COLLECTIVE BARGAINING AGREEMENT


                                    between


                      SWISS-AMERICAN SAUSAGE COMPANY INC.

                                      and
                                      

                      UNITED FOOD AND COMMERCIAL WORKERS 
                                   LOCAL 101

               208 Miller Avenue, South San Francisco, CA 94080
                                (415) 871-5730



                          [LOGO OF UFCW APPEARS HERE]


                                   covering


                     APRIL 1, 1998 THROUGH MARCH 31, 2002
                     

 
                      SWISS-AMERICAN SAUSAGE COMPANY INC.
                     APRIL 1, 1998 THROUGH MARCH 31, 2002 
                               TABLE OF CONTENTS
                               -----------------

 
          
SECTION                                                                PAGE
- -------                                                                ----
                                                                    
 1.  RECOGNITION/JURISDICTION..........................................   1 
 2.  UNION SECURITY....................................................   4 
 3.  EMPLOYMENT........................................................   5 
 4.  DISCHARGE.........................................................   6 
 5.  HOURS.............................................................   7 
 6.  OVERTIME..........................................................   8 
 7.  HOLIDAYS..........................................................   9 
 8.  VACATIONS.........................................................  10
 9.  LEAVES OF ABSENCE.................................................  12
10.  WAGES.............................................................  14
11.  SUPERANNUATED EMPLOYEES...........................................  15
12.  HEALTH AND WELFARE................................................  16
13.  SICK LEAVE........................................................  17
14.  PENSIONS..........................................................  19
15.  JURY DUTY.........................................................  19
16.  GENERAL BENEFITS..................................................  20
17.  SENIORITY.........................................................  20
18.  GRIEVANCE AND ARBITRATION.........................................  22
19.  UNION AFFAIRS.....................................................  24
20.  WORKING CONDITIONS AND SAFETY.....................................  24
21.  JOB SECURITY......................................................  25
22.  SEPARABILITY......................................................  26
23.  TRANSFER OF OWNERSHIP.............................................  26
24.  SAVINGS CLAUSE....................................................  26
25.  DRIVERS...........................................................  27
26.  NO STRIKE OR LOCKOUT..............................................  27
27.  EXTENSION AND SCOPE...............................................  27
     LETTER OF UNDERSTANDING...........................................  29


 
                        COLLECTIVE BARGAINING AGREEMENT

                                    between

                      SWISS-AMERICAN SAUSAGE COMPANY INC.

                                      and

                                UFCW LOCAL 101

                     APRIL 1, 1998 through MARCH 31, 2002

THIS AGREEMENT is made and entered into by and between SWISS-AMERICAN SAUSAGE
COMPANY, INC., located at 35 Williams Avenue, San Francisco, hereinafter
referred to as the "Employer" or "Company" and UNITED FOOD AND COMMERCIAL
WORKERS UNION LOCAL 101, AFL-CIO, CLC hereinafter referred to as the "Union".

                                  WITNESSETH
                                  ----------

In order to establish working conditions which are fair and equitable to all
Employers and employees, the parties hereto agree to the following:

The parties to this Agreement recognize the competitive nature of the industry
and further agree that no employee will be required to work hours in excess of
the working hours established in this Agreement.

                     SECTION 1. RECOGNITION, JURISDICTION
                     ------------------------------------

1.1  Union Recognition. The Employer recognizes the Union as the exclusive
     ------------------
     bargaining agent for all employees employed in the classification set forth
     in Section 10 working in the plant of the Employer located in the City of
     San Francisco, County of San Mateo and San Joaquin County.

                                       1

 
1.2       Classification Definitions. It is understood and agreed that the
          ---------------------------
          following groups of employees shall be recognized as:

1.2.1     Sausage Makers. This group shall consist of Journeymen and/or
          ---------------
          Apprentices engaged in processing and manufacturing of specialty
          sausage items, smoked, cooked and cured meats and meat food products
          involving trimming and boning, grinding, formulating, and other
          preparation, chopping and mixing, hanging, tying and linking, stuffing
          casings, loaves and table work, cooking, smokehouse, steam cabinet,
          curing and other work incidental to the above. The parties agree that
          all sausage makers or apprentices promoted before August 1, 1998,
          shall be grandfathered into this classification and shall be credited
          towards the required number of production specialists.

1.2.2     Production Specialist. This group shall consist of a minimum of ten
          ----------------------
          (10) Production Workers engaged primarily in processing and
          manufacturing of specialty sausage items, smoked, cooked and cured
          meats and meat food products involving trimming and boning, grinding,
          formulating, and other preparation, chopping and mixing, hanging,
          tying and linking, stuffing casings, loaves and table work, cooking,
          smokehouse, steam cabinet, curing and other work incidental to the
          above. Production Specialists shall have seniority as Production
          Specialists, but shall also have Production Worker seniority and can
          displaced a less senior Production Worker in the event a layoff as a
          Production Specialist.

          It is agreed and understood that the use of Production Worker as
          herein described shall not result in the displacement of any current
          employees from his/her current classification of work. It is further
          agreed that, in the event of a reduction in workforce involving or
          affecting the kitchen, employees in the Production Worker
          classification shall be the first removed from the kitchen.

1.2.3     Maintenance Workers. Employees engaged primarily in the maintenance
          --------------------
          and repair of the Employer's equipment.

1.2.4     Sanitation Workers. Employees engaged primarily in the sanitation and
          -------------------
          cleaning of the work place.

1.2.5     Rotation Workers. Employees engaged primarily in the rotation of the
          -----------------
          Employers hanging products throughout the plant. Rotation Workers
          shall have seniority as a Rotation Worker, but shall also have
          Production Worker seniority and can displace a less senior Production
          Worker in the event a layoff as a Rotation Worker.

1.2.6     Working Foreperson. A Working Foreperson shall not be disciplined by
          -------------------
          the Union or discriminated against in any way for exercising
          discretionary duties on behalf of Management or effectively
          recommending courses of action to

                                       2

 
          Management.

1.2.7     Supervisors. Supervisors will not be a part of the bargaining unit,
          ------------
          will not be required to join the Union, and will be permitted to
          perform whatever work the Company assigns; provided however that the
          number of supervisors shall be limited to a number equal to ten
          percent (10%) of the number of bargaining unit employees.

1.2.8     Owner's Family Members. It is agreed and understood that officers and
          -----------------------
          their immediate family may, is assigned to perform bargaining unit
          work, become members of the Union on the same terms and conditions
          membership is made available to all other bargaining unit employees
          provided that the officer is stationed in the jurisdiction of this
          agreement and these family members do not cause the displacement of
          any current employee.

1.3       Performance of Bargaining Unit Work. The Employer agrees that only
          ------------------------------------
          employees included in the bargaining unit shall perform any of the
          work coming within the jurisdiction of this Agreement, provided
          however; that non-bargaining unit work may perform bargaining unit
          work where necessary for: emergencies beyond the control of the
          Employer, work in the instruction or training of employees, and
          testing materials in production.

1.4       Employees Status:
          -----------------

1.4.1     Regular Employees. A Regular Employee is one who has completed the
          ------------------
          probationary period for all new employees in accordance with Section
          18 hereof.


1.4.2     Extra Employees. Any employee hired to either relieve a regular
          ----------------
          employee or to supplement the existing work force. Extra Employee
          shall not be employed to displace Regular Employees. An Extra Employee
          who works forty-five (45) work days for the same Employer within a
          twelve (12) month period shall become a Regular Employee for the
          purposes of benefit eligibility. Extra Employees may be scheduled less
          than forty (40) hours per week. Regular Employees on layoff shall be
          hired first. No Extra Employees will be hired when Regular Employees
          in the same classification are on layoff.

          It is agreed and understood that assignment of employees to work less
          than forty (40) hours per week within the meaning of this provision,
          shall not operate to replace any existing employees and, further, the
          hiring of employees to work less than forty (40) hours per week shall
          not be done for the purpose of permanently replacing full-time
          positions. In the event of a reduction in force, those employees
          regularly scheduled to work less than forty (40) hours per week shall
          be laid off prior to the layoff of any Regular Employees.

                                       3

 
1.4.3     Probationary Employees. A Probationary Employee is one who has not yet
          -----------------------
          completed the required forty-five (45) work days of trial employment
          with the current Employer, as specified in Section 18 (Seniority)
          herein. New employees to the industry hired on or after April 1, 1988,
          shall not be entitled to health and welfare contributions, holidays,
          funeral leave, sick pay and jury duty pay during the probationary
          period.

