AMONG SUIZA FOODS CORPORATION AS BUYER AND THE HOLDERS OF THE LIMITED LIABILITY COMPANY INTERESTS OF LAND-O-SUN DAIRIES, L.L.C., AS SELLERS AND

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EXHIBIT 2.1

EXECUTION COPY

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MEMBERSHIP INTEREST PURCHASE AGREEMENT
AND RECAPITALIZATION AGREEMENT

AMONG

SUIZA FOODS CORPORATION
AS BUYER

AND

THE HOLDERS OF THE LIMITED LIABILITY COMPANY INTERESTS
OF LAND-O-SUN DAIRIES, L.L.C.,
AS SELLERS

AND

DAIRY FARMERS OF AMERICA, INC.

DATED AS OF

JANUARY 31, 1998

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MEMBERSHIP INTEREST PURCHASE AGREEMENT
AND RECAPITALIZATION AGREEMENT
TABLE OF CONTENTS

SECTION 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

SECTION 2 SALE AND TRANSFER OF INTERESTS; CLOSING; RECAPITALIZATION . . . . . . . . . . . . . . . . . . . . 8

2.1 Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.2 Purchase Price Payable to LOS Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.3 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.4 Closing Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.5 Allocation of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

SECTION 3 REPRESENTATIONS AND WARRANTIES OF SELLERS . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

3.1 Organization and Good Standing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.2 Authority; No Conflict; Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.3 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.4 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.5 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.6 Title to Properties; Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.7 No Undisclosed Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.8 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.9 No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.10 Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.11 Compliance with Legal Requirements;
Governmental Authorizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.12 Legal Proceedings; Orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.13 Absence of Certain Changes and Events . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.14 Contracts; No Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.15 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.16 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.17 Labor Relations; Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.18 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.19 Brokers or Finders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.20 Competing Interests. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.21 No Misrepresentations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

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SECTION 4 REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

4.1 Organization and Good Standing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.2 Authority; No Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.3 Investment Intent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.4 Certain Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.5 Brokers or Finders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

SECTION 5 COVENANTS OF SELLERS PRIOR TO CLOSING DATE . . . . . . . . . . . . . . . . . . . . . . . . . . 25

5.1 Access and Investigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.2 Operation of the Business of the Company . . . . . . . . . . . . . . . . . . . . . . . 25
5.3 Negative Covenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.4 Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.5 Distributions and Certain Other Restricted Payments . . . . . . . . . . . . . . . . . . 26
5.6 Payment of Indebtedness by Related Persons . . . . . . . . . . . . . . . . . . . . . . 29
5.7 No Negotiation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.8 Change of Control Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.9 Best Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.10 Assistance with Permits and Filings. . . . . . . . . . . . . . . . . . . . . . . . . . 30
5.11 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

SECTION 6 COVENANTS OF BUYER PRIOR TO CLOSING DATE . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

6.1 Best Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.2 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

SECTION 7 CONDITIONS PRECEDENT TO BUYER'S
OBLIGATION TO CLOSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

7.1 Accuracy of Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.2 Sellers' Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.3 Absence of Material Adverse Effects . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.4 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.5 No Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.6 No Claim Regarding Interest Ownership or Sale Proceeds . . . . . . . . . . . . . . . . 31
7.7 No Prohibition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.8 HSR Act Waiting Period Expired . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.9 Amended and Restated Operating Agreement. . . . . . . . . . . . . . . . . . . . . . . . 32
7.10 Supply Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.11 Certificates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.12 Legal Opinion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

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SECTION 8 CONDITIONS PRECEDENT TO SELLERS' AND
DFA'S OBLIGATION TO CLOSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

8.1 Accuracy of Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.2 Buyer's Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.3 No Injunction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.4 HSR Act Waiting Period Expired . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.5 Amended and Restated Operating Agreement . . . . . . . . . . . . . . . . . . . . . . . 33
8.6 Supply Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.7 Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.8 Legal Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.9 Tax Cooperation Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

SECTION 9 TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

9.1 Termination Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
9.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

SECTION 10 INDEMNIFICATION; REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

10.1 Representations; Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
10.2 Indemnification and Payment of Damages by Sellers . . . . . . . . . . . . . . . . . . . 35
10.3 Indemnification and Payment of Damages by Buyer . . . . . . . . . . . . . . . . . . . . 35
10.4 Limitations on Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
10.5 Procedure for Indemnification - Third Party Claims . . . . . . . . . . . . . . . . . . 36
10.6 Procedure for Indemnification - Other Claims . . . . . . . . . . . . . . . . . . . . . 37

SECTION 11 POST CLOSING COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

11.1 Repayment of Long Term Indebtedness and
Redemption of Preferred Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
11.2 Nondisclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
11.3 Noncompetition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
11.4 Enforcement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
11.5 Records Retention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

SECTION 12 GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

12.1 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
12.2 Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
12.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

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12.4 Attorney's Fees and Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
12.5 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
12.6 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
12.7 Entire Agreement and Modification . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
12.8 Assignments, Successors and No Third Party Rights . . . . . . . . . . . . . . . . . . . 43
12.9 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
12.10 Section Headings, Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
12.11 Time of Essence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
12.12 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
12.13 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
12.14 Waivers by DFA and LOS Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

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EXHIBITS

Exhibit A Principal Terms of Tax Preferred Securities

Exhibit B Amended and Restated Operating Agreement

Exhibit C Milk Supply Agreement

Exhibit D Sellers' Closing Certificate

Exhibit E Certificate of the Secretaries of Sellers

Exhibit F Form of Legal Opinion of Sellers' Counsel

Exhibit G Buyer's Closing Certificate

Exhibit H Certificate of the Secretary of Buyer

Exhibit I Form of Legal Opinion of Buyer's Counsel

Exhibit J Tax Cooperation Agreement

SCHEDULES

Schedule 2.5 Allocation of Purchase Price

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MEMBERSHIP INTEREST PURCHASE AGREEMENT
AND RECAPITALIZATION AGREEMENT

This Membership Interest Purchase Agreement and Recapitalization
Agreement ("AGREEMENT") is made as of January 31, 1998, by and among Suiza
Foods Corporation, a Delaware corporation ("BUYER"), Dairy Farmers of America,
Inc., a Kansas cooperative marketing association formerly named Mid-America
Dairymen, Inc. ("DFA"), DFA Investment Company, a Nevada corporation ("DFA
INVESTMENT"), and Land-O-Sun Dairies, Inc., a Delaware corporation ("LOS INC.")
(DFA Investment and LOS Inc. referred to collectively herein as "SELLERS" and
individually as a "SELLER").

R E C I T A L S

LOS Inc. desires to sell, and Buyer desires to purchase, all of the
issued and outstanding limited liability company percentage interests (the
"INTERESTS") of Land-O-Sun Dairies, L.L.C., a Delaware limited liability
company (the "COMPANY"), owned by LOS Inc. for the consideration and on the
terms set forth in this Agreement. Immediately following consummation of the
purchase of the Interests owned by LOS Inc. as described in the immediately
preceding sentence, Buyer, DFA Investment and DFA will recapitalize the Company
on the terms set forth in this Agreement and thereafter DFA Investment will
sell to Buyer a portion of the New DFA Preferred Capital Interests (as
hereinafter defined) issued to DFA Investment as part of such recapitalization.

AGREEMENT

The parties, intending to be legally bound, agree as follows:

SECTION 1

DEFINITIONS

For purposes of this Agreement, the following terms have the meanings
specified or referred to in this Section 1:

"AFFILIATE" - means any stockholder, director or officer (or person
performing similar functions) of the Company or of either Seller or of any
Person that controls, is controlled by or is under common control with the
Company or either Seller.

"BUYER" - as defined in the first paragraph of this Agreement.

"BUYER'S ADVISORS" - as defined in Section 5.1.

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"BUYER'S INDEMNIFIED PERSONS" - as defined in Section 10.2.

"CHANGE OF CONTROL AGREEMENT" - as defined in Section 5.8.

"CHANGE OF CONTROL PAYMENTS" - as defined in Section 5.8.

"CLOSING" - as defined in Section 2.3.

"CLOSING DATE" - the date and time as of which the Closing actually
takes place.

"COMPANY" - as defined in the Recitals of this Agreement.

"COMPANY BONUS PLAN" - any plan, scheme or arrangement, written or
otherwise, pursuant to which the Company may be required to make a payment or
other transfer to any Affiliate, employee, or independent contractor of cash or
property the amount or value of which is in any way contingent on the
objectively or subjectively determined attainment of any individual or group
performance goals.

"COMPANY ERISA PLAN" - any Company Pension Plan or Company Welfare
Plan.

"COMPANY FRINGE BENEFIT PLAN" - any plan, scheme, or arrangement
currently maintained by Company for the provision of "fringe benefits" to
current or former employees within the meaning of IRC Sections 61(a) or 132(a).

"COMPANY PAYROLL POLICY" - any policy of making payments or other
awards to employees other than a Company Bonus Plan, a Company Fringe Benefit
Plan, a Company Pension Plan, a Company Stock Plan, or a Company Welfare Plan.
Company Payroll Policies include, but are not limited to, paid sick days,
vacation days, and personal time off.

"COMPANY PENSION PLAN" - any Pension Plan maintained by the Company
or to which the Company is required to contribute for any current or former
employee.

"COMPANY PLAN" - each Company Bonus Plan, Company ERISA Plan, Company
Fringe Benefit Plan, Company Payroll Policy, Company Pension Plan, Company
Stock Plan and Company Welfare Plan.

"COMPANY STOCK PLAN" - any compensatory interest option, restricted
interest, interest appreciation right, phantom interest, or similar plan,
program, or arrangement maintained by the Company for the current, deferred, or
contingent compensation of any employee, Affiliate or independent contractor
with an interest in or other equity security of the Company, a discount on the
purchase price of any interest in or other equity security of the Company, or a
payment or other transfer of cash or property the amount or value of which is
in any way contingent on any change in value of any interest in or other equity
security of the Company.

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"COMPANY WELFARE PLAN" - any Welfare Plan (as defined in Section 3(1)
of ERISA) maintained by the Company or to which the Company is required to
contribute for any current or former employees.

"COMPETITIVE PRODUCTS" - as defined in Section 11.3(a).

"CONFIDENTIAL INFORMATION" - as defined in Section 11.2.

"CONSENT" - any approval, consent, ratification, waiver, or other
authorization (including any Governmental Authorization).

"CONTEMPLATED TRANSACTIONS" - all of the transactions contemplated by
this Agreement, including:

(a) the sale of the Interests by Sellers to Buyer;

(b) the performance by Buyer and Sellers of their
respective covenants and obligations under this Agreement;

(d) the Recapitalization of the Company as provided in
this Agreement.

"CONTRACT" - any agreement, contract, obligation, promise, or
undertaking that is legally binding.

"CONTROLLED GROUP PLANS" - as defined in Section 3.10(b)(ix).

"DAMAGES" - as defined in Section 10.2.

"DEFINED BENEFIT PLAN" - with the meaning of ERISA Section 3(35).

"DFA" - as defined in the first paragraph of this Agreement.

"DISCLOSURE LETTER" - the disclosure letter delivered by Sellers to
Buyer concurrently with the execution and delivery of this Agreement.

"DOJ" - the United States Department of Justice.

"DOL" - the United States Department of Labor.

"EMPLOYEE BENEFIT PLAN" - - as defined in Section 3.10(b)(ix).

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"ENCUMBRANCE" - any lien, mortgage, easement, servitude, right of way,
charge, pledge, security interest, or other encumbrance.

"ENVIRONMENT" - soil, land surface or subsurface strata, surface
waters (including navigable waters, ocean waters, streams, ponds, drainage
basins, and wetlands), groundwaters, drinking water supply, stream sediments,
ambient air, plant and animal life, and any other environmental medium.

"ENVIRONMENTAL, HEALTH, AND SAFETY LIABILITIES" - any cost, damage,
expense, liability, or obligation arising from or under any Environmental Law
or Occupational Safety and Health Law.

"ENVIRONMENTAL LAW" - any Legal Requirement that relates to the
Environment.

"ERISA" - the Employee Retirement Income Security Act of 1974 or any
successor law, and regulations and rules issued pursuant to that Act or any
successor law.

"ERISA AFFILIATE" - The Company, the Sellers, and each corporation,
partnership or other trade or business, whether or not incorporated, which is
or has been treated as a single employer or a controlled group member with any
Seller or the Company pursuant to IRC Section 414 or Section 4001 of ERISA.

"FACILITIES" - any real property, leaseholds, or other interests in
real property owned or operated by the Company and any buildings, plants,
structures, or fixtures owned or operated by the Company.

"FINANCIAL STATEMENTS" - as defined in Section 3.4.

"FTC" - the United States Federal Trade Commission.

"GOVERNMENTAL AUTHORIZATION" - any approval, consent, license, permit,
waiver, or other authorization issued, granted, given, or otherwise made
available by or under the authority of any Governmental Body or pursuant to any
Legal Requirement.

"GOVERNMENTAL BODY" - any:

(a) nation, state, county, city, town, village, district,
or other jurisdiction of any nature;

(b) federal, state, local, municipal, foreign, or other
government;

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(d) other body exercising any administrative, executive,
judicial, legislative, police, regulatory, or taxing authority or
power.

