by law are properly
kept and filed; and in general, shall perform all the duties incident to the
office of Secretary and such other duties as from time to time may be assigned
to him by the President or the Board of Directors.

SECTION 11. Treasurer. The Treasurer shall have charge and custody of, and
be responsible for, all funds and securities of the Corporation, and shall
deposit all such funds in the name of the Corporation in such banks or other
depositories as shall be selected by the Board of Directors. He shall exhibit
at all reasonable times his books of account and records to any of the
directors of the Corporation upon application during business hours at the
office of the Corporation where such books and records shall be kept; when
requested by the Board of Directors, shall render a statement of the condition
of the finances of the Corporation at any meeting of the Board or at the

50
<PAGE> 11

Exhibit 3-3
Page 11

annual meeting of stockholders; shall receive, and give receipts for, moneys
due and payable to the Corporation from any source whatsoever; and in general,
shall perform all the duties incident to the office of the Treasurer and such
other duties as from time to time may be assigned to him by the President or
the Board of Directors. The Treasurer shall give such bond, if any, for the
faithful discharge of his duties as the Board of Directors may require.

SECTION 12. Salaries. The salaries of the principal officers shall be fixed
from time to time by the Board of Directors, and the salaries of any other
officers may be fixed by the President.

ARTICLE V.

SHARES AND THEIR TRANSFER

SECTION 1. Certificate for Stock. Every stockholder of the Corporation shall
be entitled to a certificate or certificates, to be in such form as the Board
of Directors shall prescribe, certifying the number of shares of the capital
stock of the Corporation owned by him.

SECTION 2. Stock Certificate Signature. The certificates for such stock
shall be numbered in the order in which they shall be issued and shall be
signed by the President or any Vice President and the Secretary or Treasurer of
the Corporation, and its seal shall be affixed thereto. If such certificate is
countersigned (1) by a transfer agent other than the Corporation or its
employee, or, (2) by a registrar other than the Corporation or its employee,
the signatures of such officers of the Corporation may be facsimiles. In case
any officer of the Corporation who has signed, or whose facsimile signature has
been placed upon any such certificate shall have ceased to be such officer
before such certificate is issued, it may be issued by the Corporation with the
same effect as if he were such officer at the date of issue.

SECTION 3. Stock Ledger. A record shall be kept by the Secretary, transfer
agent or by any other officer, employee or agent designated by the Board of
Directors of the name of the person, firm or corporation holding the stock
represented by such certificates, the number of shares represented by such
certificates, respectively, and the respective dates thereof, and in case of
cancellation, the respective dates of cancellation.

SECTION 4. Cancellation. Every certificate surrendered to the Corporation
for exchange or registration of transfer shall be canceled, and no new
certificate or certificates shall be issued in exchange for any existing
certificate until such existing certificate shall have been so cancelled,
except in cases provided in Section 7 of this Article V.

SECTION 5. Registrations of Transfers of Stock. Registrations of transfers
of shares of the capital stock of the Corporation shall be made on the books of
the Corporation by the registered holder thereof, or by his attorney thereunto
authorized by power of attorney duly executed and filed with the Secretary of
the Corporation, or with a transfer clerk or a transfer agent appointed as in
Section 6 of this Article V provided, and on surrender of the certificate or
certificates for

51
<PAGE> 12

Exhibit 3-3
Page 12

such shares properly endorsed and the payment of all taxes thereon. The person
in whose name shares of stock stand on the books of the Corporation shall be
deemed the owner thereof for all purposes as regards the Corporation; provided,
however, that whenever any transfer of shares shall be made for collateral
security, and not absolutely, it shall be so expressed in the entry of the
transfer if, when the certificates are presented to the Corporation for
transfer, both the transferor and the transferee request the Corporation to do
so.

SECTION 6. Regulations. The Board of Directors may make such rules and
regulations as it may deem expedient, not inconsistent with the Certificate of
Incorporation or these By-Laws, concerning the issue, transfer and registration
of certificates for shares of the stock of the Corporation. It may appoint, or
authorize any principal officer or officers to appoint, one or more transfer
clerks or one or more transfer agents and one or more registrars, and may
require all certificates of stock to bear the signature or signatures of any of
them.

SECTION 7. Lost, Stolen, Destroyed or Mutilated Certificates. As a condition
of the issue of a new certificate for shares of stock in the place of any
certificate theretofore issued and alleged to have been lost, stolen, mutilated
or destroyed, the Board of Directors, in its discretion, may require the owner
of any such certificate, or his legal representatives, to file with the
Corporation a bond in such sum and in such form as it may deem sufficient to
indemnify the Corporation against any claim that may be made against it on
account of the alleged loss, theft, mutilation or destruction of any such
certificate or the issuance of such new certificate. Proper evidence of such
loss, theft, mutilation or destruction shall be procured for the Board of
Directors, if it so requires. The Board of Directors, in its discretion, may
authorize the issuance of new certificates without any bond when in its
judgment it is proper to do so.

SECTION 8. Record Dates. For the purpose of determining the stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock, or for the purpose of
any other lawful action, the Board of Directors may fix, in advance, a date as
a record date for any such determination of stockholders. Such record date
shall not be more than sixty nor less than ten days before the date of such
meeting, nor more than sixty days prior to any other action.
Section 8 Amended 12/6/91

ARTICLE VI.

INDEMNIFICATION

The Corporation shall, to the fullest extent permitted by Section 145 of the
General Corporation Law of the State of Delaware, indemnify any and all persons
whom it shall have power to indemnify under said Section from and against any
and all of the expenses, liabilities or other matters referred to in, or
covered by said Section.

52
<PAGE> 13

Exhibit 3-3
Page 13

ARTICLE VII.

MISCELLANEOUS PROVISIONS

SECTION 1. Corporate Seal. The Board of Directors shall provide a corporate
seal, which shall be in the form of a circle, and shall bear the name of the
Corporation and words and figures showing that it was incorporated in the State
of Delaware in the year 1969. The Secretary shall be the custodian of the seal.
The Board of Directors may authorize a duplicate seal to be kept and used by
any other officer.

SECTION 2. Fiscal Year. The fiscal year of the Corporation shall end on the
Sunday nearest September 30 in each year commencing with the year 1993.
Section 2 Amended 7/21/93

SECTION 3. Voting of Stocks Owned by the Corporation. The Board of Directors
may authorize any person in behalf of the Corporation to attend, vote and grant
proxies to be used at any meeting of stockholders of any corporation (except
this Corporation) in which the Corporation may hold stock.

SECTION 4. Dividends. Subject to the provisions of the Certificate of
Incorporation, the Board of Directors may, out of funds legally available
therefor, at any regular or special meeting declare dividends upon the capital
stock of the Corporation as and when they deem expedient. Before declaring any
dividend, there may be set apart out of any funds of the Corporation available
for dividends such sum or sums as the directors from time to time in their
discretion deem proper for working capital, or as a reserve fund to meet
contingencies, or for equalizing dividends, or for such other purposes as the
Board of Directors shall deem conducive to the interests of the Corporation.

ARTICLE VIII.

AMENDMENTS

The Board of Directors may alter, amend or repeal the By-laws of the
Corporation at any regular or special meeting of the Board of Directors. Except
as may otherwise be provided in the Certificate of Incorporation, stockholders
may alter, amend or repeal the By-laws of the Corporation at any annual or
special meeting of stockholders only upon the affirmative vote of a majority of
the stock of the Corporation issued and outstanding and entitled to vote in
respect thereof, provided that notice of the proposed alteration, amendment or
repeal is contained in the notice of such meeting. By-laws, whether made or
altered by the stockholders or by the Board of Directors, shall be subject to
alteration or repeal by the stockholders as in this Article VIII above
provided.
Article VIII Amended 12/6/91

<PAGE> 1
EXHIBIT 4-1

The Fuji Bank, Limited
Atlanta Agency
Marquis One Tower, Suite 2100
245 Peachtree Center Avenue, N.E.
Atlanta, Georgia 30303-1208

Telephone 404-653-2100
Telex 9102507122
Fax 404-653-2119

August 24, 1995

Savannah Foods & Industries, Inc.
2 East Bryan Street
Savannah, GA 31401
Attention: Mr. Greg Smith

Re: Master Credit Agreement attached hereto as Exhibit A (the
"Master Credit Agreement"; capitalized terms which are used
herein without definition have the meanings given them in
the Master Credit Agreement.)

Gentlemen:

The undersigned, as the Bank, and the Borrower, by execution and
return to the Bank of a counterpart hereof, hereby agree that the Master Credit
Agreement is incorporated herein by reference and made a part hereof, and each
of them shall be a party to the Master Credit Agreement by virtue hereof. This
letter is the Letter Agreement between the Borrower and the Bank, and this
Letter Agreement and the Master Credit Agreement shall constitute the Agreement
between the Bank and the Borrower. The Bank and the Borrower hereby agree as
follows:

1. Establishment of Facility; Commitment. The Bank hereby
establishes the Facility, with a Commitment in the amount of $5,000,000.

2. Closing Date. The Closing Date for all purposes under the
Agreement shall be August 24, 1995.

3. Addresses for Notices; Lending Office. The addresses and
telecopier numbers of the Bank and the Borrower for notices, requests and other
communications under the Agreement are set forth below, as contemplated in
Section 8.01 of the Master Credit Agreement, and the address of the Bank set
forth below is its Lending Office, in each case unless a different address
hereafter is specified or designated pursuant to such Section 8.01.

54
<PAGE> 2
Savannah Foods & Industries, Inc.
August 24, 1995
Page 2

Borrower:

Savannah Foods & Industries, Inc.
2 East Bryan Street
Savannah, GA 31401
Attention: Mr. Greg Smith
Facsimile: 912-232-3469
Telephone: 912-651-5050

Bank:

The Fuji Bank, Limited - Atlanta Agency
Marquis One Tower, Suite 2100
245 Peachtree Center Avenue
Atlanta, GA 30303-1208
Attention: Connie Fowls
Facsimile: 404-653-2119
Telephone: 404-653-2100

If the terms hereof are acceptable, please execute and return a
counterpart of this letter to the undersigned, whereupon this Letter Agreement
shall be effective as of the Closing Date.

Very truly yours,

THE FUJI BANK, LIMITED - ATLANTA AGENCY

By:____________________________________
Title:______________________________

ACCEPTED AND AGREED TO:

SAVANNAH FOODS & INDUSTRIES, INC.

By: ________________________________
Title: ________________________

55
<PAGE> 3
NationsBank
600 Peachtree Street, N.E.
21st Floor
Atlanta, GA 30308-2213

August 24, 1995

Savannah Foods & Industries, Inc.
2 East Bryan Street
Savannah, GA 31401
Attention: Mr. Greg Smith

Re: Master Credit Agreement attached hereto as Exhibit A
(the "Master Credit Agreement"; capitalized terms
which are used herein without definition have the
meanings given them in the Master Credit Agreement.)

Gentlemen:

1. Establishment of Facility; Commitment. The Bank hereby
establishes the Facility, with a Commitment in the amount of $25,000,000.

2. Closing Date. The Closing Date for all purposes under the
Agreement shall be August 24, 1995.

56
<PAGE> 4
Borrower:

Savannah Foods & Industries, Inc.
2 East Bryan Street
Savannah, GA 31401
Attention: Mr. Greg Smith
Facsimile: 912-232-3469
Telephone: 912-651-5050

Bank:

ADDRESS FOR NOTICES AND REQUESTS:
NationsBank
101 North Tryon Street
Charlotte, NC 28255
Attention: Judy Dudley
Facsimile: 704-386-8694
Telephone: 704-386-8201

LENDING OFFICE AND ADDRESS FOR OTHER COMMUNICATIONS:
NationsBank of Georgia, N.A.
600 Peachtree Street
Atlanta, GA 30308
Attention: Jan J. Serafen
Facsimile: 404-607-6467
Telephone: 404-607-5549

If the terms hereof are acceptable, please execute and return a
counterpart of this letter to the undersigned, whereupon this Letter Agreement
shall be effective as of the Closing Date.

Very truly yours,

NATIONSBANK OF GEORGIA, N.A.

By:____________________________________
Title:______________________________

ACCEPTED AND AGREED TO:

SAVANNAH FOODS & INDUSTRIES, INC.

By: ________________________________
Title: ________________________

57
<PAGE> 5
NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
Phone 313-225-4227

James D. Heinz
Vice President

August 24, 1995

Savannah Foods & Industries, Inc.
2 East Bryan Street
Savannah, GA 31401
Attention: Mr. Greg Smith

Gentlemen:

1. Establishment of Facility; Commitment. The Bank hereby
establishes the Facility, with a Commitment in the amount of $20,000,000.

2. Closing Date. The Closing Date for all purposes under the
Agreement shall be August 24, 1995.

58
<PAGE> 6
Savannah Foods & Industries, Inc.
August 24, 1995
Page 2

Borrower:

Savannah Foods & Industries, Inc.
2 East Bryan Street
Savannah, GA 31401
Attention: Mr. Greg Smith
Facsimile: 912-232-3469
Telephone: 912-651-5050

Bank:

NBD Bank
611 Woodward Avenue
Detroit, MI 28226
Attention: Gilda Johnson
Facsimile: 313-225-2649
Telephone: 313-225-3677

If the terms hereof are acceptable, please execute and return a
counterpart of this letter to the undersigned, whereupon this Letter Agreement
shall be effective as of the Closing Date.

Very truly yours,

NBD BANK

By:____________________________________
Title:______________________________

ACCEPTED AND AGREED TO:

SAVANNAH FOODS & INDUSTRIES, INC.

By: ________________________________
Title: ________________________

59
<PAGE> 7
Second National Bank
101 North Washington Avenue
Saginaw, Michigan 48607

August 24, 1995

Savannah Foods & Industries, Inc.
2 East Bryan Street
Savannah, GA 31401
Attention: Mr. Greg Smith

Re: Master Credit Agreement attached hereto as Exhibit A
(the "Master Credit Agreement"; capitalized terms
which are used herein without definition have the
meanings given them in the Master Credit Agreement.)

Gentlemen:

1. Establishment of Facility; Commitment. The Bank hereby
establishes the Facility, with a Commitment in the amount of $15,000,000.

2. Closing Date. The Closing Date for all purposes under the
Agreement shall be August 24, 1995.

60
<PAGE> 8
Savannah Foods & Industries, Inc.
August 24, 1995
Page 2

Borrower:

Savannah Foods & Industries, Inc.
2 East Bryan Street
Savannah, GA 31401
Attention: Mr. Greg Smith
Facsimile: 912-232-3469
Telephone: 912-651-5050

Bank:

Second National Bank of Saginaw
101 North Washington Avenue
Saginaw, Michigan 48607
Attention: Joyce M. Van Ochten
Facsimile: 517-776-7420
Telephone: 517-776-7469

If the terms hereof are acceptable, please execute and return a
counterpart of this letter to the undersigned, whereupon this Letter Agreement
shall be effective as of the Closing Date.

Very truly yours,

SECOND NATIONAL BANK OF SAGINAW

By:____________________________________
Title:______________________________

ACCEPTED AND AGREED TO:

SAVANNAH FOODS & INDUSTRIES, INC.

By: ________________________________
Title: ________________________

61
<PAGE> 9
Trust Company Bank
A SunTrust Bank
P O Box 4418
Atlanta, Georgia 30302

August 24, 1995

Savannah Foods & Industries, Inc.
2 East Bryan Street
Savannah, GA 31401
Attention: Mr. Greg Smith

Re: Master Credit Agreement attached hereto as Exhibit A
(the "Master Credit Agreement"; capitalized terms
which are used herein without definition have the
meanings given them in the Master Credit Agreement.)

Gentlemen:

1. Establishment of Facility; Commitment. The Bank hereby
establishes the Facility, with a Commitment in the amount of $10,000,000.

2. Closing Date. The Closing Date for all purposes under the
Agreement shall be August 24, 1995.

62
<PAGE> 10
Savannah Foods & Industries, Inc.
August 24, 1995
Page 2

Borrower:

Savannah Foods & Industries, Inc.
2 East Bryan Street
Savannah, GA 31401
Attention: Mr. Greg Smith
Facsimile: 912-232-3469
Telephone: 912-651-5050

Bank:

Trust Company Bank
25 Park Place, 23rd Floor
Atlanta, GA 30303
Attention: Laura J. Sowders
Facsimile: 404-588-8833
Telephone: 404-588-7797

If the terms hereof are acceptable, please execute and return a
counterpart of this letter to the undersigned, whereupon this Letter Agreement
shall be effective as of the Closing Date.

Very truly yours,

TRUST COMPANY BANK

By:____________________________________
Title:______________________________

ACCEPTED AND AGREED TO:

SAVANNAH FOODS & INDUSTRIES, INC.

By: ________________________________
Title: ________________________

63
<PAGE> 11
Wachovia Bank of Georgia, N.A.
191 Peachtree Street, N.E.
Atlanta, Georgia 30303

August 24, 1995

Savannah Foods & Industries, Inc.
2 East Bryan Street
Savannah, GA 31401
Attention: Mr. Greg Smith

Re: Master Credit Agreement attached hereto as Exhibit A
(the "Master Credit Agreement"; capitalized terms
which are used herein without definition have the
meanings given them in the Master Credit Agreement.)

Gentlemen:

1. Establishment of Facility; Commitment. The Bank hereby
establishes the Facility, with a Commitment in the amount of $40,000,000.

2. Closing Date. The Closing Date for all purposes under the
Agreement shall be August 24, 1995.

64
<PAGE> 12
Savannah Foods & Industries, Inc.
August 24, 1995
Page 2

Borrower:

Savannah Foods & Industries, Inc.
2 East Bryan Street
Savannah, GA 31401
Attention: Mr. Greg Smith
Facsimile: 912-232-3469
Telephone: 912-651-5050

Bank:

Wachovia Bank of Georgia, N.A.
191 Peachtree Street, N.E., 30th Floor
Atlanta, GA 30303-1757
Attention: Stephen F. Blake
Facsimile: 404-332-6920
Telephone: 404-332-4078

If the terms hereof are acceptable, please execute and return a
counterpart of this letter to the undersigned, whereupon this Letter Agreement
shall be effective as of the Closing Date.

Very truly yours,

WACHOVIA BANK OF GEORGIA, N.A.

By:____________________________________
Title:______________________________

ACCEPTED AND AGREED TO:

SAVANNAH FOODS & INDUSTRIES, INC.

By: ________________________________
Title: ________________________

65
<PAGE> 13
The Chase Manhattan Bank, N.A.
1 Chase Plaza
New York, New York 10081

August 22, 1995

Savannah Foods & Industries, Inc.
2 East Bryan Street
Savannah, GA 31401
Attention: Mr. Greg Smith

Re: Master Credit Agreement attached hereto as Exhibit A
(the "Master Credit Agreement"; capitalized terms
which are used herein without definition have the
meanings given them in the Master Credit Agreement.)

Gentlemen:

1. Establishment of Facility; Commitment. The Bank hereby
establishes the Facility, with a Commitment in the amount of $25,000,000.

2. Closing Date. The Closing Date for all purposes under the
Agreement shall be August 24, 1995.

66
<PAGE> 14
Savannah Foods & Industries, Inc.
August 22, 1995
Page 2

Borrower:

Savannah Foods & Industries, Inc.
2 East Bryan Street
Savannah, GA 31401
Attention: Mr. Greg Smith
Facsimile: 912-232-3469
Telephone: 912-651-5050

Bank:

The Chase Manhattan Bank, N.A.
One Chase Manhattan Plaza - 18th Fl.
New York, NY 10081
Attention: Martine Castadot
Facsimile: 212-344-0246
Telephone: 212-552-5051

4. Governing Law; Consent to Jurisdiction. The parties hereto
acknowledge that for the purposes of interpreting each of Sections 8.10 and
8.12 of the Master Credit Agreement, the "state in which the bank has its
principal office" is New York.

If the terms hereof are acceptable, please execute and return a
counterpart of this letter to the undersigned, whereupon this Letter Agreement
shall be effective as of the Closing Date.

Very truly yours,

THE CHASE MANHATTAN BANK, N.A.

By:____________________________________
Title:______________________________

ACCEPTED AND AGREED TO:

SAVANNAH FOODS & INDUSTRIES, INC.

By: ________________________________
Title: ________________________

67
<PAGE> 15

MASTER CREDIT AGREEMENT

BETWEEN

SAVANNAH FOODS & INDUSTRIES, INC.

AND

ANY BILATERAL LENDER WHICH BECOMES
A PARTY HERETO BY LETTER AGREEMENT

DATED AS OF THE CLOSING DATE ESTABLISHED BY THE LETTER AGREEMENT

68
<PAGE> 16

TABLE OF CONTENTS

MASTER CREDIT AGREEMENT

<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I

DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . 1

SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

SECTION 1.02. Accounting Terms and Determinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

SECTION 1.03. References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

SECTION 1.04. Use of Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

SECTION 1.05. Terminology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

ARTICLE II

THE CREDITS . . . . . . . . . . . . . . . . . . . . . . . . . 16

SECTION 2.01. Commitment to Make Available Conventional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

SECTION 2.02. Method of Borrowing Conventional Rate Credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

SECTION 2.03. Offered Rate Credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

SECTION 2.04. Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

SECTION 2.05. Maturity of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

SECTION 2.06. Interest Rates; Accretion of Principal of Banker's Acceptances . . . . . . . . . . . . . . . . . . . . 21

SECTION 2.07. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

SECTION 2.08. Optional Termination or Reduction of Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

SECTION 2.09. Mandatory Reduction and Termination of Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

SECTION 2.10. Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

SECTION 2.11. Mandatory Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

SECTION 2.12. General Provisions as to Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

SECTION 2.13. Computation of Interest and Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
</TABLE>

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<PAGE> 17

<TABLE>
<S> <C>
ARTICLE III

CONDITIONS TO BORROWINGS . . . . . . . . . . . . . . . . . . . . . . 27

SECTION 3.01. Conditions to First Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

SECTION 3.02. Conditions to All Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

ARTICLE IV

REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . 29

SECTION 4.01. Corporate Existence and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

SECTION 4.02. Corporate and Governmental Authorization; No Contravention . . . . . . . . . . . . . . . . . . . . . . 29

SECTION 4.03. Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

SECTION 4.04. Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

SECTION 4.05. No Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

SECTION 4.06. Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

SECTION 4.07. Compliance with Laws; Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

SECTION 4.08. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

SECTION 4.09. Investment Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

SECTION 4.10. Public Utility Holding Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

SECTION 4.11. Ownership of Property; Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

SECTION 4.12. No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

SECTION 4.13. Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

SECTION 4.14. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

SECTION 4.15. Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

SECTION 4.16. Margin Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

SECTION 4.17. Insolvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

SECTION 4.18. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

ARTICLE V

COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . 33

SECTION 5.01. Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
</TABLE>

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<PAGE> 18

<TABLE>
<S> <C>
SECTION 5.02. Inspection of Property, Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

SECTION 5.03. Maintenance of Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

SECTION 5.04. Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

SECTION 5.05. Consolidations, Mergers and Sales of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

SECTION 5.06. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

SECTION 5.07. Compliance with Laws; Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

SECTION 5.08. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

SECTION 5.09. Change in Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

SECTION 5.10. Maintenance of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

SECTION 5.11. Environmental Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

SECTION 5.12. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

SECTION 5.13. Environmental Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

SECTION 5.14. Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

SECTION 5.15. Subsidiary Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

SECTION 5.16. Loans or Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

SECTION 5.17. Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

SECTION 5.18. Negative Pledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

SECTION 5.19. Ratio of Long-Term Debt to Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

SECTION 5.20. Ratio of Adjusted Cash Flow to Interest and Leases . . . . . . . . . . . . . . . . . . . . . . . . . . 39

SECTION 5.21. Ratio of Consolidated Current Assets to Consolidated Current Liabilities. . . . . . . . . . . . . . . 40

SECTION 5.22. Minimum Stockholders' Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

SECTION 5.23. Ratio of Long-Term Debt to Consolidated Adjusted Cash Flow . . . . . . . . . . . . . . . . . . . . . . 40

SECTION 5.24. Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

ARTICLE VI

DEFAULTS . . . . . . . . . . . . . . . . . . . . . . . . . . 40

SECTION 6.01. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
</TABLE>

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<PAGE> 19

<TABLE>
<S> <C>
ARTICLE VII

CHANGE IN CIRCUMSTANCES; COMPENSATION . . . . . . . . . . . . . . . . . . 45

SECTION 7.01. Basis for Determining Interest Rate Inadequate or Unfair . . . . . . . . . . . . . . . . . . . . . . . 45

SECTION 7.02. Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

SECTION 7.03. Increased Cost and Reduced Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

SECTION 7.04. Base Rate Loans or Other Fixed Rate Loans Substituted for Affected Fixed Rate Loans . . . . . . . . . . 47

SECTION 7.05. Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

ARTICLE VIII

MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 48

SECTION 8.01. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

SECTION 8.02. No Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

SECTION 8.03. Expenses; Documentary Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

SECTION 8.04. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

SECTION 8.05. Setoff; Sharing of Setoffs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

SECTION 8.06. Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

SECTION 8.07. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

SECTION 8.08. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

SECTION 8.09. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

SECTION 8.10. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

SECTION 8.11. Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

SECTION 8.12. Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

SECTION 8.13. Waiver of Jury Trial; Consent to Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
</TABLE>

EXHIBIT A Form of Note

EXHIBIT B Form of Opinion of Counsel for the Borrower

EXHIBIT C Form of Assignment and Acceptance

EXHIBIT D Form of Notice of Borrowing

(iv)

<PAGE> 20

EXHIBIT E Form of Compliance Certificate

EXHIBIT F Form of Closing Certificate

EXHIBIT G Form of Offered Rate Credit Quote Request

EXHIBIT H Form of Offered Rate Credit Quote

Schedule 4.05 Litigation

Schedule 4.08 Subsidiaries

Schedule 5.15 Existing Debt

Schedule 5.18(a) Existing Liens

(v)

<PAGE> 21

MASTER CREDIT AGREEMENT

MASTER CREDIT AGREEMENT dated as of the Closing Date
established by a Letter Agreement between Savannah Foods & Industries, Inc. and
each Bilateral Lender which becomes a party hereto pursuant to a Letter
Agreement.