1.5       Management Rights. The Employer shall have the right to the general
          ------------------
          management of all operations and the direction of the workforce,
          including but not limited to, the right to hire, transfer, promote,
          maintain discipline and efficiency, layoff, establish new processes or
          use new equipment, establish schedules of production, and to extend,
          limit or curtail its operations. Nothing in this Agreement shall be
          construed, by any manner or means, to preclude the subcontracting of
          work by the Company or to require the Company to perform work at this
          Plant rather than elsewhere so long as the rights specified herein are
          not exercised in a manner inconsistent with this Agreement.

                           SECTION 2. UNION SECURITY
                           -------------------------

2.1       Local Union Membership. Every person performing work covered by this
          -----------------------
          Agreement who is a member of the Union on the effective date of this
          Section shall, as a condition of employment or continued employment,
          remain a member of the Union. Every person employed to perform work
          covered by this Agreement shall, as a condition of employment, be a
          member of the Union, or shall, within a period of thirty-one (31) days
          after the effective or execution date of this Agreement, whichever is
          later, become a member of the Union.

2.2       Maintenance of Membership. The Employer shall discharge every person
          --------------------------
          who has failed to comply with the provision of Section 2.1 at the end
          of the work day during which notice of such noncompliance is received.
          The Employer further agrees not to again employ or re-employ any
          person(s) so discharged until he or she is a member of the Union;
          provided, however, in the event that the Labor Management Relations
          Act, as amended, is applicable to this Agreement, the provisions of
          this sentence of this Section 2.2 shall not be applied until a final
          administrative or judicial decision has been rendered which would
          permit its application under the Act.

2.3       Applicants for Membership. Membership in the Union shall be available
          --------------------------
          to person employed in work covered by this Agreement upon terms and
          qualifications not more burdensome than those applicable generally to
          other applicants for such membership.

                                       4

 
                             SECTION 3. EMPLOYMENT
                             ---------------------

3.1       No Discrimination. The Employer shall have sole responsibility for the
          ------------------
          full freedom in the selection and employment and discharge of persons
          employed or to be employed in work covered by this Agreement, subject
          to the provisions of this Agreement; provided, that there shall be
          no discrimination because of membership or non-membership in or
          participation or non-participation in the activities of the Union. The
          Employer will not discharge or discriminate against any employee
          upholding lawful Union principles such as serving as an officer or
          other representative of the Union, soliciting membership in the Union,
          wearing Union buttons, distributing Union literature or attending
          Union meetings provided that such activity does not interfere with his
          or her work. The Employer will not discharge or discriminate against
          any employee for failing or refusing to purchase stock, bonds,
          securities, or any other interest in any corporation, partnership or
          company.

3.2       Hiring Notification. An Employer who desires to employ a person in
          --------------------
          work covered under this Agreement shall inform the Union of the number
          and qualifications of persons desired, the location of the job site,
          in advance of the time that such persons are required.

3.3       Hiring Consideration. In the hiring of new employees, the Employer
          ---------------------
          agrees that it will give equal consideration to all applicants,
          including those referred by the Union. The Employer and the Union will
          not discriminate compensation, terms or conditions of employment
          because of such individual's race, color, religion, sex, age (to the
          extent provided by law), or national origin; nor will they limit,
          segregate or classify employees in any way to deprive any individual
          employee of employment opportunities because of their race, color,
          religion, sex, age (to the extent provided by law), or national
          origin. Any reference to the male gender in this Contract shall be in
          the generic sense and it shall refer equally to either sex without
          discrimination, as provided above.

3.4       Union Notification. The Employer shall notify the Union within one (1)
          -------------------
          week of the name, address, Social Security Account Number and
          classification of every such person employed in work covered by this
          Agreement, together with the date of such employment and location of
          the place or prospective place of employment. Whenever a person is
          rejected for or discharged for such work, the Employer shall, upon
          request of the Union, notify the Union of the reason or reasons
          therefor. The notice required by this Section shall be made in writing
          within forty-eight (48) hours after such request. Any employees hired
          shall report to the Union within one (1) week after the date of
          employment to fill out and sign applications, forms and papers for
          health and welfare, dental and pension purposes.

                                       5

 
                             SECTION 4. DISCHARGE
                             --------------------

4.1       Prohibition Against Discharge. No employee covered by this Agreement
          ------------------------------
          shall be suspended, demoted or discharged without just and sufficient
          cause. Discharge for failure to comply with Section 2.2 of this
          Agreement shall be deemed a discharge for cause. Before an employee is
          suspended for more than three (3) days or discharged, he or she shall
          receive written warning of unsatisfactory conduct and a copy of such
          notice shall be sent to the Union. Such written warning shall not be
          effective for suspension actions for more than nine (9) months. The
          employee receiving such warning shall be given reasonable opportunity
          to rectify or change such conduct. The notice and warning required by
          this section need not be given to employees disciplined for, but not
          limited to any gross violation of reasonably acceptable conduct.

4.2       Notice From Insurance Carrier. When an insurance carrier notifies the
          ------------------------------
          Employer that the Firm's vehicle insurance is being cancelled because
          of a driver's record of on-the-job driving on file with the California
          Department of Motor Vehicles, that driver may be transferred to
          another job, if available, where he or she shall have seniority as a
          new employee or, if no job is available, he or she may be laid-off
          pending the results of the grievance procedure.

4.3       Right of Appeal. Any employee claiming unjust dismissal, demotion or
          ----------------
          suspension shall make his or her claim therefor to the Union within
          ten (10) working days of such dismissal, demotion or suspension and
          the Union will that day notify the Employer by telephone and confirm
          in writing, otherwise, no action shall be taken by the Union. If,
          after proper investigation by the Union and the Employer, it has been
          found that an employee has been disciplined unjustly, he or she shall
          be reinstated with full rights and shall be paid his or her wages for
          the period he or she was suspended, demoted or dismissed.
          Investigation of any claims shall be made within ten (10) days of the
          making of such complaint by the employee. Any dispute arising out of
          such suspension, demotion, or discharge shall be processed under
          Section 19 (Grievance and Arbitration) of this Agreement.

4.4       Notification of Discharge. When an employee is discharged, the
          --------------------------
          Employer must give written notice to the employee, stating the reasons
          for such discharge, and the Union shall receive a copy of said
          notice. Upon written notification by the Union of an employee holding
          a second job, the Employer will either terminate the employment of the
          employee or require that he or she resign his or her second job. Where
          an employee is holding a full-time second job, the Employer, five (5)
          working days after written notice to the employee requesting he or she
          resign his or her second job, may terminate him or her if he or she
          does not do so.

                                       6


                               SECTION 5. HOURS
                               ---------------- 

5.1       Hours of Operation. The hours of operation of the Employer's facility
          -------------------
          shall be as hereunder provided and shall apply to all employees of the
          Employer covered herein. Hours worked in excess of eight (8) straight-
          time hours in a day or in excess of forty (40) straight-time hours in
          any week shall be paid at one and one-half (1 1/2) times the straight-
          time rate.

5.2       Posting Requirement. All regular employees shall have their schedule
          --------------------
          posted by Friday noon for the following work week. It shall not be
          changed except by reason of an Act of God or other reason beyond the
          reasonable control of the Employer. The schedule shall show the full
          name of the employee, the starting times and the days scheduled for
          him or her during the following week in ink or typewritten.

5.3       Schedule of Shift. All first shift hours shall be regularly scheduled
          ------------------
          to commence no earlier than 5:00 a.m., and no later than 10:00 a.m.
          The second shift hours shall commence on or after 10:00 a.m., and no
          later than 5:00 p.m. The third shift hours shall commence on or after
          5:00 p.m., and before 5:00 a.m. All work commenced on or after 10:00
          a.m., but no later than 5:00 p.m., shall be paid for at the rate of
          the second shift premium for all hours worked. All work commenced on
          or after 5:00 p.m., and before 5:00 a.m., shall be paid at the third
          shift premium for all hours worked.

5.4       Guaranteed Work Week. Regular Employees shall be guaranteed payment
          ---------------------
          for and expected to work eight (8) hours each day, forty (40) hours
          for each week subject to the addition of all premium and overtime
          provisions, unless such work ceases to be available by reason of an
          Act of God, or other reason beyond the control of the Employer.
          Employees unable to work eight (8) hours a day, forty (40) hours a
          week shall provide a reasonable explanation and verification of the
          reason of absence where appropriate and in compliance with the
          provisions of this Agreement.