"HAZARDOUS ACTIVITY" - the distribution, generation, handling,
importing, management, manufacturing, processing, production, refinement,
release, storage, transfer, transportation, treatment, or use of Hazardous
Materials from the Facilities into the Environment that is not in compliance
with Environmental Law.

"HAZARDOUS MATERIALS" - any waste or other substance that is listed,
defined, designated, or classified as, or otherwise determined to be,
hazardous, radioactive, or toxic or a pollutant or a contaminant under or
pursuant to any Environmental Law.

"HSR ACT" - the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976,
as amended.

"INDEBTEDNESS OWED TO ▇▇▇▇▇▇ TRUST" - the aggregate amount of
indebtedness and other obligations (including prepayment penalties, if any)
owed by the Company to ▇▇▇▇▇▇ Trust and Savings Bank as of the Closing Date
pursuant to the terms of that certain Credit Agreement dated October 31, 1996.

"INDEBTEDNESS OWED TO MID-AM CAPITAL" - the aggregate amount of
indebtedness and other obligations (including prepayment penalties, if any)
owed by the Company to Mid-Am Capital, L.L.C. or Mid-Am Finance, Inc. as of the
Closing Date pursuant to the terms of (a) that certain Subordinated Promissory
Note (Interest to be Paid) dated October 31, 1996 in the original principal
amount of $9,000,000 and (b) that certain Subordinated Working Capital Line of
Credit dated December 17, 1997 providing for a line of credit of up to
$5,000,000.

"INDEMNIFIED PERSONS" - as defined in Section 10.3.

"INTELLECTUAL PROPERTY ASSETS" - as defined in Section 3.18(a).

"INTERESTS" - as defined in the Recitals of this Agreement.

"INTERIM BALANCE SHEET" - as defined in Section 3.4.

"IRC" - the Internal Revenue Code of 1986 or any successor law, and
regulations issued by the IRS pursuant to the Internal Revenue Code or any
successor law.

"IRS" - the United States Internal Revenue Service or any successor
agency, and, to the extent relevant, the United States Department of the
Treasury.

"KEY EMPLOYEES" - as defined in Section 5.8.

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"KNOWLEDGE" - a Person (other than an individual) will be deemed to
have "Knowledge" of a particular fact or other matter if any individual who is
serving as a director, officer, or partner, of such Person (or in any similar
capacity) has knowledge of such fact or other matter.

"LEGAL REQUIREMENT" - any administrative order, constitution, law,
ordinance, principle of common law, regulation, rule or statute of any
Governmental Body, including without limitation all federal, state and local
laws related to Taxes, ERISA, Hazardous Materials and the Environment, zoning
and land use, Occupational Safety and Health Laws, product quality and safety,
employment and labor matters.

"LOS ASSIGNEE" - as defined in Section 12.8.

"LOS INC." - as defined in the first paragraph of this Agreement.

"LOS INC. INTERESTS" - as defined in Section 2.5.

"LOS OWNERS" - ▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇

"MARKS" - as defined in Section 3.18(a)(i).

"MATERIAL ADVERSE EFFECT" - any material adverse effect on the
business, properties, assets, condition (financial or otherwise), liabilities
or results of operation of the Company taken as a whole, other than any effects
arising out of or resulting from changes affecting the economy or financial
conditions generally or the dairy industry generally.

"MATERIAL CUSTOMERS" - as defined in Section 3.14(c).

"NEW DFA PREFERRED CAPITAL INTERESTS" - as defined in Section 2.1(b).

"OCCUPATIONAL SAFETY AND HEALTH LAW" - any Legal Requirement designed
to provide safe working conditions and to reduce occupational safety and health
hazards.

"OPERATING AGREEMENT" - the Operating Agreement of the Company dated
as of October 10, 1996 together with any amendments thereto.

"ORDER" - any award, decision, injunction, judgment, order, ruling,
subpoena, or verdict entered, issued, made, or rendered by any court,
administrative agency, or other Governmental Body or by any arbitrator.

"ORDINARY COURSE OF BUSINESS" - an action taken by a Person will be
deemed to have been taken in the "Ordinary Course of Business" only if:

(a) such action is consistent with the past practices of
such Person and is taken in the ordinary course of the normal
day-to-day operations of such Person; and

Page 6

(b) such action is not required to be authorized by the
board of directors of such Person (or by any Person or Group of
Persons exercising similar authority).

"ORGANIZATIONAL DOCUMENTS" - (a) the certificate of formation of the
Company; (b) the Operating Agreement; (c) the organizational minutes or
resolutions of the Company; and (d) any amendment to any of the foregoing.

"OUTSTANDING AMOUNT OF LONG TERM INDEBTEDNESS" - the sum of (i) the
Indebtedness Owed to ▇▇▇▇▇▇ Trust (ii) the Indebtedness Owed to Mid-Am Capital
and (iii) any other indebtedness for borrowed money, including any prepayment
penalties and other amounts required to be paid to the lender thereof in
connection with the repayment thereof.

"OUTSTANDING AMOUNT OF PREFERRED CAPITAL" - the sum of the Unreturned
Preferred Capital Balance and the Preferred Return (each as defined in the
Operating Agreement) of the Preferred Capital as of the Closing Date.

"PENSION PLAN" - any pension plan within the meaning of ERISA Section
3(2).

"PERSON" - any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, or other entity.

"PREFERRED CAPITAL" - the Preferred Capital (as defined in the
Operating Agreement) in the Company held by DFA.

"PROCEEDING" - any action, arbitration, audit, hearing, investigation,
litigation, or suit (whether civil, criminal, administrative, investigative, or
informal) commenced, brought, conducted, or heard by or before, any
Governmental Body or arbitrator.

"RECAPITALIZATION" - as defined in Section 2.1(b).

"RELEASE" - any spilling, leaking, emitting, discharging, depositing,
escaping, leaching, dumping, or other releasing into the Environment.

"REPORTABLE EVENT" as defined in Section 4043 of ERISA.

"REPRESENTATIVE" - with respect to a particular Person, any director,
officer, employee, agent, consultant, advisor, or other representative of such
Person, including legal counsel, accountants, and financial advisors.

"SECURITIES ACT" - the Securities Act of 1933 or any successor law,
and regulations and rules issued pursuant to that Act or any successor law.

"SELLERS" - as defined in the first paragraph of this Agreement.

Page 7

"SELLERS' CLOSING DOCUMENTS" - as defined in Section 3.2.

"SELLERS' INDEMNIFIED PERSONS" - as defined in Section 10.3.

"TAXES" - all taxes, charges, fees, duties, levies or other
assessments, including, without limitation, income, gross receipts, net
proceeds, ad valorem, real and personal property (tangible and intangible),
sales, use, franchise, user, transfer, fuel, excess profits, occupational,
employees' income withholding, unemployment and Social Security taxes, which
are imposed by any Governmental Body.

"TAX DISTRIBUTION" - as defined in Section 5.5.

"TAX PREFERRED SECURITIES" - as defined in Section 2.1(c).

"TAX RETURN" - any return (including any information return), report,
statement, schedule, notice, form, or other document or information filed with
or submitted to, or required to be filed with or submitted to, any Governmental
Body in connection with the determination, assessment, collection, or payment
of any Tax.

"TAX YEAR" - as defined in Section 5.5.

"TERRITORY" - as defined in Section 11.3(a).

"TRADE SECRETS" - as defined in Section 3.18(a)(ii).

"TRUST" - as defined in Section 2.1(c).

SECTION 2

SALE AND TRANSFER OF INTERESTS; CLOSING; RECAPITALIZATION

2.1 INTERESTS. Subject to the terms and conditions of this
Agreement, at the Closing, (a) LOS Inc. will sell and transfer all of its
Interests to Buyer, and Buyer will purchase all of such Interests from LOS
Inc., (b) Buyer, DFA Investment and DFA will recapitalize the Company and
pursuant to such recapitalization (the "Recapitalization"), DFA Investment's
Interests in the Company will be converted into new preferred capital interests
in the Company (the "New DFA Preferred Capital Interests") in a net aggregate
stated amount of $111,000,000 and the Outstanding Amount of Preferred Capital
will be converted into an equal net aggregate stated amount (which will be
specified in a certificate delivered by DFA to Buyer one business day prior to
Closing) of New DFA Preferred Capital Interests, (c) DFA Investment will retain
$20 million in net aggregate stated amount of New DFA Preferred Capital
Interests and will sell $91,000,000 in net aggregate stated amount of New DFA
Preferred Capital Interests to Buyer and Buyer will pay DFA Investment
$91,000,000 in cash for such New DFA Preferred Capital Interests, (d) Buyer
▇▇▇▇

▇▇▇▇ 8

cause the Company to redeem the New DFA Preferred Capital Interests issued to
DFA pursuant to the Recapitalization, and (e) DFA Investment will purchase for
$100 million in cash from the Suiza Capital Trust, a statutory business trust
to be created by Buyer under the laws of the State of Delaware (the "Trust"),
trust issued preferred equity securities ("TIPES") of the Trust in a net
aggregate stated amount of $100 million. The TIPES will have material terms
and conditions substantially as set forth in Exhibit A.

2.2 PURCHASE PRICE PAYABLE TO LOS INC. The purchase price to be
paid by Buyer to LOS Inc. for the Interests of LOS Inc. will be (a)
$119,000,000 if the Closing occurs prior to May 4, 1998 and (b) $111,000,000 if
the Closing occurs on May 4, 1998 or thereafter.

2.3 CLOSING. The purchase and sale (the "CLOSING") provided for
in this Agreement will take place at the offices of Sellers' counsel at Suite
4300, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇, at 10:00 a.m. (local time) on the third
business day following the satisfaction or waiver of all conditions precedent
set forth in Sections 7 and 8, or at such other time and place as the parties
agree. Subject to the provisions of Section 9, failure to consummate the
purchase and sale provided for in this Agreement on the date and time and at
the place determined pursuant to this Section 2.3 will not result in the
termination of this Agreement and will not relieve any party of any obligation
under this Agreement.

2.4 CLOSING OBLIGATIONS. At the Closing:

(a) Sellers will deliver or will cause to be delivered to
Buyer a certificate executed by Sellers representing and warranting to
Buyer that Sellers' representations and warranties in this Agreement
are accurate in all material respects as if made on the Closing Date;

(b) LOS Inc. will deliver or will cause to be delivered
to Buyer documents evidencing the transfer of all of LOS Inc.'s
Interests to Buyer;

(c) Buyer will deliver or will cause to be delivered (i)
to LOS Inc. by wire transfer, the purchase price specified in Section
2.2 and (ii) to Sellers a certificate executed by Buyer to the effect
that, except as otherwise stated in such certificate, Buyer's
representations and warranties in this Agreement are accurate in all
material respects as if made on the Closing Date;

(d) Buyer, DFA Investment and DFA will execute and
deliver an amendment and restatement of the Operating Agreement in the
form attached hereto as Exhibit B which will effect the
Recapitalization and, among other things, will provide for the
issuance of the New DFA Preferred Capital Interests and for a put in
favor of DFA Investment and a call in favor of Buyer with respect to
the $20 million in net aggregate stated amount of New DFA Preferred
Capital Interests which are not sold by DFA Investment to Buyer at
Closing;

Page 9

(e) DFA Investment will deliver or will cause to be
delivered to Buyer documents evidencing the transfer to Buyer of New
DFA Preferred Capital Interests having a net aggregate stated value
equal to $91,000,000, and Buyer will deliver to DFA Investment, by
wire transfer, $91,000,000;

(f) DFA Investment will pay to the Trust, by wire
transfer, $100 million and upon receipt thereof the Trust will issue
to DFA Investment $100 million in net aggregate stated amount of
TIPES; and

(g) Buyer will cause the Company to redeem the New DFA
Preferred Capital Interests issued to DFA pursuant to the
Recapitalization.

2.5 ALLOCATION OF PURCHASE PRICE The parties agree that, in
accordance with IRC Sections 751 and 1060, the purchase price to be paid by
Buyer for the Interests held by LOS Inc. and for the New DFA Preferred Capital
Interests, and by the Company for the redemption of the New DFA Preferred
Capital Interests issued to DFA pursuant to the Recapitalization, shall be
allocated among the assets of the Company attributable to such interests in the
Company as set forth on Schedule 2.5 attached to and made a part of this
Agreement. For this purpose, such purchase price shall include any liabilities
of the Company that are treated as part of the purchase price of the LOS Inc.
Interests for Federal income tax purposes. Each party agrees not to, and
agrees to cause the Company not to, take a position on any Tax Return that is
inconsistent with the allocation set forth on Schedule 2.5. LOS Inc., DFA
Investment, DFA and the Buyer each agree, to the extent such filing is
required, to file Form 8594 (Asset Acquisition Statement under Section 1060)
consistent with such allocation.