This Master Credit Agreement is intended to serve, through
incorporation by reference in a separate and independent Letter Agreement
between the Borrower and each Bilateral Lender, as the basis for the definitive
credit agreement between the Borrower and such Bilateral Lender, and through
such means to constitute a separate and independent credit agreement between
the Borrower, as the borrower, and such Bilateral Lender, as an individual
lender and not as a co-lender with the other Bilateral Lenders, for the
Facility provided by such Bilateral Lender, but with the credit agreement and
the Facility with each Bilateral Lender being on substantially common terms and
conditions with the credit agreement and Facility with each other Bilateral
Lender.

The parties hereto agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01. Definitions. Capitalized terms which are used
in this Agreement and are not otherwise defined herein have the meanings given
them in the Letter Agreement with the Bank. In addition, the terms as defined
in this Section 1.01 shall, for all purposes of this Agreement and any
amendment hereto (except as herein otherwise expressly provided or unless the
context otherwise requires), have the meanings set forth herein:

"Affiliate" of any relevant Person means (i) any Person that
directly, or indirectly through one or more intermediaries, controls the
relevant Person (a "Controlling Person"), (ii) any Person (other than the
relevant Person or a Subsidiary of the relevant Person) which is controlled by
or is under common control with a Controlling Person, or (iii) any Person
(other than a Subsidiary of the relevant Person) of which the relevant Person
owns, directly or indirectly, 20% or more of the common stock or equivalent
equity interests. As used herein, the term "control" means possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.

"Agreement" means this Master Credit Agreement, together with
the Letter Agreement between the Borrower and the

<PAGE> 22

Bank, and together with all amendments and supplements hereto or thereto.

"Applicable Margin" means (i) for Base Rate Loans, 0.0%, and
(ii) for Euro-Dollar Loans and Banker's Acceptances, 0.425%; provided, that if
during any Fiscal Quarter the ratio of Consolidated Adjusted Cash Flow to
Consolidated Interest Expense plus obligations of the Borrower and its
Consolidated Subsidiaries with respect to operating leases shall be less than
3.0 to 1.0 but equal to or greater than 2.5 to 1.0, as permitted by Section
5.20, the Applicable Margin for Euro-Dollar Loans and Banker's Acceptances for
the immediately succeeding Fiscal Quarter shall be 0.55%.

"Assignee" has the meaning set forth in Section 8.07(c).

"Assignment and Acceptance" means an Assignment and Acceptance
executed in accordance with Section 8.07(c) in the form attached hereto as
Exhibit C.

"Authority" has the meaning set forth in Section 7.02.

"Bank" means, as between the Borrower and any particular
Bilateral Lender, and for all purposes under this Master Credit Agreement, such
Bilateral Lender.

"Banker's Acceptance" means a banker's acceptance (x) of a
Draft (i) against the liability for which the Bank is not required to maintain
reserves under Regulation D or any other Authority and (ii) which may or may
not be (in the discretion of the Bank) eligible for discount by member banks of
the Federal Reserve System and (y) which may be a Conventional Rate Banker's
Acceptance or an Offered Rate Banker's Acceptance, and the term "Banker's
Acceptance" may refer to any one, or more, or all of the Conventional Rate
Banker's Acceptances or the Offered Rate Banker's Acceptances, as the context
shall require.

"Base Rate" means for any Base Rate Loan for any day, the rate
per annum equal to the higher as of such day of (i) the Prime Rate, or (ii)
one-half of one percent above the Federal Funds Rate. For purposes of
determining the Base Rate for any day, changes in the Prime Rate or the Federal
Funds Rate shall be effective on the date of each such change.

"Base Rate Loan" means a Loan to be made as a Base Rate Loan
pursuant to the applicable Notice of Borrowing, Section 2.02(f), or Article
VIII, as applicable.

"Bilateral Lender" means any lender which executes and
delivers a Letter Agreement with the Borrower.

<PAGE> 23

"Borrower" means Savannah Foods & Industries, Inc., a Delaware
corporation, and its successors and its permitted assigns.

"Borrowing" means a borrowing hereunder consisting of Loans or
Banker's Acceptances made available to the Borrower by the Bank, and the term
"Borrowing", when used in conjunction with a reference to a specific type of
Loan or Banker's Acceptance, means a Borrowing of such type.

"Capital Stock" means any capital stock of the Borrower or any
Consolidated Subsidiary (to the extent issued to a Person other than the
Borrower), whether common or preferred, other than Redeemable Preferred Stock.

"Capitalization" means the sum of (i) Stockholder's Equity,
plus (ii) Long-Term Debt.

"CERCLA" means the Comprehensive Environmental Response
Compensation and Liability Act, 42 U.S.C. Section 9601 et. seq. and its
implementing regulations and amendments.

"CERCLIS" means the Comprehensive Environmental Response
Compensation and Liability Inventory System established pursuant to CERCLA.

"Change of Law" shall have the meaning set forth in Section
7.02.

"Closing Certificate" has the meaning set forth in Section
3.01(d).

"Closing Date" means the Closing Date established by the
Letter Agreement with the Bank.

"Code" means the Internal Revenue Code of 1986, as amended, or
any successor Federal tax code.

"Collateral Account" has the meaning specified in Section 6.01.

"Commitment" means the amount set forth as such in the Letter
Agreement with the Bank, as such amount may be (i) reduced from time to time
pursuant to Sections 2.08 and 2.09 or (ii) increased from time to time pursuant
to the Letter Agreement.

"Compliance Certificate" has the meaning set forth in Section
5.01(c).

"Consolidated Adjusted Cash Flow" means the sum of the
following of the Borrower and its Consolidated Subsidiaries, on a consolidated
basis: (i) Consolidated Net Income, plus (ii) Consolidated Interest Expense,
plus (iii) obligations as lessee under operating leases, plus (iv) tax expense
plus (v)

<PAGE> 24

depreciation and amortization expense, plus (vi) to the extent included in
determining Consolidated Net Income but not included in clause (iii) or (v),
any non-cash charges or any non-recurring charges, less (vii) to the extent
included in determining Consolidated Net Income but not included in clause
(iii) or (v), any non-cash gains and non-recurring gains.

"Consolidated Current Assets" and "Consolidated Current
Liabilities" mean, at any time, all assets or liabilities (including contingent
liabilities), respectively, of the Borrower and its Consolidated Subsidiaries
that, in accordance with GAAP, should be classified (or, with respect to any
contingent liabilities, would be classified if they were direct liabilities) as
current assets or current liabilities, respectively, on a consolidated balance
sheet of the Borrower and its Consolidated Subsidiaries.

"Consolidated Interest Expense" for any period means interest
expense, as reported in the income statement of the Borrower and its
Consolidated Subsidiaries, in respect of Debt of the Borrower or any of its
Consolidated Subsidiaries outstanding during such period.

"Consolidated Net Income" means, for any period, the Net
Income of the Borrower and its Consolidated Subsidiaries determined on a
consolidated basis, but excluding (i) extraordinary items and (ii) any equity
interests of the Borrower or any Subsidiary in the unremitted earnings of any
Person that is not a Subsidiary.

"Consolidated Subsidiary" means at any date any Subsidiary or
other entity the accounts of which, in accordance with GAAP, would be
consolidated with those of the Borrower in its consolidated financial
statements as of such date.

"Consolidated Total Assets" means, at any time, the total
assets of the Borrower and its Consolidated Subsidiaries, determined on a
consolidated basis, as set forth or reflected on the most recent consolidated
balance sheet of the Borrower and its Consolidated Subsidiaries, prepared in
accordance with GAAP.

"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower, are treated as a single
employer under Section 414 of the Code.

"Conventional Rate" means, (i) with respect to a Conventional
Rate Loan, the Base Rate or the Euro-Dollar Rate, and (ii) with respect to a
Conventional Rate Banker's Acceptance, the Effective Discount Rate.

<PAGE> 25

"Conventional Rate Banker's Acceptance" means a Banker's
Acceptance made available at the Conventional Rate pursuant to Section 2.01.

"Conventional Rate Credit" means any one, or more, or all, as
the context shall require, of the Conventional Rate Loans and the Conventional
Rate Banker's Acceptances.

"Conventional Rate Loan" means a Loan made at a Conventional
Rate pursuant to the terms and conditions set forth in Section 2.01.

"Debt" of any Person means at any date, without duplication,
(i) all obligations of such Person for borrowed money, (ii) all obligations of
such Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable arising in the ordinary
course of business, (iv) all obligations of such Person as lessee under capital
leases, (v) all obligations of such Person to reimburse any bank or other
Person in respect of amounts payable under a banker's acceptance, (vi) all
Redeemable Preferred Stock of such Person (in the event such Person is a
corporation), (vii) all obligations of such Person to reimburse any bank or
other Person in respect of amounts paid or to be paid under a letter of credit
or similar instrument, (viii) all Debt of others secured by a Lien on any asset
of such Person, whether or not such Debt is assumed by such Person, and (ix)
all Debt of others Guaranteed by such Person.

"Default" means any condition or event which constitutes an
Event of Default or which with the giving of notice or lapse of time or both
would, unless cured or waived, become an Event of Default.

"Default Rate" means, with respect to any Loan, on any day,
the sum of 2% plus the then highest interest rate (including the Applicable
Margin) which may be applicable to any Loans hereunder (irrespective of whether
any such type of Loans are actually outstanding hereunder).

"Dollars" or "$" means dollars in lawful currency of the
United States of America.

"Domestic Business Day" means any day except a Saturday,
Sunday or other day on which commercial banks in the state in which the Bank
has its principal office are authorized by law to close.

"Draft" means a draft in form and substance satisfactory to
the Bank, relating to a Banker's Acceptance, and duly executed in blank by the
Borrower or on its behalf by the Bank under a power of attorney, in favor of
the Bank from the Borrower.

<PAGE> 26

"Drawing Purchase Price" means:

(i) with respect to Conventional Rate Banker's Acceptances,
the difference between (A) the aggregate Face Amount of such
Conventional Rate Banker's Acceptance and (B) the product (rounded to
the nearest whole cent, with one-half of one cent being rounded up) of
(x) the aggregate Face Amount multiplied by (y) the sum of the
Effective Discount Rate plus Applicable Margin multiplied by (z) a
fraction of the numerator of which is the term of maturity (from the
date of creation of such Banker's Acceptance to the Stated Maturity
Date) of such Banker's Acceptances and the denominator is 360; and

(ii) with respect to Offered Rate Banker's Acceptances, the
discounted net proceeds to be received by the Borrower upon the
creation of such Banker's Acceptance, after taking into account the
Offered Rate with respect thereto.

"Effective Discount Rate" means, with respect to Conventional
Rate Bankers' Acceptances, the rate offered by the Bank on the date of
Borrowing in its sole discretion which is specific to the Bank's funding
position for bankers' acceptances generally, and not tied to a verifiable
market index, taking into account such factors as the Bank may deem appropriate
in regard to the establishment of such rates, for banker's acceptances having a
maturity approximately equal to the maturity (from the date of creation of the
Banker's Acceptance to the Stated Maturity Date) of the relevant Bankers'
Acceptance.

"Environmental Authority" means any foreign, federal, state,
local or regional government that exercises any form of jurisdiction or
authority under any Environmental Requirement.

"Environmental Authorizations" means all licenses, permits,
orders, approvals, notices, registrations or other legal prerequisites for
conducting the business of the Borrower or any Subsidiary required by any
Environmental Requirement.

"Environmental Judgments and Orders" means all judgments,
decrees or orders arising from or in any way associated with any Environmental
Requirements, whether or not entered upon consent, or written agreements with
an Environmental Authority or other entity arising from or in any way
associated with any Environmental Requirement, whether or not incorporated in a
judgment, decree or order.

"Environmental Liabilities" means any liabilities, whether
accrued, contingent or otherwise, arising from and in any way associated with
any Environmental Requirements.

"Environmental Notices" means notice from any Environmental
Authority or by any other person or entity, of possible or alleged
noncompliance with or liability under any

<PAGE> 27

Environmental Requirement, including without limitation any complaints,
citations, demands or requests from any Environmental Authority or from any
other person or entity for correction of any violation of any Environmental
Requirement or any investigations concerning any violation of any Environmental
Requirement.

"Environmental Proceedings" means any judicial or
administrative proceedings arising from or in any way associated with any
Environmental Requirement.

"Environmental Releases" means releases as defined in CERCLA
or under any applicable state or local environmental law or regulation.

"Environmental Requirements" means any legal requirement
relating to health, safety or the environment and applicable to the Borrower,
any Subsidiary or the Properties, including but not limited to any such
requirement under CERCLA or similar state legislation and all federal, state
and local laws, ordinances, regulations, orders, writs, decrees and common law.

"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, or any successor law. Any reference to any
provision of ERISA shall also be deemed to be a reference to any successor
provision or provisions thereof.

"Euro-Dollar Business Day" means any Domestic Business Day on
which dealings in Dollar deposits are carried out in the London interbank
market.

"Euro-Dollar Loan" means a Loan to be made as a Euro-Dollar
Loan pursuant to the applicable Notice of Borrowing.

"Euro-Dollar Reserve Percentage" has the meaning set forth in
Section 2.06(b).

"Event of Default" has the meaning set forth in Section 6.01.

"Face Amount" means, in respect of a Draft or a Banker's
Acceptance, the amount payable to the holder thereof on its maturity.

"Facility" means the particular credit facility made available
by a Bilateral Lender to the Borrower pursuant to the Letter Agreement between
them.

"Federal Funds Rate" means, for any day, the rate per annum
(rounded upward, if necessary, to the next higher 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Domestic

<PAGE> 28

Business Day immediately succeeding such day, provided that (i) if the day for
which such rate is to be determined is not a Domestic Business Day, the Federal
Funds Rate for such day shall be such rate on such transactions on the
immediately preceding Domestic Business Day as so published on the immediately
succeeding Domestic Business Day, and (ii) if such rate is not so published for
any day, the Federal Funds Rate for such day shall be the average rate charged
to the Bank on such day on such transactions, as determined by the Bank.

"Fiscal Quarter" means any fiscal quarter of the Borrower.

"Fiscal Year" means any fiscal year of the Borrower.

"Fixed Rate Borrowing" means a Euro-Dollar Borrowing, an
Offered Rate Borrowing, a Banker's Acceptance Borrowing, or any or all of them,
as the context shall require.

"Fixed Rate Loans" means Euro-Dollar Loans or Offered Rate
Loans, or any or all of them, as the context shall require.

"GAAP" means generally accepted accounting principles applied
on a consistent basis as used by the Borrower it its annual audited financial
statements submitted to the Securities and Exchange Commission. Such
principles, in accordance with Section 1.02, are to be used in making the
calculations for purposes of determining compliance with the terms of this
Agreement.

"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to secure, purchase or pay (or advance or supply funds for the
purchase or payment of) such Debt or other obligation (whether arising by
virtue of partnership arrangements, by agreement to keep-well, to purchase
assets, goods, securities or services, to provide collateral security, to
take-or-pay, or to maintain financial statement conditions or otherwise) or
(ii) entered into for the purpose of assuring in any other manner the obligee
of such Debt or other obligation of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part), provided that
the term Guarantee shall not include endorsements for collection or deposit in
the ordinary course of business. The term "Guarantee" used as a verb has a
corresponding meaning.

"Hazardous Materials" includes, without limitation, (a) solid
or hazardous waste, as defined in the Resource Conservation and Recovery Act of
1980, 42 U.S.C. Section 6901 et seq. and its implementing regulations and
amendments, or in any applicable state or local law or regulation, (b)
"hazardous substance",

<PAGE> 29

"pollutant", or "contaminant" as defined in CERCLA, or in any applicable state
or local law or regulation, (c) gasoline, or any other petroleum product or
by-product, including, crude oil or any fraction thereof, or (d) pesticides, as
defined in the Federal Insecticide, Fungicide, and Rodenticide Act of 1975, or
in any applicable state or local law or regulation, as each such Act, statute
or regulation may be amended from time to time.

"Interest Period" means: (1) with respect to each Euro-Dollar
Borrowing, the period commencing on the date of such Borrowing and ending on
the numerically corresponding day in the first, second, third or sixth month
thereafter, as the Borrower may elect in the applicable Notice of Borrowing;
provided that:

(a) any Interest Period (subject to paragraph (c) below)
which would otherwise end on a day which is not a Euro-Dollar Business
Day shall be extended to the immediately succeeding Euro-Dollar
Business Day unless such Euro-Dollar Business Day falls in another
calendar month, in which case such Interest Period shall end on the
immediately preceding Euro-Dollar Business Day;

(b) any Interest Period which begins on the last
Euro-Dollar Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the appropriate
subsequent calendar month) shall, subject to paragraph (c) below, end
on the last Euro-Dollar Business Day of the appropriate subsequent
calendar month; and

(c) no Interest Period may be selected which begins before the
Termination Date and would otherwise end after the Termination Date.

(2) with respect to each Base Rate Borrowing, the period commencing on the date
of such Borrowing and ending 30 days thereafter; provided that:

(a) any Interest Period (subject to paragraph (b) below)
which would otherwise end on a day which is not a Domestic Business
Day shall be extended to the immediately succeeding Domestic Business
Day; and

(b) no Interest Period which begins before the
Termination Date and would otherwise end after the Termination Date
may be selected.

(3) with respect to each Conventional Rate Banker's Acceptance Borrowing, the
period commencing on the date of such Borrowing and ending not less than 30
days nor more than 180 days thereafter; provided that:

(a) any Interest Period (subject to paragraph (b) below)
which would otherwise end on a day which is not a

<PAGE> 30

Domestic Business Day shall be extended to the immediately succeeding
Domestic Business Day; and

(b) no Interest Period which begins before the
Termination Date and would otherwise end after the Termination Date
may be selected.

(4) with respect to each Offered Rate Borrowing, the period commencing on the
date of such Borrowing and ending on the Stated Maturity Date or such other
date or dates as may be specified in the applicable Offered Rate Quote;
provided that:

(a) any Interest Period (subject to clause (b) below) which
would otherwise end on a day which is not a Euro-Dollar Business Day
shall be extended to the immediately succeeding Euro-Dollar Business
Day; and

(b) no Interest Period may be selected which begins before the
Termination Date and would otherwise end after the Termination Date.

"Investment" means any investment in any Person, whether by
means of purchase or acquisition of obligations or securities of such Person,
capital contribution to such Person, loan or advance to such Person, making of
a time deposit with such Person, Guarantee or assumption of any obligation of
such Person or otherwise.

"Lending Office" means the office of the Bank located at its
address set forth or identified as its Lending Office in the Letter Agreement
with the Bank or such other office as the Bank may hereafter designate as its
Lending Office by notice to the Borrower.

"Letter Agreement" means a letter agreement between the
Borrower and a Bilateral Lender establishing a Facility and incorporating by
reference therein the terms of this Master Credit Agreement, so that the Master
Credit Agreement, together with such Letter Agreement, constitutes the
definitive credit agreement for such Facility.

"Lien" means, with respect to any asset, any mortgage, deed to
secure debt, deed of trust, lien, pledge, charge, security interest, security
title, preferential arrangement which has the practical effect of constituting
a security interest or encumbrance, or encumbrance or servitude of any kind in
respect of such asset to secure or assure payment of a Debt or a Guarantee,
whether by consensual agreement or by operation of statute or other law, or by
any agreement, contingent or otherwise, to provide any of the foregoing. For
the purposes of this Agreement, the Borrower or any Subsidiary shall be deemed
to own subject to a Lien any asset which it has acquired or holds subject to
the interest of a vendor or lessor under any

<PAGE> 31

conditional sale agreement, capital lease or other title retention agreement
relating to such asset.

"Loan" means a Conventional Rate Loan or Offered Rate Loan
(but not a Banker's Acceptance), and "Loans" means Conventional Rate Loans or
Offered Rate Loans, or any or all of them, as the context shall require.

"Loan Documents" means this Agreement, the Note, the Banker's
Acceptances, any other document evidencing, relating to or securing the Loans
or the Banker's Acceptances, and any other document or instrument delivered
from time to time in connection with this Agreement, the Note, the Loans or the
Banker's Acceptances, as such documents and instruments may be amended or
supplemented from time to time.

"London Interbank Offered Rate" has the meaning set forth in
Section 2.06(b).

"Long-Term Debt" means at any date the amount of Debt reported
as long-term on the Borrower's consolidated financial statements in accordance
with GAAP and any other Debt of the Borrower or the Consolidated Subsidiaries
which has a maturity date more than one year from the date of measurement.

"Margin Stock" means "margin stock" as defined in Regulations
G, T, U or X.

"Material Adverse Effect" means, with respect to any event,
act, condition or occurrence of whatever nature (including any adverse
determination in any litigation, arbitration, or governmental investigation or
proceeding), whether singly or in conjunction with any other event or events,
act or acts, condition or conditions, occurrence or occurrences, whether or not
related, a material adverse change in, or a material adverse effect upon (as a
result of such event, act, condition or occurrence) any of (a) the financial
condition, operations, business, properties or prospects of the Borrower and
its Consolidated Subsidiaries taken as a whole, (b) the rights and remedies of
the Bank under the Loan Documents, or the ability of the Borrower to perform
its obligations under the Loan Documents to which it is a party, as applicable,
or (c) the legality, validity or enforceability of any Loan Document.

"Multiemployer Plan" shall have the meaning set forth in
Section 4001(a)(3) of ERISA.

"Net Income" means, as applied to any Person for any period,
the aggregate amount of net income of such Person, after taxes, for such
period, as determined in accordance with GAAP.

"Net Proceeds of Capital Stock" means any proceeds received by
the Borrower or a Consolidated Subsidiary in respect of the issuance of Capital
Stock, after deducting therefrom all

<PAGE> 32

reasonable and customary costs and expenses incurred by the Borrower or such
Consolidated Subsidiary directly in connection with the issuance of such
Capital Stock.

"Note" means the promissory note of the Borrower,
substantially in the form of Exhibit A, evidencing the obligation of the
Borrower to repay Loans, together with all amendments, consolidations,
modifications, renewals and supplements thereto.

"Notice of Borrowing" has the meaning set forth in Section
2.02.

"Offered Rate" has the meaning specified in Section
2.03(c)(ii)(C).

"Offered Rate Banker's Acceptance" means a Banker's Acceptance
made available at an Offered Rate pursuant to Section 2.03.

"Offered Rate Credit" means any one, or more, or all, as the
context shall require, of the Offered Rate Loans and the Offered Rate Banker's
Acceptances.

"Offered Rate Credit Borrowing Date" has the meaning specified
in Section 2.03(b)(i).

"Offered Rate Credit Quote" has the meaning specified in
Section 2.03(c)(i).

"Offered Rate Credit Quote Request" has the meaning specified
in Section 2.03(b).

"Offered Rate Loans" means Loans made pursuant to the terms
and conditions set forth in Section 2.03.

"Participant" has the meaning set forth in Section 8.07(b).

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

"Person" means an individual, a corporation, a partnership, a
limited liability company, an unincorporated association, a trust or any other
entity or organization, including, but not limited to, a government or
political subdivision or an agency or instrumentality thereof.

"Plan" means at any time an employee pension benefit plan
which is covered by Title IV of ERISA or subject to the minimum funding
standards under Section 412 of the Code and is either (i) maintained by a
member of the Controlled Group for employees of any member of the Controlled
Group or (ii) maintained pursuant to a collective bargaining agreement or any

<PAGE> 33

other arrangement under which more than one employer makes contributions and to
which a member of the Controlled Group is then making or accruing an obligation
to make contributions or has within the preceding 5 plan years made
contributions.

"Prime Rate" refers to that interest rate so denominated and
set by the Bank from time to time as an interest rate basis for borrowings.
The Prime Rate is but one of several interest rate bases used by the Bank. The
Bank lends at interest rates above and below the Prime Rate.

"Properties" means all real property owned, leased or
otherwise used or occupied by the Borrower or any Subsidiary, wherever located.

"Redeemable Preferred Stock" of any Person means any preferred
stock issued by such Person which is at any time prior to the Termination Date
either (i) mandatorily redeemable (by sinking fund or similar payments or
otherwise) or (ii) redeemable at the option of the holder thereof.

"Refunding Loan" means a new Conventional Rate Loan made on
the day on which an outstanding Conventional Rate Loan is maturing or a Base
Rate Borrowing is being converted to a Fixed Rate Borrowing, if and to the
extent that the proceeds thereof are used entirely for the purpose of paying
such maturing Loan or Loan being converted, excluding any difference between
the amount of such maturing Loan or Loan being converted and any greater amount
being borrowed on such day and actually either being made available to the
Borrower pursuant to Section 2.02(c) or remitted to the Bank as provided in
Section 2.12, in each case as contemplated in Section 2.02(d).

"Regulation G" means Regulation G of the Board of Governors of
the Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.