5.5       Extra Employees Work Week. Extra Employees may be scheduled to work
          --------------------------
          less than forty (40) hours per week. Extra Employees shall be
          scheduled to work in accordance with their seniority. Extra Employees
          scheduled to work less than forty (40) hours shall be scheduled as
          work is available.

5.6       Regular Work Week. The regular work day shall consist of eight (8)
          ------------------
          hours within nine (9) hours, Monday through Friday, inclusive,
          provided however, it is agreed and understood that the Employer may,
          during the course of this Agreement, with seven (7) calendar days
          notice to the Union, institute a Tuesday through Saturday work week.
          This work week shall be comprised of a regular

                                       7

 
          crew and established only for the purpose of expanding production
          capability. This work week shall be offered on a voluntary basis to
          existing employees and shall not be used to reduce existing Saturday
          overtime opportunities.

5.7       Minimums. Five (5) days consisting of eight (8) working hours per day,
          ---------
          forty (40) hours, Monday through Friday, inclusive, except as
          otherwise herein provided, shall constitute a work week for all
          eligible employees except that during a week in which a holiday falls,
          the work week shall consist of thirty-two (32) hours. Employees called
          to work will be provided with a minimum of eight (8) hours work or pay
          in lieu of work, such pay to start from the hour the employee is
          required to report for work, except in case of matters beyond the
          control of the Employer. Employees doing security inspection or
          quality control shall be guaranteed a minimum of one (1) hour work or
          pay in lieu thereof.

5.8       Bid on Job Shifts. Employees shall have the right to bid on job shift
          ------------------
          assignments in the order of their seniority except that no employee
          shall have this opportunity more often than once in every six-month
          period, except when a shift is reestablished within the six (6)
          months. It is understood that this privilege shall not result in chain
          bumping. When a shift is discontinued, the senior employee shall have
          the right to bid on the job classification in the existing shift.

5.9       Call Back. An employee called back to work within twelve (12) hours
          ----------
          from the end of his or her shift shall be paid one and one-half 
          (1 1/2) his or her applicable rate for the hours worked prior to the
          expiration of such hours.

5.10      Meal Periods. All employees shall receive one (1) full uninterrupted
          -------------
          hour for a meal period or by mutual agreement between the employees,
          the Employer and the Union one-half (1/2) hour, approximately in the
          middle of the working day, and in no event shall an employee work more
          than five (5) hours before any meal period. In agreeing on lunch
          periods, the parties will consider the requirement set by the USDA for
          meat inspectors.

5.11      Rest Periods. All employees shall receive two (2), fifteen (15) minute
          -------------
          rest periods in an eight (8) hour day. Employees working beyond nine
          (9) hours in a day shall receive an additional ten (10) minute rest
          period.

5.12      Clean Up. Sufficient time shall be allowed to clean up the Plant in
          ---------
          order that the employees may leave by their regular quitting time.

                              SECTION 6. OVERTIME
                              -------------------

6.1       Overtime Pay. All work in excess of eight (8) hours in one (1) day and
          -------------
          all work in excess of forty (40) hours in one (1) week shall be paid
          for at the overtime rate of one and one-half (1 1/2) time the
          employee's regular straight time rate of pay.

                                       8

 
          Employees shall be paid at one and one-half (1 1/2) for all work
          performed on the sixth (6th) day of the employee's work week. All work
          performed in excess of ten (10) hours in any one (1) day shall be paid
          for at the overtime rate of two (2) times the employee's regular
          straight time rate of pay. When overtime work is scheduled for Sundays
          and Holidays, such work shall be paid for at the overtime rate of (2)
          times the employee's regular straight time rate of pay (double time).
          All work performed either before the employee's scheduled eight (8)
          hour shift or after the completion of his or her scheduled eight (8)
          hour shift, except as provided above, shall be paid for at the rate of
          one and one-half (1 1/2) times the employee's regular straight time
          rate of pay. In the event an employee is required to report for work
          earlier than his scheduled shift starting time, the Employer shall
          schedule a minimum thirty (30) minutes of work time in this period.
          There shall be no pyramiding of overtime under this Agreement. Extra
          Employees will be given the preference whenever possible to avert
          overtime.

6.2       Daily Overtime. Preference for overtime work shall be given to
          ---------------
          employees performing the work prior to the expiration of the shift. If
          additional employees are required such overtime work shall be offered
          to employees by classification seniority within the department, then
          plantwide.

6.3       Weekend/Holiday Overtime. Preference for overtime work on a weekend or
          -------------------------
          holiday shall be offered to employees performing the work during the
          regular work week first, next by classification seniority within the
          department, then plantwide as per current practice.

6.4       Reporting Pay. When an employee is sent out from the Union to a
          --------------
          position at the request of the Employer, or is requested by the
          Employer to report to work arriving there on time is not permitted to
          work, the employee reporting to work shall be given a day's pay. If an
          employee arrives late, then he or she may be sent home and the
          Employer shall not be obligated to pay him or her for that day;
          however, if the employee is allowed to work any part of that day, he
          or she shall be paid only for the hours actually worked on that day
          and his or her guarantee shall be proportionately reduced by the hours
          not worked on that day.

                              SECTION 7. HOLIDAYS
                              -------------------

7.1       Recognized Holidays. The following holidays shall be recognized and
          --------------------
          observed annually under this Agreement and eligible employees as set
          forth in Section 7.4 shall receive pay for said holidays as if worked.

          1.  New Year's Day                       6.  Labor Day
          2.  Martin Luther King's Birthday        7.  Thanksgiving Day
          3.  President Day                        8.  Day after Thanksgiving
          4.  Memorial Day                         9.  Christmas Day
          5.  Fourth of July                      10.  Employee Birthday

                                       9

 
7.2       Employee's Birthday. Each employee shall give his or her Employer
          --------------------
          notice of his or her birthday at least two (2) weeks prior to the week
          in which the birthday occurs. When the necessities of the Employer's
          business preclude the granting of the Holiday on such birthday of the
          employee, the Employer shall notify the employee during the week in
          which the employee gave notice of the birthday to the Employer and a
          change shall be scheduled by mutual agreement in the week preceding or
          in the week following the week of the employee's birthday. The
          Birthday holiday shall apply only to Regular Employees who have been
          employed by the Company for one (1) one full year. If an employee's
          birthday falls on a day which is otherwise considered as the Holiday,
          or on a Saturday or Sunday, he or she shall receive an additional day
          off for the birthday in addition to the Holiday on which it falls or
          may receive pay (eight (8) hours at the straight time rate of pay) by
          mutual agreement with the Employer. The Birthday Holiday must be taken
          within each contract year or it shall be lost.

7.3       Holiday Pay Eligibility. Non-probationary employees working their
          ------------------------
          scheduled work day before and their scheduled work day after the
          Holiday shall receive pay for the Holiday, except that an employee who
          is absent due to illness or injury for a period not in excess of
          thirty (30) days, or death in the immediate family and is, therefore,
          unable to work the scheduled work day before and the scheduled work
          day after the Holiday shall receive pay for the Holiday. If a Regular
          Employee worked in the week before Christmas Week or in the week
          following New Year's Day Week, he or she shall be paid for both
          Holidays. Any Regular Employee or temporary layoff who worked any
          portion of the week preceding, the week of, or the week following the
          Holiday week shall be paid for the Holiday if temporary layoff has not
          and does not exceed three (3) weeks. Extra Employees working the work
          days in the week of the Holiday shall be paid for the Holiday.

7.4       Holidays Falling on Saturday/Sunday. When one of the above enumerated
          ------------------------------------
          Holidays falls on a Sunday, then Monday shall be considered as the
          Holiday. When one of the above enumerated Holidays falls on a
          Saturday, then Friday shall be considered as the Holiday.

                             SECTION 8. VACATIONS
                             --------------------

8.1       Vacation Benefits. All Regular Employees who have been in the employ
          ------------------
          of the Employer for at least one (1) year shall be entitled to receive
          vacation benefits as specified below. Employees going on vacation
          shall receive pay for said vacation period prior to leaving on
          vacation.

8.1.1     One (1) week's (five (5) days) vacation with pay after completion of
          the first year

                                       10

 
          of service.

8.1.2     Two (2) week's (ten (10) days) vacation with pay after completion of
          the second year of service.


8.1.3     Three (3) week's (fifteen (15) days) vacation with pay after
          completion of the five year of service.

8.1.4     Four (4) week's (twenty (20) days) vacation with pay after completion
          of the fifteenth year of service.

          Employees with seniority dates prior to October 1, 1982 who are
          entitled to four (4) or more weeks of vacation with pay shall be
          frozen at their current entitlement and shall not accrue further
          additional vacation benefits by virtue of additional years of Company
          service or otherwise.