SECTION 3

REPRESENTATIONS AND WARRANTIES OF SELLERS

Sellers represent and warrant to Buyer as follows (provided, however,
that the Disclosure Letter sets forth certain exceptions to such
representations and warranties or discloses certain matters in response to such
representations and warranties, in each case identified by the applicable
Section numbers below):

3.1 ORGANIZATION AND GOOD STANDING.

(a) The Company is a limited liability company duly
organized, validly existing, and in good standing under the laws of
the State of Delaware, with full limited liability company power and
authority to conduct its business as it is now being conducted. The
Company is duly qualified to do business as a foreign limited
liability company and is in good standing under the laws of each state
or other jurisdiction in which the nature of the activities conducted
by it requires such qualification, except where such failure to so
qualify does not have a Material Adverse Effect.

Page 10

(b) Sellers have delivered to Buyer copies of the
Organizational Documents of the Company, as currently in effect.

(c) The Company does not own any direct or indirect
equity or debt interest in any other Person and is not obligated or
committed to acquire any such interest.

3.2 AUTHORITY; NO CONFLICT; CONSENTS.

(a) This Agreement constitutes the legal, valid, and
binding obligation of each of the Sellers, enforceable against such
Seller in accordance with its terms except to the extent that its
enforceability may be limited by bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium or other laws relating
or affecting creditors' rights generally and by general equity
principles.

(b) Each Seller has the requisite cooperative or
corporate right, power, authority, and capacity to execute and deliver
this Agreement and to perform its obligations under this Agreement.
The execution, delivery and performance of this Agreement by each of
the Sellers have been duly authorized by all necessary corporate or
cooperative action, as the case may be, on the part of the Company,
the Sellers and the owners of the Sellers.

(c) Except for any Consent which may be required under
the HSR Act, neither the execution and delivery of this Agreement nor
the consummation or performance of any of the Contemplated
Transactions will, directly or indirectly:

(i) conflict with (A) any provision of the
Organizational Documents, or (B) any resolution adopted by the
Representative Committee of the Company or the owners of the
Interests of the Company;

(ii) result in a violation of, or give any
Governmental Body or other Person the right to exercise any
remedy or obtain any relief under, any Legal Requirement or
any Order to which the Company is subject;

(iii) result in a violation of any of the terms or
requirements of, or give any Governmental Body the right to
revoke, withdraw, suspend, cancel, terminate, or modify, any
Governmental Authorization that is held by the Company;

(iv) result in a violation or breach of any
provision of, or give any Person the right to declare a
default or exercise any remedy under, or to accelerate the
maturity or performance of, or to cancel, terminate, or
modify, any Contract of the Company described in Section
3.14(a); or

(v) result in the imposition or creation of any
Encumbrance upon any of the assets owned or used by the
Company.

Page 11

(d) No Seller or the Company is or will be required to
obtain any Consent from any Person or Governmental Body in connection
with the execution and delivery of this Agreement or the consummation
or performance of any of the Contemplated Transactions, except for:
(i) Consents, if any, required under the HSR Act; (ii) Consents as
will be obtained by Closing; or (iii) where the failure to obtain such
Consents will not have a Material Adverse Effect.

3.3 CAPITALIZATION. The authorized and outstanding limited
liability company interests of the Company are listed in Section 3.3 of the
Disclosure Letter. Sellers are and will be on the Closing Date the record and
beneficial owners and holders of the Interests, free and clear of all
Encumbrances, and the Interests are the only outstanding ownership interests in
the Company. The LOS Owners own all of the outstanding ownership interests in
LOS Inc. At the Closing, after giving effect to the Recapitalization, DFA
Investment and DFA will be the sole record and beneficial owners and holders of
the New DFA Preferred Capital Interests, free and clear of all Encumbrances.
All of the outstanding Interests of the Company to be purchased by Buyer have
been duly authorized and validly issued and are fully paid and nonassessable.
All of the New DFA Preferred Capital Interests to be purchased by Buyer will
have been duly authorized and validly issued and will be fully paid and
nonassessable. Except for certain rights of first refusal set forth in the
Operating Agreement, (which are being waived with respect to the Contemplated
Transactions pursuant to Section 12.14 of this Agreement) there are no
Contracts relating to the issuance, sale, or transfer of any Interests of the
Company. None of the outstanding Interests of the Company was issued in
violation of the Securities Act.

3.4 FINANCIAL STATEMENTS. Included within Section 3.4 of the
Disclosure Letter are: (a) the audited financial statements (i) of the Company
for the two month period ended December 31, 1996 and (ii) of LOS Inc. for the
year ended December 31, 1996, (b) an unaudited balance sheet of the Company as
at November 30, 1997 (the "INTERIM BALANCE SHEET") and a profit and loss
statement for the 11 months ended on the Interim Balance Sheet Date
(collectively, the "FINANCIAL STATEMENTS"). The Financial Statements fairly
present in all material respects the assets and liabilities, financial
condition and the results of operations, changes in stockholders' equity or
membership equity, as applicable, and cash flow of LOS Inc. or the Company, as
applicable, as at the respective dates of and for the periods referred to in
such Financial Statements. The Financial Statements have been prepared in
accordance with generally accepted accounting principles, consistently applied,
subject in the case of the unaudited statements to the absence of footnote
disclosure and other presentation items and to changes resulting from normal
period-end adjustments for recurring accruals, which will not have a Material
Adverse Effect. Subject to the limitations provided in the immediately
preceding sentence, the Financial Statements have been prepared from the books
and records of the Company and LOS Inc., as applicable, which accurately and
fairly reflect in all material respects the transactions of, acquisitions and
dispositions of assets by, and incurrence of liabilities by the Company and LOS
Inc., as applicable. All inventories and raw materials reflected in the
Interim Balance Sheet or acquired since the date thereof are of good and
merchantable quality and are salable in the ordinary course of business (in the
case of inventory held for sale) or currently usable (in the case of other
inventory and raw materials) or adequate reserves have been established with
respect thereto. All

Page 12

accounts receivable reflected in the Interim Balance Sheet or acquired since
the date thereof arose in the Ordinary Course of Business and are not subject
to set-off, counterclaim or other reduction. As of the Interim Balance Sheet
Date, the Outstanding Amount of Long Term Indebtedness was $41,516,000, and
since such date the Outstanding Amount of Long Term Indebtedness has not
changed except (A) for changes specifically permitted under Section 3.13(h) and
(B) for distributions or bonuses paid by the Company for the 1997 fiscal year
of the Company which are set forth in Section 3.8 of the Disclosure Letter. As
of December 31, 1997, the Outstanding Amount of Preferred Capital equaled
$13,564,200, and such amount has not increased since such date except to
reflect accrued but unpaid distributions after such date.

3.5 BOOKS AND RECORDS. The books of account, minute books, and
other records of the Company, all of which have been made available to Buyer,
are complete and correct. At the Closing, all of those books and records will
be in the possession of the Company.

3.6 TITLE TO PROPERTIES; ENCUMBRANCES.

(a) Section 3.6(a) of the Disclosure Letter includes a
complete list (including the street address, where applicable) of each
Facility and of each material item of tangible personal property owned
by the Company as of the date indicated. The tangible personal
property listed in the Disclosure Letter is in good repair and
operating condition, normal wear and tear excepted.

(b) The Company owns all the properties and assets
(whether real, personal, or mixed and whether tangible or intangible)
that it purports to own located in the Facilities owned or operated by
the Company or reflected as owned in the books and records of the
Company, including all of the properties and assets reflected in the
Interim Balance Sheet (except for personal property sold since the
date of the Interim Balance Sheet in the Ordinary Course of Business),
and all of the properties and assets purchased or otherwise acquired
by the Company since the date of the Interim Balance Sheet (except for
personal property acquired and sold since the date of the Interim
Balance Sheet in the Ordinary Course of Business). Except as
described in Section 3.6(b) of the Disclosure Letter, all material
properties and assets reflected in the Interim Balance Sheet are free
and clear of all Encumbrances except for (a) security interests
incurred in connection the Indebtedness Owed to ▇▇▇▇▇▇ Bank and (b)
liens for current Taxes not yet due.

(c) Permanent certificates of occupancy have been issued
for the improvements included within the Facilities permitting the
existing use of such improvements. To Sellers' knowledge, there are
no proceedings pending or threatened that would alter the current
zoning classification of the Facilities or alter any applicable laws,
statutes, regulations, codes, conditions or restrictions related to
zoning or land use that would adversely affect the existing use of the
Facilities in the Company's business. Except as described in Section
3.6(c) of the Disclosure Letter, the Company has not received any
written notice from any insurance company of any defects or
inadequacies in the Facilities that would, if not corrected, result in
the termination of existing insurance coverage or a

Page 13

material increase in the present cost thereof. The Company has not
received any written notice providing for or threatening the
discontinuation of necessary utilities to the Facilities. None of the
Sellers or LOS owners is a "foreign person" as that term is defined in
Section 1445 of the IRC.

3.7 NO UNDISCLOSED LIABILITIES. The Company has no liabilities or
obligations of any nature (whether known or unknown and whether absolute,
accrued, contingent or otherwise) except for (a) liabilities or obligations
reflected or reserved against in the Interim Balance Sheet (b) current
liabilities incurred in the Ordinary Course of Business since the date thereof
and (c) matters disclosed in Section 3.7 of the Disclosure Letter.

3.8 TAXES. Except as set forth in Section 3.8 of the Disclosure
Letter:

(a) The Company has filed or caused to be filed on a
timely basis all Tax Returns that are or were required to be filed by
it pursuant to applicable Legal Requirements. The Company has paid,
or made provision for the payment of, all Taxes that have become due
and payable as Taxes imposed on the Company pursuant to those Tax
Returns or otherwise, or pursuant to any assessment received by the
Company, except such Taxes, if any, as are being contested in good
faith and as to which adequate reserves have been provided in the
Interim Balance Sheet.

(b) The Company has not been granted an extension of time
for filing any Tax Return that has not yet been filed.

(c) The charges, accruals, and reserves with respect to
Taxes on the respective books of the Company are adequate in all
material respects. There exists no proposed tax assessment against the
Company except as disclosed in the Interim Balance Sheet. All Taxes
that the Company is or was required by Legal Requirements to withhold
or collect have been duly withheld or collected and, to the extent
required, have been paid to the proper Governmental Body.

(d) All Tax Returns filed by the Company are true,
correct, and complete with respect to Taxes imposed on the Company.
The Company is not, and within the five-year period preceding the
Closing Date has not been, an "S" corporation.

(e) There are no outstanding agreements, waivers, or
arrangements extending the statutory period of limitation applicable
to any claim for, or the period for the collection or assessment of,
Taxes due from or with respect to the Company for any taxable period.

(f) No Proceeding is pending or, to Sellers' knowledge,
threatened in regard to any Taxes due from or with respect to the
Company or any Tax Return filed by or with respect to the Company.

Page 14

(g) The Company has made distributions to its members in
order to reimburse them for Taxes resulting from the inclusion in
their taxable income of income of the Company. The amount, date and
recipient of each such distribution (i) made since the incorporation
of LOS Inc. or the formation of the Company, as applicable, or (ii)
that the Company anticipates making prior to the Closing Date, the
period of the income the Tax upon which each such distribution was or
will be designed to reimburse and the Tax computations for such
periods, are set forth in Section 3.8 of the Disclosure Letter.

3.9 NO MATERIAL ADVERSE CHANGE. Since the date of the Interim
Balance Sheet, there has not been any material adverse change in the business,
operations, properties, prospects, assets, or condition (financial or
otherwise) of the Company.

3.10 EMPLOYEE BENEFITS.

(a) Section 3.10(a) of the Disclosure Letter lists each
Company Plan.

(b) Except as set forth in Section 3.10(b) of the
Disclosure Letter:

(i) The terms and operations of each and every
Company Plan have at all times been in accordance with ERISA,
the IRC, and/or any and all other applicable laws and
regulations.

(ii) All governmental reports and returns
(including, but not limited to, annual IRS/DOL 5500-series
information returns/reports) required to be filed in
connection with all Company Plans have been timely filed, and
were true and complete when filed.

(iii) The Company does not have a contribution
obligation to a "multiemployer plan" within the meaning of
Section 4001(a)(3) of ERISA.

(iv) The Company has not participated in any
transaction that could reasonably be expected to result in a
Material Adverse Effect to the Company under ERISA Section
4069.

(v) All required contributions to all Company
Plans and all premiums, fees, or other payments required to be
made in connection with any Company Plan have either been
timely made or are reflected in the Financial Statements on an
accrual basis.

(vi) No Company Plan is currently under audit by
the IRS or the DOL.

(vii) Other than routine claims for benefits, there
are no actions, suits, claims or investigations pending, or to
Sellers' knowledge, threatened against or with respect to any
of the Company Plans or their assets.

Page 15

(viii) With respect to any Employee Benefit Plan
which is a "Defined Benefit Plan" with the meaning of ERISA
Section 3(35), (A) the Company has not incurred and is not
reasonably likely to incur any liability under Title IV of
ERISA (other than for the payment of premiums, all of which
have been paid when due), (B) the Company has not incurred any
accumulated funding deficiency within the meaning of IRC
Section 412 and has not applied for or obtained a waiver of
any minimum funding standard or an extension of any
amortization period under IRC Section 412, and (C) no
"Reportable Event" as defined in Section 4043 of ERISA) has
occurred or is expected to occur.