"Regulation T" means Regulation T of the Board of Governors of
the Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.

"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.

"Regulation X" means Regulation X of the Board of Governors of
the Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.

<PAGE> 34

"Related Investments" mean equity Investments by the Borrower
or any Subsidiary in any business related to the ongoing business lines of the
Borrower as of the Closing Date.

"Reported Net Income" means, for any period, the Net Income of
the Borrower and its Consolidated Subsidiaries determined on a consolidated
basis in accordance with GAAP and reported quarterly to the Securities and
Exchange Commission.

"Senior Note Agreement" means, collectively, the Note
Agreements relating ot the $50,000,000 8.35% Series A Senior Notes Due November
1, 2002 and the $20,000,000 7.15% Series Senior notes Due November 1, 2002 of
the Borrower.

"Stated Maturity Date" means, (i) with respect to any
Conventional Rate Banker's Acceptance, the last day of the Interest Period
related thereto, and (ii) with respect to any Offered Rate Credit, the Stated
Maturity Date therefor specified by the Bank in the applicable Offered Rate
Credit Quote.

"Stockholders' Equity" means, at any time, the shareholders'
equity of the Borrower and its Consolidated Subsidiaries, as set forth or
reflected on the most recent consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries prepared in accordance with GAAP, but excluding any
Redeemable Preferred Stock of the Borrower or any of its Consolidated
Subsidiaries. Shareholders' equity generally would include, but not be limited
to (i) the par or stated value of all outstanding Capital Stock, (ii) capital
surplus, (iii) retained earnings, and (iv) various deductions such as (A)
purchases of treasury stock, (B) valuation allowances, (C) receivables due from
an employee stock ownership plan, (D) employee stock ownership plan debt
guarantees, and (E) translation adjustments for foreign currency transactions.

"Subsidiary" means any corporation or other entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by the Borrower.

"Taxes" has the meaning set forth in Section 2.12(c).

"Termination Date" means January 1, 1999, unless such date is
otherwise extended by the Bank pursuant to Section 2.05(b), in its sole and
absolute discretion.

"Third Parties" means all lessees, sublessees, licensees and
other users of the Properties, excluding those users of the Properties in the
ordinary course of the Borrower's business and on a temporary basis.

<PAGE> 35

"Transferee" has the meaning set forth in Section 8.07(d).

"Unfunded Vested Liabilities" means, with respect to any Plan
at any time, the amount (if any) by which (i) the present value of all vested
nonforfeitable benefits under such Plan exceeds (ii) the fair market value of
all Plan assets allocable to such benefits, all determined as of the then most
recent valuation date for such Plan, but only to the extent that such excess
represents a potential liability of a member of the Controlled Group to the
PBGC or the Plan under Title IV of ERISA.

"Unrelated Investments" means equity Investments by the
Borrower or any Subsidiary in any Person, which Investments are not Related
Investments.

"Unused Commitment" means at any date an amount equal to the
Commitment less the aggregate outstanding principal amount of Loans and the
aggregate Face Amount of Banker's Acceptances.

"Westway Stock" shall mean two hundred fifty shares of common
stock of Westway Trading Corporation currently owned by Borrower.

SECTION 1.02. Accounting Terms and Determinations. Unless
otherwise specified herein, all terms of an accounting character used herein
shall be interpreted, all accounting determinations hereunder shall be made,
and all financial statements required to be delivered hereunder shall be
prepared, in accordance with GAAP, applied on a basis consistent (except for
changes concurred in by the Borrower's independent public accountants or
otherwise required by a change in GAAP) with the most recent audited
consolidated financial statements of the Borrower and its Consolidated
Subsidiaries delivered to the Bank unless with respect to any such change
concurred in by the Borrower's independent public accountants or required by
GAAP, in determining compliance with any of the provisions of this Agreement or
any of the other Loan Documents: (i) the Borrower shall have objected to
determining such compliance on such basis at the time of delivery of such
financial statements, or (ii) the Bank shall so object in writing within 30
days after the delivery of such financial statements, in either of which events
such calculations shall be made on a basis consistent with those used in the
preparation of the latest financial statements as to which such objection shall
not have been made (which, if objection is made in respect of the first
financial statements delivered under Section 5.01 hereof, shall mean the
financial statements referred to in Section 4.04).

SECTION 1.03. References. Unless otherwise indicated,
references in this Agreement to "Articles", "Exhibits", "Schedules", "Sections"
and other Subdivisions are references to articles, exhibits, schedules,
sections and other subdivisions hereof.

<PAGE> 36

SECTION 1.04. Use of Defined Terms. All terms defined in this
Agreement shall have the same defined meanings when used in any of the other
Loan Documents, unless otherwise defined therein or unless the context shall
require otherwise.

SECTION 1.05. Terminology. All personal pronouns used in this
Agreement, whether used in the masculine, feminine or neuter gender, shall
include all other genders; the singular shall include the plural, and the
plural shall include the singular. Titles of Articles and Sections in this
Agreement are for convenience only, and neither limit nor amplify the
provisions of this Agreement.

ARTICLE II

THE CREDITS

SECTION 2.01. Commitment to Make Available Conventional Rate
Credits. The Bank agrees, on the terms and conditions set forth herein, to
make available Conventional Rate Credits to the Borrower from time to time
before the Termination Date; provided that (i) notwithstanding any other
provision of this Master Credit Agreement to the contrary, if the Letter
Agreement with the Bank expressly excludes the availability of Conventional
Rate Banker's Acceptances, then unless and until the Bank subsequently notifies
the Borrower in writing that Conventional Rate Banker's Acceptances shall be
available, no Conventional Rate Banker's Acceptances shall be available
hereunder, and any provisions in this Master Credit Agreement to the contrary
shall be null and void (but each Bilateral Lender agrees that it will not so
exclude Conventional Rate Banker's Acceptances unless not to do so would be to
the material disadvantage of such Bilateral Lender), and (ii) immediately after
each such Conventional Rate Credit is made available, the aggregate principal
amount of Loans outstanding and the aggregate Face Amount of Banker's
Acceptances outstanding shall not exceed the amount of the Commitment. Each
Conventional Rate Borrowing under this Section shall be in a minimum principal
amount of $1,000,000 (with respect to Loans) or Face Amount (with respect to
Banker's Acceptances) or any larger multiple of $500,000 (except that any such
Conventional Rate Borrowing may be in the amount of the Unused Commitment).
Within the foregoing limits, the Borrower may borrow under this Section, repay
or, to the extent permitted by Section 2.09, prepay Conventional Rate Loans and
reborrow under this Section at any time before the Termination Date.

SECTION 2.02. Method of Borrowing Conventional Rate Credits.
(a) The Borrower shall give the Bank notice (a "Notice of Borrowing"), which
may be given by telephone or, at the request of the Bank, shall be in writing
in substantially in the form of Exhibit D, prior to 11:00 A.M. (prevailing
Eastern time) on the same Domestic Business Day as each Base Rate Borrowing or

<PAGE> 37

Banker's Acceptance Borrowing and at least 2 Euro-Dollar Business Days before
each Euro-Dollar Borrowing, specifying:

(i) the date of such Conventional Rate Borrowing, which
shall be a Domestic Business Day, in the case of a Base Rate Borrowing
or Banker's Acceptance Borrowing, or a Euro-Dollar Business Day in the
case of a Euro-Dollar Borrowing,

(ii) the aggregate principal amount (with respect to Loans) or
Face Amount (with respect to Banker's Acceptances) of such
Conventional Rate Borrowing,

(iii) whether the Conventional Rate Borrowing is to be a Base
Rate Loan, a Euro-Dollar Loan or a Banker's Acceptance, and

(iv) in the case of a Fixed Rate Borrowing, the duration of
the Interest Period applicable thereto, subject to the provisions of
the definition of Interest Period.

(b) Once a Notice of Borrowing is received by the Bank,
it shall not thereafter be revocable by the Borrower without either (i) the
consent of the Bank or (ii) the payment of compensation for any loss which the
Bank may incur, in accordance with the provisions of Section 7.05.

(c) Not later than 3:00 P.M. (prevailing Eastern time) on the
date of each Conventional Rate Borrowing, unless the Bank determines that any
applicable condition specified in Article III has not been satisfied, the Bank
will make such Borrowing available to the Borrower at the Bank's aforesaid
address.

(d) If the Bank makes a new Conventional Rate Loan hereunder
on a day on which the Borrower is to repay all or any part of an outstanding
Conventional Rate Loan, the Bank shall apply the proceeds of its new
Conventional Rate Loan to make such repayment as a Refunding Loan and only an
amount equal to the difference (if any) between the amount being borrowed and
the amount of such Refunding Loan shall be made available by the Bank to the
Borrower as provided in paragraph (c) of this Section, or remitted by the
Borrower to the Bank as provided in Section 2.12, as the case may be.

(e) Notwithstanding anything to the contrary contained in
this Agreement, no Fixed Rate Borrowing may be made if there shall have
occurred a Default or an Event of Default, which Default or Event of Default
shall not have been cured or waived, and all Refunding Loans shall be made as
Base Rate Loans (but shall bear interest at the Default Rate, if applicable).

(f) In the event that a Notice of Borrowing fails to specify
whether the Conventional Rate Loan comprising such Conventional Rate Borrowing
is to be a Base Rate Loan or a

<PAGE> 38

Euro-Dollar Loan, such Conventional Rate Loan shall be made as a Base Rate
Loan. If the Borrower is otherwise entitled under this Agreement to repay any
Conventional Rate Loan maturing at the end of an Interest Period applicable
thereto with the proceeds of a new Borrowing, and the Borrower fails to repay
such Conventional Rate Loan using its own moneys and fails to give a Notice of
Borrowing in connection with such new Conventional Rate Borrowing, a new
Conventional Rate Borrowing shall be deemed to be made on the date such
Conventional Rate Loan matures in an amount equal to the principal amount of
the Conventional Rate Loan so maturing, and the Conventional Rate Loan
comprising such new Conventional Rate Borrowing shall be a Base Rate Loan.

(g) Notwithstanding anything to the contrary contained
herein, there shall not be more than 5 Fixed Rate Borrowings outstanding at any
given time.

(h) With respect to each Conventional Rate Banker's
Acceptance to be made available by the Bank, the Borrower agrees to (x)
promptly furnish (and in any event not later than 11:00 A.M., prevailing
Eastern time, on the date such Conventional Rate Banker's Acceptance is to be
made available) to the Bank such documentation as the Bank shall reasonably
request in connection with such Conventional Rate Banker's Acceptance, and (y)
promptly execute and deliver to the Bank such instruments, agreements and other
documents as the Bank shall reasonably request in connection with such
Conventional Rate Banker's Acceptance, including such Drafts and other
documentation as the Bank usually requires in connection with its banker's
acceptances; provided, that, such documentation shall not contain any
provisions which are inconsistent with the terms of this Agreement (e.g. cash
collateral provisions).

SECTION 2.03. Offered Rate Credits. (a) In addition to making
Conventional Rate Borrowings, the Borrower may, as set forth in this Section
2.03, request the Bank to make an offer to make Offered Rate Borrowings
available to the Borrower. The Bank may, but shall have no obligation to, make
such offers and the Borrower may, but shall have no obligation to, accept any
such offers in the manner set forth in this Section 2.03, provided that:

(i) the number of Fixed Rate Borrowings which may be
outstanding at any given time is subject to the provisions of Section
2.02(g); and

(ii) immediately after each such Offered Rate Credit is
made available, the aggregate principal amount of Loans outstanding
and the aggregate Face Amount of Banker's Acceptances outstanding
shall not exceed the amount of the Commitment at such time.

(b) When the Borrower wishes to request an offer to make
available an Offered Rate Credit, it shall give the Bank

<PAGE> 39

notice, which may be given by telephone or, at the request of the Bank, in
writing, substantially in the form of Exhibit G hereto (an "Offered Rate Credit
Quote Request") so as to be received no later than 10:00 A.M. (prevailing
Eastern time) on the day of the Offered Rate Borrowing proposed therein (or
such other time and date as the Borrower and the Bank may agree), specifying:

(i) the proposed date of such Offered Rate Borrowing,
which shall be a Domestic Business Day (the "Offered Rate Credit
Borrowing Date");

(ii) the maturity date (or dates) (each a "Stated
Maturity Date") for repayment of the Offered Rate Credit to be made as
part of such Offered Rate Borrowing (which Stated Maturity Date shall
be that date occurring not less than 1 day (in the case of Loans) or
30 days (in the case of Banker's Acceptances) but not greater than 180
days from the date of such Offered Rate Borrowing); provided that the
Stated Maturity Date for any Offered Rate Credit Loan may not extend
beyond the Termination Date (as in effect on the date of such Offered
Rate Credit Quote Request); and

(iii) the aggregate amount of principal or, if such
Offered Rate Credit is made available as a Banker's Acceptance, the
Face Amount requested by the Borrower for such Offered Rate Borrowing,
subject to the limits specified in Section 2.03(a).

The Borrower may request offers to make Offered Rate Credits having up to 3
different Stated Maturity Dates in a single Offered Rate Credit Quote Request;
provided that the request for each separate Stated Maturity Date shall be
deemed to be a separate Offered Rate Credit Quote Request for a separate
Offered Rate Borrowing.

(c) (i) The Bank may, but shall have no obligation
to, submit to the Borrower a response containing an offer to make an
Offered Rate Credit, which may be given by telephone or, in the
discretion of the Bank, in writing, substantially in the form of
Exhibit H hereto (an "Offered Rate Credit Quote") in response to any
Offered Rate Credit Quote Request; provided that, if the Borrower's
request under Section 2.03(b) specified more than 1 Stated Maturity
Date, the Bank may, but shall have no obligation to, make a single
submission to the Borrower containing a separate offer for each such
Stated Maturity Date and each such separate offer shall be deemed to
be a separate Offered Rate Credit Quote. Each Offered Rate Credit
Quote must be submitted to the Borrower not later than 11:00 A.M.
(prevailing Eastern time) on the Offered Rate Credit Borrowing Date.
Subject to Section 6.01, any Offered Rate Credit Quote so made shall
be irrevocable except with the written consent of the Borrower.

<PAGE> 40

(ii) Each Offered Rate Quote shall specify:

(A) the proposed Offered Rate Credit
Borrowing Date and the Stated Maturity Date therefor;

(B) whether such offer is to make
available an Offered Rate Loan or a Banker's
Acceptance; and

(C) (x) with respect to each Offered
Rate Loan, the rate of interest per annum (rounded
upwards, if necessary, to the nearest 1/100th of 1%)
offered for such Offered Rate Loan and (y) with
respect to each Offered Rate Banker's Acceptance,
such all in rate (including anycommissions, discounts
and yields to maturity) which shall be applicable to
such Offered Rate Banker's Acceptance (such amounts
being hereinafter referred to as the "Offered Rate").

Unless otherwise agreed by the Bank and the Borrower, no Offered Rate
Credit Quote shall contain qualifying, conditional or similar language
or propose terms other than or in addition to those set forth in the
applicable Offered Rate Credit Quote Request.

(d) Not later than 12:00 P.M. (prevailing Eastern time)
on the Offered Rate Credit Borrowing Date, the Borrower shall notify the Bank
of its acceptance or nonacceptance of the offers so notified to it pursuant to
Section 2.03(c)(i). In the case of acceptance, such notice shall specify the
offers (for each Stated Maturity Date) that are accepted.

(e) If any offer to make available any Offered Rate
Credit has been accepted, the Bank shall, not later than 3:00 P.M. (prevailing
Eastern time) on the Offered Rate Credit Borrowing Date, make the appropriate
amount of such Offered Rate Credit available to the Borrower on such date.

(f) By its acceptance of an Offered Rate Credit Quote of
the Bank to make available an Offered Rate Banker's Acceptance, the Borrower
shall be deemed to have agreed to (x) promptly furnish (and in any event not
later than 1:00 P.M., prevailing Eastern time, on the acceptance date of such
Offered Rate Banker's Acceptance) to the Bank such documentation as the Bank
shall reasonably request in connection with such Banker's Acceptance, and (y)
promptly execute and deliver to the Bank such instruments, agreements and other
documents as the Bank shall reasonably request in connection with such Offered
Rate Banker's Acceptance, including such Drafts and other documentation as the
Bank usually requires in connection with its banker's acceptances; provided,
that, such documentation shall not contain any provisions which are
inconsistent with the terms of this Agreement (e.g. cash collateral
provisions).

<PAGE> 41

SECTION 2.04. Note. (a) The Loans of the Bank shall be
evidenced by a single Note payable to the order of the Bank for the account of
its Lending Office in an amount equal to the original principal amount of the
Commitment.

(b) The Bank shall record, and prior to any transfer of
its Note shall endorse on the schedules forming a part thereof appropriate
notations to evidence, the date, amount and maturity of, and effective interest
rate and type of Loan for, each Loan made by it, the date and amount of each
payment of principal made by the Borrower with respect thereto, and such
schedules of the Note shall constitute rebuttable presumptive evidence of the
respective principal amounts owing and unpaid on the Note; provided that the
failure of the Bank to make any such recordation or endorsement shall not
affect the obligation of the Borrower hereunder or under the Note or the
ability of the Bank to assign its Note. The Bank is hereby irrevocably
authorized by the Borrower to endorse its Note in accordance with the foregoing
and to attach to and make a part of the Note a continuation of any such
schedule as and when required.

SECTION 2.05. Maturity of Loans. (a) Each Loan and Banker's
Acceptance included in any Borrowing shall mature, and the principal amount
thereof shall be due and payable, on the last day of the Interest Period
applicable to such Borrowing.

(b) Notwithstanding the foregoing, the outstanding
principal amount of the Loans, if any, together with all accrued but unpaid
interest thereon, if any, and the Face Amount of the outstanding Banker's
Acceptances, shall be due and payable on the Termination Date; provided, that
the Facility provided by the Bank shall be automatically extended on each
anniversary of the Closing Date for an additional 12 months unless the Bank, in
its sole discretion, notifies the Borrower at least 30 days prior to the
applicable anniversary date that it will not be so extended, in which event no
such extension shall become effective.

SECTION 2.06. Interest Rates; Accretion of Principal of
Banker's Acceptances. (a) Each Base Rate Loan shall bear interest on the
outstanding principal amount thereof, for each day from the date such Loan is
made until it becomes due, at a rate per annum equal to the Base Rate for such
day plus the Applicable Margin. Such interest shall be payable for each
Interest Period on the last day thereof. Any overdue principal of and, to the
extent permitted by applicable law, overdue interest on any Base Rate Loan
shall bear interest, payable on demand, for each day until paid at a rate per
annum equal to the Default Rate.

(b) Each Euro-Dollar Loan shall bear interest on the
outstanding principal amount thereof, for the Interest Period applicable
thereto, at a rate per annum equal to the sum of the Applicable Margin plus the
applicable Adjusted London Interbank Offered Rate for such Interest Period.
Such interest shall be payable for each Interest Period on the last day thereof
and, if

<PAGE> 42

such Interest Period is longer than 3 months, at intervals of 3 months after
the first day thereof. Any overdue principal of and, to the extent permitted
by law, overdue interest on any Euro-Dollar Loan shall bear interest, payable
on demand, for each day until paid at a rate per annum equal to the Default
Rate.

The "Adjusted London Interbank Offered Rate" applicable to any
Interest Period means a rate per annum equal to the quotient obtained (rounded
upwards, if necessary, to the next higher 1/100th of 1%) by dividing (i) the
applicable London Interbank Offered Rate for such Interest Period by (ii) 1.00
minus the Euro-Dollar Reserve Percentage.

The "London Interbank Offered Rate" applicable to any
Euro-Dollar Loan means for the Interest Period of such Euro-Dollar Loan, the
rate per annum determined on the basis of the offered rate for deposits in
Dollars of amounts equal or comparable to the principal amount of such
Euro-Dollar Loan offered for a term comparable to such Interest Period, which
rates appear on the Reuters Screen LIBO Page effective as of 11:00 A.M., London
time, 2 Euro-Dollar Business Days prior to the first day of such Interest
Period, provided that (i) if more than one such offered rate appears on the
Reuters Screen LIBO Page, the "London Interbank Offered Rate" will be the
offered rate which is used in the majority of such quotations, if there is a
majority, otherwise the arithmetic average (rounded upward, if necessary, to
the next higher 1/100th of 1%) of such offered rates; (ii) if no such offered
rates appear on such page, the "London Interbank Offered Rate" for such
Interest Period will be the arithmetic average (rounded upward, if necessary,
to the next higher 1/100th of 1%) of rates quoted by not less than 2 major
banks in New York City, selected by the Bank, at approximately 10:00 A.M., New
York City time, 2 Euro-Dollar Business Days prior to the first day of such
Interest Period, for deposits in Dollars offered to leading European banks for
a period comparable to such Interest Period in an amount comparable to the
principal amount of such Euro-Dollar Loan.

"Euro-Dollar Reserve Percentage" means for any day that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the reserve requirement for the Bank in respect of
"Eurocurrency liabilities" (or in respect of any other category of liabilities
which includes deposits by reference to which the interest rate on Euro-Dollar
Loans is determined or any category of extensions of credit or other assets
which includes loans by a non-United States office of any Bank to United States
residents). The Adjusted London Interbank Offered Rate shall be adjusted
automatically on and as of the effective date of any change in the Euro-Dollar
Reserve Percentage.

<PAGE> 43

such Offered Rate Loan is made until it becomes due, at a rate per annum equal
to the applicable Offered Rate set forth in the relevant Offered Rate Credit
Quote. Such interest shall be payable on the Stated Maturity Date thereof,
and, if the Stated Maturity Date occurs more than 90 days after the date of the
relevant Offered Rate Loan, at intervals of 90 days after the first day
thereof. Any overdue principal of and, to the extent permitted by law, overdue
interest on any Offered Rate Loan shall bear interest, payable on demand, for
each day until paid at a rate per annum equal to the Default Rate.

(d) The Drawing Purchase Price of each Offered Rate Banker's
Acceptance shall accrete thereon at a rate per annum equal to the relevant
Offered Rate applicable thereto for the period from the date such Banker's
Acceptance was created to the Stated Maturity Date thereof, for the actual
number of days elapse on the basis of a 360 day year, and the Drawing Purchase
Price of each Conventional Rate Banker's Acceptance shall accrete at a rate per
annum equal to the product, expressed as a percentage, of (i) a fraction, the
numerator of which is the difference between the Face Amount thereof and the
Drawing Purchase Price thereof, and the denominator of which is the Drawing
Purchase Price thereof, multiplied by (ii) a fraction, the numerator of which
is 360 and the denominator of which is the term of maturity (from the date such
Banker's Acceptance was created to the Stated Maturity Date) thereof. .

(e) The Bank shall determine each interest rate applicable to
the Loans hereunder and give prompt notice to the Borrower by telephone or
telecopier of each rate of interest so determined, and its determination
thereof shall be conclusive in the absence of manifest error.

(f) After the occurrence and during the continuance of a
Default, the principal amount of the Loans and the Face Amount of the Banker's
Acceptances (and, to the extent permitted by applicable law, all accrued
interest thereon) may, at the election of the Bank, bear interest at the
Default Rate.

SECTION 2.07. Fees. (a) The Borrower shall pay to the Bank a
commitment fee, calculated on the average daily amount of Unused Commitment, at
the rate of 0.125% per annum. Such commitment fee shall accrue from and
including the Closing Date to but excluding the Termination Date and shall be
payable in arrears on each March 31, June 30, September 30 and December 31 and
on the Termination Date.

(b) The Borrower shall pay to the Bank a facility fee,
calculated on the aggregate amount of the Bank's Commitment (without taking
into account the amount of the outstanding Loans made or Banker's Acceptances
created by such Bank), at the rate of 0.075% per annum. Such facility fees
shall accrue from and including the Closing Date to but excluding the
Termination Date

<PAGE> 44

and shall be payable in arrears on each March 31, June 30, September 30 and
December 31 and on the Termination Date.

SECTION 2.08. Optional Termination or Reduction of Commitment.
The Borrower may, upon at least 3 Domestic Business Days' notice to the Bank,
terminate at any time, or proportionately reduce the Unused Commitment from
time to time by an aggregate amount of at least $5,000,000 or any larger
multiple of $1,000,000. If the Commitment is terminated in its entirety, all
accrued fees (as provided under Section 2.07) shall be due and payable on the
effective date of such termination.

SECTION 2.09. Mandatory Reduction and Termination of
Commitment. The Commitment shall terminate on the Termination Date and any
Loans (together with accrued interest thereon) and Banker's Acceptances then
outstanding shall be due and payable on such date.

SECTION 2.10. Optional Prepayments. (a) The Borrower may, on
any Domestic Business Day, prepay any Base Rate Borrowing in whole at any time,
or from time to time in part in an aggregate amount of at least $1,000,000 or
any larger multiple of $500,000, by paying the principal amount to be prepaid
together with accrued interest thereon to the date of prepayment.

(b) Except as provided in Section 7.02, the Borrower may
prepay all or any portion of the principal amount of any Fixed Rate Loan or
Banker's Acceptance prior to the maturity thereof only upon payment of amounts
required by Section 7.05, or upon other terms mutually acceptable to the Bank
and the Borrower.

(c) After receipt by the Bank of notice of prepayment
pursuant to this Section 2.10, such notice shall not thereafter be revocable by
the Borrower.