8.2       Multiple Week Vacation Schedules. Where an employee is entitled to
          ---------------------------------
          three (3) or more weeks of vacation the employee and Employer may, if
          they mutually agree, provide that two (2) weeks be taken at one time
          and the balance taken at one other time during the year, or that two
          (2) weeks may be taken at one time together with payment in lieu of
          the balance thereof.

8.3       The principle of seniority shall be observed in the choice of vacation
          periods. The Vacation Schedule for the period March 15 of the current
          year to March 15 of the following year shall be posted by February
          First and selection of the first increment of vacation shall be
          completed by all employees by March First. Selection of the second
          increment of vacation shall be completed by all employees by March
          Fifteenth. After this, there shall be no changes in the schedule
          except is case of severe personal hardship. The Employer shall have
          the right to designate the number of employees that may be off at any
          given time, but in no event less than one employee in any one week
          except for five weeks out of the year marked out by the Employer in
          consideration of its business needs. If an Employee who is entitled to
          more than three weeks vacation does not select dates for the fourth,
          fifth or sixth weeks by March 15, he or she may subsequently select
          dates after September 30, upon mutual arrangement with the Employer,
          so long as such selection would not require a change in another
          employee's scheduled vacation. An employee who fails to select his or
          her vacation in a timely manner as provided in this Section shall be
          placed at the bottom of the seniority list for the purpose of
          selecting vacation dates after the deadline for such selection has
          passed. In the event the employee has not utilized or made a previous
          selection of their vacation(s) schedule, the Employer shall have the
          right to assign those weeks which are remaining within the last three
          (3) months of the eligible year.

                                       11

 
8.4       Pro-Rated Vacation Pay Upon Separation From Employment. Upon
          -------------------------------------------------------
          termination of employment or change of ownership of a plant, employees
          shall receive prorated vacation pay based on each full month worked
          since the employee's last anniversary date of employment; provided,
          however, vacation pay shall not be paid during the first year of
          employment in cases of discharge for cause or voluntary quit, except
          that on voluntary quits where one week's notice has been given to the
          Employer, the employee shall receive pro-rated vacation pay.

          Employment period                  Rate of Accrual
          -----------------                  ---------------

          First six (6) months               none
          After six (6) months               1/6 weeks(s) owed per month
          After four (4) years               1/4 week per month

8.5       Pro-Rated Vacation Formula for Employees Working Less Than a Full
          -----------------------------------------------------------------
          Year. An Employee shall receive full vacation pay at his or her
          -----
          regular weekly rate of pay if he or she works one hundred and eighty
          (180) days or more during his or her anniversary year. If an employee
          works less than one hundred and eighty (180) days during his or her
          anniversary year, he or she shall receive pro-rated vacation pay. Such
          pro-rated vacation pay shall be computed by taking his or her gross
          earnings during his or her anniversary year, divided by fifty-two (52)
          and multiplied by the number of weeks vacation to which the employee
          is entitled according to his or her length of service. Calculation of
          vacation under this Section is permitted only on an employee's
          anniversary date and is not to be used for incomplete years.

8.6       Holiday During Vacation. When a Holiday falls within the employee's
          ------------------------
          vacation period, he or she shall be eligible for a paid day off at a
          time mutually agreeable to the employee and the Employer, except that,
          if the employee and the Employer mutually agree, the employee may
          receive pay in lieu of the Holiday.

8.7       Estate Benefit. In the event of the death of an employee who is
          ---------------
          eligible for sick leave and vacation pay, his or her estate, or the
          person legally entitled thereto, shall receive pro-rated vacation and
          sick pay computed under the provisions of Section 8.4 and 13.1 of
          this Agreement.

8.8       Vacation Mobility. The Employer agrees to consider vacation benefits
          ------------------
          earned with a previous industry Employer when hiring employees.

                         SECTION 9. LEAVES OF ABSENCE
                         ----------------------------

9.1       Approved Leave of Absence. The Employer may grant leaves to employees
          --------------------------
          based on merit of the leave. Request and permission must be in
          writing. An Employee who fails to report for work at the end of a
          Leave of Absence shall

                                       12

 
          terminate seniority rights except where the Employer has agreed to
          extend the Leave of Absence. A thirty (30) days Leave of Absence
          without pay shall be allowed where necessary in order to care for
          necessary details resulting from the death of a member of his or her
          immediate family as defined below. All Leaves of Absence granted in
          this Agreement shall be considered as part of the continuous service
          with the Employer subject to the limitation outlined in Section 17.3.
          When a personal Leave of Absence is granted to an employee by an
          Employer, a written notice shall be given to evidence such an
          arrangement. Employees shall use all vacation time and Floating
          Holidays prior to the start of any leave of absence.

9.2       Union Business. Employees chosen by the Union to attend Union business
          ---------------
          outside the Plant shall, with permission of the Employer, be granted
          leave of absence without pay, not exceeding thirty (30) days. A
          request for such leave of absence shall be made at least seven (7)
          working days prior to the first (1st) day of absence, except that such
          notice need not be provided for absences to attend collective
          bargaining negotiations.

9.3       Non-Paid Funeral Leave. In the event of a death of a person other than
          -----------------------
          those identified in this Section the employee shall be given one (1)
          day off upon request, without pay, for the purpose of attending the
          funeral unless the number of requests for attendance at the funeral
          would unduly hamper the operation of the Employer's business during
          the time of the funeral, in which case attendance at the funeral shall
          be granted on the basis of the order in which the requests were made.

9.4.1     Funeral Leave. When a Regular Full-Time Employee on the active payroll
          --------------
          is absent from work for the purpose of arranging for or attending the
          funeral of a member of his or her immediate family as defined below,
          the Employer shall pay him or her for eight (8) hours at his or her
          regular rate of pay for each day of such absence up to a maximum of
          three (3) days provided:

9.4.2     The employee notifies the Employer of the purpose of his or her
          absence on the first day of such absence;

9.4.3     The absence occurs on the day during which the employee would have
          worked but for the absence;

9.4.4     The day of absence is not later than the day of such funeral except
          where substantial travel time is required. 

9.5       Proof of Relationship. The employee, when requested, furnish proof
          ----------------------
          satisfactory to the Employer of the death, his or her relationship to
          the deceased, the date of the funeral, and the employee's actual
          attendance at such funeral. For the purpose of this Agreement, a
          member of the immediate family means the

                                       13

 
          employee's spouse, child, mother, father, sister, brother, mother-in-
          law, father-in-law, grandparents, grandchildren, step-parents and 
          step-children.

                               SECTION 10. WAGES
                               -----------------

10.1      SAUSAGE MAKERS:
          ---------------

               4/01/98        4/01/99        4/01/00        4/01/01

               (+25c)         (+25c)         (+25c)         (+25c)

               $13.80         $14.05         $14.30         $14.55

10.2      PRODUCTION SPECIALIST:
          ----------------------

               4/01/98        4/01/99        4/01/00        4/01/01

               $11.00         $11.25         $11.50         $11.75

10.3      PRODUCTION/SANITATION WORKERS:
          ------------------------------
          Effective April 1, 1998

          1st  6 months  $7.00 per hour        6th  6 months  $ 8.50 per hour
          2nd  6 months  $7.50 per hour        7th  6 months  $ 9.00 per hour
          3rd  6 months  $7.75 per hour        8th  6 months  $ 9.25 per hour
          4th  6 months  $8.00 per hour        9th  6 months  $ 9.50 per hour
          5th  6 months  $8.25 per hour        10th 6 months  $10.00 per hour  

          Effective April 1st of each year, all current employees paid at the
          top of or over the scale shall receive a 25c per hour, per year 
          increase above their current wage rate.

10.3.1    ROTATION WORKERS:
          -----------------

          1st  6 months  $7.50 per hour        6th  6 months  $ 9.00 per hour
          2nd  6 months  $8.00 per hour        7th  6 months  $ 9.50 per hour
          3rd  6 months  $8.25 per hour        8th  6 months  $ 9.75 per hour
          4th  6 months  $8.50 per hour        9th  6 months  $10.00 per hour
          5th  6 months  $8.75 per hour        10th 6 months  $10.50 per hour

10.3.2    MAINTENANCE WORKERS:
          --------------------

          1st  6 months  $10.00 per hour       6th  6 months  $11.25 per hour
          2nd  6 months  $10.25 per hour       7th  6 months  $11.50 per hour
          3rd  6 months  $10.50 per hour       8th  6 months  $11.75 per hour
          4th  6 months  $10.75 per hour       9th  6 months  $12.00 per hour
          5th  6 months  $11.00 per hour       10th 6 months  $12.50 per hour  

                                       14

 
          Foreperson.         75 cents per hour above Classification Rate
          -----------
     
          Second Shift        30 cents per hour above Classification Rate

          Third Shift         35 cents per hour above Classification Rate

          Leadperson          50 cents per hour above Classification Rate

          It is also specifically agreed that all employees receiving above
          scale rates will maintain such rates and also be eligible for any
          scheduled wage increase.