(ix) With respect to each "Employee Benefit Plan"
(as defined in ERISA) maintained or contributed to, currently
or in the past, by the Company or any ERISA Affiliate, or with
respect to which the Company or any ERISA Affiliate has
liability (the "Controlled Group Plans"); (A) there are no
unfunded liabilities existing under any Control Group Plan and
each Controlled Group Plan could be terminated as of the date
of Closing with no liability to the Company, any Seller or
Buyer; and (B) each such Control Group Plan has been operated
in compliance with ERISA, applicable tax qualification
requirements and all other applicable laws.

(x) Neither the Company any Seller, any ERISA
Affiliate nor any plan fiduciary of any Company Plan has
engaged in any transaction in violation of Section 406(a) of
ERISA or any "prohibited transaction" (as defined in IRC
Section 4975(c)(1) that would subject the Company, any Seller,
Buyer or any ERISA Affiliate to any taxes, penalties or other
liabilities resulting from such transaction.

(c) Except as set forth in Section 3.10(c) of the
Disclosure Letter, the Company is not a party to or subject to any
collective bargaining agreement, contract, commitment or arrangement,
nor does any other written agreement determine the terms and
conditions of employment of any employee of the Company, nor will this
Agreement or the transactions contemplated hereby cause a termination
or renegotiation of, or trigger any rights or result in a default
under, any such agreement. To Seller's Knowledge, no attempts are
presently being made, to organize or represent any employees or group
of employees of the Company.

3.11 COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL
AUTHORIZATIONS. Except as set forth in Section 3.11 of the Disclosure Letter:

(a) The Company is in compliance with each Legal
Requirement that is applicable to it or to the conduct or operation of
its business.

(b) No event has occurred or circumstance exists that
(with or without notice or lapse of time) (i) constitutes a violation
by the Company of, or a failure on the part of the Company to comply
with, any Legal Requirement, or (ii) may give rise to any

Page 16

obligation on the part of the Company to undertake, or to bear all or
any portion of the cost of, any remedial action.

(c) The Company has not received any outstanding notice
from any Governmental Body or any other Person regarding (i) any
actual or alleged violation of any Legal Requirement, or (ii) any
actual or alleged obligation on the part of the Company to undertake,
or to bear the cost of, any remedial action of any nature.

(d) The Company holds all Governmental Authorizations
that are required in connection with the business of the Company.
Each such Governmental Authorization is valid and in full force and
effect except where the failure to keep such authorization valid and
in full force and effect will not have a Material Adverse Effect.

(e) The Company is in compliance with all of the terms
and requirements of each Governmental Authorization.

(f) The Company has not received any outstanding notice
from any Governmental Body or any other Person regarding (i) any
actual or alleged violation of any term or requirement of any
Governmental Authorization, or (ii) any actual or proposed revocation,
withdrawal, suspension, cancellation, termination of, or modification
to any Governmental Authorization.

(g) All applications required to have been filed for the
renewal of the Governmental Authorizations have been duly filed on a
timely basis with the appropriate Governmental Bodies, and all other
filings required to have been made with respect to such Governmental
Authorizations have been duly made on a timely basis with the
appropriate Governmental Bodies.

(h) The Governmental Authorizations held by the Company
constitute all of the Governmental Authorizations necessary to permit
the Company to lawfully conduct and operate its business in the manner
it currently operates such business.

(i) To the Sellers' knowledge, since September 1, 1994,
none of the Company's officers, employees or agents, nor any other
Person acting on behalf of any of them or the Company has, directly or
indirectly, given or agreed to give any gift or similar benefit to any
customer, supplier, governmental employee or other person in violation
of any Legal Requirement, including, without limitation, the Foreign
Corrupt Practices Act.

(j) Since September 1, 1994 the Company has not effected
a recall or withdrawal of any of its products for health reasons, and,
to the Sellers' Knowledge, no facts have existed that, if known by the
applicable Governmental Body, would have resulted in such a recall or
withdrawal.

Page 17

3.12 LEGAL PROCEEDINGS; ORDERS.

(a) Except as set forth in Section 3.12(a) of the
Disclosure Letter, there is no Proceeding:

(i) pending or threatened against the Company
which, alone or in the aggregate, has had or would (if decided
adversely) have, a Material Adverse Effect; or

(ii) that challenges, or that may have the effect
of preventing or making illegal, any of the Contemplated
Transactions.

Sellers have delivered, or have caused the Company to deliver,
to Buyer copies of all pleadings, correspondence, and other documents
relating to each pending Proceeding related to the Company.

(b) Except as set forth in Section 3.12(b) of the
Disclosure Letter:

(i) there is no Order to which the Company is
subject;

(ii) no Affiliate, agent, or employee of the
Company is subject to any Order that prohibits such Affiliate,
agent, or employee from engaging in or continuing any conduct,
activity, or practice relating to the business of the Company
which would have a Material Adverse Effect; and

(iii) no event has occurred or circumstance exists
that constitutes or results in (with or without notice or
lapse of time) a violation of or failure to comply with any
term or requirement of any Order to which the Company is
subject.

3.13 ABSENCE OF CERTAIN CHANGES AND EVENTS. Except as set forth in
Section 3.13 of the Disclosure Letter, since the date of the Interim Balance
Sheet, the Company has conducted its businesses only in the Ordinary Course of
Business and there has not been any Material Adverse Effect or any:

(a) change in the Company's authorized or issued
Interests; grant of any option or right to purchase Interests of the
Company; issuance of any security convertible into Interests; grant of
any registration rights; purchase, redemption, retirement, or other
acquisition by the Company of any Interests; or declaration or payment
of any dividend or other distribution or payment in respect of
Interests;

(b) amendment to the Organizational Documents of the
Company;

Page 18

(c) payment or increase by the Company of any bonuses,
salaries, or other compensation to any Affiliate, or (except in the
Ordinary Course of Business) employee or entry into any employment,
severance, or similar Contract with any Affiliate, or employee;

(d) adoption of, or increase in the payments to or
benefits under, any profit sharing, bonus, deferred compensation,
savings, insurance, pension, retirement, or other employee benefit
plan for or with any employees of the Company;

(e) damage to or destruction or loss of any material
asset or property of the Company that is not covered by insurance;

(f) entry into, termination of, or receipt of notice of
termination of any Contract or transaction involving a total remaining
commitment by or to the Company that could exceed $100,000 or any
material breach or material default (or event that with notice or
lapse of time would constitute a material breach or material default)
under any such Contract;

(g) sale (other than sales of inventory in the Ordinary
Course of Business), lease, or other disposition of any asset or
property of the Company or any Encumbrance on any material asset or
property of the Company;

(h) any incurrence of indebtedness for borrowed money or
any other change in the Outstanding Amount of Long Term Indebtedness,
except for (i) decreases resulting from scheduled principal payments
on the term loan portion of the Indebtedness Owed to ▇▇▇▇▇▇ Trust,
(ii) increases or decreases resulting from borrowings and repayments
made in the Ordinary Course of Business pursuant (A) to the
Subordinated Working Capital Line of Credit in the amount of
$5,000,000 owed to Mid-Am Capital, L.L.C. and (B) to the revolving
credit portion of the Indebtedness Owed to ▇▇▇▇▇▇ Trust; (iii)
increases or decreases resulting from borrowings and repayments made
pursuant to the revolving credit portion of the Indebtedness Owed to
▇▇▇▇▇▇ Trust to make Tax Distributions permitted under Section 5.5,
and (iv) increases resulting from the accrual of interest on the
Indebtedness Owed to ▇▇▇▇▇▇ Trust and the Indebtedness Owed to Mid-Am
Capital in accordance with the terms thereof;

(i) material change in the accounting methods used by the
Company; or

(j) Contract, whether oral or written, by the Company to
do any of the foregoing.

3.14 CONTRACTS; NO DEFAULTS.

(a) Section 3.14(a) of the Disclosure Letter contains a
complete and accurate list of:

Page 19

(i) each Contract that involves performance of
services or delivery of goods or materials by or to the
Company of an amount or value that could exceed $100,000;

(ii) each Contract that was not entered into in
the Ordinary Course of Business and that involves expenditures
or receipts of the Company that could exceed $100,000 or that
is otherwise material to the Company;

(iii) each lease, rental or occupancy agreement,
license, installment and conditional sale agreement, and other
Contract affecting the ownership of, leasing of, title to, use
of, or any leasehold or other interest in, any real or
personal property (except personal property leases and
installment and conditional sales agreements having a value
per item or aggregate payments of less than $100,000 and with
terms of less than one year);

(iv) each Contract containing covenants that
materially restrict the business activity of the Company or
limit the freedom of the Company to engage in any line of
business or to compete with any Person;

(v) each employment, consulting, noncompetition,
separation, collective bargaining, union or labor Contract;

(vi) each Contract with or for the benefit of any
Seller or Affiliate or, to the Sellers' knowledge, any
immediate family member of an Affiliate;

(vii) each Contract under which the Company is
obligated to indemnify, or entitled to indemnification from,
any third party, excluding any agreement that requires
indemnification solely for a breach of such agreement:

(viii) each Contract for capital expenditures in
excess of $100,000; and

(ix) each amendment, supplement, and modification
(whether oral or written) in respect of any of the foregoing.

(b) With respect to the Contracts identified in Section
3.14(a) of the Disclosure Letter:

(i) each Contract is in full force and effect
and is valid and enforceable in accordance with its terms
except to the extent that its enforceability may be limited by
bankruptcy, insolvency, reorganization, fraudulent transfer,
moratorium or other laws relating or affecting creditors'
rights generally and by general equity principles;

Page 20

(ii) the Company has delivered to Buyer a copy of
each such Contract that is in writing and a written summary
accurately describing the material provisions of each such
Contract that is not in writing;

(iii) the Company is in compliance with all
material terms and requirements; and

(iv) the Company has not given to or received from
any other Person any notice regarding any actual or alleged
violation of any Contract.

(c) Section 3.14(c) of the Disclosure Letter includes a
complete list of each customer of the Company that accounted for more
than $1,000,000 in gross sales of the Company during the years ended
December 31, 1996 and December 31, 1997 (the "MATERIAL CUSTOMERS") and
indicating the amount of gross sales attributable to each Material
Customer during such years. None of the Material Customers has
notified the Company or either Seller of any intention to, or to
Sellers' Knowledge otherwise threatened to, terminate or materially
alter its relationship with the Company, and there has been no
material dispute with a Material Customer since January 1, 1996.

3.15 INSURANCE.

(a) Sellers have delivered to Buyer true and complete
copies of all policies of insurance to which the Company is a party or
under which the Company, or any director of the Company, is covered.

(b) Section 3.15 of the Disclosure Letter describes:

(i) any self-insurance arrangement by the
Company, including any reserves established thereunder; and

(ii) all material obligations of the Company to
third parties with respect to insurance (including such
obligations under leases and service agreements) and
identifies the policy under which such coverage is provided.

(c) All policies to which the Company is a party or that
provide coverage to the Company taken together provide adequate
insurance coverage for the assets and the operations of the Company
for all risks normally insured against by a Person carrying on the
same business as the Company.

(d) The Company has not received (i) any refusal of
coverage or any notice that a defense will be afforded with
reservation of rights, or (ii) any notice of cancellation or any other
indication that any insurance policy is no longer in full force or
effect or will not be renewed or will be renewed only with a material
increase in cost or that the issuer of any policy is not willing or
able to perform its obligations thereunder.

Page 21

3.16 ENVIRONMENTAL MATTERS. Except as set forth in Section 3.16 of
the Disclosure Letter:

(a) The Company has not violated and is not in violation
of any Environmental Law.

(b) None of the Facilities contains any Hazardous
Materials in amounts exceeding the levels permitted by applicable
Environmental Law or under circumstances that would require
remediation or removal under Environmental Law.

(c) The Company has not engaged in any Hazardous
Activities, and no Hazardous Materials have been disposed of, released
or transported in violation of any applicable Environmental Law to or
from any of the Facilities.

(d) There have been no environmental investigations,
studies, audits, tests, reviews or other analyses regarding compliance
or noncompliance with any Environmental Law conducted by or on behalf
of the Company, or which are in the possession of the Company,
relating to the activities of the Company or any of the Facilities
that have not been delivered to Buyer.

(e) No Seller or the Company has received any actual or
threatened Order or notice from any Governmental Body or the current
or prior owner or operator of any Facilities, of any actual or
potential violation or failure to comply with any Environmental Law,
or of any actual or threatened obligation to undertake or bear the
cost of any Environmental, Health, and Safety Liabilities with respect
to any of the Facilities.