SECTION 2.11. Mandatory Prepayments. On each date on which
the Commitments are reduced pursuant to Section 2.08 or Section 2.09, the
Borrower shall repay or prepay such principal amount of the outstanding Loans,
if any (together with interest accrued thereon), as may be necessary so that
after such payment the aggregate unpaid principal amount of the Loans and the
aggregate Face Amount of all of the Banker's Acceptances does not exceed the
amount of the Commitment as then reduced. Each such payment or prepayment shall
be applied ratably to the Loans outstanding on the date of payment or
prepayment in the following order of priority: (i) first, to Base Rate Loans;
(ii) secondly, to Euro-Dollar Loans; and (iii) lastly, to Offered Rate
Credits, and any such payment applied to a Euro-Dollar Loan or Offered Rate
Credit shall be accompanied by payment of amounts required by Section 7.05, or
such other amount as may be mutually acceptable to the Bank and the Borrower.

<PAGE> 45

SECTION 2.12. General Provisions as to Payments. (a) The
Borrower shall make each payment of principal of, and interest on, the Loans
and of the Bank's fees hereunder, not later than 1:00 P.M. (prevailing Eastern
time) on the date when due, in federal or other funds immediately available at
the place where payment is due, to the Bank at its address set forth in the
Letter Agreement with the Bank.

(b) Whenever any payment of principal of, or interest on, the
Base Rate Loans or of fees hereunder shall be due on a day which is not a
Domestic Business Day, the date for payment thereof shall be extended to the
immediately succeeding Domestic Business Day. Whenever any payment of
principal of or interest on, the Euro-Dollar Loans or Offered Rate Loans shall
be due on a day which is not a Euro-Dollar Business Day, the date for payment
thereof shall be extended to the immediately succeeding Euro-Dollar Business
Day unless such Euro-Dollar Business Day falls in another calendar month, in
which case the date for payment thereof shall be the immediately preceding
Euro-Dollar Business Day.

(c) All payments of principal, interest and fees and all
other amounts to be made by the Borrower pursuant to this Agreement with
respect to any Loan or fee relating thereto shall be paid without deduction
for, and free from, any tax, imposts, levies, duties, deductions, or
withholdings of any nature now or at anytime hereafter imposed by any
governmental authority or by any taxing authority thereof or therein excluding
in the case of the Bank, taxes imposed on or measured by its net income, and
franchise taxes imposed on it, by the jurisdiction under the laws of which the
Bank (as the case may be) is organized or any political subdivision thereof
and, in the case of the Bank, taxes imposed on its income, and franchise taxes
imposed on it, by the jurisdiction of the Bank's applicable Lending Office or
any political subdivision thereof (all such non-excluded taxes, imposts,
levies, duties, deductions or withholdings of any nature being "Taxes"). In
the event that the Borrower is required by applicable law to make any such
withholding or deduction of Taxes with respect to any Loan or fee or other
amount, the Borrower shall pay such deduction or withholding to the applicable
taxing authority, shall promptly furnish to the Bank in respect of which such
deduction or withholding is made all receipts and other documents evidencing
such payment and shall pay to the Bank additional amounts as may be necessary
in order that the amount received by the Bank after the required withholding or
other payment shall equal the amount such Bank would have received had no such
withholding or other payment been made. If no withholding or deduction of
Taxes are payable in respect to any Loan or fee relating thereto, the Borrower
shall furnish any, at the Bank's request, a certificate from each applicable
taxing authority or an opinion of counsel acceptable to such, in either case
stating that such payments are exempt from or not subject to withholding or
deduction of Taxes. If the Borrower fails to provide such original or
certified copy of a receipt evidencing

<PAGE> 46

payment of Taxes or certificate(s) or opinion of counsel of exemption, the
Borrower hereby agrees to compensate the Bank for, and indemnify them with
respect to, the tax consequences of the Borrower's failure to provide evidence
of tax payments or tax exemption.

The Bank agrees, if it is not organized under the laws of the
United States or any state thereof agree, as soon as practicable after receipt
by it of a request by the Borrower to do so, to file all appropriate forms and
take other appropriate action to obtain a certificate or other appropriate
document from the appropriate governmental authority in the jurisdiction
imposing the relevant Taxes, establishing that it is entitled to receive
payments of principal and interest under this Agreement and the Note without
deduction and free from withholding of any Taxes imposed by such jurisdiction;
provided that if it is unable, for any reason, to establish such exemption, or
to file such forms and, in any event, during such period of time as such
request for exemption is pending, the Borrower shall nonetheless remain
obligated under the terms of the immediately preceding paragraph.

In the event the Bank receives a refund of any Taxes paid by
the Borrower pursuant to this Section 2.12(c), it will pay to the Borrower the
amount of such refund promptly upon receipt thereof; provided that if at any
time thereafter it is required to return such refund, the Borrower shall
promptly repay to it the amount of such refund.

Without prejudice to the survival of any other agreement of
the Borrower hereunder, the agreements and obligations of the Borrower and the
Bank contained in this Section 2.12(c) shall be applicable with respect to any
Participant, Assignee or other Transferee, and any calculations required by
such provisions (i) shall be made based upon the circumstances of such
Participant, Assignee or other Transferee, and (ii) constitute a continuing
agreement and shall survive the termination of this Agreement and the payment
in full or cancellation of the Note.

SECTION 2.13. Computation of Interest and Fees. Interest on
all Loans and accretion of principal on all Banker's Acceptances shall be
computed on the basis of a year of 360 days and paid for the actual number of
days elapsed (including the first day but excluding the last day). Commitment
fees and any other fees payable hereunder shall be computed on the basis of a
year of 360 days and paid for the actual number of days elapsed (including the
first day but excluding the last day).

<PAGE> 47

ARTICLE III

CONDITIONS TO BORROWINGS

SECTION 3.01. Conditions to First Borrowing. The obligation
of the Bank to make a Loan or create a Banker's Acceptance on the occasion of
the first Borrowing is subject to the satisfaction of the conditions set forth
in Section 3.02 and receipt by the Bank of the following:

(a) a duly executed counterpart of the Letter Agreement
with the Bank, signed by the Borrower;

(b) a duly executed Note complying with the provisions of
Section 2.04;

(c) an opinion letter (together with any opinions of
local counsel relied on therein) of counsel for the Borrower, dated as
of the Closing Date, substantially in the form of Exhibit B and
covering such additional matters relating to the transactions
contemplated hereby as the Bank may reasonably request;

(d) a certificate (the "Closing Certificate")
substantially in the form of Exhibit F), dated as of the Closing Date,
signed by a principal financial officer of the Borrower, to the effect
that (i) no Default has occurred and is continuing on the date of the
first Borrowing and (ii) the representations and warranties of the
Borrower contained in Article IV are true on and as of the date of the
first Borrowing hereunder;

(e) all documents which the Bank may reasonably request
relating to the existence of the Borrower, the corporate authority for
and the validity of this Agreement and the Note, and any other matters
relevant hereto, all in form and substance satisfactory to the Bank,
including, without limitation, a certificate of incumbency of the
Borrower, signed by the Secretary or an Assistant Secretary of the
Borrower, certifying as to the names, true signatures and incumbency
of the officer or officers of the Borrower authorized to execute and
deliver the Loan Documents, and certified copies of the following
items: (i) the Borrower's Certificate of Incorporation, (ii) the
Borrower's Bylaws, (iii) a certificate of the Secretary of State of
the State of Delaware as to the good standing of the Borrower as a
Delaware corporation, and (iv) the action taken by the Board of
Directors of the Borrower authorizing the Borrower's execution,
delivery and performance of this Agreement, the Note and the other
Loan Documents to which the Borrower is a party;

(f) a Notice of Borrowing or notification pursuant to
Section 2.03(d) of acceptance of one or more Offered Rate

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Credit Quotes, as applicable, together with, if such Borrowing is a
Banker's Acceptance Borrowing, the instruments, agreements and other
documents required by Section 2.03(f); and

(g) cancellation and termination of the Credit Agreement
dated as of October 1, 1993, as amended, between and among the
Borrower, NationsBank of Georgia, National Association, as
Documentation Agent, and the Lenders parties thereto.

In addition, if the Borrower desires funding of a Fixed Rate Loan on the
Closing Date, the Bank shall have received, the requisite number of days prior
to the Closing Date, a funding indemnification letter satisfactory to it,
pursuant to which (i) the Bank and the Borrower shall have agreed upon the
interest rate, amount of Borrowing and Interest Period for such Fixed Rate
Loan, and (ii) the Borrower shall indemnify the Bank from any loss or expense
arising from the failure to close on the anticipated Closing Date identified in
such letter or the failure to borrow such Fixed Rate Loan on such date.

SECTION 3.02. Conditions to All Borrowings. The obligation of
the Bank to make a Loan or create a Banker's Acceptance on the occasion of each
Borrowing is subject to the satisfaction of the following conditions, except as
expressly provided in the last sentence of this Section 3.02:

(a) receipt by the Bank of a Notice of Borrowing or
notification pursuant to Section 2.03(e) of acceptance of one or more
Offered Rate Credit Quotes, as applicable, together with, if such
Borrowing is a Banker's Acceptance Borrowing, the instruments,
agreements and other documents required by Section 2.03(f).

(b) the fact that, immediately before and after such
Borrowing, no Default shall have occurred and be continuing;

(c) the fact that the representations and warranties of
the Borrower contained in Article IV of this Agreement shall be true
on and as of the date of such Borrowing; and

(d) the fact that, immediately after such Borrowing, the
aggregate principal amount of Loans outstanding and the aggregate Face
Amount of Banker's Acceptances outstanding shall not exceed the amount
of the Commitment at such time.

Each Borrowing shall be deemed to be a representation and warranty by the
Borrower on the date of such Borrowing as to the truth and accuracy of the
facts specified in paragraphs (b), (c) and (d) of this Section; provided that
if such Borrowing consists solely of a Refunding Loan, such Borrowing shall not
be deemed to be such a representation and warranty to the effect set forth in
Section 4.04(b) as to any event, act or condition having a

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Material Adverse Effect which has theretofore been disclosed in writing by the
Borrower to the Bank.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants that:

SECTION 4.01. Corporate Existence and Power. The Borrower is
a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, is duly qualified to transact
business in every jurisdiction where, by the nature of its business, such
qualification is necessary, and has all corporate powers and all governmental
licenses, authorizations, consents and approvals, and all permits, trademarks,
patents and other rights required to carry on its business as now conducted.

SECTION 4.02. Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by the Borrower of this
Agreement, the Note and the other Loan Documents (i) are within the Borrower's
corporate powers, (ii) have been duly authorized by all necessary corporate
action, (iii) require no action by or in respect of or filing with, any
governmental body, agency or official, (iv) do not contravene, or constitute a
default under, any provision of applicable law or regulation or of the
certificate of incorporation or by-laws of the Borrower or of any agreement,
judgment, injunction, order, decree or other instrument binding upon the
Borrower or any of its Subsidiaries, and (v) do not result in the creation or
imposition of any Lien on any asset of the Borrower or any of its Subsidiaries.

SECTION 4.03. Binding Effect. This Agreement constitutes a
valid and binding agreement of the Borrower enforceable in accordance with its
terms, and the Note and the other Loan Documents, when executed and delivered
in accordance with this Agreement, will constitute valid and binding
obligations of the Borrower enforceable in accordance with their respective
terms, provided that the enforceability hereof and thereof is subject in each
case to general principles of equity and to bankruptcy, insolvency and similar
laws affecting the enforcement of creditors' rights generally.

SECTION 4.04. Financial Information. (a) The consolidated
balance sheet of the Borrower and its Consolidated Subsidiaries as of October
3, 1994 and the related consolidated statements of income, shareholders' equity
and cash flows for the Fiscal Year then ended, reported on by Price Waterhouse,
LLP, copies of which have been delivered to the Bank, and the unaudited
consolidated financial statements of the Borrower for the interim period ended
July 2, 1995, copies of which have been delivered to the Bank, fairly present,
in conformity with GAAP,

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the consolidated financial position of the Borrower and its Consolidated
Subsidiaries as of such dates and their consolidated results of operations and
cash flows for such periods stated.

(b) Since October 3, 1994, there has been no event, act,
condition or occurrence having a Material Adverse Effect.

SECTION 4.05. No Litigation. There is no action, suit or
proceeding pending, or to the knowledge of the Borrower threatened, against or
affecting the Borrower or any of its Subsidiaries before any court or
arbitrator or any governmental body, agency or official which could have a
Material Adverse Effect or which in any manner draws into question the
validity of or could impair the ability of the Borrower to perform its
obligations under, this Agreement, the Note or any of the other Loan Documents.
All litigation threatened, against or affecting the Borrower is set forth on
Schedule 4.05.

SECTION 4.06. Compliance with ERISA. (a) The Borrower and
each member of the Controlled Group have fulfilled their obligations under the
minimum funding standards of ERISA and the Code with respect to each Plan and
are in compliance in all material respects with the presently applicable
provisions of ERISA and the Code, and have not incurred any liability to the
PBGC or a Plan under Title IV of ERISA.

(b) Neither the Borrower nor any member of the Controlled
Group is or ever has been obligated to contribute to any Multiemployer Plan.

SECTION 4.07. Compliance with Laws; Payment of Taxes. The
Borrower and its Subsidiaries are in compliance with all applicable laws,
regulations and similar requirements of governmental authorities, except where
such compliance is being contested in good faith through appropriate
proceedings. There have been filed on behalf of the Borrower and its
Subsidiaries all Federal, state and local income, excise, property and other
tax returns which are required to be filed by them and all taxes due pursuant
to such returns or pursuant to any assessment received by or on behalf of the
Borrower or any Subsidiary have been paid. The charges, accruals and reserves
on the books of the Borrower and its Subsidiaries in respect of taxes or other
governmental charges are, in the opinion of the Borrower, adequate. United
States income tax returns of the Borrower and its Subsidiaries have been
examined and closed through December 31, 1991.

SECTION 4.08. Subsidiaries. Each of the Borrower's
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation, is duly qualified
to transact business in every jurisdiction where, by the nature of its
business, such qualification is necessary, and has all corporate powers and all
governmental licenses, authorizations, consents and approvals

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required to carry on its business as now conducted. The Borrower has no
Subsidiaries except for those Subsidiaries listed on Schedule 4.08, which
accurately sets forth each such Subsidiary's complete name and jurisdiction of
incorporation.

SECTION 4.09. Investment Company Act. Neither the Borrower
nor any of its Subsidiaries is an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.

SECTION 4.10. Public Utility Holding Company Act. Neither the
Borrower nor any of its Subsidiaries is a "holding company", or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company", as such terms are defined in the
Public Utility Holding Company Act of 1935, as amended.

SECTION 4.11. Ownership of Property; Liens. Each of the
Borrower and its Consolidated Subsidiaries has title to its properties
sufficient for the conduct of its business, and none of such property is
subject to any Lien except as permitted in Section 5.18.

SECTION 4.12. No Default. Neither the Borrower nor any of its
Consolidated Subsidiaries is in default under or with respect to any agreement,
instrument or undertaking to which it is a party or by which it or any of its
property is bound which could have or cause a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.

SECTION 4.13. Full Disclosure. All information heretofore
furnished by the Borrower to the Bank for purposes of or in connection with
this Agreement or any transaction contemplated hereby is, and all such
information hereafter furnished by the Borrower to the Bank will be, true,
accurate and complete in every material respect or based on reasonable
estimates on the date as of which such information is stated or certified. The
Borrower has disclosed to the Bank in writing any and all facts which could
have or cause a Material Adverse Effect.

SECTION 4.14. Environmental Matters. (a) Neither the Borrower
nor any Subsidiary is subject to any Environmental Liability which could have
or cause a Material Adverse Effect and neither the Borrower nor any Subsidiary
has been designated as a potentially responsible party under CERCLA or under
any state statute similar to CERCLA. None of the Properties has been
identified on any current or proposed (i) National Priorities List under 40
C.F.R. Section 300, (ii) CERCLIS list or (iii) any list arising from a state
statute similar to CERCLA.

(b) No Hazardous Materials have been or are being used,
produced, manufactured, processed, treated, recycled, generated, stored,
disposed of, managed or otherwise handled at,

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or shipped or transported to or from the Properties or are otherwise present
at, on, in or under the Properties, or, to the best of the knowledge of the
Borrower, at or from any adjacent site or facility that could have or cause a
Material Adverse Effect, except for Hazardous Materials, such as cleaning
solvents, pesticides and other materials used, produced, manufactured,
processed, treated, recycled, generated, stored, disposed of, managed, or
otherwise handled in minimal amounts in the ordinary course of business in
compliance with all applicable Environmental Requirements.

(c) The Borrower, and each of its Subsidiaries and
Affiliates, has procured all Environmental Authorizations necessary for the
conduct of its business, and is in compliance with all Environmental
Requirements in connection with the operation of the Properties and the
Borrower's, and each of its Subsidiary's and Affiliate's, respective
businesses.

SECTION 4.15. Capital Stock. All Capital Stock, debentures,
bonds, notes and all other securities of the Borrower and its Subsidiaries
presently issued and outstanding are validly and properly issued in accordance
with all applicable laws, including, but not limited to, the "Blue Sky" laws of
all applicable states and the federal securities laws. The issued shares of
Capital Stock of the Borrower's Subsidiaries are owned by the Borrower free and
clear of any Lien or adverse claim. At least a majority of the issued shares
of capital stock of each of the Borrower's other Subsidiaries is owned by the
Borrower free and clear of any Lien or adverse claim.

SECTION 4.16. Margin Stock. Neither the Borrower nor any of
its Subsidiaries is engaged principally, or as one of its important activities,
in the business of purchasing or carrying any Margin Stock, and no part of the
proceeds of any Loan or Banker's Acceptance will be used to purchase or carry
any Margin Stock or to extend credit to others for the purpose of purchasing or
carrying any Margin Stock, or be used for any purpose which violates, or which
is inconsistent with, the provisions of Regulation X.

SECTION 4.17. Insolvency. After giving effect to the
execution and delivery of the Loan Documents and the making of the Loans and
the creating of Banker's Acceptances under this Agreement: (i) the Borrower
will not (x) be "insolvent," within the meaning of such term as used in
O.C.G.A. Section 18-2-22 or as defined in Section 101 of the "Bankruptcy
Code", or Section 2 of either the "UFTA" or the "UFCA", or as defined or used
in any "Other Applicable Law" (as those terms are defined below), or (y) be
unable to pay its debts generally as such debts become due within the meaning
of Section 548 of the Bankruptcy Code, Section 4 of the UFTA or Section 6 of
the UFCA, or (z) have an unreasonably small capital to engage in any business
or transaction, whether current or contemplated, within the meaning of Section
548 of the Bankruptcy Code, Section 4 of the UFTA or Section 5 of the UFCA;

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and (ii) the obligations of the Borrower under the Loan Documents and with
respect to the Loans will not be rendered avoidable under any Other Applicable
Law. For purposes of this Section 4.17, "Bankruptcy Code" means Title 11 of the
United States Code, "UFTA" means the Uniform Fraudulent Transfer Act, "UFCA"
means the Uniform Fraudulent Conveyance Act, and "Other Applicable Law" means
any other applicable state law pertaining to fraudulent transfers or acts
voidable by creditors, in each case as such law may be amended from time to
time.

SECTION 4.18. Insurance. The Borrower and each of its
Subsidiaries has (either in the name of the Borrower or in such Subsidiary's
own name), with financially sound and reputable insurance companies, insurance
on all its property in at least such amounts and against at least such risks as
are usually insured against in the same general area by companies of
established repute engaged in the same or similar business.

ARTICLE V

COVENANTS

The Borrower agrees that, so long as the Bank has any
Commitment hereunder or any amount payable hereunder or under the Note remains
unpaid:

SECTION 5.01. Information. The Borrower will deliver to the
Bank beginning with the Fiscal Year ending October 1, 1995, and beginning with
the Fiscal Quarter ending before each Closing Date thereafter:

(a) as soon as available and in any event within 90 days
after the end of each Fiscal Year, a consolidated balance sheet of the
Borrower and its Consolidated Subsidiaries as of the end of such
Fiscal Year and the related consolidated statements of income,
shareholders' equity and cash flows for such Fiscal Year, setting
forth in each case in comparative form the figures for the previous
fiscal year, all certified by Price Waterhouse, LLP or other
independent public accountants of nationally recognized standing, with
such certification to be free of exceptions and qualifications not
acceptable to the Bank;

(b) as soon as available and in any event within 45 days
after the end of each of the first 3 Fiscal Quarters of each Fiscal
Year, a consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such Fiscal Quarter and the
related statement of income and statement of cash flows for such
Fiscal Quarter and for the portion of the Fiscal Year ended at the end
of such Fiscal Quarter, setting forth in each case in comparative form
the figures for the corresponding Fiscal Quarter and the corresponding
portion of the previous Fiscal Year, all

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certified (subject to normal year-end adjustments) as to fairness of
presentation, GAAP and consistency by the chief financial officer, the
treasurer or the chief accounting officer of the Borrower;

(c) simultaneously with the delivery of each set of
financial statements referred to in paragraphs (a) and (b) above, a
certificate, substantially in the form of Exhibit E (a "Compliance
Certificate"), of the chief financial officer or the chief accounting
officer of the Borrower (i) setting forth in reasonable detail the
calculations required to establish whether the Borrower was in
compliance with the requirements of Sections 5.16 through 5.24,
inclusive on the date of such financial statements and (ii) stating
whether any Default exists on the date of such certificate and, if any
Default then exists, setting forth the details thereof and the action
which the Borrower is taking or proposes to take with respect thereto;

(d) simultaneously with the delivery of each set of
annual financial statements referred to in paragraph (a) above, a
statement of the firm of independent public accountants which reported
on such statements to the effect that, in the course of their
examination in connection with such annual financial statements
(without performing any special procedures in order to give such
statement) nothing has come to their attention to cause them to
believe that any Default existed on the date of such financial
statements;

(e) within 5 Domestic Business Days after the Borrower
becomes aware of the occurrence of any Default, a certificate of the
chief financial officer, the treasurer or the chief accounting officer
of the Borrower setting forth the details thereof and the action which
the Borrower is taking or proposes to take with respect thereto;

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

(g) promptly upon the filing thereof, copies of all
registration statements (other than the exhibits thereto and any
registration statements on Form S-8 or its equivalent) and annual,
quarterly or monthly reports which the Borrower shall have filed with
the Securities and Exchange Commission;

(h) if and when any member of the Controlled Group (i)
gives or is required to give notice to the PBGC of any "reportable
event" (as defined in Section 4043 of ERISA) with respect to any Plan
which might constitute grounds for a termination of such Plan under
Title IV of ERISA, or knows

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that the plan administrator of any Plan has given or is required to
give notice of any such reportable event, a copy of the notice of such
reportable event given or required to be given to the PBGC; (ii)
receives notice of complete or partial withdrawal liability under
Title IV of ERISA, a copy of such notice; or (iii) receives notice
from the PBGC under Title IV of ERISA of an intent to terminate or
appoint a trustee to administer any Plan, a copy of such notice; and

(i) from time to time such additional information
regarding the financial position or business of the Borrower and its
Subsidiaries as the Bank may reasonably request.

SECTION 5.02. Inspection of Property, Books and Records. The
Borrower will (i) keep, and cause each Subsidiary to keep, proper books of
record and account in which full, true and correct entries in conformity with
GAAP shall be made of all dealings and transactions in relation to its business
and activities; and (ii) permit, and cause each Subsidiary to permit,
representatives of any Bank at such Bank's expense prior to the occurrence of a
Default and at the Borrower's expense after the occurrence of a Default to
visit and inspect any of their respective properties, to examine and make
abstracts from any of their respective books and records and to discuss their
respective affairs, finances and accounts with their respective officers,
employees and independent public accountants. The Borrower agrees to cooperate
and assist in such visits and inspections, in each case at such reasonable
times and as often as may reasonably be desired.

SECTION 5.03. Maintenance of Existence. The Borrower shall,
and shall cause each Subsidiary to, maintain its corporate existence and carry
on its business in substantially the same manner and in substantially the same
fields as such business is now carried on and maintained.

SECTION 5.04. Dissolution. Neither the Borrower nor any of
its Subsidiaries shall suffer or permit dissolution or liquidation either in
whole or in part or redeem or retire any shares of its own stock or that of any
Subsidiary, except through corporate reorganization to the extent permitted by
Section 5.05.

SECTION 5.05. Consolidations, Mergers and Sales of Assets.
The Borrower will not, nor will it permit any Subsidiary to, consolidate or
merge with or into, or sell, lease or otherwise transfer all or any substantial
part of its assets to, any other Person, or discontinue or eliminate any
business line or segment, provided that (a) the Borrower may merge with another
Person if (i) such Person was organized under the laws of the United States of
America or one of its states, (ii) the Borrower is the corporation surviving
such merger and (iii) immediately after giving effect to such merger, no
Default shall have occurred and be continuing, (b) Subsidiaries of the Borrower
may merge with one another, and (c) the foregoing limitation on the

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sale, lease or other transfer of assets and on the discontinuation or
elimination of a business line or segment shall not prohibit 1) the sale of
Westway Stock, or 2) a transfer of assets or the discontinuance or elimination
of a business line or segment (in a single transaction or in a series of
related transactions) unless the aggregate assets to be so transferred or
utilized in a business line or segment to be so discontinued, when combined
with all other assets transferred (excluding Westway Stock), and all other
assets utilized in all other business lines or segments discontinued, since the
Closing Date, constituted more than 10% of Consolidated Total Assets at the end
of the Fiscal Quarter just ended.