10.3.3    "Workshare" Program. The Employer agrees to provide for continued
           -------------------
          participation by the Employer in the California Economic Development
          Department "Workshare" program.

10.4      Records. The Employer agrees to keep records of time worked by all
          --------
          employees in such a manner as is prescribed by the applicable
          provisions of the Fair Labor Standards Act, whether or not that Act
          actually applies to the Employer. Every Employer shall install a time
          clock for the purpose of keeping accurate records of the hours worked
          by each employee. Upon request, the Employer shall permit the Union to
          examine the payroll records of the employees in the bargaining unit at
          reasonable times during the regular scheduled working hours.

10.5      Bonus Payments. The Employer shall pay to each Regular Employee on the
          ---------------
          first pay period following April 1, 1998, a bonus not to exceed 50 
          cents per hour of all straight time hours compensated in addition to
          wages but subject to payroll taxes. The schedule for the payment of
          such bonuses is as follows:

          July         1998      January      2000      July         2000
          October      1998      April        2000      October      2000
          January      1999      July         2000      January      2001/2002
          April        1999      October      2000      April        2001/2002
          July         1999      January      2000      July         2001
          October      1999      April        2000      October      2001

10.5.1    In all cases the bonuses will be prorated at $20.00 for each week, or
          portion thereof, worked for the thirteen (13) week period preceding
          the payments except for the provision in Section 12.1.1.

                      SECTION 11. SUPERANNUATED EMPLOYEES
                      -----------------------------------

11.       Any employee whose earning capacity is limited because of advance age
          or other handicaps that may interfere with his or her normal
          employment activities may

                                       15

 
          be employed on suitable work at a wage agreed upon by the employee,
          the Employer and the Union.

                        SECTION 12. HEALTH AND WELFARE
                        ------------------------------

12.1      The Employer agrees to continue to make payments to UFCW Wholesale
          Health Trust Fund for the purpose of paying health and welfare
          benefits for eligible employees and their eligible dependents.

12.1.1    Contribution. Effective for hours worked in April 1998 and thereafter,
          -------------
          payable in May 1998, the employer will pay Two Dollars and forty-five
          cents ($2.45) per hour for all straight time hours worked or paid for
          each eligible employee. The Employer agrees to be signatory to the
          terms and conditions, including contributions rate set forth by the
          Trustees of the UFCW Wholesale Health and Welfare Plan for the term of
          this Agreement.

12.2      Contribution shall be made on all straight-time hours worked and/or
          compensated for. It is understood that the contributions required on
          behalf of any employee shall not exceed forty (40) hours per week or
          two thousand eighty (2080) hours in any calendar year. In order to
          qualify for health and welfare coverage, employees must work or be
          compensated for a minimum of eighty (80) straight-time hours per month
          in addition to meeting other eligibility requirements as established
          by the current plan of benefits.

12.3      The parties recognize and acknowledge that the regular and prompt
          payment of Employer contributions to the Fund is essential to the
          maintenance of the Health and Welfare Plan, and inasmuch as
          beneficiaries under this Plan are entitled to health and welfare
          benefits for the period of time that they may have worked while
          covered by the Plan even though contributions have not been paid on
          their behalf by the Employer, that it would be extremely difficult, if
          not impractical, to fix the actual expense and damage to the Fund and
          to the Health and Welfare Plan which would result from the failure of
          an individual Employer to pay such monthly contribution in full within
          the time period provided. Therefore, the amount of damage to the Fund
          and Health and Welfare Plan resulting from such failure shall be
          presumed to be the sum of Twenty-Five Dollars ($25.00) per
          delinquency, or ten percent (10%) of the amount of the contribution or
          contributions due whichever is greater, which amount shall become due
          and payable to the Fund as liquidated damages and not as a penalty,
          upon the day immediately following the date upon which the
          contribution became delinquent contribution or contributions, as well
          as any further sums permitted by law.

                                       16

                            SECTION 13. SICK LEAVE 
                            ----------------------

13.1      Annual Allowance Effective April 1, 1988. All Regular Employees shall
          ----------------------------------------
          be entitled to two-thirds (2/3) of one (1) day of leave for every
          month in which eighty (80) hours (or more) are worked. Employees who
          work forty (40) or more hours per month, but less than eighty (80)
          hours per month, shall be given one-third (1/3) day credit for each
          such month. Unused sick and accident leave shall be cumulative to
          twenty (20) days on each anniversary year.

13.2      Sick Leave Pay. Sick leave shall commence with the first (1st) day of
          ---------------
          absence for sickness or accident except as prescribed in Section
          13.2.1. Sick leave shall always be paid for the first (1st) day of
          absence when the employee is hospitalized or when the first day of
          absence is the day following an injury incurred on the job for which
          the employee required medical treatment. A day's sick and accident
          benefits shall mean a day's pay at the rate in effect at the time the
          employee qualifies to receive the sick and accident benefits, and may
          actually be spread over more than one (1) day to integrate with other
          payments contemplated in Section 13.3.

13.2.1    Employees who receive a verbal warning because of six (6) absences
          shall lose the right to sick leave on the first day of absence and
          shall only be able to collect sick leave on the second day of absence.
          The collection of sick leave on the second day shall stay in effect
          until the employees have maintained their record at five (5) or less
          absences in a twelve (12) month period at which time the employee
          shall then be eligible for first (1st) day absence sick leave.

13.3      Integration with Worker's Compensation or Unemployment Disability
          -----------------------------------------------------------------
          Insurance. An employee who is collecting unemployment compensation
          ----------
          disability benefits, or workers' compensation temporary disability
          benefits, or both, shall not receive sick and accident benefits as
          provided herein; provided, however, if such unemployment compensation
          disability benefits or workmen's compensation temporary disability
          benefits, or both are less than the amount of the sick and accident
          benefits provided herein for such period; such employee shall receive
          sick and accident benefits in addition to such unemployment
          compensation disability benefits or workers' compensation temporary
          disability, or both, in an amount sufficient to equal the amount of
          sick and accident benefits he or she would have otherwise received as
          provided herein. All sickness and accident benefit payments due under
          this Section shall be payable on the employee's regular pay period.

13.4      Proof of Illness. The Employer shall reserve the right to request the
          -----------------
          employee to produce a medical doctor's certificate verifying the fact
          of such illness. An employee may be excused from the requirement to
          provide medical verification of illness provided the following
          criteria are met:

                                       17

 
13.4.1    The absence does not exceed two (2) days including any Holiday which
          is the day before or after the day of absence.

13.4.2    Upon request, the employee signs a statement stating he or she was
          unable to work because of illness which did not require medical
          attention and that any false statement will be grounds for
          disciplinary action. The employee and/or doctor must check in at not
          more than two (2) week intervals with the Company when an employee is
          out on an illness in order to protect his or her rights under Section
          17.

13.4.3    The employee calls his or her supervisor no later than the regular
          starting time on the day of each such absence stating the reasons for
          the absence.

13.5      Job Injury. An employee who is injured on the job and does not
          -----------
          complete that day's work or is otherwise not permitted to return to
          work, shall receive pay for the entire work day and such pay shall not
          be charged against sick leave or accident leave; provided, the
          employee is sent home or is otherwise not permitted to work by a
          medical doctor, chiropractor or osteopath on the approved list of the
          insurance carrier of the individual company.

13.6      Medical Appointments. Visits to the doctor or dentist shall not
          ---------------------
          qualify the employee for sick leave pay. Whenever possible,
          appointments by reason of illness or non-compensable injury shall be
          made outside of working hours. Where such appointments must be made
          during working hours, the employee shall apply to the Employer, in
          writing, at least two (2) working days prior to his or her appointment
          date for unpaid time off to keep such an appointment. Time not worked
          by an employee because of visits to a doctor for an industrial injury
          shall be paid by the Employer at the employee's applicable rate to
          pay. Emergency appointments shall not be subject to the two (2) day
          rule.