3.17 LABOR RELATIONS; COMPLIANCE. Section 3.17 of the Disclosure
Letter includes a complete list of all current employees of the Company as of
the date set forth therein, including date of employment, current title and
compensation, and date and percentage of last increase in compensation and
indicating any employees on disability or other permitted leaves of absence.
There is not presently pending or existing (a) any strike, slowdown, picketing,
work stoppage, or employee grievance process, or (b) any Proceeding against or
affecting the Company relating to the alleged violation of any Legal
Requirement pertaining to labor relations or employment matters. To Sellers'
Knowledge, no event has occurred or circumstance exists that could provide the
basis for any work stoppage or other labor dispute. There is no lockout of any
employees by the Company. The Company has complied with all Legal Requirements
relating to employment, equal employment opportunity, nondiscrimination,
immigration, wages, hours, benefits, collective bargaining, the payment of
social security and similar taxes, occupational safety and health, and plant
closing.

3.18 INTELLECTUAL PROPERTY.

(a) The term "INTELLECTUAL PROPERTY ASSETS" includes:

Page 22

(i) the name Land-O-Sun, all fictional business
names, trading names, registered and unregistered trademarks,
service marks, and applications (collectively, "MARKS") owned,
used, or licensed by the Company as licensee or licensor; and

(ii) all know-how, trade secrets, confidential
information, customer lists, software, technical information,
data, process technology, plans, drawings, and blue prints
(collectively, "TRADE SECRETS") owned, used, or licensed by
the Company as licensee or licensor.

(b) The Company has the right to use all of the
Intellectual Property Assets without infringing on or otherwise acting
adversely to the rights or claimed rights of any Person. Section
3.18(b) of the Disclosure Letter contains a complete and accurate list
and summary description, including any royalties paid or received by
the Company, of all Contracts relating to the Intellectual Property
Assets to which the Company is a party or by which the Company is
bound, except for any license implied by the sale of a product and
perpetual, paid-up licenses for commonly available software programs
with a value of less than $50,000 under which the Company is the
licensee. There are no outstanding disputes or disagreements with
respect to any such Contract.

(c) Section 3.18(c) of the Disclosure Letter contains a
complete and accurate list and summary description of all Marks.
Except for Marks used under licences disclosed in Section 3.18(b) of
the Disclosure Letter, the Company is the owner of all right, title,
and interest in and to each of the Marks, free and clear of all
Encumbrances. To Sellers' Knowledge, there is no potentially
interfering trademark or trademark application of any third party, and
no ▇▇▇▇ is infringed or has been challenged or threatened in any way.
To Sellers' Knowledge, none of the Marks used by the Company infringes
or is alleged to infringe any trade name, trademark, or service ▇▇▇▇
of any third party.

3.19 BROKERS OR FINDERS. Sellers and their agents have incurred no
obligation or liability, contingent or otherwise, for brokerage or finders'
fees or agents' commissions or other similar payment in connection with this
Agreement for which Buyer will be liable.

3.20 COMPETING INTERESTS. Except as set forth in Section 3.20 of
the Disclosure Letter, neither of the Sellers, nor any Person that controls, is
controlled by or is under common control with either Seller, nor, to the
Sellers' Knowledge, any Affiliate owns, directly or indirectly, an interest in
any Person that is a competitor, customer or supplier of the Company or that
otherwise has material business dealings with the Company, other than ownership
of less than 1% of publicly traded securities of such Person.

3.21 NO MISREPRESENTATIONS. The representations, warranties and
statements made by the Sellers in or pursuant to this Agreement are true,
complete and correct in all material respects and do not contain any untrue
statement of a material fact or omit to state any material fact

Page 23

necessary to make any such representation, warranty or statement, under the
circumstances in which it is made, not misleading.

SECTION 4

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to Sellers as follows:

4.1 ORGANIZATION AND GOOD STANDING. Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the State
of Delaware and has the corporate power to carry on its business as it is now
being conducted or currently proposed to be conducted. Buyer is duly qualified
to do business as a foreign corporation and is in good standing under the laws
of each state or other jurisdiction in which the nature of the activities
conducted by it requires such qualification, except where such failure to so
qualify does not have a material adverse effect on Buyer.

4.2 AUTHORITY; NO CONFLICT.

(a) This Agreement has been duly authorized for execution
by the Board of Directors of Buyer and constitutes the legal, valid,
and binding obligation of Buyer, enforceable against Buyer in
accordance with its terms except to the extent that its enforceability
may be limited by bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium or other laws relating or affecting creditors'
rights generally and by general equity principles. Buyer has the
absolute and requisite corporate right, power, and authority to
execute and deliver this Agreement and to perform its obligations
under this Agreement.

(b) Neither the execution and delivery of this Agreement
by Buyer nor the consummation or performance of any of the
Contemplated Transactions by Buyer will give any Person the right to
prevent, delay, or otherwise interfere with any of the Contemplated
Transactions pursuant to:

(i) any provision of Buyer's Organizational
Documents;

(ii) any Legal Requirement or Order to which Buyer
may be subject; or

(iii) any Contract to which Buyer is a party or by
which Buyer may be bound.

(c) Buyer is not required to obtain any Consent from any
Person or Governmental Body in connection with the execution and
delivery of this Agreement or

Page 24

the consummation of any of the Contemplated Transactions, except under
the HSR Act and except for such Consents as will be obtained by Buyer
prior to Closing.

4.3 INVESTMENT INTENT. Buyer is acquiring the Interests from LOS
Inc. and the New DFA Preferred Capital Interests from DFA for its own account
and not with a view to their distribution within the meaning of Section 2(11)
of the Securities Act.

4.4 CERTAIN PROCEEDINGS. There is no pending Proceeding that has
been commenced against Buyer and that challenges, or may have the effect of
preventing or making illegal any of the Contemplated Transactions. To Buyer's
Knowledge, no such Proceeding has been threatened.

4.5 BROKERS OR FINDERS. Buyer and its officers and agents have
incurred no obligation or liability, contingent or otherwise, for brokerage or
finders' fees or agents' commissions or other similar payment in connection
with this Agreement for which Sellers will be liable.

SECTION 5

COVENANTS OF SELLERS PRIOR TO CLOSING DATE

5.1 ACCESS AND INVESTIGATION. Following the date of this
Agreement, Sellers will, and will cause the Company and its Representatives to,
(a) afford Buyer and its Representatives and prospective lenders and their
Representatives (collectively, "BUYER'S ADVISORS") reasonable access during
normal business hours to the Company's personnel, properties, contracts, books
and records, and other documents and data, (b) furnish Buyer and Buyer's
Advisors with copies of all such contracts, books and records, and other
existing documents and data as Buyer may reasonably request with respect to the
Company, and (c) furnish Buyer and Buyer's Advisors with such additional
financial, operating, and other data and information with respect to the
Company as Buyer may reasonably request.

5.2 OPERATION OF THE BUSINESS OF THE COMPANY. Between the date of
this Agreement and the Closing Date, Sellers will, and will cause the Company
to:

(a) conduct the business of the Company only in the
Ordinary Course of Business;

(b) use their best efforts to preserve intact the current
business organization of the Company, keep available the services of
the current officers, employees, and agents of the Company, and
maintain the relations and good will with suppliers, customers,
landlords, creditors, employees, agents, and others having business
relationships with the Company; and

(c) otherwise report periodically to Buyer concerning the
status of the business, operations, and finances of the Company.

Page 25

5.3 NEGATIVE COVENANT. Except as otherwise expressly permitted by
this Agreement, between the date of this Agreement and the Closing Date,
Sellers will not, and will cause the Company not to, without the prior consent
of Buyer, take any affirmative action, or fail to take any reasonable action
within their or its control, as a result of which any of the changes or events
listed in Section 3.13 will occur; provided, however, that Sellers may amend
the Operating Agreement to permit Tax Distributions to be made to DFA in
accordance with Section 5.5.

5.4 NOTIFICATION. Between the date of this Agreement and the
Closing Date, each Seller will promptly notify Buyer in writing if such Seller
or the Company becomes aware of any fact or condition that causes or
constitutes a material breach of any of Sellers' representations and warranties
as of the date of this Agreement, or if any Seller or the Company becomes aware
of the occurrence after the date of this Agreement of any fact or condition
that would (except as expressly contemplated by this Agreement) cause or
constitute a material breach of any such representation or warranty had such
representation or warranty been made as of the time of occurrence or discovery
of such fact or condition. During the same period, each Seller will promptly
notify Buyer of the occurrence of any material breach of any covenant of
Sellers in this Section 5 or of the occurrence of any event that may make the
satisfaction of the conditions in Section 7 impossible.

5.5 DISTRIBUTIONS AND CERTAIN OTHER RESTRICTED PAYMENTS. Between
the date of this Agreement and the Closing Date, Sellers will cause the Company
not to during any fiscal year of the Company (a) declare or pay any
distributions in respect of any Interests of or (b) directly or indirectly
purchase, redeem or otherwise acquire or retire any Interests; provided,
however, that the Company may pay distributions ("Tax Distributions") to the
members of the Company to enable such members or their Flow-Through Owners (as
defined below) to make payments of Income Taxes, as defined below (including
estimates therefor) which shall become due and payable either before, on or
after the Closing Date with respect to any fiscal year or portion thereof
beginning on or after January 1, 1995 and ending or occurring on or prior to
the Closing Date (a "Pre-Closing Tax Period"), provided, however, that the "Tax
Distributions" for any such Pre-Closing Tax Period shall not exceed the
Undistributed Income Tax Liability (as defined below) for such Pre-Closing Tax
Period. The Company may make borrowings under the revolving credit portion of
the Indebtedness Owed to ▇▇▇▇▇▇ Trust to make the Tax Distributions provided
for in this Section 5.5.

(a) "UNDISTRIBUTED INCOME TAX LIABILITY" of a member for
any Pre-Closing Tax Period means the excess of (i) the Flow-Through
Tax Amount, as hereinafter defined, for such Pre-Closing Tax Period
for such member, over (ii) all prior distributions made by the Company
to such member with respect to the Flow-Through Tax Amount for such
Pre-Closing Tax Period for such member; provided, however, that the
aggregate Undistributed Income Tax Liability of all members for all
Pre-Closing Tax Periods ending on or before December 31, 1996,
including without limitation any interest and penalties in connection
therewith, shall be limited to and shall not exceed $5,000,000 in the
aggregate.

Page 26

(b) "FLOW-THROUGH OWNER" of a member shall mean a direct
or indirect owner of a member that is taxable on such owner's share of
the various items of taxable income or loss or alternative minimum
taxable income or loss of the Company by reason of owning an interest
in the Company through one or more S corporations or entities taxed as
non-exempt cooperatives or partnerships for Federal income tax
purposes.

(c) "FLOW-THROUGH TAX AMOUNT" of a member means the
amount of money to enable such member or its Flow-Through Owners to
pay Income Taxes (including quarterly estimated Income Taxes) with
respect to the Company's net income or any division or segment thereof
allocable to such member for Pre-Closing Tax Periods. For the purpose
of this definition:

(i) "Income Taxes" means all Federal, state and
local taxes, fees, assessments or charges of any kind, imposed
on, or determined with reference to, net income of the Company
or any division or segment thereof, or any allocable portion
thereof, including without limitation any self-employment or
similar tax imposed with respect a member's or Flow-Through
Owner's allocable share of net income or any division or
segment thereof, together with any interest and penalties,
additions to tax or additional amounts with respect thereto
and "Income Tax" means any one of such Income Taxes.

(ii) The Flow-Through Tax Amount of a member in
any applicable Pre-Closing Tax Period shall equal the greater
of (1) the product of (i) the sum of (A) the highest marginal
federal tax rate (taking into account actual deductions or
credits for state and local taxes) applicable to the member or
its Flow-Through Owners (at either individual or corporate
rates, as applicable) with respect to the taxable income
directly or indirectly allocable to such member or
Flow-Through Owners with respect to such applicable
Pre-Closing Tax Period, (B) the highest state tax rate (taking
into account actual deductions or credits for local taxes)
applicable to the member or its Flow-Through Owners (at either
individual or corporate rates, as applicable) with respect to
the taxable income directly or indirectly allocable to such
member or Flow-Through Owners with respect to such applicable
Pre-Closing Tax Period and (C) the highest local tax rate
applicable to the member or its Flow-Through Owners (at either
individual or corporate rates, as applicable) with respect to
the Company's taxable income, directly or indirectly allocable
to such member or Flow-Through Owners with respect to such
applicable Pre-Closing Tax Period, multiplied by (ii) the
Company's taxable income directly or indirectly allocable to
such member or its Flow-Through Owners with respect to such
Pre-Closing Tax Period, or (2) the product of (i) the sum of
(A) the highest Federal alternative minimum tax rate (taking
into account actual deductions or credits for state and local
taxes) applicable to the member or its Flow-Through Owners (at
either individual or corporate rates, as applicable) with
respect to the Company's alternative minimum taxable income
directly or indirectly allocable to such member or
Flow-Through Owners with respect to such applicable
Pre-Closing

Page 27

Tax Period, (B) the highest state tax rate (taking into
account actual deductions or credits for local taxes)
applicable to the member or its Flow-Through Owners (at either
individual or corporate rates, as applicable) with respect to
the Company's taxable income or alternative minimum taxable
income, as applicable, directly or indirectly allocable to
such member or Flow-Through Owners with respect to such
applicable Pre-Closing Tax Period and (C) the highest local
tax rate applicable to the member or its Flow-Through Owners
(at either individual or corporate rates, as applicable) with
respect to the Company's taxable income or alternative minimum
taxable income, as applicable, directly or indirectly
allocable to such member or Flow-Through Owners with respect
to such applicable Pre-Closing Tax Period, multiplied by (ii)
the Company's taxable income or alternative minimum taxable
income, as applicable, directly or indirectly allocable to
such member or its Flow-Through Owners with respect to such
Pre-Closing Tax Period.