SECTION 5.06. Use of Proceeds. No portion of the proceeds of
the Loans will be used by the Borrower or any Subsidiary (i) in connection
with, whether directly or indirectly, any tender offer for, or other
acquisition of, stock of any corporation with a view towards obtaining control
of such other corporation, unless such tender offer or other acquisition is to
be made on a negotiated basis with the approval of the Board of Directors of
the Person to be acquired, and the provisions of Section 5.17 would not be
violated, (ii) directly or indirectly, for the purpose, whether immediate,
incidental or ultimate, of purchasing or carrying any Margin Stock, or (iii)
for any purpose in violation of any applicable law or regulation.

SECTION 5.07. Compliance with Laws; Payment of Taxes. The
Borrower will, and will cause each of its Subsidiaries and each member of the
Controlled Group to, comply with applicable laws (including but not limited to
ERISA), regulations and similar requirements of governmental authorities
(including but not limited to PBGC), except where the necessity of such
compliance is being contested in good faith through appropriate proceedings.
The Borrower will, and will cause each of its Subsidiaries to, pay promptly
when due all taxes, assessments, governmental charges, claims for labor,
supplies, rent and other obligations which, if unpaid, might become a lien
against the property of the Borrower or any Subsidiary, except liabilities
being contested in good faith and against which, if requested by the Bank, the
Borrower will set up reserves in accordance with GAAP.

SECTION 5.08. Insurance. The Borrower will maintain, and will
cause each of its Subsidiaries to maintain (either in the name of the Borrower
or in such Subsidiary's own name), with financially sound and reputable
insurance companies, insurance on all its property in at least such amounts
and against at least such risks as are usually insured against in the same
general area by companies of established repute engaged in the same or similar
business.

SECTION 5.09. Change in Fiscal Year. The Borrower will not
change its Fiscal Year without the consent of the Bank.

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SECTION 5.10. Maintenance of Property. The Borrower shall,
and shall cause each Subsidiary to, maintain all of its properties and assets
in good condition, repair and working order, ordinary wear and tear excepted.

SECTION 5.11. Environmental Notices. The Borrower shall
furnish to the Bank prompt written notice of all material Environmental
Liabilities, pending, threatened or anticipated Environmental Proceedings,
Environmental Notices, Environmental Judgments and Orders, and Environmental
Releases at, on, in, under or in any way affecting the Properties or any
adjacent property, and all facts, events, or conditions that could lead to any
of the foregoing.

SECTION 5.12. Environmental Matters. The Borrower and its
Subsidiaries will not, and will not permit any Third Party to, use, produce,
manufacture, process, treat, recycle, generate, store, dispose of, manage at,
or otherwise handle, or ship or transport to or from the Properties any
Hazardous Materials except for Hazardous Materials such as cleaning solvents,
pesticides and other similar materials used, produced, manufactured, processed,
treated, recycled, generated, stored, disposed, managed, or otherwise handled
in minimal amounts in the ordinary course of business in compliance with all
applicable Environmental Requirements.

SECTION 5.13. Environmental Release. The Borrower agrees that
upon the occurrence of an Environmental Release at or on any of the Properties
it will act immediately to investigate the extent of, and to take appropriate
remedial action to eliminate, such Environmental Release, whether or not
ordered or otherwise directed to do so by any Environmental Authority.

SECTION 5.14. Transactions with Affiliates. Neither the
Borrower nor any of its Subsidiaries shall enter into, or be a party to, any
transaction with any Affiliate of the Borrower or such Subsidiary (which
Affiliate is not the Borrower or a Subsidiary), except as permitted by law and
in the ordinary course of business and pursuant to reasonable terms which are
fully disclosed in writing by the Bank, and are no less favorable to Borrower
or such Subsidiary than would be obtained in a comparable arm's length
transaction with a Person which is not an Affiliate.

SECTION 5.15. Subsidiary Debt. Attached as Schedule 5.15 is a
list of all Debt of the Borrower and its Subsidiaries in existence on the
Closing Date. The Borrower shall not permit any Subsidiary to incur or permit
to exist any Debt not in existence on the Closing Date, and extensions or
renewals thereof, other than (i) Debt of the types described in clause (vii) of
the definition of Debt which is incurred in the ordinary course of business in
connection with the sale or purchase of goods or to assure performance of an
obligation to a utility or a governmental entity or a worker's compensation
obligation;

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(ii) Debt permitted by clause (iii) of Section 5.16, and (iii) Debt secured by
Liens permitted by Section 5.18.

SECTION 5.16. Loans or Advances. Neither the Borrower nor any
of its Subsidiaries shall make loans or advances to any Person except as
permitted by Section 5.17 and except: (i) loans or advances to employees, in
each case made in the ordinary course of business and consistent with practices
existing on July 2, 1995; (ii) deposits required by government agencies or
public utilities; and (iii) loans or advances to Subsidiaries; provided that
after giving effect to the making of any loans, advances or deposits permitted
by this Section, the Borrower will be in full compliance with all the
provisions of this Agreement.

SECTION 5.17. Investments. Neither the Borrower nor any of
its Subsidiaries shall make Investments in any Person except as permitted by
Section 5.16 and except in (i) direct obligations of the United States
Government maturing within one year, (ii) certificates of deposit issued by a
commercial bank whose credit is satisfactory to the Bank, (iii) commercial
paper rated A1 or the equivalent thereof by Standard & Poor's Corporation or P1
or the equivalent thereof by Moody's Investors Service, Inc. and in either case
maturing within 6 months after the date of acquisition, (iv) tender bonds the
payment of the principal of and interest on which is fully supported by a
letter of credit issued by a United States bank whose long-term certificates of
deposit are rated at least AA or the equivalent thereof by Standard & Poor's
Corporation and Aa or the equivalent thereof by Moody's Investors Service,
Inc., (v) Related Investments in an amount not exceeding the sum of 30% of
Capitalization, minus the amount of Unrelated Investments at the time
outstanding, and/or (vi) Unrelated Investments in an amount not exceeding the
lesser of (A) $20,000,000 and (B) the sum of 30% of Capitalization, minus the
amount of Related Investments at the time outstanding provided however,
immediately after giving effect to the making of any Investment, no Default
shall have occurred and be continuing.

In valuing any Investments for the purpose of applying the
limitations set forth in this Section, such Investments shall be taken at the
original cost thereof, without allowance for any subsequent write-offs or
appreciation or depreciation therein, but less any amount repaid or recovered
on account of capital or principal.

SECTION 5.18. Negative Pledge. Neither the Borrower nor any
Consolidated Subsidiary will create, assume or suffer to exist any Lien on any
asset now owned or hereafter acquired by it, except:

(a) Liens existing on the date of this Agreement and
specified on Schedule 5.18(a), including any renewals, extensions or
refundings (but not increases) of the Debt incurred in connection
therewith to the extent of the principal amount thereof outstanding on
the Closing Date;

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(b) any Lien existing on any specific fixed asset of any
corporation at the time such corporation becomes a Consolidated
Subsidiary and not created in contemplation of such event;

(c) any Lien on any specific fixed asset securing Debt
incurred or assumed for the purpose of financing all or any part of
the cost of acquiring or constructing such asset, provided that such
Lien attaches to such asset concurrently with or within 18 months
after the acquisition or completion of construction thereof;

(d) any Lien on any specific fixed asset of any
corporation existing at the time such corporation is merged or
consolidated with or into the Borrower or a Consolidated Subsidiary
and not created in contemplation of such event;

(e) any Lien existing on any specific fixed asset prior
to the acquisition thereof by the Borrower or a Consolidated
Subsidiary and not created in contemplation of such acquisition;

(f) Liens securing Debt owing by any Subsidiary to the
Borrower;

(g) any Lien arising out of the refinancing, extension,
renewal or refunding of any Debt secured by any Lien permitted by any
of the foregoing paragraphs of this Section, provided that (i) such
Debt is not secured by any additional assets, and (ii) the amount of
such Debt secured by any such Lien is not increased;

(h) Liens incidental to the conduct of its business or
the ownership of its assets which (i) do not secure Debt and (ii) do
not in the aggregate materially detract from the value of its assets
or materially impair the use thereof in the operation of its business;

(i) any Lien on Margin Stock; and

(j) Liens on inventories of the Borrower consisting of
sugar processed from sugar beets and sugarcane securing current
liabilities of the Borrower or any Subsidiary to the United States
Commodity Credit Corporation, provided that the amount of the current
liabilities so secured by a Lien in favor of the United states
Commodity Credit Corporation shall be less than the fair market value
of the related seasonal sugar inventories of the Borrower.

SECTION 5.19. Ratio of Long-Term Debt to Capitalization. The
ratio of Long-Term Debt to Capitalization will not at any time exceed 0.45 to
1.00.

SECTION 5.20. Ratio of Adjusted Cash Flow to Interest and
Leases. The ratio of (i) Consolidated Adjusted Cash Flow to

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(ii) Consolidated Interest Expense plus obligations of the Borrower and its
Consolidated Subsidiaries with respect to operating leases shall be equal to or
greater than 3.0 to 1.0 as of the end of each Fiscal Quarter, for the Fiscal
Quarter just ended and the immediately preceding 3 Fiscal Quarters; provided,
that the Borrower shall be deemed to be in compliance with this covenant if, at
the end of no more than 2 out of any 6 consecutive Fiscal Quarters, such ratio
for the Fiscal Quarter just ended and the immediately preceding 3 Fiscal
Quarters is less than 3.0 to 1.0 but is equal to or greater than 2.5 to 1.0.

SECTION 5.21. Ratio of Consolidated Current Assets to
Consolidated Current Liabilities. The ratio of Consolidated Current Assets to
Consolidated Current Liabilities will not at any time be less than 1.15 to
1.00.

SECTION 5.22. Minimum Stockholders' Equity. Stockholder'
Equity will at no time be less than $150,000,000 plus the sum of (i) 50% of the
cumulative Reported Net Income of the Borrower and its Consolidated
Subsidiaries during any period after July 2, 1995 (taken as one accounting
period), calculated quarterly at the end of each Fiscal Quarter but excluding
from such calculations of Reported Net Income for purposes of this clause (i),
any quarter in which the Reported Net Income of the Borrower and its
Consolidated Subsidiaries is negative, (ii) 100% of the cumulative Net Proceeds
of Capital Stock received during any period after July 2, 1995, calculated
quarterly at the end of each Fiscal Quarter, and (iii) 100% of the amount of
any equity resulting from conversion of Debt to equity at any time after July
2, 1995.

SECTION 5.23. Ratio of Long-Term Debt to Consolidated Adjusted
Cash Flow. At the end of each Fiscal Quarter, the ratio of Long-Term Debt to
Consolidated Adjusted Cash Flow for the Fiscal Quarter just ended and the
immediately preceding 3 Fiscal Quarters shall not have been greater than 4.0 to
1.00.

SECTION 5.24. Intangibles. The Borrower shall not, without
the prior consent of the Bank, acquire or cause to exist, at any time,
intangible assets (as determined in accordance with GAAP), net of amortization,
in an aggregate amount greater than 25% of Stockholders' Equity for the Fiscal
Quarter just ended.

ARTICLE VI

DEFAULTS

SECTION 6.01. Events of Default. If one or more of the
following events ("Events of Default") shall have occurred and be continuing:

(a) the Borrower shall fail to pay when due any principal
of any Loan or Banker's Acceptance or shall fail to pay any interest
on any Loan within 5 Domestic Business

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Days after such interest shall become due, or shall fail to pay any
fee or other amount payable hereunder within 5 Domestic Business Days
after such fee or other amount becomes due; or

(b) the Borrower shall fail to observe or perform any
covenant contained in Sections 5.01(e), 5.02(ii), 5.03 through 5.06,
inclusive, Sections 5.15 or 5.16, or Sections 5.18 through 5.24,
inclusive; or

(c) the Borrower shall fail to observe or perform any
covenant or agreement contained or incorporated by reference in this
Agreement (other than those covered by paragraph (a) or (b) above) and
such failure shall not have been cured within 30 days after the
earlier to occur of (i) written notice thereof has been given to the
Borrower by the Bank or (ii) the date the Borrower is required to
notify the Bank of any such failure pursuant to Section 5.01(e); or

(d) any representation, warranty, certification or
statement made by the Borrower in Article IV of this Agreement or in
any certificate, financial statement or other document delivered
pursuant to this Agreement shall prove to have been incorrect or
misleading in any material respect when made (or deemed made); or

(e) the Borrower or any Subsidiary shall fail to make any
payment in respect of Debt outstanding (other than the Note) when due
or within any applicable grace period; or

(f) any event or condition shall occur which results in the
acceleration of the maturity of Debt (or any obligation under any
interest rate protection agreement), outstanding of the Borrower or
any Subsidiary (including, without limitation, any required mandatory
prepayment or "put" of such Debt to the Borrower or any Subsidiary) or
enables (or, with the giving of notice or lapse of time or both, would
enable) the holders of such Debt or commitment or interest rate
protection agreement or any Person acting on such holders' behalf to
accelerate the maturity thereof or terminate any such commitment
(including, without limitation, any required mandatory prepayment or
"put" of such Debt to the Borrower or any Subsidiary); provided, that
no Event of Default shall be deemed to have occurred solely by reason
of a default under any of Sections 5.6 through 5.9, inclusive, of the
Senior Note Agreement which occurs within one year after the Closing
Date, unless the maturity of such Debt has been accelerated; provided,
further, that any amendment to the Senior Note Agreement which would
have the effect of making the Senior Note Agreement more restrictive
than this Agreement as in effect on the Closing Date must be
acceptable to the Bank; or

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(g) the Borrower or any Subsidiary shall commence a
voluntary case or other proceeding seeking liquidation, reorganization
or other relief with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of
its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an
involuntary case or other proceeding commenced against it, or shall
make a general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due, or shall take any
corporate action to authorize any of the foregoing; or

(h) an involuntary case or other proceeding shall be
commenced against the Borrower or any Subsidiary seeking liquidation,
reorganization or other relief with respect to it or its debts under
any bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of
its property, and such involuntary case or other proceeding shall
remain undismissed and unstayed for a period of 60 days; or an order
for relief shall be entered against the Borrower or any Subsidiary
under the federal bankruptcy laws as now or hereafter in effect; or

(i) the Borrower or any member of the Controlled Group
shall fail to pay when due any material amount which it shall have
become liable to pay to the PBGC or to a Plan under Title IV of ERISA;
or notice of intent to terminate a Plan or Plans shall be filed under
Title IV of ERISA by the Borrower, any member of the Controlled Group,
any plan administrator or any combination of the foregoing; or the
PBGC shall institute proceedings under Title IV of ERISA to terminate
or to cause a trustee to be appointed to administer any such Plan or
Plans or a proceeding shall be instituted by a fiduciary of any such
Plan or Plans to enforce Section 515 or 4219(c)(5) of ERISA and such
proceeding shall not have been dismissed within 30 days thereafter; or
a condition shall exist by reason of which the PBGC would be entitled
to obtain a decree adjudicating that any such Plan or Plans must be
terminated; or

(j) one or more judgments or orders for the payment of
money in an aggregate amount in excess of $500,000 shall be rendered
against the Borrower or any Subsidiary and such judgment or order
shall continue unsatisfied and unstayed for a period of 30 days; or

(k) a federal tax lien shall be filed against the
Borrower or any Subsidiary under Section 6323 of the Code or a lien of
the PBGC shall be filed against the Borrower or

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any Subsidiary under Section 4068 of ERISA and in either case such
lien shall remain undischarged for a period of 25 days after the date
of filing; or

(l) (i) any Person or two or more Persons acting in concert
shall have acquired beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934) of 20% or more of the outstanding shares of the
voting stock of the Borrower; or (ii) as of any date a majority of the
Board of Directors of the Borrower consists of individuals who were
not either (A) directors of the Borrower as of the corresponding date
of the previous year, (B) selected or nominated to become directors by
the Board of Directors of the Borrower of which a majority consisted
of individuals described in clause (A), or (C) selected or nominated
to become directors by the Board of Directors of the Borrower of which
a majority consisted of individuals described in clause (A) and
individuals described in clause (B)

then, and in every such event, (i) the Bank may, by notice to the Borrower,
terminate the Commitment and it shall thereupon terminate, (ii) the Bank may
refuse to make available any Borrowing which has been requested but not yet
funded, and (iii) the Bank may, by notice to the Borrower, declare the Note
(together with accrued interest thereon) to be, and the Note shall thereupon
become, immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower
together with (x) in the case of Loans, interest at the Default Rate accruing
on the principal amount thereof from and after the date of such Event of
Default and (y) in the case of Banker's Acceptances, a 2.0% per annum fee on
the Face Amount of all Banker's Acceptances shall be paid by the Borrower to
the Bank from and after the date of any such Event of Default until such date
as such Banker's Acceptances are collateralized in full pursuant to the
immediately succeeding paragraph; provided that if any Event of Default
specified in paragraph (g) or (h) above occurs with respect to the Borrower,
without any notice to the Borrower or any other act by the Bank, the Commitment
shall thereupon terminate and the Note (together with accrued interest thereon)
and the Banker's Acceptances shall become immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower together with (x) in the case of Loans, interest
thereon at the Default Rate accruing on the principal amount thereof from and
after the date of such Event of Default and (y) in the case of Banker's
Acceptances, a 2.0% per annum fee on the Face Amount of all Banker's
Acceptances shall be paid by the Borrower to the Bank from and after the date
of any such Event of Default until such date as such Banker's Acceptances are
collateralized in full pursuant to the immediately succeeding paragraph.
Notwithstanding the foregoing, the Bank shall have available to it all other
remedies at law or equity.

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In addition to the provisions contained in the immediately
preceding paragraph, the Borrower agrees that upon the occurrence of an Event
of Default and the acceleration of the maturity of the Notes pursuant to clause
(iii) above, the Borrower will establish a deposit account (the "Collateral
Account") to be maintained by the Bank, and the Borrower will promptly pay to
the Bank for deposit in the Collateral Account, in immediately available funds,
an amount equal to the aggregate of the then outstanding Face Amounts of
Banker's Acceptances. As security for the payment of the Note and the
Borrower's other obligations set forth in any of the other Loan Documents, the
Borrower shall grant, convey, assign and pledge and create in the Bank's favor
a Lien on all monies, instruments and securities at any time held in or
acquired in connection with the Collateral Account, together with all proceeds
thereof. The Collateral Account shall be at all times under the sole dominion
and control of the Bank. The Bank shall (i) apply any funds in the Collateral
Account on account of Banker's Acceptances when the same become due and payable
if and to the extent that the Borrower shall fail directly to pay such Banker's
Acceptances and (ii) after the Termination Date and the date on which all
Banker's Acceptances shall have expired and all of the Borrower's obligations
to the Bank in respect thereof shall have been paid in full, apply any proceeds
remaining in the Collateral Account first to pay the Note and the Borrower's
other obligations set forth in any of the Loan Documents (in such order as the
Bank shall, in its sole discretion, determine) and then to refund any remaining
amount to the Borrower. The Bank shall invest the funds held in the Collateral
Account in one or more certificates of deposit issued by the Bank with
maturities not to exceed 30 days, unless the aggregate amount of such funds
which are not then otherwise invested is less than the smallest certificate of
deposit offered by the Bank, in which case the Bank shall have no obligation to
invest such funds. The Borrower recognizes that any losses or taxes with
respect to such investments shall be borne solely by the Borrower, and the
Borrower agrees to hold the Bank harmless from any such losses or taxes. The
Bank may liquidate any investment held in the Collateral Account in order to
apply the proceeds of such investment on account of the Note and the Borrower's
other obligations set forth in any of the Loan Documents without regard to
whether such investment has matured and without liability for any penalty or
other fee incurred (with respect to which the Borrower hereby agrees to
reimburse the Bank) as a result of such application. Upon the establishment of
the Collateral Account, the Borrower shall pay to the Bank the fees customarily
charged by it with respect to the maintenance of accounts similar to the
Collateral Account.

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ARTICLE VII

CHANGE IN CIRCUMSTANCES; COMPENSATION

SECTION 7.01. Basis for Determining Interest Rate Inadequate
or Unfair. If on or prior to the first day of any Interest Period:

(a) the Bank determines that deposits in Dollars (in the
applicable amounts) are not being offered in the relevant market for
such Interest Period, or

(b) the Bank determines that the London Interbank Offered Rate
will not adequately and fairly reflect the cost to the Bank of funding
the relevant type of Fixed Rate Loans for such Interest Period,

the Bank shall forthwith give notice thereof to the Borrower, whereupon until
the Bank notifies the Borrower that the circumstances giving rise to such
suspension no longer exist, the obligation of the Bank to make the type of
Fixed Rate Loans specified in such notice shall be suspended. Unless the
Borrower notifies the Bank at least 2 Domestic Business Days before the date of
any Borrowing of such type of Fixed Rate Loans for which a Notice of Borrowing
has previously been given that it elects not to borrow on such date, such
Borrowing shall instead be made as a Base Rate Borrowing.

SECTION 7.02. Illegality. If, after the date hereof, the
adoption of any applicable law, rule or regulation, or any change therein, or
any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof (any such agency being referred to as an "Authority" and
any such event being referred to as a "Change of Law"), or compliance by the
Bank (or its Lending Office) with any request or directive (whether or not
having the force of law) of any Authority shall make it unlawful or impossible
for the Bank (or its Lending Office) to make, maintain or fund its Euro-Dollar
Loans and the Bank shall so notify the Borrower, then until the Bank notifies
the Borrower that the circumstances giving rise to such suspension no longer
exist, the obligation of the Bank to make Euro-Dollar Loans shall be suspended.
Before giving any notice to the Borrower pursuant to this Section, the Bank
shall designate a different Lending Office if such designation will avoid the
need for giving such notice and will not, in the judgment of such Bank, be
otherwise disadvantageous to the Bank. If the Bank shall determine that it may
not lawfully continue to maintain and fund any of its outstanding Euro-Dollar
Loans to maturity and shall so specify in such notice, the Borrower shall
immediately prepay in full the then outstanding principal amount of each
Euro-Dollar Loan of the Bank, together with accrued interest thereon.
Concurrently with prepaying each such Euro-Dollar Loan, the Borrower shall
borrow a Base Rate Loan in

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an equal principal amount from the Bank, and the Bank shall make such a Base
Rate Loan.

SECTION 7.03. Increased Cost and Reduced Return. (a) If after
the date hereof, a Change of Law or compliance by any Bank (or its Lending
Office) with any request or directive (whether or not having the force of law)
of any Authority:

(i) shall impose, modify or deem applicable any reserve,
special deposit or similar requirement (including, without limitation,
any such requirement imposed by the Board of Governors of the Federal
Reserve System, but excluding with respect to any Euro-Dollar Loan any
such requirement included in an applicable Euro-Dollar Reserve
Percentage) against assets of, deposits with or for the account of, or
credit extended by, the Bank (or its Lending Office); or

(ii) shall impose on the Bank (or its Lending Office) or the
London interbank market any other condition affecting its Fixed Rate
Borrowings, its Note or its obligation to make available Fixed Rate
Borrowings;

and the result of any of the foregoing is to increase the cost to the Bank (or
its Lending Office) of making or maintaining any Loan, or to reduce the amount
of any sum received or receivable by the Bank (or its Lending Office) under
this Agreement or under its Note or Banker's Acceptances with respect thereto,
by an amount deemed by the Bank to be material, then, within 15 days after
demand by the Bank, the Borrower shall pay to the Bank such additional amount
or amounts as will compensate the Bank for such increased cost or reduction.

(b) If the Bank shall have determined that after the date
hereof the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof, or compliance by the Bank (or its Lending Office) with
any request or directive regarding capital adequacy (whether or not having the
force of law) of any Authority, has or would have the effect of reducing the
rate of return on such Bank's capital as a consequence of its obligations
hereunder to a level below that which the Bank could have achieved but for such
adoption, change or compliance (taking into consideration such Bank's policies
with respect to capital adequacy) by an amount deemed by such Bank to be
material, then from time to time, within 15 days after demand by the Bank, the
Borrower shall pay to the Bank such additional amount or amounts as will
compensate the Bank for such reduction.

(c) The Bank will promptly notify the Borrower of any
event of which it has knowledge, occurring after the date hereof, which will
entitle such Bank to compensation pursuant to this Section and will designate a
different Lending Office if such

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designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the judgment of the Bank, be otherwise disadvantageous to such
Bank. A certificate of any Bank claiming compensation under this Section and
setting forth the additional amount or amounts to be paid to it hereunder
shall be conclusive in the absence of manifest error. In determining such
amount, the Bank may use any reasonable averaging and attribution methods.

(d) The provisions of this Section 7.03 shall be
applicable with respect to any Participant, Assignee or other Transferee, and
any calculations required by such provisions shall be made based upon the
circumstances of such Participant, Assignee or other Transferee.

SECTION 7.04. Base Rate Loans or Other Fixed Rate Loans
Substituted for Affected Fixed Rate Loans. If (i) the obligation of the Bank
to make or maintain any type of Fixed Rate Loans has been suspended pursuant to
Section 7.02 or (ii) any Bank has demanded compensation under Section 7.03, and
the Borrower shall, by at least 5 Euro-Dollar Business Days' prior notice to
the Bank, have elected that the provisions of this Section shall apply to the
Bank, then, unless and until the Bank notifies the Borrower that the
circumstances giving rise to such suspension or demand for compensation no
longer apply:

(a) all Loans which would otherwise be made by the Bank
as Euro-Dollar Loans shall be made instead as Base Rate Loans, and

(b) after each of the Euro-Dollar Loans has been repaid,
all payments of principal which would otherwise be applied to repay
such Fixed Rate Loans shall be applied to repay the Base Rate Loans
instead.