13.7      Accumulation. An employee who has accumulated twenty (20) days sick
          -------------
          leave with his current Employer shall be paid in cash by the Employer
          the amount of any unused sick leave accumulated over twenty (20) days
          on each anniversary year. On termination of employment, an employee
          may apply to his or her last Employer for cash payout of all unused
          sick leave accumulated with that Employer. No employee who has begun a
          scheduled vacation, may convert the time off to sick leave instead of
          vacation because of illness incurred after the vacation began.

13.8      Bonus Payment on Worker's Compensation. The Employer will agree that
          ---------------------------------------
          employees off the job due to a bona fide industrial injury shall have
          such time off considered as credited straight-time hours for the
          purpose of the Bonus calculation under the Collective Bargaining
          Agreement.

                                       18

 

                   SECTION 14. PENSIONS, RETIREMENT BENEFITS
                   -----------------------------------------

14.1.1    Contributions. Effective for April 1, 1998, the Company will
          --------------
          contribute the sum of One Dollar and Twenty-five cents ($1.25) per 
          hour worked or paid for, exclusive of overtime hours, for each
          individual employed under this Agreement to an I.R.A. (Simplified
          Employee Pension). Contributions will be made at year end. The parties
          agree that the contributions to the I.R.A. shall be made no later than
          January 31, of the year following the earned credit.

14.1.2    The employer agrees that in the event that an employee terminates
          anytime prior to year end they shall be eligible for pension
          contribution earned and payable at year end as per Section 14.1.1. For
          the purpose of this Section, each hour, other than overtime hours, for
          which payment is made to an employee, shall be deemed to be an hour
          worked.

14.2      Waiting Period. Effective April 1, 1988, Pensions/Retirement Benefits
          ---------------
          contributions shall commence after six (6) months of employment for
          new employees in the industry. For the purpose of this Section, each
          hour, other than overtime hours, for which payment is made to an
          employee, shall be deemed to be an hour worked.

                             SECTION 15. JURY DUTY
                             ---------------------

15.1      Benefit. An employee who is summoned and reports for jury duty shall
          --------
          receive the difference between jury pay and his or her regular daily
          rate of pay for each day for which he or she reported for jury duty
          and/or orientation and on which he or she would normally have worked.

15.2      Return to Work. Day shift employees called for jury duty or
          ---------------
          examination and excused by the court prior to 12:00 Noon shall return
          to work for the balance of their day shift and shall be paid for the
          difference between jury pay or examination pay, if any, and their
          straight-time lost. Night or swing shift employees called for jury
          duty or examination and excused by the court prior to noon shall
          report for their regular night shift or swing shift work and shall not
          be eligible for any jury pay under this Section. Night or swing shift
          employees shall not be required to serve on jury duty in the same day
          time and work night shift or swing shift on the same calendar day, but
          shall receive the difference between their jury pay and their regular
          shift pay lost.

15.3      Proof of Attendance. Employees will present proof of service,
          --------------------
          including time served and amount of pay received.

                                       19

 
                         SECTION 16. GENERAL BENEFITS
                         ----------------------------

16.1      All uniforms, caps, gowns, aprons, with reasonable limited laundry
          service, oilskin aprons, rubber aprons, rubber boots, knives, steels,
          whetstones and hoods and other tools of same shall be furnished free
          of cost to all employees, who use them in the performance of their
          work and the Employer shall keep the same dressed, sharpened and
          otherwise in proper order without cost to the employee.

16.2      Computing Overtime. Paid absences from work, such as vacations,
          -------------------
          Holidays and sick leave, shall be considered as time worked for the
          purpose of this Agreement but shall not be deemed as time worked for
          the purpose of computing overtime.

16.3      Company Meetings. Time spent in mandatory company meetings called by
          -----------------
          the Employer, before or after the day's work, shall be considered as
          time worked and shall be paid for in accordance with the provisions of
          this Agreement.

16.4      Minimum Wage/Benefits. No employee receiving wages, other benefits or
          ----------------------
          privileges either above the minimum herein or not provided for herein
          shall have such benefits or privileges taken away by reason of any
          provisions of this Agreement. The Employer agrees that no employee
          shall be compelled or allowed to enter into any individual contract or
          agreement with his or her Employer concerning wages, hours or work
          and/or working conditions that provide benefits less than the terms
          and provision of this Agreement. Where the basis for amounts paid over
          the wage rated provided for in Section 10 have specifically set forth
          in writing to the employee, they may be discontinued when the reason
          for their payment ceases to exist and the employee has been so advised
          in writing with a copy to the Union.

16.5      Hand Trucks. The Employer shall provide hand trucks and hooks to those
          ------------
          employees who use them in the performance of their work. Where the
          Employer provides facilities to lock up the hand truck, the employee
          shall be held responsible for it.

                             SECTION 17. SENIORITY
                             ---------------------

17.1      Posting. Where a higher wage rate position becomes open, the Employer
          --------
          agrees to post notice of such job opening and further agrees to
          consider (up to three (3) qualifying) employees who apply for such
          opening, based upon their seniority, attendance, attitude and work
          performance. However, in order for an employee to be eligible for the
          job, application must be made in writing within two (2) working days
          following posting of the notice. Jobs will be posted according to job
          title and as commonly known. Employees shall be given a fair trial for
          all jobs open in the unit. The Employer may promote employees to
          Working Forepersons without jeopardizing their former rating.

                                       20

 
17.2      Acquisition of Seniority. There shall be a forty-five (45) work day
          -------------------------
          probationary period for all new employees, during which time they may
          be discharged for any reason. Following completion of such period the
          employee shall become a Regular Employee for all purposes under this
          Agreement and his or her seniority shall date from the first (1st) day
          of employment. Seniority shall be applicable among probationary
          employees as a group when an issue of seniority arises between two (2)
          or more probationary employees.

17.3      Termination of Seniority. Subject to the provision of this Agreement
          -------------------------
          seniority shall be based upon continuous service with the Employer but
          no employee shall suffer loss of seniority unless he or she:

17.3.1    Is discharged for cause;

17.3.2    Resigns or voluntarily quits;

17.3.3    Is absent from work for six (6) consecutive months, except in cases of
          approved leaves of absence;

17.3.4    Is absent from work for twenty-four (24) consecutive months due to
          injury or illness on or off the job;

17.3.5    Is absent from work for more than thirty (30) days due to death in the
          immediate family (as defined in Section 9) or otherwise;

17.3.6    Fails to return to work within three (3) days after receipt of notice
          of recall from layoff as provided in Section 17.7 hereof.

17.4      Application of Seniority. Seniority shall be by classification
          -------------------------
          throughout the Employer's plant, unless the Employer and the Union
          agree that seniority is by classification within designated
          departments of the Employer's plant.

17.5      Layoff/Recall. In the reduction of the number of employees due to lack
          --------------
          of work, the last employee hired in the classification shall be the
          first to be laid off and, in recalling, the last employee laid off in
          that classification shall be the first recalled until the list of
          employees previously laid off has been exhausted. The Employer shall
          give written notice of layoff to the employee and the employee shall
          provide the Employer with his or her current address and telephone
          number at the time of layoffs, and the employee is to keep the
          Employer advised of any change in address. The Employer agrees that
          Regular Employees laid off and not terminated for cause, as defined in
          Section 4, shall have seniority rights on layoffs, rehiring for extra
          and/or steady jobs subsequently available with the Employer prior to
          the hiring of any new employees.

                                       21

 
17.6      Notification of Recall. When an employee is recalled to return to work
          -----------------------
          after layoff and he or she cannot be reached by telephone, the
          Employer shall notify the employee of such recall either by telegram
          or certified letter addressed to his or her last known address
          appearing in the Employer's records and a copy of such communication
          shall be sent to the Union.

17.7      Reporting After Recall. When an employee is recalled after layoff, he
          -----------------------
          or she shall have three (3) business days to report after receipt of
          such recall. If after three (3) such telegram or certified letter is
          returned to the Employer unclaimed or undeliverable, such employee's
          seniority shall be considered broken and all rights forfeited three
          (3) business days after the date such telegram or certified letter
          would have been received. An employee who is recalled from layoff and
          who, at the time of recall, is working for another Employer in the
          meat industry, shall have sufficient time to complete the work week in
          his or her other employment before reporting on the recall so long as
          he or she so informs the Employer who is calling him or her.

17.8      Notice of Return. Employees who are absent from work over forty-eight
          -----------------
          (48) hours shall be required to give the Employer twenty-four (24)
          hours notice of their intention to work.

17.9      Seniority List. A seniority list of all employees in the bargaining
          ---------------
          until will be posted in the Plant and a copy will be given to the
          Union. Such seniority list shall be revised and brought up-to-date
          every six (6) months and a revised copy shall be furnished to the
          Union.