(d) For purposes of this Section 5.5, "net income" or
"taxable income" of the Company shall not include any gain or income,
including recapture income, (i) resulting from the purchase of
Interests by the Buyer pursuant to this Agreement or (ii) recognized
by the Company in any transaction in which the Company was formed.

(e) The intent of this Section 5.5 is that distributions
can be made between the date of this Agreement and the Closing Date so
that each member can receive such distributions as necessary to fully
reimburse such member or its Flow-Through Owner(s) for all Income
Taxes incurred as a result of such member or its Flow-Through Owner(s)
being required to report, and pay Income Tax with respect to, his, her
or its allocable share of the items of income, gain, loss, deduction
and credit of the Company for all Pre-Closing Tax Periods (excluding
such items resulting from the transactions contemplated by this
Agreement and excluding any gain or income recognized by the Company
in any transaction in which the Company was formed), subject to the
limitation stated in Section 5.5(a) that limits distributions of
Undistributed Income Tax Liability under this Section 5.5 for all
Pre-Closing Tax Periods ending on or before December 31, 1996 to
$5,000,000 in the aggregate for all members.

(f) The LOS Owners and DFA agree that they are bound by
and shall comply with the provisions of Section 5.5(a) of the
Operating Agreement which obligates LOS Inc., the LOS Owners and DFA
to pay to the Company certain tax benefits realized by DFA, LOS Inc.
or the Flow-Through Owners. In addition, ▇▇▇▇▇ ▇. ▇▇▇▇▇ ("▇▇▇▇▇")
hereby agrees that, to the extent that the bonus paid to him by the
Company on January 23, 1998, in the amount of $933,673 less the amount
of Income Taxes and Medicare Taxes that he pays as a result of such
bonus (computed using the highest marginal Income Tax rates applicable
to ▇▇▇▇▇ for 1998), exceeds the additional Income Taxes that he pays
for tax year 1994 as a result of the examination of Tax Returns of the
Company and LOS Inc. for such year, he will pay such excess to the
Company within ten (10) business days after the amount of such excess
is finally determined (meaning, if applicable, at the final conclusion
of any controversy concerning the amount of Tax liabilities affecting
the amount of such

Page 28

excess, either by settlement or by judgment of a court when the period
for appeal of such judgment has expired). The LOS Owners and DFA also
agree that any decrease in Income Taxes or other Tax Benefit, as
described in Section 5.5(a) of the Operating Agreement, realized with
respect to tax years subsequent to tax year 1994 by reason of any Net
Tax Addition, as defined in Section 5.5(a) of the Operating Agreement,
paid by ▇▇▇▇▇ for tax year 1994 will be subject to the provisions of
Section 5.2(a)(i)(F) of the Operating Agreement.

(g) The provisions of Section 7 of the Tax Cooperation
Agreement shall determine the Person or Persons who shall control the
conduct of all examinations and audits by any Governmental Body.

5.6 PAYMENT OF INDEBTEDNESS BY RELATED PERSONS. Except as
expressly provided in this Agreement, Sellers will cause all indebtedness owed
to the Company by either Seller or any Person (including, without limitation,
the Indebtedness Owed by LOS Inc.) in any way related to or affiliated with
either Seller to be paid in full prior to Closing.

5.7 NO NEGOTIATION. Until such time, if any, as this Agreement is
terminated pursuant to Section 9, Sellers and DFA will not, and will cause
their Representatives, the Company and the Company's Representatives not to,
directly or indirectly solicit, initiate, or encourage any inquiries or
proposals from, discuss or negotiate with, provide any non-public information
to any Person (other than Buyer and Buyer's Advisors) relating to any
transaction involving the sale of the business or assets (other than in the
Ordinary Course of Business) of the Company, or any of the Interests of the
Company, or any merger, consolidation, business combination, or similar
transaction involving the Company.

5.8 CHANGE OF CONTROL PAYMENTS. Notwithstanding anything
contained in this Agreement to the contrary, Buyer acknowledges and agrees that
the Company may enter into change of control agreements (each a "Change of
Control Agreement") providing for aggregate payments to be made by the Company
of up to $2,000,000 (the "Change of Control Payments") to certain key employees
of the Company (collectively, the "Key Employees") in the event that fifty
percent (50%) of the Interests are acquired by any Person that does not
currently hold any Interests. Such Change of Control Agreements will provide
that the Closing will be a condition precedent to the Company's obligation to
make the Change of Control Payment although the Company may, in its discretion,
make such Change of Control Payments prior to Closing, and the Company will
make such Change of Control Payment within two days prior to the Closing if
requested to do so by Buyer. The Company may make borrowings under the
revolving credit portion of the Indebtedness Owed to ▇▇▇▇▇▇ Trust to make the
Change of Control Payments provided for in this Section 5.8.

5.9 BEST EFFORTS. Between the date of this Agreement and the
Closing Date, Sellers and DFA will use their best efforts to cause the
conditions in Sections 7 and 8 to be satisfied.

Page 29

5.10 ASSISTANCE WITH PERMITS AND FILINGS. The Company and the
Sellers will furnish Buyer with all information that is required for inclusion
in any application or filing to be made by Buyer or its affiliates to any
Governmental Body in connection with the Contemplated Transactions. The
Company and the Sellers will use commercially reasonable efforts to assist
Buyer in obtaining any Governmental Authorizations, or any Consents related
thereto, that Buyer will require in connection with the Contemplated
Transactions.

5.11 CONFIDENTIALITY. The Sellers, DFA and, prior to the Closing,
the Company will maintain in confidence, and will cause their respective
Representatives to maintain in confidence, any non-public information furnished
to them by Buyer or Buyer's Representatives in connection with this Agreement
or the Contemplated Transactions to the extent required by, and in accordance
with, the provisions of the letter dated December 12, 1997 executed by Buyer
and LOS Inc. (as if each such Seller and the Company were a party thereto).

SECTION 6

COVENANTS OF BUYER PRIOR TO CLOSING DATE

6.1 BEST EFFORTS. Between the date of this Agreement and the
Closing Date, Buyer will use its best efforts to cause the conditions in
Sections 7 and 8 to be satisfied; provided that Buyer shall be required to use
only commercially reasonable efforts to satisfy the condition set forth in
Section 7.8 with respect to the HSR Act, and Buyer shall have no obligation to
comply with any request or requirement imposed by the FTC, the DOJ or any other
Governmental Body in connection with the satisfaction of such condition if
Buyer, in the exercise of its reasonable discretion, elects not to do so.
Without limiting the generality of the foregoing, Buyer shall not be obligated
to comply with any request by, or any requirement of, the FTC, the DOJ or any
other Governmental Body (i) to disclose confidential information of Buyer; (ii)
to dispose of any assets or operations; or (iii) to comply with any restriction
on the manner in which it conducts its operations.

6.2 CONFIDENTIALITY. Between the date of this Agreement and the
Closing Date, Buyer will maintain in confidence, and will cause Buyer's
Advisors to maintain in confidence, any non-public information furnished to
Buyer or Buyer's Advisors by Sellers or the Company in connection with this
Agreement or the Contemplated Transactions, to the extent required by, and in
accordance with, the provisions of the letter dated December 12, 1997, executed
by Buyer and LOS Inc.

Page 30

SECTION 7

CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE

Buyer's obligation to purchase the Interests of LOS Inc. and to take
the other actions required to be taken by Buyer at the Closing is subject to
the satisfaction, at or prior to the Closing, of each of the following
conditions (any of which may be waived by Buyer, in whole or in part):

7.1 ACCURACY OF REPRESENTATIONS. All of Sellers' representations
and warranties in this Agreement must have been accurate in all material
respects as of the date of this Agreement and must be accurate in all material
respects as of the Closing Date as if made on the Closing Date.

7.2 SELLERS' PERFORMANCE.

(a) All of the covenants and obligations that Sellers and
DFA are required to perform or to comply with pursuant to this
Agreement at or prior to the Closing must have been duly performed and
complied with in all material respects.

(b) Each document required to be delivered by Sellers and
DFA pursuant to Section 2.4 must have been delivered, and each of the
other covenants and obligations of Sellers in this Agreement must have
been performed and complied with in all respects.

7.3 ABSENCE OF MATERIAL ADVERSE EFFECTS. Since the date of this
Agreement, the Company shall not have suffered any Material Adverse Effect.

7.4 CONSENTS. Any Consents which Buyer, any Seller, DFA or the
Company may be required to obtain to consummate the Contemplated Transactions
must have been obtained and must be in full force and effect.

7.5 NO PROCEEDINGS. Since the date of this Agreement, there must
not have been commenced or threatened against Buyer, or against any Person
affiliated with Buyer, any Proceeding (a) involving any challenge to, or
seeking damages or other relief in connection with, any of the Contemplated
Transactions, or (b) that may have the effect of preventing or making illegal
any of the Contemplated Transactions.

7.6 NO CLAIM REGARDING INTEREST OWNERSHIP OR SALE PROCEEDS. There
must not have been made or threatened by any Person any claim asserting that
such Person (a) is the holder or the beneficial owner of, or has the right to
acquire or to obtain beneficial ownership of, any Interest in the Company, or
(b) is entitled to all or any portion of the consideration payable for the
Interests or the New DFA Preferred Capital Interests.

7.7 NO PROHIBITION. Neither the consummation nor the performance
of any of the Contemplated Transactions will, directly or indirectly (with or
without notice or lapse of time)

Page 31

result in a material violation of, or cause Buyer or any Person affiliated with
Buyer to suffer any Material Adverse Effect under any applicable Legal
Requirement or Order.

7.8 HSR ACT WAITING PERIOD EXPIRED. All applicable waiting
periods specified under the HSR Act with respect to the Contemplated
Transactions shall have lapsed or been terminated.

7.9 AMENDED AND RESTATED OPERATING AGREEMENT. DFA Investment and
DFA shall have executed and delivered an amendment and restatement of the
Operating Agreement in the form attached hereto as Exhibit A.

7.10 SUPPLY AGREEMENT. The Company shall have entered into a
Supply Agreement with DFA with respect to the supply of raw milk to the Company
in the form attached hereto as Exhibit C.

7.11 CERTIFICATES. The Sellers shall have delivered to Buyer a
closing certificate, substantially in the form attached hereto as Exhibit D,
and a certificate of the Secretaries of the Sellers, substantially in the form
attached hereto as Exhibit E.

7.12 LEGAL OPINION. The Sellers shall have delivered to Buyer a
legal opinion of the Sellers' counsel, substantially in the form attached
hereto as Exhibit F.

SECTION 8

CONDITIONS PRECEDENT TO SELLERS' AND DFA'S OBLIGATION TO CLOSE

LOS Inc.'s obligation to sell its Interests and the obligation of the
Sellers and DFA to take the other actions required to be taken by them at the
Closing is subject to the satisfaction, at or prior to the Closing, of each of
the following conditions (any of which may be waived by Sellers and DFA, in
whole or in part):

8.1 ACCURACY OF REPRESENTATIONS. All of Buyer's representations
and warranties in this Agreement must have been accurate in all material
respects as of the date of this Agreement and must be accurate in all material
respects as of the Closing Date as if made on the Closing Date.

8.2 BUYER'S PERFORMANCE.

(a) All of the covenants and obligations that Buyer is
required to perform or to comply with pursuant to this Agreement at or
prior to the Closing must have been performed and complied with in all
material respects.

Page 32

(b) Buyer must have delivered, or caused to be delivered,
each of the documents required to be delivered by Buyer pursuant to
Section 2.4 and must have made the payments required to be made by
Buyer pursuant to Sections 2.4(c).

8.3 NO INJUNCTION. There must not be in effect any Legal
Requirement or any injunction or other Order that prohibits the sale of the
Interests by Sellers to Buyer that has been adopted or issued since the date of
this Agreement.

8.4 HSR ACT WAITING PERIOD EXPIRED. All applicable waiting
periods specified under HSR Act with respect to the Contemplated Transactions
shall have lapsed or been terminated.

8.5 AMENDED AND RESTATED OPERATING AGREEMENT. Buyer shall have
executed and delivered an amendment and restatement of the Operating Agreement
in the form attached hereto as Exhibit B.

8.6 SUPPLY AGREEMENT. The Company shall have entered into a
Supply Agreement with DFA with respect to the supply of raw milk to the Company
in the form attached hereto as Exhibit C.

8.7 CERTIFICATES. Buyer shall have delivered to Sellers a closing
certificate, substantially in the form attached as Exhibit G, and a certificate
of the Secretary of Buyer, substantially in the form attached hereto as Exhibit
H.