SECTION 7.05. Compensation. Upon the request of the Bank, the
Borrower shall pay to the Bank such amount or amounts as shall compensate the
Bank for any loss, cost or expense incurred by the Bank as a result of:

(a) any payment or prepayment (pursuant to Section 2.10,
2.11, 6.01, 7.02 or otherwise) of a Fixed Rate Borrowing on a date other than
the last day of an Interest Period for such Borrowing; or

(b) any failure by the Borrower to prepay a Fixed Rate
Borrowing on the date for such prepayment specified in the relevant notice of
prepayment hereunder ; or

(c) any failure by the Borrower to borrow a Fixed Rate
Loan on the date for the Fixed Rate Borrowing of which such Fixed Rate Loan is
a part specified in the applicable Notice of Borrowing delivered pursuant to
Section 2.02 or notification of

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acceptance of Offered Rate Credit Quotes pursuant to Section 2.03(e);

such compensation to include (except where a different amount has been agreed
to pursuant to Section 2.10(b)), without limitation, an amount equal to the
excess, if any, of (x) the amount of interest which would have accrued (or
amount of principal which would have accreted on a Banker's Acceptance) on the
amount so paid or prepaid or not prepaid or borrowed for the period from the
date of such payment, prepayment or failure to prepay or borrow to the last day
of the then current Interest Period for such Fixed Rate Borrowing (or, in the
case of a failure to prepay or borrow, the Interest Period for such Fixed Rate
Borrowing which would have commenced on the date of such failure to prepay or
borrow) at the applicable rate of interest for such Fixed Rate Borrowing (or
amount of principal which would have accreted on a Banker's Acceptance)
provided for herein over (y) the amount of interest (as reasonably determined
by such Bank) such Bank would have paid on (i) deposits in Dollars of
comparable amounts having terms comparable to such period placed with it by
leading banks in the London interbank market (if such Fixed Rate Borrowing is a
Euro-Dollar Loan or an Offered Rate Loan based on such deposits).

ARTICLE VIII

MISCELLANEOUS

SECTION 8.01. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including bank wire,
telecopier or similar writing) and shall be given to such party at its address
or telecopier number set forth in the Letter Agreement or such other address or
telecopier number as such party may hereafter specify for the purpose by notice
to each other party. Each such notice, request or other communication shall be
effective (i) if given by telecopier, when such telecopy is transmitted to the
telecopier number specified in this Section and the appropriate confirmation is
received, (ii) if given by mail, 72 hours after such communication is deposited
in the mails with first class postage prepaid, addressed as aforesaid or (iii)
if given by any other means, when delivered at the address specified in this
Section; provided that notices to the Bank under Article II shall not be
effective until received.

SECTION 8.02. No Waivers. No failure or delay by the Bank in
exercising any right, power or privilege hereunder or under the Note or other
Loan Document shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.

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SECTION 8.03. Expenses; Documentary Taxes. The Borrower shall
pay (i) all out-of-pocket expenses of the Bank, including fees and
disbursements of special counsel for the Bank, in connection with the
preparation of any waiver or consent hereunder or under any other Loan
Documents or any amendment hereof or thereof or any Default or alleged Default
hereunder or thereunder and (ii) if a Default occurs, all out-of-pocket
expenses incurred by the Bank, including fees and disbursements of counsel, in
connection with such Default and collection and other enforcement proceedings
resulting therefrom, including out-of-pocket expenses incurred in enforcing
this Agreement and the other Loan Documents. The Borrower shall indemnify the
Bank against any transfer taxes, documentary taxes, assessments or charges made
by any Authority by reason of the execution and delivery of this Agreement or
the other Loan Documents.

SECTION 8.04. Indemnification. The Borrower shall indemnify
the Bank and each Affiliate thereof and its directors, officers, employees and
agents from, and hold each of them harmless against, any and all losses,
liabilities, claims or damages to which any of them may become subject, insofar
as such losses, liabilities, claims or damages arise out of or result from any
actual or proposed use by the Borrower of the proceeds of any extension of
credit by the Bank hereunder or breach by the Borrower of this Agreement or any
other Loan Document or from any investigation, litigation (including, without
limitation, any actions taken by the Bank to enforce this Agreement or any of
the other Loan Documents) or other proceeding (including, without limitation,
any threatened investigation or proceeding) relating to the foregoing, and the
Borrower shall reimburse the Bank, and each Affiliate thereof and their its
directors, officers, employees and agents, upon demand for any expenses
(including, without limitation, legal fees) incurred in connection with any
such investigation or proceeding; but excluding any such losses, liabilities,
claims, damages or expenses incurred by reason of the gross negligence or
wilful misconduct of the Person to be indemnified.

SECTION 8.05. Setoff; Sharing of Setoffs. (a) The Borrower
agrees that each Bilateral Lender shall have a lien for all indebtedness and
obligations owing to it from the Borrower upon all deposits or deposit
accounts, of any kind, or any interest in any deposits or deposit accounts
thereof, now or hereafter pledged, mortgaged, transferred or assigned to such
Bilateral Lender or otherwise in the possession or control of such Bilateral
Lender for any purpose for the account or benefit of the Borrower and including
any balance of any deposit account or of any credit of the Borrower with such
Bilateral Lender, whether now existing or hereafter established hereby
authorizing such Bilateral Lender at any time or times with or without prior
notice to apply such balances or any part thereof to such of the indebtedness
and obligations owing by the Borrower to such Bilateral Lender then past due
and in such amounts as it may elect, and whether or not the collateral, if any,
or the

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responsibility of other Persons primarily, secondarily or otherwise liable may
be deemed adequate. For the purposes of this paragraph, all remittances and
property shall be deemed to be in the possession of such Bilateral Lender as
soon as the same may be put in transit to it by mail or carrier or by other
bailee. The Borrower agrees, to the fullest extent it may effectively do so
under applicable law, that any holder of a participation in a Note or Banker's
Acceptance, whether or not acquired pursuant to the foregoing arrangements, may
exercise rights of setoff or counterclaim and other rights with respect to such
participation as fully as if such holder of a participation were a direct
creditor of the Borrower in the amount of such participation.

(b) Each Bilateral Lender agrees that if it shall, by
exercising any right of setoff or counterclaim or resort to collateral security
or otherwise, receive payment of a proportion of the aggregate amount of
principal and interest owing with respect to the Note and Banker's Acceptances
held by it which is greater than the proportion received by any other Bilateral
Lender in respect of the aggregate amount of all principal and interest owing
with respect to the Note and Banker's Acceptances held by such other Bilateral
Lender, the Bilateral Lender receiving such proportionately greater payment
shall purchase such participations in the Notes and Banker's Acceptances held
by the other Bilateral Lender owing to such other Bilateral Lenders, and such
other adjustments shall be made, as may be required so that all such payments
of principal and interest with respect to the Notes and Banker's Acceptances
held by the Banks owing to such other Bilateral Lenders shall be shared by the
Bilateral Lenders pro rata; provided that (i) nothing in this Section shall
impair the right of any Bilateral Lender to exercise any right of setoff or
counterclaim it may have and to apply the amount subject to such exercise to
the payment of indebtedness of the Borrower other than its indebtedness under
the Notes and Banker's Acceptances, and (ii) if all or any portion of such
payment received by the purchasing Bilateral Lender is thereafter recovered
from such purchasing Bilateral Lender, such purchase from each other Bilateral
Lender shall be rescinded and such other Bilateral Lender shall repay to the
purchasing Bilateral Lender the purchase price of such participation to the
extent of such recovery together with an amount equal to such other Bilateral
Lender's ratable share (according to the proportion of (x) the amount of such
other Bilateral Lender's required repayment to (y) the total amount so
recovered from the purchasing Bilateral Lender) of any interest or other amount
paid or payable by the purchasing Bilateral Lender in respect of the total
amount so recovered. The Borrower agrees, to the fullest extent it may
effectively do so under applicable law, that any holder of a participation in a
Note or Banker's Acceptance, whether or not acquired pursuant to the foregoing
arrangements, may exercise rights of setoff or counterclaim and other rights
with respect to such participation as fully as if such holder of a
participation were a direct creditor of the Borrower in the

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amount of such participation. The foregoing covenants are intended for the
mutual benefit of the Bank and each other Bilateral Lender, and the Borrower
and the Bank agree, with respect to the Agreement, that each other Bilateral
Lender shall be a third party beneficiary of, and shall have the right to
enforce, the foregoing covenants.

(c) In furtherance of the provisions of this Section 8.05, the
Borrower agrees to furnish in writing to each Bilateral Lender, with respect to
each other Bilateral Lender, the name, address, telephone number, facsimile
number and name of a contact person, and promptly upon any change in any of the
foregoing, or upon the addition or deletion of any Bilateral Lender, or upon
any increase or decrease in the Commitment of any Bilateral Lender, to notify
each other Bilateral Lender thereof in writing.

(d) The provisions of this Section 8.05 are for the benefit
of, and may be enforced against the Borrower and each other Bilateral Lender
by, each Bilateral Lender, as a third party beneficiary.

SECTION 8.06. Amendments and Waivers. Any provision of this
Agreement, the Note or any other Loan Documents may be amended or waived if,
but only if, such amendment or waiver is in writing and is signed by the
Borrower and the Bank.

SECTION 8.07. Successors and Assigns. (a) The Borrower may
not assign or otherwise transfer any of its rights under this Agreement.

(b) The Bank may at any time sell to one or more Persons
(each a "Participant") participating interests in any Loan owing to the Bank,
the Note held by the Bank, the Commitment hereunder or any other interest of
the Bank hereunder. In the event of any such sale by the Bank of a
participating interest to a Participant, the Bank's obligations under this
Agreement shall remain unchanged, the Bank shall remain solely responsible for
the performance thereof, the Bank shall remain the holder of the Note for all
purposes under this Agreement, and the Borrower shall continue to deal solely
and directly with the Bank in connection with the Bank's rights and obligations
under this Agreement. In no event shall the Bank, in selling a participation,
be obligated to the Participant to take or refrain from taking any action
hereunder except that the Bank may agree that it will not (except as provided
below), without the consent of the Participant, agree to (i) the change of any
date fixed for the payment of principal of or interest on the related loan or
loans, (ii) the change of the amount of any principal, interest or fees due on
any date fixed for the payment thereof with respect to the related loan or
loans, (iii) the change of the principal of the related loan or loans, (iv) any
change in the

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rate at which either interest is payable thereon or (if the Participant is
entitled to any part thereof) fee is payable hereunder from the rate at which
the Participant is entitled to receive interest or fee (as the case may be) in
respect of such participation, (v) the release or substitution of all or any
substantial part of the collateral (if any) held as security for the Loans and
the Banker's Acceptances, or (vi) the release of any Guarantee given to support
payment of the Loans and the Banker's Acceptances. The Borrower agrees that
each Participant shall be entitled to the benefits of Article VII with respect
to its participation in Loans and Banker's Acceptances outstanding from time to
time.

(c) The Bank may at any time assign to one or more banks or
financial institutions (each an "Assignee") all, or in the case of its Loans,
Banker's Acceptances and Commitments, a proportionate part of all its Loans,
Banker's Acceptances and Commitments, of its rights and obligations under this
Agreement, the Note, the Banker's Acceptances and the other Loan Documents, and
such Assignee shall assume all such rights and obligations, pursuant to an
Assignment and Acceptance, executed by such Assignee and, subject to clause
(iii) below, by the Borrower; provided that (i) no interest may be sold by the
Bank pursuant to this paragraph (c) unless the Assignee shall agree to assume
ratably equivalent portions of the Commitment, (ii) if the Bank is assigning
only a portion of its Commitment, then, the amount of the Commitment being
assigned (determined as of the effective date of the assignment) shall be in an
amount not less than $10,000,000, (iii) except during the continuance of a
Default, no interest may be sold by the Bank pursuant to this paragraph (c) to
any Assignee that is not then a Bilateral Lender (or an Affiliate of a
Bilateral Lender) without the consent of the Borrower, which consent shall be
deemed to have been given unless the Borrower provides the Bank written notice
of its refusal to consent to the assignment within 5 Domestic Business Days
from the date the request was made. Upon (A) execution of the Assignment and
Acceptance by the Bank and such Assignee, and (if applicable) the Borrower, (B)
delivery of an executed copy of the Assignment and Acceptance to the Borrower,
(C) payment by such Assignee to the Bank of an amount equal to the purchase
price agreed between the Bank and such Assignee, and (D) execution by the
Assignee and the Borrower of a Letter Agreement, such Assignee shall for all
purposes become a Bilateral Lender, with a separate and independent credit
agreement with the Borrower, rather than a party to this Agreement, with a
Commitment as set forth in such instrument of assumption and in such Letter
Agreement, and the Bank shall be released from its obligations hereunder to a
corresponding extent, and no further consent or action by the Borrower shall be
required. Upon the consummation of any transfer to an Assignee pursuant to
this paragraph (c), the Bank and the Borrower shall make appropriate
arrangements so that, if required, a new Note is issued and, if applicable, new
Banker's Acceptances are issued, to the Bank hereunder and a new

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note is issued and, if applicable, new banker's acceptances are issued, to such
Assignee under such separate credit agreement.

(d) Subject to the provisions of Section 8.09, the Borrower
authorizes the Bank to disclose to any Participant, Assignee or other
transferee (each a "Transferee") and any prospective Transferee any and all
financial information in the Bank's possession concerning the Borrower which
has been delivered to the Bank by the Borrower pursuant to this Agreement or
which has been delivered to such Bank by the Borrower in connection with the
Bank's credit evaluation prior to entering into this Agreement.

(e) No Participant shall be entitled to receive any greater
payment under Section 7.03 than the transferor Bank would have been entitled to
receive with respect to the rights transferred, unless such transfer is made
with the Borrower's prior written consent or by reason of the provisions of
Section 7.02 or 7.03 requiring such Bank to designate a different Lending
Office under certain circumstances or at a time when the circumstances giving
rise to such greater payment did not exist.

(f) Anything in this Section 8.08 to the contrary
notwithstanding, the Bank may assign and pledge all or any portion of the
Loans, Banker's Acceptances and/or obligations owing to it to any Federal
Reserve Bank or the United States Treasury as collateral security pursuant to
Regulation A of the Board of Governors of the Federal Reserve System and any
Operating Circular issued by such Federal Reserve Bank, provided that any
payment in respect of such assigned Loans, Banker's Acceptances and/or
obligations made by the Borrower to the assigning and/or pledging Bank in
accordance with the terms of this Agreement shall satisfy the Borrower's
obligations hereunder in respect of such assigned Loans, Banker's Acceptances
and/or obligations to the extent of such payment. No such assignment shall
release the Bank from its obligations hereunder.

SECTION 8.08. Confidentiality. The Bank agrees to exercise
commercially reasonable efforts to keep any information delivered or made
available by the Borrower to it which is clearly indicated to be confidential
information, confidential from anyone other than persons employed or retained
by the Bank who are or are expected to become engaged in evaluating, approving,
structuring or administering the Loans and Banker's Acceptances; provided that
nothing herein shall prevent the Bank from disclosing such information (i) to
any other Bilateral Lender, (ii) upon the order of any court or administrative
agency, (iii) upon the request or demand of any regulatory agency or authority
having jurisdiction over the Bank, (iv) which has been publicly disclosed, or
which was in the Bank's possession prior to the Borrower's disclosure to the
Bank and, to the Bank's knowledge, not subject to any other obligation, whether
express or implied, of confidentiality, (v) to the extent reasonably required
in connection with any litigation to which the Bank or

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its Affiliates may be a party, (vi) to the extent reasonably required in
connection with the exercise of any remedy hereunder, (vii) to the Bank's legal
counsel and independent auditors and (viii) to any actual or proposed
Participant, Assignee or other Transferee of all or part of its rights
hereunder which has agreed in writing to be bound by the provisions of this
Section 8.09; provided that should disclosure of any such confidential
information be required by virtue of clause (ii) of the immediately preceding
sentence, the Bank shall promptly notify the Borrower of same so as to allow
the Borrower to seek a protective order or to take any other appropriate
action; provided, further, that, the Bank shall not be required to delay
compliance with any directive to disclose any such information so as to allow
the Borrower to effect any such action.

SECTION 8.09. Governing Law. This Agreement, the Letter
Agreement, the Note and each Banker's Acceptance shall be construed in
accordance with and governed by the law of the state in which the Bank has its
principal office.

SECTION 8.10. Severability. In case any one or more of the
provisions contained in this Agreement, the Note, the Banker's Acceptances or
any of the other Loan Documents should be invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein and therein shall not in any way be affected or
impaired thereby and shall be enforced to the greatest extent permitted by law.

SECTION 8.11. Interest. In no event shall the amount of
interest (and for purposes of this Section, accreted principal with respect to
a Banker's Acceptance shall be included in all references to "interest"), and
all charges, amounts or fees contracted for, charged or collected pursuant to
this Agreement, the Letter Agreement, the Notes, the Banker's Acceptances or
the other Loan Documents and deemed to be interest under applicable law
(collectively, "Interest") exceed the highest rate of interest allowed by
applicable law (the "Maximum Rate"), and in the event any such payment is
inadvertently received by the Bank, then the excess sum (the "Excess") shall be
credited as a payment of principal, unless the Borrower shall notify the Bank
in writing that it elects to have the Excess returned forthwith. It is the
express intent hereof that the Borrower not pay and the Bank not receive,
directly or indirectly in any manner whatsoever, interest in excess of that
which may legally be paid by the Borrower under applicable law. The right to
accelerate maturity of any of the Loans and the Banker's Acceptances does not
include the right to accelerate any interest that has not otherwise accrued on
the date of such acceleration, and the Bank does not intend to collect any
unearned interest in the event of any such acceleration. All monies paid to
the Bank hereunder or under the Note, the Banker's Acceptances or the other
Loan Documents, whether at maturity or by prepayment, shall be subject to
rebate of unearned interest as and to the extent required by

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applicable law. By the execution of this Agreement, the Borrower covenants
that (i) the credit or return of any Excess shall constitute the acceptance by
the Borrower of such Excess, and (ii) the Borrower shall not seek or pursue any
other remedy, legal or equitable, against the Bank, based in whole or in part
upon contracting for charging or receiving any Interest in excess of the
Maximum Rate. For the purpose of determining whether or not any Excess has
been contracted for, charged or received by the Bank, all interest at any time
contracted for, charged or received from the Borrower in connection with this
Agreement, the Letter Agreement, the Note, the Banker's Acceptances or any of
the other Loan Documents shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and spread in equal parts throughout the full
term of the Commitment. The Borrower and the Bank shall, to the maximum extent
permitted under applicable law, (i) characterize any non-principal payment as
an expense, fee or premium rather than as Interest and (ii) exclude voluntary
prepayments and the effects thereof. The provisions of this Section shall be
deemed to be incorporated into the Note and each Banker's Acceptance and each
of the other Loan Documents (whether or not any provision of this Section is
referred to therein). All such Loan Documents and communications relating to
any Interest owed by the Borrower and all figures set forth therein shall, for
the sole purpose of computing the extent of obligations hereunder and under the
Note, the Banker's Acceptances and the other Loan Documents be automatically
recomputed by the Borrower, and by any court considering the same, to give
effect to the adjustments or credits required by this Section.

SECTION 8.12. Interpretation. No provision of this Agreement
or any of the other Loan Documents shall be construed against or interpreted to
the disadvantage of any party hereto by any court or other governmental or
judicial authority by reason of such party having or being deemed to have
structured or dictated such provision.

SECTION 8.13. Waiver of Jury Trial; Consent to Jurisdiction.
The Borrower (a) and the Bank irrevocably waive, to the fullest extent
permitted by law, any and all right to trial by jury in any legal proceeding
arising out of this Agreement, any of the other Loan Documents, or any of the
transactions contemplated hereby or thereby, (b) submits to the nonexclusive
personal jurisdiction in the state in which the Bank has its principal office,
the courts thereof and the United States District Courts sitting therein, for
the enforcement of this Agreement, the Note, the Banker's Acceptances and the
other Loan Documents, (c) waives any and all personal rights under the law of
any jurisdiction to object on any basis (including, without limitation,
inconvenience of forum) to jurisdiction or venue within the state in which the
Bank has its principal office for the purpose of litigation to enforce this
Agreement, the Note, the Banker's Acceptances or the other Loan Documents, and
(d) agrees that service of process may be made upon it in the

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manner prescribed in Section 8.01 for the giving of notice to the Borrower.
Nothing herein contained, however, shall prevent the Bank from bringing any
action or exercising any rights against any security and against the Borrower
personally, and against any assets of the Borrower, within any other state or
jurisdiction.

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EXHIBIT A

NOTE

___________________, 19____

For value received, ________________, a ___________
corporation (the "Borrower"), promises to pay to the order of
__________________________________________________, a ____________________ (the
"Bank"), for the account of its Lending Office, the principal sum of
___________________________________ AND NO/100 DOLLARS ($____________), or such
lesser amount as shall equal the unpaid principal amount of each Loan made by
the Bank to the Borrower pursuant to the Credit Agreement referred to below, on
the dates and in the amounts provided in the Credit Agreement. The Borrower
promises to pay interest on the unpaid principal amount of this Note on the
dates and at the rate or rates provided for in the Credit Agreement. Interest
on any overdue principal of and, to the extent permitted by law, overdue
interest on the principal amount hereof shall bear interest at the Default
Rate, as provided for in the Credit Agreement. All such payments of principal
and interest shall be made in lawful money of the United States in Federal or
other immediately available funds at the office of the Bank located at
_________________________ ______________________________, or such other address
as may be specified from time to time pursuant to the Letter Agreement.

All Loans made by the Bank, the respective maturities thereof,
the interest rates from time to time applicable thereto, and all repayments of
the principal thereof shall be recorded by the Bank and, prior to any transfer
hereof, endorsed by the Bank on the relevant schedule attached hereto, or on a
continuation of such schedule attached to and made a part hereof; provided that
the failure of the Bank to make any such recordation or endorsement shall not
affect the obligations of the Borrower hereunder or under the Credit Agreement.

This Note is the Note referred to in the Master Credit
Agreement referred to in and incorporated by reference into the Letter
Agreement between the Bank and the Borrower dated __________(the Master Credit
Agreement and the Letter Agreement, as the same may be amended and modified
from time to time, being the "Credit Agreement"). Terms defined in the Credit
Agreement are used herein with the same meanings. Reference is made to the
Credit Agreement for provisions for the optional and mandatory prepayment and
the repayment hereof and the acceleration of the maturity hereof.

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IN WITNESS WHEREOF, the Borrower has caused this Note to be
duly executed, under seal, by its duly authorized officer as of the day and
year first above written.

SAVANNAH FOODS & INDUSTRIES,
INC. (SEAL)

By: __________________________
Title:

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<PAGE> 79

Note (cont'd)

<TABLE>
<CAPTION>
CONVENTIONAL RATE LOANS AND PAYMENTS OF PRINCIPAL
--------------------------------------------------
Base Rate Amount Amount of
or Euro- of Principal Maturity Notation
Date Dollar Loan Loan Repaid Date Made By
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------

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

- ------------------------------------------------------------------------------------------------------
</TABLE>

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<PAGE> 80

<TABLE>
<CAPTION>
OFFERED RATE LOANS AND PAYMENTS OF PRINCIPAL
- -------------------------------------------------------------------------------------------------------------------------
Amount Amount of Stated
Interest of Principal Maturity Notation
Date Rate Loan Repaid Date Made By
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------

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

- -------------------------------------------------------------------------------------------------------------------------
</TABLE>

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<PAGE> 81

EXHIBIT B

OPINION OF
COUNSEL FOR THE BORROWER

[Dated as provided in Section 3.01 of
the Credit Agreement]

To ___________________________________
______________________________________
______________________________________
______________________________________
Attn: _______________________________

Dear Sirs:

We have acted as counsel for Savannah Foods & Industries,
Inc., a Delaware corporation (the "Borrower") in connection with the Letter
Agreement dated as of ________, 19____, between the Borrower and you and the
Master Credit Agreement referred to in and incorporated by reference into the
Letter Agreement (collectively, the "Credit Agreement"). Terms defined in the
Credit Agreement are used herein as therein defined.

We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as we have deemed necessary or advisable
for purposes of this opinion. We have assumed for purposes of our opinions set
forth below that the execution and delivery of the Credit Agreement by the Bank
have been duly authorized by the Bank.

Upon the basis of the foregoing, we are of the opinion that:

1. The Borrower is a corporation duly incorporated,
validly existing and in good standing under the laws of Delaware and has all
corporate powers required to carry on its business as now conducted.

2. The execution, delivery and performance by the
Borrower of the Credit Agreement, the Note and the Banker's Acceptances (i) are
within the Borrower's corporate powers, (ii) have been duly authorized by all
necessary corporate action, (iii) require no action by or in respect of, or
filing with, any governmental body, agency or official, (iv) do not contravene,
or constitute a default under, any provision of applicable law or regulation or
of the certificate of incorporation or by-laws of the Borrower or of any
agreement, judgment, injunction, order, decree

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or other instrument which to our knowledge is binding upon the Borrower and (v)
to our knowledge, except as provided in the Credit Agreement, do not result in
the creation or imposition of any Lien on any asset of the Borrower or any of
its Subsidiaries.