17.10     Effect of Leave on Seniority. An employee who accepts employment
          -----------------------------
          elsewhere while on personal leave of absence from his or her Employer
          shall forfeit his or her seniority rights and he or she shall be
          considered as a voluntary quit. When a personal leave of absence is
          granted to an employee by the Employer, a written notice shall be
          given to evidence such an arrangement. The Employer will abide by the
          provisions of the Selective Service Act as amended and interpreted or
          other applicable legislation governing reinstatement rights of
          employees entering service under such legislation.

                     SECTION 18. GRIEVANCE AND ARBITRATION
                     -------------------------------------

18.1      Grievances. A grievance shall be defined as a matter of dispute which
          -----------
          arises over the interpretation and application of any of the Sections
          of this Agreement.

18.1.1    Any matter of dispute shall be addressed directly by the Union with
          the Employer or by the Employer with the Union and a settlement
          attempted.

18.1.2    If the dispute is not settled directly, the grievance shall be
          referred to the other

                                       22

 
          party, in writing, specifying the complaint and setting forth the
          facts on which the grievance is based and the Contract provision
          violated. The written grievance must by filed by certified mail or in
          person within ten (10) calendar days of the date of the occurrence of
          the dispute, or knowledge thereof, whichever is later.

18.1.3    Unless extended by mutual agreement, an Adjustment Board Hearing shall
          be held within ten (10) calendar days of the date the grievance was
          filed, provided however, the parties must have met and attempted to
          resolve the grievance before any hearing can be convened.

          The right to an Adjustment Board Hearing or arbitration is lost if the
          grieving party fails to follow these steps.

18.1.4    An Adjustment Board shall be established and convened for the purpose
          of hearing and deciding grievances. The Adjustment Board (Board) shall
          consist of two (2) representatives of the Union and two (2)
          representatives of the Employer. The Board shall meet within two (2)
          weeks of such notification and requests, unless the time is mutually
          extended. In any proceeding before the Adjustment Board, the Employer
          shall be represented by an Employer representative and the Union
          member involved shall be represented by the Union. Proceedings before
          the Board shall be conducted in accordance with the rules of procedure
          adopted by the Union and the Employer. A majority decision reached by
          the Board shall be final and binding on all parties. In the event that
          any matter submitted to the Board cannot be settled within five (5)
          business days, excluding Saturday, Sunday and Holidays, (unless the
          time is mutually extended) the parties may choose an impartial
          arbitrator, and the grievance shall be submitted for disposition to
          the Arbitrator, whose decision shall be final and binding on all
          parties, provided the moving party requests arbitration within ten
          (10) business days from the date the Adjustment Board met, otherwise
          the right to arbitration is lost. The parties will request a bench
          decision from the arbitrator at the close of the arbitration hearing.
          In the event that the parties cannot agree upon the selection of the
          impartial arbitrator within five (5) business days, exclusive of
          Saturday, Sunday and holidays, the matter is submitted shall then be
          referred to the Federal Mediation and Conciliation Service for a list
          of arbitrators.

18.2      Authority. Neither the Adjustment Board nor an Arbitrator shall have
          ----------
          the authority or power to add to, alter or amend the terms and
          provisions of this Agreement.

18.3      Expenses. The compensation of the Arbitrator and all expenses incurred
          ---------
          by the Arbitrator and any expense incidental to the work of the
          Adjustment Board and authorized it, shall be borne one-half (1/2) by
          the Union and one-half (1/2) by the Employer, provided, however, that
          this shall not be deemed to include any cost or expense of
          presentation by either of the parties to the dispute.

                                       23

 
18.4      Money Claims. A claim of any employee for payment of any additional
          -------------
          compensation or sum due under the terms of this Agreement shall not go
          beyond a thirty (30) day period, unless notified within ten (10) days
          of the pay period when such claimed sums should have been paid.

                           SECTION 19. UNION AFFAIRS
                           -------------------------

19.1      Union Visitation. Only authorized representative of the Union shall be
          -----------------
          allowed to visit the places of business of the Employer which are
          covered by the Agreement for the purpose of observing working
          conditions and to confirm that the Agreement is being followed, so
          long as the representative has first informed management that he/she
          is on the premises. The visitation right shall be exercised so that
          employees are not interrupted.

19.2      Union Activity. No employee shall be discriminated against for
          ---------------
          membership in or legal activity on behalf of the Union.

19.3      Union Shop Card. The Union Shop Card is the property of the United
          ----------------
          Food and Commercial Workers, AFL-CIO & CLC and is loaned for display
          to the Employer who signs and abides by this Agreement. The Union Shop
          Card can and may be removed from any establishment by the Secretary or
          Union Representatives of the Union for any violation of this
          Agreement. The Union Shop Card shall be displayed prominently and
          visible to the public.

19.4      Check-Off. The Company, for its employees shall for the duration of
          ----------
          this Agreement between the parties deduct from the first pay of each
          month union dues for the current month, and promptly remit same to the
          Union. The initiation fees of the union shall be deducted by the
          Company and remitted to the Union in the same manner as dues
          collections. No deduction, either for dues or initiation fees, shall
          be made by the Employer unless specifically authorized by the
          individual employee by signed authorization card.

19.5      Stewards. Stewards may be designated by the Union.
          ---------

19.6      Bulletin Boards. The Employer and the Union shall jointly provide and
          ----------------
          share a glassed in and lockable bulletin board in the employee's lunch
          room for the purpose of posting notices of official Union business and
          other information, such as times and places of meetings.

                   SECTION 20. WORKING CONDITIONS AND SAFETY
                   -----------------------------------------

20.1      First Aid Equipment. The Employer shall be responsible for the
          --------------------
          installation and maintenance of first aid equipment, and it shall be
          kept throughout the Plant in places readily and conveniently
          accessible to the employees. 

                                       24

 
20.2      Floor Covering/Protective Clothing. A suitable floor covering shall be
          ----------------------------------
          provided so that no employee shall need to stand or traverse any
          limited work area on concrete or concrete substitute flooring. The
          Employer shall furnish mesh gloves and protective aprons for all
          employees who use a knife in the performance of their work. Such
          equipment and hard hats where furnished by the Employer, shall be worn
          by the employees. Where the employees wear cotton gloves on the job,
          the Employer will provide them at no expense to the employees so long
          as they are treated with care and benefit is not abused.
          
20.3      Governmental Regulations. All sanitary and safety regulations of
          ------------------------
          Federal, State and Local governments shall prevail in all departments.
          Failure to follow such regulations shall be considered insubordination
          subject to disciplinary action.
          
20.4      Injurious Working Conditions. Pasteur-Ray lamps or other working
          ----------------------------
          conditions which are injurious to the health and safety of the
          employees shall be directed to the attention of the Employer at which
          time the Employer shall immediately investigate the alleged condition,
          shall meet with representatives of the Union to discuss the alleged
          condition and shall immediately take the necessary steps and measures
          to correct such condition if found to be injurious.

20.5      Efficient Operations. Policy regarding speed of operation shall be
          --------------------
          made on the basis of fairness and equity, consistent with quality of
          workmanship, efficiency of operations, and the reasonable working
          capacity of normal operation. Any dispute which may arise with respect
          to work loans shall be subject to the Grievance Procedure under
          Section 18 of this Agreement.


                           SECTION 21. JOB SECURITY
                           ------------------------

21.       New Methods of Operation. The parties to the Agreement have discussed
          ------------------------
          new methods of operation and subcontracting of work being performed by
          bargaining unit employees and agree that both parties shall discuss
          the effects of additional new methods of operation and subcontracting
          on job security of the employees and will work at that end. When
          additional subcontracting of any existing operation or new method of
          operation becomes necessary or desirable the Employer will notify the
          Union. The Union shall discuss the effects on the job security of the
          employees and the parties will meet for the purpose. The Employer
          agrees to delay layoffs caused by subcontracting or new method of
          operation until at least thirty (30) days subsequent to its notice to
          the union of its intention so that the parties have ample time to
          suggest methods of solving layoff problems. The Employer shall furnish
          the Union facts and suggestions with request to jobs available in the
          Employer's Plant and methods of solving layoff problems.