8.8 LEGAL OPINION. Buyer shall have delivered to Sellers a legal
opinion of the Buyer's counsel, substantially in the form attached hereto as
Exhibit I.

8.9 TAX COOPERATION AGREEMENT. Buyer shall have entered into a
Tax Cooperation Agreement with Sellers in the form attached hereto as Exhibit
J.

SECTION 9

TERMINATION

9.1 TERMINATION EVENTS. This Agreement may, by notice given prior
to or at the Closing, be terminated:

(a) by either Buyer or Sellers if a material Breach of
any provision of this Agreement has been committed by the other party
and such Breach has not been waived;

(b) (i) by Buyer if any of the conditions in Section 7
has not been satisfied as of the Closing Date or if satisfaction of
such a condition is or becomes impossible (other than through the
failure of Buyer to comply with its obligations under this Agreement)
and Buyer has not waived such condition on or before the Closing Date
or (ii) by Sellers and

Page 33

DFA, if any of the conditions in Section 8 has not been satisfied as
of the Closing Date or if satisfaction of such a condition is or
becomes impossible (other than through the failure of Sellers or DFA
to comply with their respective obligations under this Agreement) and
Sellers and DFA have not waived such condition on or before the
Closing Date;

(d) by either Buyer or Sellers and DFA if the Closing has
not occurred (other than through the failure of any party seeking to
terminate this Agreement to comply fully with its obligations under
this Agreement) on or before May 30, 1998 or such later date as the
parties may agree upon.

9.2 EFFECT OF TERMINATION. Each party's right of termination
under Section 9.1 is in addition to any other rights it may have under this
Agreement or otherwise, and the exercise of a right of termination will not be
an election of remedies. If this Agreement is terminated pursuant to Section
9.1, all further obligations of the parties under this Agreement will
terminate, except that the obligations in Sections 5.10, 6.2 and 12.1 will
survive; provided, however, that if this Agreement is terminated by a party
because of the breach of the Agreement by the other party or because one or
more of the conditions to the terminating party's obligations under this
Agreement is not satisfied as a result of the other party's failure to comply
with its obligations under this Agreement, the terminating party's right to
pursue all legal remedies will survive such termination unimpaired.

SECTION 10

INDEMNIFICATION; REMEDIES

10.1 REPRESENTATIONS; SURVIVAL. Except for the express
representations and warranties contained in Section 3 and in any certificate
delivered by Sellers pursuant to this Agreement, Sellers are making no
representation or warranty whatsoever, express or implied, including but not
limited to any implied warranty or representation as to condition,
merchantability or suitability, as to any of the properties or assets of the
Company and Buyer takes the Company "AS IS" and "WHERE IS." It is understood
that, except as otherwise specified in this Agreement and except to the extent
included within or incorporated into the Disclosure Letter, any cost estimates,
projections or other predictions, any data, any financial information or any
memoranda or offering materials or presentations provided or addressed to Buyer
are not and shall not be deemed to be or to include representations or
warranties of Sellers. Except as otherwise provided in this Section 10.1, all
representations and warranties in this Agreement and any other certificate or
document delivered pursuant to this Agreement will terminate twelve months
after the Closing; provided, however, that (a) if any breach of the
representations and warranties set forth in Sections 3.1, 3.2, 3.8, 3.10, 3.11,
3.12 and 3.16 constitutes a violation of any Legal Requirement, then such
representations and warranties and any claim for indemnification applicable to
such a violation shall survive for the applicable statute of limitation with
respect thereto; and (b) with

Page 34

respect to the representations and warranties set forth in Section 3.3, such
representations and warranties and any claim for indemnification with respect
thereto shall survive indefinitely.

10.2 INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLERS.
Notwithstanding any investigation by Buyer or its Representatives, Sellers and
the LOS Owners, jointly and severally will indemnify, defend and hold harmless
Buyer, the Company, and their respective Representatives, stockholders,
controlling persons, and affiliates (collectively, the "BUYER'S INDEMNIFIED
PERSONS") for, and will pay to the Buyer's Indemnified Persons the amount of,
any loss, liability, claim, damage (including incidental and consequential
damages), expense (including costs of investigation and defense and reasonable
attorneys' fees) or diminution of value, whether or not involving a third-party
claim (collectively, "DAMAGES"), arising, directly or indirectly, from or in
connection with:

(a) any breach of any representation or warranty made by
Sellers in this Agreement or in any certificate delivered by Sellers
pursuant to this Agreement that survives the Closing in accordance
with Section 10.1 or any allegation by a third party that, if true,
would constitute such a breach provided, that any claim for
indemnification pursuant to this subparagraph (a) is made within the
time period specified in Section 10.1 for the survival of the
applicable representation or warranty that has been breached or is the
subject of the third party claim;

(b) any breach by any Seller of any covenant or
obligation of such Seller in this Agreement;

(c) any Proceeding commenced by any third party after
Closing relating to actions or omissions of the Company which occurred
prior to Closing except to the extent reduced by insurance in
accordance with the provisions of Section 10.4; or

(d) any claim by any Person, including, without
limitation, for brokerage or finder's fees or commissions or similar
payments based upon any agreement or understanding alleged to have
been made by any such Person with Sellers or the Company (or any
Person acting on their behalf) in connection with any of the
Contemplated Transactions.

10.3 INDEMNIFICATION AND PAYMENT OF DAMAGES BY BUYER.
Notwithstanding any investigation by Sellers or their Representatives, Buyer
will indemnify, defend and hold harmless Sellers and their respective
representatives, stockholders, members, controlling persons and affiliates (the
"SELLERS' INDEMNIFIED PERSONS" and, together with the Buyer's Indemnified
Persons, the "INDEMNIFIED PERSONS") and will pay to Sellers' Indemnified
Persons the amount of any Damages arising, directly or indirectly, from or in
connection with (a) any breach of any representation or warranty made by Buyer
in this Agreement or in any certificate delivered by Buyer pursuant to this
Agreement, (b) any breach by Buyer of any covenant or obligation of Buyer in
this Agreement, or (c) any claim by any Person for brokerage or finder's fees
or commissions

Page 35

or similar payments based upon any agreement or understanding alleged to have
been made by such Person with Buyer (or any Person acting on its behalf) in
connection with any of the Contemplated Transactions.

10.4 LIMITATIONS ON AMOUNT.

(a) The liability of each Seller and the LOS Owners under
Section 10.2 shall not exceed the value of the portion of the
consideration pursuant to Section 2.4 ultimately received by such
Seller or LOS Owner. Additionally, in determining the amount of
Damages for which an Indemnified Person is entitled to indemnification
under Section 10.2 or Section 10.3, any insurance proceeds that are
realized or that could reasonably be expected to be realized by such
Indemnified Person (if a claim were properly pursued under the
relevant insurance arrangements), as well as any costs associated with
obtaining such insurance proceeds, will be considered.

(b) Buyer's Indemnified Persons will be entitled to
indemnification under paragraph (a) of Section 10.2, and Sellers'
Indemnified Persons will be entitled to indemnification under
paragraph (a) of Section 10.3, only to the extent and in the amount
that the aggregate amount of indemnifiable Damages incurred by all
Buyer's Indemnified Persons and Sellers' Indemnified Persons,
respectively, under such paragraphs exceeds $2 million.

(c) The maximum aggregate amount to which Buyer's
Indemnified Persons will be entitled to indemnification under
paragraph (a) of Section 10.2 is limited to $15 million.

(d) Notwithstanding the foregoing, the limitations set
forth in Section 10.4(b) and (c) will not apply to Damages arising
from or in connection with a breach or alleged breach of the
representations and warranties (i) of the Sellers set forth in Section
3.3 or the last sentence of Section 3.4 or (ii) of the Buyer set forth
in Section 4.2(c).

10.5 PROCEDURE FOR INDEMNIFICATION - THIRD PARTY CLAIMS.

(a) Promptly after receipt by an Indemnified Person under
Section 10.2 or 10.3 of notice of the commencement of any Proceeding
against it, such Indemnified Person will, if a claim is to be made
against an indemnifying party under such Section, give notice to the
indemnifying party of the commencement of such claim, but the failure
to notify the indemnifying party will not relieve the indemnifying
party of any liability that it may have to any Indemnified Person,
except to the extent that the indemnifying party demonstrates that the
defense of such action is prejudiced by the indemnifying party's
failure to give such notice.

(b) If any Proceeding referred to in Section 10.5(a) is
brought against an Indemnified Person and it gives notice to the
indemnifying party of the commencement of such Proceeding, the
indemnifying party will, to the extent that it wishes (unless (i) the

Page 36

indemnifying party is also a party to such Proceeding and the
Indemnified Person determines in good faith that joint representation
would be inappropriate, or (ii) the indemnifying party fails to
provide reasonable assurance to the Indemnified Person of its
financial capacity to defend such Proceeding and provide
indemnification with respect to such Proceeding), assume the defense
of such Proceeding with counsel satisfactory to the Indemnified Person
and, after notice from the indemnifying party to the Indemnified
Person of its election to assume the defense of such Proceeding and an
acknowledgment of its indemnification obligation with respect thereto,
the indemnifying party will not, as long as it diligently conducts
such defense, be liable to the Indemnified Person under this Section
10 for any fees of other counsel or any other expenses with respect to
the defense of such Proceeding, in each case subsequently incurred by
the Indemnified Person in connection with the defense of such
Proceeding, other than reasonable costs of investigation. If the
indemnifying party assumes the defense of a Proceeding in accordance
with the preceding sentence, (i) no compromise or settlement of such
claims may be effected by the indemnifying party without the
Indemnified Person's consent unless (A) there is no finding or
admission of any violation of Legal Requirements or any violation of
the rights of any Person and no effect on any other claims that may be
made against the Indemnified Person, and (B) the sole relief provided
is monetary damages that are paid in full by the indemnifying party
and (ii) the Indemnified Person will have no liability with respect to
any compromise or settlement of such claims effected without its
consent. If notice is given to an indemnifying party of the
commencement of any Proceeding and the indemnifying party does not,
within ten days after the Indemnified Person's notice is given, give
notice to the Indemnified Person of its election to assume the defense
of such Proceeding, the indemnifying party will be bound by any
determination made in such Proceeding or any compromise or settlement
reasonably effected by the Indemnified Person.

(c) Notwithstanding the foregoing, if an Indemnified
Person determines in good faith that there is a reasonable probability
that a Proceeding may adversely affect it or its Affiliates other than
as a result of monetary damages for which it would be entitled to
indemnification under this Agreement, the Indemnified Person may, by
notice to the indemnifying party, assume the exclusive right to
defend, compromise, or settle such Proceeding, but the indemnifying
party will not be bound by any determination of a Proceeding so
defended or any compromise or settlement effected without its consent
(which may not be unreasonably withheld).

10.6 PROCEDURE FOR INDEMNIFICATION - OTHER CLAIMS. A claim for
indemnification for any matter not involving a third party claim may be
asserted by notice to the party from whom indemnification is sought.

Page 37

SECTION 11

POST CLOSING COVENANTS

11.1 REPAYMENT OF LONG TERM INDEBTEDNESS AND REDEMPTION OF
PREFERRED INTERESTS. After Closing, the parties hereto agree to take all
actions necessary so that immediately after or simultaneously with Closing, the
Company repays the Outstanding Amount of Long Term Indebtedness and redeems the
Preferred Capital held by DFA.

11.2 NONDISCLOSURE. The Sellers, the LOS Owners and DFA
acknowledge and agree that all customer, prospect and marketing lists, sales
data, intellectual property, proprietary information, trade secrets and other
confidential information of the Company (collectively, "CONFIDENTIAL
INFORMATION") are valuable assets of the Company and will continue to be owned
exclusively by the Company following the Closing. The Sellers, the LOS Owners
and DFA agree to, and agree to cause their respective Representatives to, treat
the Confidential Information as confidential and not to disclose such
information or make use of such information for their own purposes or for the
benefit of any other Person (other than the Company or, after the Closing,
Buyer). The foregoing confidentiality obligations will not apply to
information that (a) is at the time of receipt or thereafter becomes publicly
known through no wrongful act of any Seller or LOS Owner or DFA, (b) is
received from a third party not under an obligation to keep such information
confidential and without breach of this Agreement or (c) is required to be
disclosed pursuant to any Proceedings or an Order.

11.3 NONCOMPETITION.

(a) Each of the Sellers, the LOS Owners and DFA
acknowledges and agrees for a period of two (2) years after Closing,
they will not call on, solicit, interfere with or attempt to entice
away, either directly or indirectly, any employee or customer (who is
not also currently a customer of DFA) of the Company either for their
own benefit or purposes or for the benefit or purposes of any other
Person within the geographic area currently served by the Company (the
"TERRITORY"). For the purposes of the foregoing, a customer shall be
any Person with which the Company had a written or verbal agreement in
any way relating to any products or services provided to such customer
by the Company within the twelve-month period preceding the date of
Closing.