3. The Credit Agreement constitutes a valid and binding
agreement of the Borrower, enforceable against the Borrower in accordance with
its terms, and the Note and the Banker's Acceptances constitute valid and
binding obligations of the Borrower, enforceable in accordance with their
respective terms, except as such enforceability may be limited by: (i)
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally and (ii) general principles of equity.

4. To our knowledge (after due inquiry), there is no
action, suit or proceeding pending, or threatened, against or affecting the
Borrower or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official in which there is a reasonable
possibility of an adverse decision which could materially adversely affect the
business, consolidated financial position or consolidated results of operations
of the Borrower and its Consolidated Subsidiaries, considered as a whole, or
which in any manner questions the validity or enforceability of the Credit
Agreement, the Note or any Banker's Acceptance.

5. Each of the Borrower's Subsidiaries is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation, and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted.

6. Neither the Borrower nor any of its Subsidiaries is
an "investment company" within the meaning of the Investment Company Act of
1940, as amended.

7. Neither the Borrower nor any of its Subsidiaries is a
"holding company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company", as such terms are defined in the Public Utility Holding Company Act
of 1935, as amended.

[8. The choice of ____________ law to govern the Agreement,
the Note and each Banker's Acceptance in which such choice is stipulated is a
valid and effective choice of law under the laws of the State of, and adherence
to existing judicial precedents generally would require a court sitting in the
State of New York to abide by such choice of law, unless a fundamental policy
of the State of Georgia would be violated. We are not aware of any provision
of the Agreement or the Note which would violate a fundamental policy of the
State of Georgia.][USE IF BANK'S PRINCIPAL OFFICE IS NOT IN GEORGIA.]

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We are qualified to practice in the State of Georgia and do not
purport to be experts on any laws other than the laws of the United States, the
State of Georgia and the General Corporate Law of the State of Delaware and
this opinion is rendered only with respect to such laws. We have made no
independent investigation of the laws of any other jurisdiction.

This opinion is delivered to you in connection with the transaction
referenced above and may only be relied upon by you, any Assignee or
Participant Transferee and your counsel without our prior written consent.

Very truly yours,

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<PAGE> 84

EXHIBIT C

ASSIGNMENT AND ACCEPTANCE
Dated __________ __, ____

Reference is made to the Letter Agreement dated as of
________, 19____, between Savannah Foods & Industries, Inc., a Delaware
corporation (the "Borrower") and ___________________________________________
(the "Assignor") and the Master Credit Agreement referred to in and
incorporated by reference into the Letter Agreement (the "Master Credit
Agreement") (the Letter Agreement with the Assignor and the Master Credit
Agreement collectively, together with all amendments and modifications thereto,
being the "Credit Agreement"). Terms defined in the Credit Agreement are used
herein with the same meaning.

The Assignor and ________________________________________ (the
"Assignee") agree as follows:

1. The Assignor hereby sells and assigns to the
Assignee, without recourse to the Assignor, and the Assignee hereby purchases
and assumes from the Assignor, a ______% interest in and to all of the
Assignor's rights and obligations under the Credit Agreement as of the
Effective Date (as defined below) (including, without limitation, a ____%
interest (which on the Effective Date hereof is $__________) in the Assignor's
Commitment and a ______ interest (which on the Effective Date hereof is
$_______________) in the Conventional Rate Credits [and Offered Rate Credits]
owing to the Assignor and a ___% interest in the Note [and Banker's
Acceptances] held by the Assignor (which on the Effective Date hereof is
$__________).

2. The Assignor (i) makes no representation or warranty
and assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of the Credit Agreement or any other instrument or document furnished
pursuant thereto, other than that it is the legal and beneficial owner of the
interest being assigned by it hereunder, that such interest is free and clear
of any adverse claim and that as of the date hereof its Commitment (without
giving effect to assignments thereof which have not yet become effective) is
$__________ and the aggregate outstanding principal amount of Conventional Rate
Credits [and Offered Rate Credits] owing to it (without giving effect to
assignments thereof which have not yet become effective) is $_________________;
(ii) makes no representation or warranty and assumes no responsibility with
respect to the financial condition of the Borrower or the performance or
observance by the Borrower of any of its obligations under the Credit Agreement
or any other instrument or document furnished pursuant thereto; and (iii)
attaches the Note [and Banker's Acceptances] referred to in paragraph 1 above
and

137

<PAGE> 85

requests that the Borrower exchange such Note for [a new Note dated
_____________, ____ in the principal amount of $__________ payable to the order
of the Assignor and new Banker's Acceptances in the following Face Amounts and
dated the following dates:_____________________________________] and execute a
Letter Agreement with and issue a new Note to the Assignee [and new Banker's
Acceptances] in accordance herewith, with the effect set forth in Section
8.07(c) of the Credit Agreement.

3. The Assignee (i) confirms that it has received a copy
of the Master Credit Agreement, together with copies of the financial
statements referred to in Section 4.04(a) thereof (or any more recent financial
statements of the Borrower delivered pursuant to Section 5.01(a) or (b)
thereof) and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Assignment and
Acceptance; (ii) agrees that it will, independently and without reliance upon
the Assignor and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Master Credit Agreement; (iii) confirms that it is
a bank or financial institution; (iv) agrees that it will execute a Letter
Agreement incorporating the terms and provisions of the Master Credit Agreement
and (v) represents and warrants that the execution, delivery and performance of
this Assignment and Acceptance are within its corporate powers and have been
duly authorized by all necessary corporate action, and (viii) attaches the
forms prescribed by the Internal Revenue Service of the United States
certifying as to the Assignee's status for purposes of determining exemption
from United States withholding taxes with respect to all payments to be made to
the Assignee under the Master Credit Agreement with it and its Note and
Banker's Acceptances or such other documents as are necessary to indicate that
all such payments are subject to such taxes at a rate reduced by an applicable
tax treaty.

4. The Effective Date for this Assignment and Acceptance
shall be __________, ____ (the "Effective Date"). Following the execution of
this Assignment and Acceptance, it will be delivered to the Borrower for
execution by the Borrower.

5. Upon such execution and acceptance by the Borrower [IF
REQUIRED BY THE MASTER CREDIT AGREEMENT] and execution of a Letter Agreement by
the Assignee and the Borrower, from and after the Effective Date, (i) the
Assignee shall be a Bilateral Lender party to a separate and independent credit
agreement with the Borrower and, to the extent rights and obligations have been
transferred to it by this Assignment and Acceptance, have the rights and
obligations of a Bank thereunder and (ii) the Assignor shall, to the extent its
rights and obligations have been transferred to the Assignee by this Assignment
and Acceptance, relinquish its rights (other than under Sections 7.03, 8.03 and
8.04 of the Credit Agreement) and be released from its obligations under the
Credit Agreement.

138

<PAGE> 86

6. This Assignment and Acceptance shall be governed by,
and construed in accordance with, the laws of the state in which the Assignor
has its principal office.

[NAME OF ASSIGNOR]

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

[NAME OF ASSIGNEE]

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

SAVANNAH FOODS & INDUSTRIES, INC.
IF REQUIRED BY THE MASTER CREDIT AGREEMENT

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

139

<PAGE> 87

EXHIBIT D

NOTICE OF BORROWING

_____________________, _____

____________________________
____________________________
____________________________
Attention: ________________

Re: Letter Agreement dated as of ________, 19____, between
Savannah Foods & Industries, Inc., a Delaware corporation (the
"Borrower") and ___________________________________________
(the "Bank") and the Master Credit Agreement referred to in
and incorporated by reference into the Letter Agreement (the
"Master Credit Agreement") (the Letter Agreement with the Bank
and the Master Credit Agreement collectively, together with
all amendments and modifications thereto, being the "Credit
Agreement").

Gentlemen:

Unless otherwise defined herein, capitalized terms used herein shall
have the meanings attributable thereto in the Credit Agreement.

This Notice of Borrowing is delivered to you pursuant to Section 2.02
of the Credit Agreement.

The Borrower hereby requests a [Euro-Dollar Borrowing] [Base Rate
Borrowing] [Conventional Rate Banker's Acceptance] in the aggregate principal
amount of $___________ to be made on ______________, 199__, and for interest to
accrue thereon at the rate established by the Credit Agreement for [Euro-Dollar
Loans] [Base Rate Loans] [Conventional Rate Banker's Acceptances]. The
duration of the Interest Period with respect thereto shall be [1 month] [2
months] [3 months] [6 months] [30 days][__ days].

The Borrower has caused this Notice of Borrowing to be executed and
delivered by its duly authorized officer this _____ day of ___________, _____.

SAVANNAH FOODS & INDUSTRIES, INC.

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

140

<PAGE> 88

EXHIBIT E

COMPLIANCE CERTIFICATE

Reference is made to the Letter Agreement dated as of ________,
19____, between Savannah Foods & Industries, Inc., a Delaware corporation (the
"Borrower") and ___________________________________________ (the "Bank") and
the Master Credit Agreement referred to in and incorporated by reference into
the Letter Agreement (the "Master Credit Agreement") (the Letter Agreement with
the Bank and the Master Credit Agreement collectively, together with all
amendments and modifications thereto, being the "Credit Agreement").
Capitalized terms used herein shall have the meanings ascribed thereto in the
Credit Agreement.

Pursuant to Section 5.01(c) of the Credit Agreement,
_______________, the duly authorized ________________ ___ of Savannah Foods &
Industries, Inc. hereby (i) certifies to the Bank that the information
contained in the Compliance Check List attached hereto is true, accurate and
complete as of ________, ___, and that no Defaults or Events of Default exist
and (ii) restates and reaffirms that the representations and warranties
contained in Article IV of the Credit Agreement are true on and as of the date
hereof as though restated on and as of this date.

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

141

<PAGE> 89

COMPLIANCE CHECK LIST
(Savannah Foods & Industries, Inc.)
__________________________

_____________, _____

1. Investments (Section 5.17)

Neither the Borrower nor any of its Subsidiaries shall make Investments
in any Person except as permitted by Section 5.16 and except in [. . .]
(v) Related Investments in an amount not exceeding the sum of 30% of
Capitalization, minus the amount of Unrelated Investments at the time
outstanding, and/or (vi) Unrelated Investments in an amount not
exceeding the lesser of (A) $20,000,000 and (B) the sum of 30% of
Capitalization, minus the amount of Related Investments at the time
outstanding.

Related Investments

<TABLE>
<S> <C>
(a) Aggregate amount of
Related Investments $
-------------

(b) Stockholders' Equity $
-------------

(d) sum of (b) and (c) $
-------------

(e) 30% of (d) $
-------------

(f) Aggregate amount of
Unrelated Investments $
-------------

(g) (e) minus (f) $
-------------

Limitation--(a) not to
exceed (g)

Unrelated Investments

(h) (e) minus (a) $
-------------

(i) lesser of $20,000,000
and (h) $
-------------

Limitation--(f) not to
exceed (i)
</TABLE>

142

<PAGE> 90

COMPLIANCE CHECK LIST
(Savannah Foods & Industries, Inc.)
__________________________

_____________, _____

2. Negative Pledge (Section 5.18)

Neither the Borrower nor any Consolidated Subsidiary will create, assume
or suffer to exist any Lien on any asset now owned or hereafter acquired
by it, except: [ . . .] (j) Liens on inventories of the Borrower
consisting of sugar processed from sugar beets and sugarcane securing
current liabilities of the Borrower or any Subsidiary to the United
States Commodity Credit Corporation, provided that the amount of the
current liabilities so secured by a Lien in favor of the United States
Commodity Credit Corporation shall be less than the fair market value of
the related seasonal sugar inventories of the Borrower.

<TABLE>
<S> <C> <C>
(a) aggregate amount of current
liabilities to United States
Commodity Credit Corporation
secured by Liens on inventories
consisting of sugar processed
from sugar beets and sugarcane $
-------------

(b) fair market value of such
inventories $
-------------

Limitation (a) must be less than (b)
</TABLE>

3. Ratio of Long-Term Debt to
Capitalization (Section 5.19)

The ratio of Long-Term Debt to Capitalization will not at any time
exceed 0.45 to 1.00.

<TABLE>
<S> <C>
(a) Long-Term Debt Schedule - 1 $
----------

(b) Stockholder's Equity $
----------

Actual Ratio of (a) to (c)
----------

Maximum Ratio < 0.45 to 1.0
</TABLE>

143

<PAGE> 91

COMPLIANCE CHECK LIST
(Savannah Foods & Industries, Inc.)

__________________________
_____________, _____

4. Ratio of Consolidated Adjusted Cash Flow to Interest and Leases (Section
5.20)

The ratio of (i) Consolidated Adjusted Cash Flow to (ii) Consolidated
Interest Expense plus obligations of the Borrower and its Consolidated
Subsidiaries with respect to operating leases shall be equal to or
greater than 3.0 to 1.0 as of the end of each Fiscal Quarter, for the
Fiscal Quarter just ended and the immediately preceding 3 Fiscal
Quarters; provided, that the Borrower shall be deemed to be in
compliance with this covenant if, at the end of no more than 2 out of
any 6 consecutive Fiscal Quarters, such ratio for the Fiscal Quarter
just ended and the immediately preceding 3 Fiscal Quarters is less than
3.0 to 1.0 but is equal to or greater than 2.5 to 1.0.

<TABLE>
<S> <C>
(a) Consolidated Adjusted Cash
Flow, Schedule - 2 $
----------

(b) (i) Consolidated Interest
Expense, Schedule - 2, plus
(ii) Aggregate operating lease
obligations, Schedule- 2 $
----------

Actual ratio of (a) to (b)
----------

Required ratio [greater than or equal to 3.0 to 1.0]
[greater than or equal to 2.5 to 1.0]
</TABLE>

5. Ratio of Consolidated Current Assets to Consolidated Current
Liabilities (Section 5.21)

The ratio of Consolidated Current Assets to Consolidated Current
Liabilities will not at any time be less than 1.15 to 1.0.

<TABLE>
<S> <C>
(a) Consolidated Current Assets $
----------

(b) Consolidated Current Liabilities $
----------

Actual ratio of (a) to (b)
----------

Required ratio greater than or equal to 1.15 to 1.0
</TABLE>

144

<PAGE> 92

COMPLIANCE CHECK LIST
(Savannah Foods & Industries, Inc.)
__________________________

_____________, _____

6. Minimum Stockholder's Equity (Section 5.22)

Stockholder' Equity will at no time be less than $150,000,000 plus the
sum of (i) 50% of the cumulative Reported Net Income of the Borrower and
its Consolidated Subsidiaries during any period after July 2, 1995
(taken as one accounting period), calculated quarterly at the end of
each Fiscal Quarter but excluding from such calculations of Reported Net
Income for purposes of this clause (i), any quarter in which the
Reported Net Income of the Borrower and its Consolidated Subsidiaries is
negative, (ii) 100% of the cumulative Net Proceeds of Capital Stock
received during any period after July 2, 1995, calculated quarterly at
the end of each Fiscal Quarter, and (iii) 100% of the amount of any
equity resulting from conversion of Debt to equity at any time after
July 2, 1995.

<TABLE>
<S> <C>
(a) Stockholder's Equity $
----------

(b) Reported Net Income since July 2, 1995 $
----------

(d) Aggregate Net Proceeds of Capital Stock
received after July 2, 1995 $
----------

(e) Aggregate of equity from conversion
of Debt to equity after July 2, 1995 $
----------

(f) Sum of (b) less (c) less (d) less (e) $
----------

(g) 50% of (f) $
----------

(h) sum of (g) and $150,000,000 $
----------

Limitation--(a) not to be less than (h)
</TABLE>

145

<PAGE> 93

COMPLIANCE CHECK LIST
(Savannah Foods & Industries, Inc.)
__________________________

_____________, _____

7. Ratio of Long-Term Debt to Consolidated Adjusted Cash Flow (Section
5.23)

At the end of each Fiscal Quarter, the ratio of Long-Term Debt to
Consolidated Adjusted Cash Flow for the Fiscal Quarter just ended and
the immediately preceding 3 Fiscal Quarters shall not have been greater
than 4.0 to 1.00.

<TABLE>
<S> <C>
(a) Long-Term Debt Schedule - 1 $
----------

(b) Consolidated Adjusted Cash
Flow Schedule - 2 $
----------

Actual ratio of (a) to (b)
----------

Required ratio less than or equal to 4.0 to 1.0
</TABLE>

8. Intangibles (Section 5.24)

The Borrower shall not, without the prior consent of the Bank, acquire
or cause to exist, at any time, net intangible assets (as determined in
accordance with GAAP) in an aggregate amount greater than 25% of
Stockholders' Equity for the Fiscal Quarter just ended.

<TABLE>
<S> <C>
(a) Intangible assets $
---------

(b) Stockholder's Equity $
---------

Limitation--(a) not to exceed (c)
</TABLE>

146

<PAGE> 94

COMPLIANCE CHECK LIST
(Savannah Foods & Industries, Inc.)
__________________________

_____________, _____

<TABLE>
<CAPTION>
Schedule - 1
------------
Long-Term Debt
- --------------
INTEREST
RATE MATURITY TOTAL
------------------------- -----

Secured
- -------
<S> <C> <C> <C>
$
---------------------------------------------------------------- --------------

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

Total Secured $
-------------

Unsecured
- ---------

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

Total Unsecured $
-------------

Redeemable Preferred Stock $
- -------------------------- -------------

Total Preferred Stock $
-------------

Other Long-Term Debt
- --------------------

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

Total Other Long-Term Debt $
-------------

TOTAL LONG-TERM DEBT $
=============
</TABLE>

147

<PAGE> 95

COMPLIANCE CHECK LIST
(Savannah Foods & Industries, Inc.)
__________________________

_____________, _____

Schedule - 2

<TABLE>
<CAPTION>
Consolidated Adjusted Cash Flow
- -------------------------------
<S> <C>
(a) Consolidated Net Income
quarter - $
--- ---- -------- -----------
quarter - $
--- ---- -------- -----------
quarter - $
--- ---- -------- -----------
quarter - $
--- ---- -------- -----------

(b) Consolidated Interest Expense
quarter - $
--- ---- -------- -----------
quarter - $
--- ---- -------- -----------
quarter - $
--- ---- -------- -----------
quarter - $
--- ---- -------- -----------

(c) operating lease obligations
quarter - $
--- ---- -------- -----------
quarter - $
--- ---- -------- -----------
quarter - $
--- ---- -------- -----------
quarter - $
--- ---- -------- -----------

(d) tax expense
quarter - $
--- ---- -------- -----------
quarter - $
--- ---- -------- -----------
quarter - $
--- ---- -------- -----------
quarter - $
--- ---- -------- -----------

(e) depreciation
quarter - $
--- ---- -------- -----------
quarter - $
--- ---- -------- -----------
quarter - $
--- ---- -------- -----------
quarter - $
--- ---- -------- -----------

(f) amortization
quarter - $
--- ---- -------- -----------
quarter - $
--- ---- -------- -----------
quarter - $
--- ---- -------- -----------
quarter - $
--- ---- -------- -----------
</TABLE>

148

<PAGE> 96

<TABLE>
<S> <C>
(g) other non-cash or non-recurring
charges deducted from Consolidated
Net Income
quarter - $
--- ---- -------- -----------
quarter - $
--- ---- -------- -----------
quarter - $
--- ---- -------- -----------
quarter - $
--- ---- -------- -----------

(h) other non-cash or non-recurring
gain included in Consolidated
Net Income
quarter - $
--- ---- -------- -----------
quarter - $
--- ---- -------- -----------
quarter - $
--- ---- -------- -----------
quarter - $
--- ---- -------- -----------

Consolidated Adjusted Cash Flow
(a) plus (b) plus (c) plus (d)
plus (e) plus (f) plus (g)
minus (h) $
===========

Description of Operating Leases
- -------------------------------

Annual
Lessor Property Leased Term Rental
------ --------------- ---- ------

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

Description of other non-cash charges deducted from operating income:
- --------------------------------------------------------------------

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

Description of other non-cash charges included in operating income:
- ------------------------------------------------------------------

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

- ----------------------------------------------------------------
</TABLE>

149

<PAGE> 97

EXHIBIT F

[NAME OF BORROWER]

CLOSING CERTIFICATE

Reference is made to the Letter Agreement dated as of ________, 19____,
between Savannah Foods & Industries, Inc., a Delaware corporation (the
"Borrower") and ___________________________________________ (the "Bank") and
the Master Credit Agreement referred to in and incorporated by reference into
the Letter Agreement (the "Master Credit Agreement") (the Letter Agreement with
the Bank and the Master Credit Agreement collectively, together with all
amendments and modifications thereto, being the "Credit Agreement").
Capitalized terms used herein have the meanings ascribed thereto in the Credit
Agreement.

Pursuant to Section 3.01(e) of the Credit Agreement,
______________________________, the duly authorized _________ __________ of
the Borrower hereby certifies to the Bank that (i) no Default has occurred and
is continuing as of the date hereof, and (ii) the representations and
warranties contained in Article IV of the Credit Agreement are true on and as
of the date hereof.

Certified as of this _____ day of _______________, ____.

By:
---------------------------
Printed Name:
--------------
Title:
---------------------

150

<PAGE> 98

EXHIBIT G

OFFERED RATE CREDIT QUOTE REQUEST

_________________________________
_________________________________
_________________________________
Attention: _____________________

Re: Offered Rate Credit Quote Request

This Offered Rate Credit Quote Request is given in accordance
with the Letter Agreement dated as of ____ ___, 19____, between Savannah Foods
& Industries, Inc., a Delaware corporation (the "Borrower") and
_____________________ _____________________ (the "Bank") and the Master Credit
Agreement referred to in and incorporated by reference into the Letter
Agreement (the "Master Credit Agreement") (the Letter Agreement with the Bank
and the Master Credit Agreement collectively, together with all amendments and
modifications thereto, being the "Credit Agreement"), and pursuant to Section
2.03 thereof. Terms defined in the Credit Agreement are used herein as defined
therein.

The Borrower hereby requests that the Bank issue a quote for an
Offered Rate Borrowing based upon the following:

1. The proposed date of the Offered Rate Borrowing shall be
______________, _____ (the "Offered Rate Credit Borrowing
Date").1*

2. The aggregate amount (or, if the Bank makes a quote based on a
Banker's Acceptance, the Face Amount) of the Offered Rate
Borrowing shall be $____________.2

3. The Stated Maturity Date(s) applicable to the Offered Rate
Borrowing shall be ______ days.3

________________________
* All numbered footnotes appear on the last page of this Exhibit G.

151

<PAGE> 99

Very truly yours,

SAVANNAH FOODS & INDUSTRIES, INC.

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

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

(1) The date must be a Domestic Business Day.

(2) The amount of the Offered Rate Borrowing is subject to Section 2.03(a)
and (b).

(3) The Stated Maturity Dates are subject to Section 2.03(b)(ii). The
Borrower may request that up to 3 different Stated Maturity Dates be
applicable to any Offered Rate Borrowing, provided that (i) each such
Stated Maturity Date shall be deemed to be a separate Offered Rate
Credit Quote Request and (ii) the Borrower shall specify the amounts
of such Offered Rate Borrowing to be subject to each such different
Stated Maturity Date.

152

<PAGE> 100

EXHIBIT H

OFFERED RATE CREDIT QUOTE

__________________________________
__________________________________
__________________________________
Attention: ______________________

Re: Offered Rate Credit Quote to Savannah Foods & Industries, Inc.

This Offered Rate Credit Quote is given in accordance with the
Letter Agreement dated as of ________, 19____, between Savannah Foods &
Industries, Inc., a Delaware corporation (the "Borrower") and
__________________________ ________________ (the "Bank") and the Master Credit
Agreement referred to in and incorporated by reference into the Letter
Agreement (the "Master Credit Agreement") (the Letter Agreement with the Bank
and the Master Credit Agreement collectively, together with all amendments and
modifications thereto, being the "Credit Agreement"), and pursuant to Section
2.03(c)(ii) thereof. Terms defined in the Credit Agreement are used herein as
defined therein.

In response to the Borrower's Offered Rate Credit Quote
Request dated ____________, ____, we hereby make the following Offered Rate
Credit Quote on the following terms:

1. Person to contact
at Bank:

2. Date of Offered Rate Borrowing:1*

3. We hereby offer to make Offered Rate [Loan(s)] [Banker's
Acceptances] in the following maximum [principal amounts] [Face Amount] for the
following Interest Periods and at the following rates:

Maximum
Principal Amount Stated
or Face Maturity
Amount(2) Date (3) Rate Per Annum(4)
- -------- -------- ---- --- -----

________________________

* All numbered footnotes appear on the last page of this Exhibit H.

153

<PAGE> 101

We understand and agree that the offer(s) set forth above,
subject to the satisfaction of the applicable conditions set forth in the
Credit Agreement, irrevocably obligate(s) us to make the Offered Rate
Borrowings(s) for which any offer(s) [is] [are] accepted, in whole or in part
(subject to the last sentence of Section 2.03(c)(i) of the Credit Agreement).

Very truly yours,

[Name of Bank]

Dated: By:
---------------------------
Authorized Officer

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

________________________

(1) As specified in the related Offered Rate Credit Quote Request.

(2) The principal amount bid for each Stated Maturity Date may not exceed
the principal amount requested. Offered Rate Credit Quotes must be made
for at least a principal amount (or, with respect to Banker's
Acceptances, Face Amount) of $1,000,000 or a larger multiple of
$500,000.