                                       25

 
                           SECTION 22. SEPARABILITY
                           ------------------------

22.       The provisions of the Agreement are deemed to be separable to the
          extent that if and when a court of last resort adjudges any provisions
          of this Agreement in its application between the Union and the
          undersigned Employer to be in conflict with any law, such decision
          shall not affect the validity of the remaining provisions of this
          Agreement, but such remaining provisions shall continue in full force
          and effect, provided further, that in the event any provision or
          provisions are so declared to be in conflict with law, both parties
          shall meet within thirty (30) days for the purpose of re-negotiation
          and agreement on provision or provisions so invalidated.

                       SECTION 23. TRANSFER OF OWNERSHIP
                       ---------------------------------

23.       In the event of change of ownership of the operation, whether it be
          voluntary, involuntary, or by operation of law, the Employer will
          immediately pay off all obligations, including accumulated wages, pro-
          rata of earned vacations, sick and accident contributions, accumulated
          prior to the date of the change of ownership. If any Owner or Employer
          hereunder sells, leases or transfers his or her business or any part
          thereof, whether voluntary, involuntary or by operation of law, it
          shall be his or her obligation to advise the successor, lessee or
          transferee of the existence of this Agreement and such successor,
          lessee or transferee shall be bound fully by the terms of this
          Agreement and shall be obligated to pay the wages, vacations, sick and
          accident contributions and comply with all other conditions of this
          Agreement in effect at the time of the sale, lease or transfer; and in
          the event the seller or transferror fails to pay his obligations
          hereunder, shall assume all obligations of this Agreement in the place
          and stead of the Employer signatory thereto the same as if her or she
          had been the Owner or Employer from the beginning.


          Before completion of any such transfer, the Employer shall give
          written notice to the buyer, with a copy to the Union, of the
          existence of this Agreement, furnishing him or her with a copy of this
          Agreement and call his or her attention particularly to this Section
          concerning Transfer of Ownership.


                          SECTION 24. SAVINGS CLAUSE
                          --------------------------

24.       If any contract provision may not be put into effect because of
          applicable legislation, Executive order, or Regulations dealing with
          wage or price stabilization, then such provisions, or any part
          thereof, shall become effective at such time, in such amounts and for
          such periods as will be permitted by law at any time during the life
          of this Agreement and any extension thereof with prospective effect.

                                       26

 
                              SECTION 25. DRIVERS
                              -------------------

25. 1     Protective Gowns. Drivers may be required to wear protective gowns
          ----------------
          which will be provided by the Employer. A driver who is required to
          handle product which causes excessive soil on the gown may request and
          the Employer shall provide a second gown and/or oilskin apron to give
          adequate protection to his clothes.

25.2      Overnight Trips. Drivers who are required to be out of town overnight
          ---------------
          in the interest of the Employer shall be paid all reasonable actual
          expenses for meals and lodging as substantiated with vouchers.

25.3      Night Depository. The Employer will provide a night depository or make
          ----------------
          other arrangements so that drivers will not be required to keep money
          collected overnight.


                       SECTION 26. NO STRIKE OR LOCKOUT
                       --------------------------------

26.       During the term of this Agreement there shall be no strikes, sympathy
          strikes, picketing or lockouts pending or following any decision by an
          Adjustment Board of Arbitrator, nor shall there be a stoppage of work
          in violation of any other provision of this Agreement. Nothing herein
          shall preclude the Union or its members from honoring lawful picket
          lines or strikes during the term of this Agreement.


                        SECTION 27. EXTENSION AND SCOPE
                        -------------------------------

27.       This Agreement shall be binding upon the heirs, executors,
          administrators and assignees of the parties hereto. This Agreement
          shall remain in full force and effect from the First (1st) day of
          April 1, 1998 to and including the Thirty First (31) day of March
          31, 2002 and shall be automatically renewed from year-to-year
          thereafter unless either party, at least sixty (60) days prior to
          April 1, 2002, or at least sixty (60) days prior to April 1st of any
          succeeding term, shall notify the other party in writing of its
          intention and desire to change, modify or terminate

                                       27

 
          this Agreement. In the event the Contract is reopened pursuant to the
          provision hereof, and no Agreement is reached within sixty (60) days
          of such reopening, then nothing herein contained shall be construed to
          prevent the Union from taking strike action or other economic action
          desired by it, or the Employer the right to lockout.


IN WITNESS WHEREOF, the parties hereto, have executed this Agreement on the
dates set forth below:


SWISS-AMERICAN SAUSAGE CO. INC.                UFCW LOCAL 101
- -------------------------------                --------------


/s/  SIGNATURE ILLEGIBLE                         /s/  SIGNATURE ILLEGIBLE   
- -------------------------------                -------------------------------- 
(Signature)                                    (Signature)        
                                               

         President                                      President
- --------------------------------               --------------------------------
(Title)                                        (Title)                         


          10/2/98                                        9-30-98
- --------------------------------               --------------------------------
(Date)                                         (Date) 


                                       28


 
                            LETTER OF UNDERSTANDING

                                    between
                                    
                      SWISS-AMERICAN SAUSAGE COMPANY INC.
                      
                                      and

              UNITED FOOD AND COMMERCIAL WORKERS UNION LOCAL 101
              
                     APRIL 1, 1998 THROUGH MARCH 31, 2002

1.        The parties agree that any employees currently in the Sausage Maker
          Apprenticeship Program shall continue to progress through the wage
          steps found in the previous Agreement.

1.1       The parties agree that all Production Workers "A" shall receive wages
          equal to the Sausage Maker classification.

2.        PLANT RELOCATION AND INCENTIVE PAY: The Union recognizes the
          ----------------------------------
          Employer's exclusive right to transfer work, relocate or close the
          plant; in whole or in part.

2.1       The Employer will provide the Union with a ninety (90) day notice
          prior to transfers of bargaining unit work, plant relocation, or plant
          closure. All bargaining unit employees shall be offered employment
          under the terms and conditions of the current Collective Bargaining
          Agreement in the new plant of the Employer.

3.        The employees who are permanently laid off as a direct result of plant
          closure, plant relocation, or transfer of bargaining unit work shall
          receive all wages due for hours of work performed during their last
          week of employment and shall receive pro-rata vacation pay pursuant to
          Section 8, unused accumulated sick leave pursuant to Section 14, and
          prorated bonus per Section 10 of the collective bargaining agreement.

3.2       Severance pay that is paid in accordance with paragraph (3.) above
          shall not be considered as extra-contractual earnings and shall not be
          considered as hours worked or compensable hours for any purpose such
          as vacation computation, holiday entitlement, health and welfare,
          pension, etc. All employees who are subject to permanent layoff shall
          not be denied unemployment benefits by any action of the Employer,
          regardless of whether the layoff is voluntary or forced.

                                       29

 
          It is agreed that there shall be no denial of unemployment benefits by
          any action of the Employer for voluntary layoff by employees for up to
          six months for those who accept employment in the new facility.

3.3       Employees who are permanently laid off pursuant to this Section shall
          receive their final paycheck, including pro-rata vacation, accumulated
          unused holiday and sick leave, and their severance check at the time
          of their permanent layoff. The final check shall be calculated in
          forty (40) hour increments for taxation purposes.

3.4       The seniority and employment rights of employees who are permanently
          laid off pursuant to this Section shall be terminated as of the date
          of their permanent layoff. Permanently laid off employees who may
          subsequently be rehired shall be hired as new employees with a new
          seniority date at the new wage rate, but shall not be subject to
          delays in health and welfare, pension or holiday benefits.

3.5       Employees that are laid off as a result of a general decline in
          business and who retain recall rights shall be eligible for severance
          pay as outlined in this Section if the company institutes a permanent
          layoff.

3.6       The Employers agrees to pay an incentive payment of a net $250.00 per
          month or part thereof for up to two months to any employee on the
          payroll at the San Francisco facility who relocates to any new
          facility.

4.        This Section shall modify and supersede anything to the contrary
          elsewhere in this Labor Agreement. The parties agree that this Section
          shall govern and control any disputes that may arise with respect to
          the Employer's decisions to transfer work, relocate or close the
          plant, and any effects from the exercise of such rights on employees.

The terms and conditions of this Letter of Understanding shall be subject to a 
ratification of the members of Local 101 employed at Swiss-American Sausage 
Company.

SWISS-AMERICAN SAUSAGE CO. INC.                UFCW LOCAL 101
- -------------------------------                --------------


/s/  SIGNATURE ILLEGIBLE                         /s/  SIGNATURE ILLEGIBLE   
- -------------------------------                ------------------------------ 
(Signature)                                    (Signature)        
                                               

         President                                      President
- --------------------------------               --------------------------------
(Title)                                        (Title)                         


         10/2/98                                        9/30/98
- --------------------------------               --------------------------------
(Date)                                         (Date)

                                       30