(b) For a period of five (5) years after Closing, each of
the Sellers, the LOS Owners, shall not, directly or indirectly, engage
or participate in, assist or have any interest in any Person (whether
as an employee, officer, director, agent, creditor, consultant or
otherwise) which directly is competitive with or engaged in
substantially the same or similar business as the Company. The
foregoing shall not preclude any Seller from being a passive investor
or security holder of an interest constituting less than 5% of the
equity ownership, voting rights or debt of any of the foregoing. For
a period of five (5) years after Closing, DFA shall not directly
engage in or participate in or assist any Person which directly is
competitive with or engaged in substantially the same business as

Page 38

the Company provided, however, that nothing in this Section 11.3 shall
be construed as preventing DFA from engaging (a) in any business after
Closing that it engaged in within the Territory prior to Closing; (b)
in any business outside the Territory; or (c) in any business within
the Territory in products and services not provided by the Company.
The parties acknowledge and agree that any current affiliate of DFA
shall not be competitively restricted in any form or manner in the
Territory by the terms, conditions and provisions of this Section
11.3.

(c) If following the Closing, as a result of a merger,
sale of the Company Interests, sale of substantially all of the assets
of the Company or other reorganization, there is a change in the
voting control of the Company such that the holders of 100% of the
votes prior to the event hold less than 30% after the event, then the
provisions of this Section 11.3 shall automatically terminate and be
of no further force or effect.

11.4 ENFORCEMENT.

(a) The Sellers, the LOS Owners and DFA acknowledge and
agree that their respective obligations under Section 11.3 are a
material inducement and condition to Buyer's entering into this
Agreement and performing its obligations hereunder and that the
restrictions and remedies contained in Section 11.3 are reasonable as
to time, geographic area and scope of activity and do not impose a
greater restraint than is necessary to protect the goodwill and other
legitimate business interests of Buyer. It is the intent of all
parties hereto that the foregoing restrictions against unlawful and
unfair competitive activities be given the fullest effect consistent
with applicable law.

(b) If the provisions of Section 11.3 are found by a
court of competent jurisdiction to contain unreasonable or unnecessary
limitations as to time, geographic area or scope of activity, then
such court is hereby directed to reform such provisions to the minimum
extent necessary to cause the limitations contained therein as to
time, geographical area and scope of activity to be reasonable and
enforceable.

(c) The Sellers, the LOS Owners and DFA acknowledge and
agree that Buyer would be irreparably harmed by any violation of its
obligations under Section 11.3 and that, in addition to all other
rights or remedies available at law or in equity, Buyer will be
entitled to injunctive and other equitable relief to prevent or enjoin
any such violation, without posting any bond whatsoever.

11.5 RECORDS RETENTION. Sellers and Buyer agree that so long as
any books, records and files, including Tax Records (as defined below) relating
to the Company that are retained by Sellers relating to the Company, or
Business Records of the Company delivered to the control of Buyer pursuant to
this Agreement (collectively, "Business Records"), remain in existence and
available, each of the parties hereto (at its expense) shall have the right
upon prior notice to inspect and make copies of the same at any time during
business hours for any proper purpose. Each party hereto shall undertake
reasonable measures (a) to preserve in good order to the extent

Page 39

required by law the Business Records relating to the Company, (b) not destroy
or allow the destruction of any such Business Records without first offering in
writing to deliver them to the other party, (c) retain to the extent required
by law and provide the other parties with any records or other information
relating to liability for Taxes, and (d) provide the other parties with any
final determination of any such amount required to be shown on any Tax Return
of the other parties for any period. Without limiting the generality of the
foregoing, each of the parties hereto shall retain until the expiration of the
applicable statutory period of limitations (including any extensions), complete
copies of all returns, supporting work schedules and other records or
information (collectively, "TAX RECORDS"), delivered to such party, or retained
by such Party, pursuant to this Agreement, which are relevant to such Return
for all tax periods or portions thereof ending before or including the Closing
Date.

SECTION 12

GENERAL PROVISIONS

12.1 EXPENSES. Except as otherwise expressly provided in this
Agreement, Buyer and Sellers each will bear the expenses incurred by them in
connection with the preparation, execution, and performance of this Agreement
and the Contemplated Transactions, including all fees and expenses of their
Representatives. Sellers agree to reimburse the Company for all expenses
incurred by the Company in connection with the preparation, execution and
performance of this Agreement and the Contemplated Transactions (the "Company
Expenses"), including all fees and expenses of the Company's Representatives
(to the extent paid or payable by the Company), provided, however, that any
fees and expenses relating to the preparation, filing, audit or examination of
the Company's Tax Returns shall be paid by the Company and Sellers shall not be
obligated to reimburse the Company for such fees and expenses. Prior to the
Closing, Buyer and Sellers will agree on a good faith estimate of the Company
Expenses, and the Sellers will reimburse Buyer for such estimated Company
Expenses at the Closing (or Buyer may offset such amount against the
consideration payable to the Sellers at the Closing). Within 60 days after the
Closing, Buyer and the Sellers will agree on the actual Company Expenses and
make any payments that may be necessary to reconcile any difference between the
estimated and actual Company Expenses. In the event of termination of this
Agreement, the obligation of each party to pay its own expenses will be subject
to any rights of such party arising from a breach of this Agreement by another
party.

12.2 PUBLIC ANNOUNCEMENTS. So long as this Agreement is in effect,
Sellers and Buyer agree to consult with each other in issuing any press release
or otherwise making any public statement with respect to the transactions
contemplated by this Agreement, and none of them shall issue any press release
or make any public statement prior to such consultation, except as may be
required by Legal Requirements.

12.3 NOTICES. All notices, consents, waivers, and other
communications under this Agreement must be in writing and will be deemed to
have been duly given when (a) delivered by

Page 40

hand (with written confirmation of receipt), (b) sent by telecopier (with
written confirmation of receipt), or (c) when received by the addressee, if
sent by a nationally recognized overnight delivery service, in each case to the
appropriate addresses and telecopier numbers set forth below (or to such other
addresses and telecopier numbers as a party may designate by notice to the
other parties):

Sellers:

If to LOS Inc. or the c/o ▇▇▇▇▇ ▇. ▇▇▇▇▇
LOS Owners: Milk Products, LLC
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇

with a copy to:

Counsel to LOS Inc.: ▇▇▇▇▇▇▇▇▇▇▇ & Price, L.L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇

If to DFA Investment or DFA: ▇▇▇▇▇▇ ▇. ▇▇▇
Vice President
Dairy Farmers of America, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇

with a copy to:

Counsel to DFA Investment ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
and DFA: General Counsel
Dairy Farmers of America, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇

Page 41

Buyer: Suiza Foods Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇

with a copy to:

Counsel for Buyer: ▇▇▇▇▇▇ & ▇▇▇▇, L.L.P.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇

12.4 ATTORNEY'S FEES AND COSTS. In the event of a breach by any
party to this Agreement and commencement of a subsequent legal action in a
court of law or forum of arbitration, or in the event legal counsel is
consulted in the event of any such breach or in anticipation of any such
prospective legal action, the prevailing party in any such dispute shall be
entitled to reimbursement of reasonable attorney's fees and expenses.

12.5 FURTHER ASSURANCES. The parties agree (a) to furnish upon
request to each other such further information, (b) to execute and deliver to
each other such other documents, and (c) to do such other acts and things, all
as the other party may reasonably request for the purpose of carrying out the
intent of this Agreement and the documents referred to in this Agreement.

12.6 WAIVER. The rights and remedies of the parties to this
Agreement are cumulative and not alternative. Neither the failure nor any
delay by any party in exercising any right, power, or privilege under this
Agreement or the documents referred to in this Agreement will operate as a
waiver of such right, power, or privilege, and no single or partial exercise of
any such right, power, or privilege will preclude any other or further exercise
of such right, power, or privilege or the exercise of any other right, power,
or privilege. To the maximum extent permitted by applicable law, (a) no claim
or right arising out of this Agreement or the documents referred to in this
Agreement can be discharged by one party, in whole or in part, by a waiver or
renunciation of the claim or right unless in a writing signed by the other
party; (b) no waiver that may be given by a party will be applicable except in
the specific instance for which it is given; and (c) no notice to or demand on
one party will be deemed to be a waiver of any obligation of such party or of
the right of the party giving such notice or demand to take further action
without notice or demand as provided in this Agreement or the documents
referred to in this Agreement.

12.7 ENTIRE AGREEMENT AND MODIFICATION. This Agreement supersedes
all prior agreements between the parties with respect to its subject matter and
constitutes (along with the documents referred to in this Agreement) a complete
and exclusive statement of the terms of the agreement between the parties with
respect to its subject matter. This Agreement may not be amended except by a
written agreement executed by the party to be charged with the amendment.

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12.8 ASSIGNMENTS, SUCCESSORS AND NO THIRD PARTY RIGHTS. No party
may assign any of its rights under this Agreement or its Interests without the
prior consent of the other parties; provided that (a) LOS Inc. may assign its
rights and obligations hereunder and all or a portion of its Interests to any
wholly-owned subsidiary of LOS Inc. and such wholly-owned subsidiary may in its
discretion further transfer and assign such transferred Interests to a limited
partnership of which it is a limited partner and LOS Inc. or another duly
formed wholly-owned subsidiary of LOS Inc. is the general partner, if LOS Inc.
remains liable for its obligations hereunder and (b) provided that Buyer may
assign its rights and obligations hereunder to a wholly-owned subsidiary of
Buyer, if Buyer remains liable for its obligations hereunder. In connection
with an assignment pursuant to the preceding sentence from LOS Inc. to a
wholly-owned subsidiary of LOS Inc. and any further assignment by such
wholly-owned subsidiary to another entity (collectively, the "LOS Assignee"),
LOS Inc. may also transfer its Interests to the LOS Assignee, and such
assignment and transfer will not be deemed to violate any of the
representations, warranties or covenants of LOS Inc. hereunder, if LOS Inc.
agrees in writing to guarantee all obligations of the LOS Assignee hereunder.
Additionally, at any time prior to Closing, any actions necessary to cause the
Company to become a "manager managed" rather than a "member managed" limited
liability company under Delaware law may be taken by the Company and its
members. Neither the transfers and assignments referred to in this Section
12.8, nor the actions related to changing the form of management of the Company
shall be deemed a violation of any obligation of LOS Inc. or DFA Investment
under this Agreement. Subject to the preceding provisions of this Section
12.8, this Agreement will apply to, be binding in all respects upon, and inure
to the benefit of the successors (including the LOS Owners) and permitted
assigns of the parties. Nothing expressed or referred to in this Agreement
will be construed to give any Person other than the parties to this Agreement
any legal or equitable right, remedy, or claim under or with respect to this
Agreement or any provision of this Agreement. This Agreement and all of its
provisions and conditions are for the sole and exclusive benefit of the parties
to this Agreement and their successors and assigns.

12.9 SEVERABILITY. If any provision of this Agreement is held
invalid or unenforceable by any court of competent jurisdiction, the other
provisions of this Agreement will remain in full force and effect. Any
provision of this Agreement held invalid or unenforceable only in part or
degree will remain in full force and effect to the extent not held invalid or
unenforceable.

12.10 SECTION HEADINGS, CONSTRUCTION. The headings of Sections in
this Agreement are provided for convenience only and will not affect its
construction or interpretation. All references to "Section" or "Sections"
refer to the corresponding Section or Sections of this Agreement. All words
used in this Agreement will be construed to be of such gender or number as the
circumstances require. Unless otherwise expressly provided, the word
"including" does not limit the preceding words or terms.

12.11 TIME OF ESSENCE. With regard to all dates and time periods
set forth or referred to in this Agreement, time is of the essence.

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12.12 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE
SUBSTANTIVE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY
CHOICE-OF-LAW RULES THAT MAY REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION.

12.13 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.

12.14 WAIVERS BY DFA AND LOS INC. By executing this Agreement, each
of DFA Investment and LOS Inc. waive any right of first refusal or similar
right which either of them may have pursuant to the terms of the Operating
Agreement and consent to the sale or conversion of the Interests pursuant to
the terms hereof.

[Remainder of page intentionally left blank]

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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.

BUYER:

SUIZA FOODS CORPORATION

By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------------

Its: Vice President
-----------------------------------

SELLERS:

DFA INVESTMENT COMPANY

By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------

Its: President
-----------------------------------

LAND-O-SUN DAIRIES, INC.

By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------

Its: Chief Executive Officer
-----------------------------------

DAIRY FARMERS OF AMERICA, INC

By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇
-----------------------------------------

Its: Chief Financial Officer
-----------------------------------

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The undersigned LOS Owners have executed this Agreement for the sole purpose of
agreeing to the provisions of Section 5.5(f), Section 10, Sections 11.2, 11.3
and 11.4 and Section 12.

/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇

/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇

DFA hereby unconditionally guarantees the payment and performance in full of
all obligations of DFA Investment under this Agreement.

DAIRY FARMERS OF AMERICA, INC.

By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇
-----------------------------------------

Its: CFO
-----------------------------------

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AMONG SUIZA FOODS CORPORATION AS BUYER AND THE HOLDERS OF THE LIMITED LIABILITY COMPANY INTERESTS OF LAND-O-SUN DAIRIES, L.L.C., AS SELLERS AND

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