(3) The Stated Maturity Dates are subject to Section 2.03(b)(ii).

(4) Subject to Section 2.03(c)(ii)(C).

154

<PAGE> 102
SCHEDULE 4.05

LITIGATION

In May 1992, the United States Customs Service (Customs) issued a bill to the
Company for approximately $7,500,000 seeking reimbursement for certain drawback
claims filed by the Company with Customs during the period 1984 through 1988.
The Company disputes Customs' findings and is vigorously protesting the
decision of Customs. As of July 1995, approximately $5,000,000 of the claim
has been dismissed. Based upon the facts known to the Company at this time,
the ultimate resolution of this matter is not expected to have a materially
adverse effect on the Company's financial position or results of operations.

In July 1991, National Utility Service, Inc. (NUS) filed a complaint against
the Company in the United States District Court for the District of New Jersey
seeking compensation and damages arising from a contract between the Company
and NUS for energy cost saving recommendations. On September 12, 1994, summary
judgment was entered against the Company in the amount of $2,973,000 in this
case. On December 19, 1994, the judgment was amended to add $1,343,000
prejudgment interest. The United States Court of Appeals for the Third Circuit
has affirmed the judgment subject to an insignificant reduction in the
prejudgment interest. The Company is considering an appeal to the Supreme
Court. Reserves were established for this claim in previous fiscal years, and
the ultimate resolution of this matter is not expected to have a materially
adverse effect on the Company's financial position or results of operations.

155

<PAGE> 103

SCHEDULE 4.08

SAVANNAH FOODS & INDUSTRIES, INC.

SUBSIDIARIES

<TABLE>
<CAPTION>
NAME JURISDICTION OF INCORPORATION
----- -----------------------------
<S> <C>
*BIOMASS CORPORATION A Delaware Corporation
A Research Facility - non operational

*CHATHAM SUGAR COMPANY A Delaware Corporation
Holds real estate - non operational

*COLONIAL SUGARS, INC. A Delaware Corporation
A sugar refinery

*DIXIE CRYSTALS BRANDS, INC. A Delaware Corporation
(Dixie Crystals Foodservice, Inc.)
(King Packaging Co., Inc.)

*EVERGLADES SUGAR REFINERY, INC. A Florida Corporation
A sugar refinery

*FOOD CARRIER, INC. A Georgia Corporation
Trucking

*MICHIGAN SUGAR CO. A Michigan Corporation
(Great Lakes)
(Pioneer Trading Co.)
A beet sugar refinery

*PHOENIX PACKAGING A Delaware Corporation
A packaging operation

*RACELAND SUGARS, INC. A Delaware Corporation
A cane operation

*REFINED SUGAR TRADING INSTITUTE A Delaware Corporation
A non-profit corporation owned
jointly with Amstar

*SAVANNAH FOODS INDUSTRIAL, INC. A Delaware Corporation
An operation engaged in the refining and selling of cane sugar

*SAVANNAH INTERNATIONAL COMPANY A Delaware Corporation
(Savannah Packaging Company)
(Savannah Total Invert Company)

*SAVANNAH INTERNATIONAL SERVICES, INC Delaware Corporation
Non operational

*SAVANNAH INVESTMENT CO. A Delaware Corporation
An investment company
</TABLE>

-Continued-

156

<PAGE> 104
<TABLE>
<S> <C>
*SAVANNAH MOLASSES & SPECIALTIES CO. A Delaware Corporation
Non-operational

*SAVANNAH SUGAR REFINING CORP. A Georgia Corporation
Non-operational

*SOUTH COAST SUGARS, INC. A Delaware Corporation
Non-operational
</TABLE>

*Savannah Foods owns 100% of this subsidiary

157

<PAGE> 105
SCHEDULE 4.08

SAVANNAH FOODS & INDUSTRIES, INC.
SUBSIDIARIES

158

<PAGE> 106

SCHEDULE 5.15

LONG TERM DEBT AS OF JULY 30, 1995(1)

<TABLE>
<CAPTION>
SUBSIDIARY AMOUNT DESCRIPTION EXPIRATION DATE
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Savannah Foods $47,857,143 Series A - 8.35%. 11/1/98 $ 6,250,000
& Industries, Inc. Senior Note 11/1/99 $12,500,000
11/1/00 $12,500,000
11/1/01 $12,232,143
11/1/02 $ 4,375,000

Savannah Foods $12,142,857 Series B - 7.15% 11/1/98 $ 2,500,000
& Industries, Inc. Senior Note 11/1/99 $ 4,803,571
11/1/00 $ 3,250,000
11/1/01 $ 1,589,286

Savannah Foods $ 480,000 Pollution Control 8/1/95 $ 100,000
& Industries, Inc. Bond - 6.60% 8/1/96 $ 115,000
8/1/97 $ 125,000
8/1/98 $ 130,000

Savannah Foods $ 1,330,000 Pollution Control Bond $190,000 Due 11/1/95 to
& Industries, Inc. 75% of CD rate 11/1/2001

Savannah Foods $ 4,100,000 ESOP Loan-85% of $500,000 due 10/25/97 to
& Industries, Inc. LIBOR 10/25/04

SFII ESOP Loans: $ 3,000,000 Loan 86% of LIBOR $100,000 Due 10/25/05
$ 1,285,000 78% of Prime, Due 03/07/96
$ 3,500,000 or 90% of CD Rate Due 10/09/97
$ 2,215,000 Due 06/30/98

Michigan Sugar Co. $ 4,500,000 MS Tax-Free Bond: Due 9/1/2000
Sebewaing-Var.Rate

Michigan Sugar Co. $ 4,500,000 MS Tax-Free Bond: Due 12/1/2000
Croswell-Var. Rate

Michigan Sugar Co. $ 3,500,000 MS Tax-Free Bond: Due 11/1/2003
Caro - Var. Rate

Michigan Sugar Co. $ 6,000,000 MS Tax-Free Bond: Due 6/1/07
Carrollton - Var. Rate

Dixie Crystals Brands $ 2,500,000 SFI Industrial Revenue Due 6/1/05
Bonds-Visalia, CA
Project -Var. Rate

Dixie Crystals Brands $ 60,000 Covenant not to compete Due 05/01/96

Everglades Sugar $ 1,500,000 SFI Industrial Revenue Due 3/1/17
Refinery, Inc. Bonds-Hendry County
ESRI -Var. Rate

King Packaging $ 3,368,000 Covenant not to compete Due through
June 1998
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) $10,000,000 of long term debt is drawn under the existing
revolving credit agreement

159

<PAGE> 107

SCHEDULE 5.18(a)

SAVANNAH FOODS & INDUSTRIES, INC.

EXISTING LIENS

The following Industrial Revenue Bond issues are secured by various
equipment and buildings financed by the issue:
<TABLE>
<CAPTION>
Expiration
Amount Description Date
-------------- --------------------------- ---------------------------
<S> <C> <C>
$4,500,000 Michigan Sugar Total due
Tax-free Bond September 1, 2000
Sebewaing Project -
Variable rate

$4,500,000 Michigan Sugar Total due
Tax-free Bond December 1, 2000
Croswell Project -
Variable rate

$3,500,000 Michigan Sugar Total due
Tax-free Bond November 1, 2003
Caro Project -
Variable rate

$6,000,000 Michigan Sugar $1,000,000 due
Tax-free Bond June 1, 2002 - 2007
Carrollton Project -
Variable rate

$2,500,000 SFII - Industrial $500,000 due
Revenue Bonds - June 1, 2002 - 2006
Visalia Project
Variable rate

$1,500,000 SFII - Industrial March 1, 2017
Revenue Bonds -
Hendry County/ESRI
Variable rate

$1,330,000 SFII - Pollution Control $190,000 due
Bonds - Variable rate November 1, 1996 -
November 1, 2002

$ 480,000 SFII - Pollution Control $115, 000 due Aug 1,1996
Bonds - 6.60% $125, 000 due Aug 1,1997
$130, 000 due Aug 1,1998

</TABLE>

160

<PAGE> 1

[LOGO] SAVANNAH FOODS & INDUSTRIES, INC.

WILLIAM W. SPRAGUE III EXHIBIT 10-9
PRESIDENT AND TELEPHONE (912) 234-1261
CHIEF EXECUTIVE OFFICER FAX (912) 232-3469

May 19, 1995

Mr. David H. Roche
Vice President
Savannah Foods & Industries, Inc.
c/o Michigan Sugar, Inc.
Post Office Box 1348
Saginaw, Michigan 48605

Dear Mr. Roche:

Savannah Foods & Industries, Inc. (the "Company") considers the
establishment and maintenance of a sound and vital management to be essential
to protecting and enhancing the best interests of the Company and its
shareholders. In this connection, the Company recognizes that, as is the case
with many publicly held corporations, the possibility of a change in control
may exist and that such possibility, and the uncertainty and questions which it
may raise among management, may result in the departure or distraction of
management personnel to the detriment of the Company and its shareholders.
Accordingly, the Company's Board of Directors has determined that appropriate
steps should be taken to reinforce and encourage the continued attention and
dedication of members of the Company's management, including yourself, to their
assigned duties without distraction in the face of the potentially disturbing
circumstances arising from the possibility of a change in control of the
Company.
In order to induce you to remain in the employ of the Company, this
letter agreement sets forth the severance benefits which the

161

<PAGE> 2

Company agrees will be provided to you in the event your employment with the
Company is terminated subsequent to a "change in control of the Company" (as
defined in Section 2 hereof) under the circumstances described below.
1. TERM. This Agreement shall commence on the date hereof and
shall continue until END OF YEAR DATED ABOVE; provided, however, that
commencing on January 1, 1995, and each January 1st thereafter, the terms of
this Agreement shall automatically be extended for one additional year unless
at least thirty (30) days prior to such January 1st date, the Company shall
have given notice that it does not wish to extend this Agreement. In the event
of a change in control, as referred to in Section 2 of this Agreement, your
rights thereafter under this Agreement shall become permanent, are not
terminable, and cannot be affected by any corporate action without your
consent, except as is provided for in Section 3 of this Agreement with respect
to death or normal retirement, termination by the Company for cause, or your
disability.
2. CHANGE IN CONTROL. No benefits shall be payable
hereunder unless there shall have been a change in control of the Company, as
set forth below, and your employment by the Company shall thereafter have been
terminated in accordance with Section 3 below. For purposes of this Agreement,
a "change in control of the Company" shall mean a change in control of a nature
that would be required to be reported in response to Item 5(f) of Schedule 14A
of Regulation 14A promulgated under the Securities Exchange Act of 1934, as
amended ("Exchange Act"); provided that, without

162

<PAGE> 3

limitation, such a change in control shall be deemed to have occurred if (i)
any "person" (as such term is used in Sections 13(d) and 14(d)(2) of the
Exchange Act) is or becomes the beneficial owner, directly or indirectly, of
securities of the Company representing 25% or more of the combined voting power
of the Company's then outstanding securities; or (ii) during any period of two
consecutive years, individuals who at the beginning of such period constitute
the Board of Directors of the Company (the "Board") cease for any reason to
constitute at least a majority thereof unless the election, or the nomination
for election by the Company's shareholders, of each new Director was approved
by a vote of at least two-thirds of the Directors then still in office who were
Directors at the beginning of the period.
3. TERMINATION FOLLOWING CHANGE IN CONTROL. If any of the
events described in Section 2 hereof constituting a change in control of the
Company shall have occurred, you shall be entitled to the benefits provided in
Section 4 hereof upon the subsequent termination of your employment unless such
termination is (a) because of your death or retirement, (b) by the Company for
cause or disability, or (c) by you other than for good reason.
(i) DISABILITY; RETIREMENT.
(A) If, as a result of your incapacity due to physical or
mental illness, you have been absent from your duties with the Company on a
full-time basis for 180 consecutive days, and within thirty (30) days after
written notice of termination is given you shall not have returned to the
full-time performance of your

163

<PAGE> 4

duties, the Company may terminate this Agreement for "disability."
(B) Termination by the Company or by you of your
employment based on "retirement" shall mean termination in accordance with the
Company's retirement policy, including early retirement, generally applicable
to its salaried employees or in accordance with any retirement arrangement
established with your consent with respect to you.
(ii) CAUSE. The Company may terminate your employment for cause.
For the purposes of this Agreement, the Company shall have "cause" to terminate
your employment hereunder upon (A) the willful and continued failure by you to
substantially perform your duties with the Company (other than any such failure
resulting from your incapacity due to physical or mental illness), after a
demand for substantial performance is delivered to you by the Board which
specifically identifies the manner in which the Board believes that you have
not substantially performed your duties, or (B) the willful engaging by you in
gross misconduct materially and demonstrably injurious to the Company. For
purposes of this paragraph, no act, or failure to act, on your part shall be
considered "willful" unless done, or omitted to be done, by you not in good
faith and without reasonable belief that your action or omission was in the
best interest of the Company. Notwithstanding the foregoing, you shall not be
deemed to have been terminated for cause unless and until there shall have been
delivered to you a copy of a resolution duly adopted by the affirmative vote of
not less than three-quarters of the entire membership of the Board at

164

<PAGE> 5

a meeting of the Board called and held for the purpose (after reasonable notice
to you and an opportunity for you, together with your counsel, to be heard
before the Board), finding that in good faith opinion of the Board you were
guilty of conduct set forth in clauses (A) or (B) of the first sentence of this
paragraph and specifying the particulars thereof in detail.
(iii) GOOD REASON. You may terminate your employment for good
reason. For purposes of this Agreement "good reason" shall mean:
(A) without your express written consent, the assignment
to you of any duties inconsistent with your positions, duties, responsibilities
and status with the Company immediately prior to a change in control, or a
change in your reporting responsibilities, titles or offices as in effect
immediately prior to a change in control, or any removal of you from or any
failure to re-elect you to any of such positions, except in connection with the
termination of your employment for cause, disability or retirement, or as a
result of your death, or by you other than for good reason;
(B) a reduction by the Company in your base salary as in
effect on the date hereof or as the same may be increased from time to time; or
the failure by the Company to increase such base salary each year after 1988 by
an amount which at least equals, on a percentage basis, the mean average
percentage increase in base salary for all officers of the Company during the
two full calendar years immediately preceding a change in control of the
Company (the

165

<PAGE> 6

"annual salary adjustment");
(C) The Company's requiring you to be based anywhere
other than the executive offices in Saginaw County, Michigan, except for
required travel on the Company's business to an extent substantially consistent
with your present business travel obligations, or, in the event you consent to
a relocation of your place of employment, the failure by the Company to pay (or
reimburse you for) all reasonable moving expenses incurred by you relating to a
change of your principle residence in connection with such relocation and to
indemnify you against any loss (defined as the difference between the actual
sales price of such residence and the higher of (a) your aggregate investment
in such residence or (b) the fair market value of such residence as determined
by a real estate appraiser designated by you and reasonably satisfactory to the
Company) realized in the sale of your principal residence in connection with
any such change of residence;
(D) the failure of the Company to continue in effect any
benefit or compensation plan, pension plan, life insurance plan,
health-and-accident plan, 401(k) plan, Employee Stock Ownership Plan,
Supplemental Employee Retirement Plan, and Deferred Compensation Plan for Key
Employees, or disability plan in which you are participating at the time of a
change in control of the Company (or plans providing you with substantially
similar benefits), the taking of any action by the Company which would
adversely affect your participating in or materially reduce your benefits under
any of such plans or deprive you of a material

166

<PAGE> 7

fringe benefit enjoyed by you at the time of the change in control, or the
failure by the Company to provide you with the number of paid vacation days to
which you are then entitled on the basis of years of service with the Company
in accordance with the Company's normal vacation policy in effect on the date
hereof;
(E) the failure of the Company to obtain the assumption
of the agreement to perform this Agreement by any successor as contemplated in
paragraph 5 hereof; or
(F) any purported termination of your employment which is
not effected pursuant to a Notice of Termination satisfying the requirements of
subparagraph (iv) below (and, if applicable, subparagraph (ii) above); and for
purposes of this Agreement, no such purported termination shall be effective.
(iv) NOTICE OF TERMINATION. Any termination by the Company
pursuant to subparagraphs (i) or (ii) above or by you pursuant to subparagraph
(iii) above shall be communicated by written Notice of Termination to the other
party hereto. For purposes of this Agreement, a "Notice of Termination" shall
mean a notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of your employment
under the provision so indicated.
(v) DATE OF TERMINATION. "Date of Termination" shall mean (A)
if this Agreement is terminated for disability, thirty (30) days after Notice
of Termination is given (provided that you shall not have returned to the
performance of your duties on a full-time

167

<PAGE> 8

basis during such thirty (30) day period), (B) if your employment is terminated
pursuant to subparagraph (iii) above, the date specified in the Notice of
Termination, and (C) if your employment is terminated for any other reason, the
date on which a Notice of Termination is given; provided that if within thirty
(30) days after any Notice of Termination is given the party receiving such
Notice of Termination notifies the other party that a dispute exists concerning
the termination, the Date of Termination shall be the date on which the dispute
is finally determined, either by mutual written agreement of the parties, or by
a final judgment, order or decree of a Court of competent jurisdiction (the
time for appeal therefrom having expired and no appeal having been perfected).
4. COMPENSATION UPON TERMINATION OR DURING DISABILITY
(i) During any period that you fail to perform your duties
hereunder as a result of incapacity due to physical or mental illness, you
shall continue to receive your full base salary at the rate then in effect and
any other compensation then payable to you until this Agreement is terminated
pursuant to paragraph 3(i) hereof. Thereafter, your benefits shall be
determined in accordance with the Company's disability plan then in effect.
(ii) If your employment shall be terminated for cause, the Company
shall pay you your full base salary through the Date of Termination at the rate
in effect at the time Notice of Termination is given and the Company shall have
no further obligation to you under this Agreement.

168

<PAGE> 9

(iii) If the Company shall terminate your employment other than
pursuant to paragraph 3(i) or 3(ii) hereof or if you shall terminate your
employment for good reason, then the Company shall pay to you as severance pay
in a lump sum on the fifth day following the Date of Termination, the following
amounts:
(A) your full base salary through the Date of Termination
at the rate in effect at the time Notice of Termination is given;
(B) in lieu of any further salary payments to you for
periods subsequent to the Date of Termination an amount equal to the product of
2.99 times your average annual compensation paid by the Company and included in
your gross income for federal income tax purposes for the most recent 5 taxable
years ending before the date on which a change in control occurs (or such
portion of such period during which you performed personal services for the
Company, if less than 5 years); such amount shall be less than the amount
defined as a parachute payment by 280G(b)(2) of the Internal Revenue Code of
1986;
(C) the Company shall pay other damages to which you may
be entitled as a result of the Company's termination of your employment under
this Agreement, including damages for any and all loss of benefits to you under
the Company's employee benefit plans which you would have received if the
Company had not breached this Agreement and had your employment continued for
the full term provided in this Agreement (including specifically but without
limitation the benefits which you would have been entitled to

169

<PAGE> 10

receive pursuant to the Company's Pension Plan had your employment continued
for the full term provided herein at the rate of compensation specified
herein), and including all legal fees and expenses incurred by you as a result
of such termination.
(iv) Unless you are terminated for cause, the Company shall
maintain in full force and effect for the continued benefit of you for three
years after the Date of Termination, the equivalent of all employee benefit
plans and programs or arrangements in which you were entitled to participate
immediately prior to the Date of Termination provided that your continued
participation is possible under the general terms and provisions of such plans
and programs. In the event that your participation in any such plan or program
is barred, the Company shall arrange to provide you with benefits substantially
similar to those which you are entitled to receive under such plans and
programs.
(v) Upon your termination for any reason, the Company shall enable
you to purchase the automobile, if any, which the Company was providing for
your use at the time Notice of Termination was given at the wholesale value of
such automobile at such time.
(vi) You shall not be required to mitigate the amount of any
payment provided for in this paragraph 4 by seeking other employment or
otherwise, nor shall the amount of any payment provided for in this paragraph 4
be reduced by any compensation earned by you as the result of employment by
another employer after the Date of Termination, or otherwise.

170

<PAGE> 11

5. SUCCESSORS: BINDING AGREEMENT
(i) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by agreement in
form and substance satisfactory to you, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession has taken place.
Failure of the Company to obtain such agreement prior to the effectiveness of
any such succession shall be a breach of this Agreement and shall entitle you
to compensation from the Company in the same amount and on the same terms as
you would be entitled hereunder if you terminated your employment for good
reason, except that for purposes of implementing the foregoing, the date on
which any such succession becomes effective shall be deemed the Date of
Termination. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which executes and delivers the agreement provided for in this
paragraph 5 or which otherwise becomes bound by all the terms and provisions of
this Agreement by operation of law.
(ii) This Agreement shall insure to the benefit of and be
enforceable by your personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If you
should die while any amounts would still be payable to you hereunder if you had
continued to live, all such

171

<PAGE> 12

amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to your designee or, if there be no such designee, to
your estate.
6. NOTICE. For the purposes of this Agreement, notices and all
other communications provided for in the Agreement shall be in writing and
shall be deemed to have been duly given when delivered or mailed by United
States registered mail, return receipt requested, postage prepaid, addressed to
the respective addresses set forth on the first page of this Agreement,
provided that all notices to the Company shall be directed to the attention of
the Chief Executive Officer of the Company with a copy to the Secretary of the
Company, or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notices of change of
address shall be effective only upon receipt.
7. MISCELLANEOUS. No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by you and such officer as may be specifically
designated by the Board of Directors of the Company. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any time prior to subsequent time. No agreements
or representations, oral or otherwise, express or implied, with respect to the
subject matter

172

<PAGE> 13

hereof have been made by either party which are not set forth expressly in this
Agreement. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of Georgia.
8. VALIDITY. The invalidity or unenforceability of any
provisions of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement, which shall remain in full force and
effect.
If this letter correctly sets forth our agreement on the subject
matter hereof, kindly sign and return to the Company the enclosed copy of this
letter which will then constitute our agreement on this Matter.

<TABLE>
<S> <C>
Sincerely,

SAVANNAH FOODS & INDUSTRIES, INC.

By: /s/ William W. Sprague, III
-------------------------------------
William W. Sprague, III
President and Chief Executive Officer

Agreed to this 24th day
of May, 1995.

/s/ D.L.H. Roche
- -----------------
Employee
</TABLE>

173

<PAGE> 1

Exhibit 21-1

SAVANNAH FOODS & INDUSTRIES, INC.
LIST OF SUBSIDIARIES

<TABLE>
<CAPTION>
JURISDICTION OF
---------------
NAME OF SUBSIDIARY INCORPORATION
- ------------------ -------------
<S> <C>
Biomass Corporation Delaware

Dixie Crystals Brands, Inc. Delaware
Subsidiary of Dixie Crystals Brands, Inc.
King Packaging Company, Inc. Georgia

Food Carrier, Inc. Georgia

Michigan Sugar Company Michigan
Subsidiaries of Michigan Sugar Company
Great Lakes Sugar Company Ohio
Pioneer Trading Corporation Virgin Islands

Refined Sugar Trading Institute Delaware

Savannah Foods Industrial, Inc. Delaware
Subsidiaries of Savannah Foods Industrial, Inc.
Phoenix Packaging Corporation Delaware
Raceland Sugars, Inc. Delaware

Savannah International Company
Subsidiaries of Savannah International Company
Savannah Packaging Company Delaware
Savannah Total Invert Company Delaware

Savannah International Services, Inc. Delaware

Savannah Investment Company Delaware

Savannah Molasses & Specialties Company Delaware

Savannah Sugar Refining Corporation Georgia

South Coast Sugars, Inc. Delaware
</TABLE>

174

<PAGE> 1
EXHIBIT 23-1

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference (i) the Registration
Statement on Form S-8 (No. 2-63448), as amended April 3, 1992 pertaining to the
Monthly Investment Plan for Employees of Savannah Foods & Industries, Inc., and
(ii) the Registration Statement of Form S-8 (No. 2-94678), as amended October
18, 1994, pertaining to the Employee Retirement Savings Account Plan of
Savannah Foods & Industries, Inc., of our report dated November 17, 1995,
appearing on page 14 of this Form 10-K.

PRICE WATERHOUSE LLP
Savannah, Georgia
December 29, 1995

175

<ARTICLE> 5
<LEGEND>
SAVANNAH FOODS & INDUSTRIES, INC.
FINANCIAL DATA SCHEDULES
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF SAVANNAH FOODS & INDUSTRIES, INC. FOR THE YEAR ENDED
OCTOBER 1, 1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-01-1996
<PERIOD-END> OCT-01-1995
<CASH> 11,574
<SECURITIES> 0
<RECEIVABLES> 66,991
<ALLOWANCES> 0
<INVENTORY> 103,121
<CURRENT-ASSETS> 197,802
<PP&E> 436,991
<DEPRECIATION> 206,100
<TOTAL-ASSETS> 476,507
<CURRENT-LIABILITIES> 114,740
<BONDS> 106,864
0
0
<COMMON> 17,365
<OTHER-SE> 152,284
<TOTAL-LIABILITY-AND-EQUITY> 476,507
<SALES> 1,098,544
<TOTAL-REVENUES> 1,098,544
<CGS> 1,005,914
<TOTAL-COSTS> 1,005,914
<OTHER-EXPENSES> 28,314
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 14,847
<INCOME-PRETAX> (6,078)
<INCOME-TAX> (2,585)
<INCOME-CONTINUING> (3,493)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,493)
<EPS-PRIMARY> (.13)
<EPS-DILUTED> 0

</TABLE>