SECURITIES AND EXCHANGE COMMISSION
                               WASHINGTON, D.C. 20549
                                      FORM 10-K
          (Mark One)
           X   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                  SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
               For the fiscal year ended September 29, 2001

                                          OR

                 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                    SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
               For the transition period from   to

                             Commission File No. 0-14616

                               J & J SNACK FOODS CORP.
               (Exact name of registrant as specified in its charter)

                           New Jersey                22-1935537
                  (State or other jurisdiction        (I.R.S. Employer
                  incorporation or organization)      Identification No.)

                     6000 Central Highway
                    Pennsauken, New Jersey                   08109
             (Address of principal executive offices)          (Zip Code)

                                 Registrant's telephone number
                              including area code:(856-665-9533)

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

            Common Stock, par value: None                   None
                (Title of each class)             (Name of each exchange
                                                    on which registered)

          Securities registered pursuant to Section 12(g) of the Act: None

               Indicate by check mark whether the Registrant (1) has filed all
          reports required to be filed by Section 13 or 15(d) of the Securities
          Exchange Act of 1934 during the preceding 12 months and (2) has been
          subject to such filing requirements for the past 90 days.
          Yes  [X]    No  [ ]

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

               As of November 30, 2001, the latest practicable date, 8,650,458
          shares of the Registrant's common stock were issued and outstanding.
          The aggregate market value of shares held by non-affiliates of the
          Registrant on such date was $147,768,227 based on the last price on
          that date of $23.90 per share, which is an average of bid and asked
          prices.

                         DOCUMENTS INCORPORATED BY REFERENCE

               The Registrant's 2001 Annual Report to Shareholders for the
          fiscal year ended September 29, 2001 and Proxy Statement for its
          Annual Meeting of Shareholders to be held on February 5, 2002 are
          incorporated herein by reference into Parts I, II, III and IV as set
          forth herein.

                                 J & J SNACK FOODS CORP.
                             2001 FORM 10-K ANNUAL REPORT
                                   TABLE OF CONTENTS

                                         PART I
                                                                  Page

          Item 1    Business . . . . . . . . . . . . . . . . . . .  1

          Item 2    Properties . . . . . . . . . . . . . . . . . .  8

          Item 3    Legal Proceedings. . . . . . . . . . . . . . .  9

          Item 4    Submission Of Matters To A Vote Of Security
                    Holders. . . . . . . . . . . . . . . . . . . .  9

                    Executive Officers Of The Registrant . . . . . 10

                                       PART II

          Item 5    Market For Registrant's Common Stock And
                    Related Stockholder Matters. . . . . . . . . . 11

          Item 6    Selected Financial Data. . . . . . . . . . . . 11

          Item 7    Management's Discussion And Analysis Of Finan-
                    cial Condition And Results Of Operations . . . 11

          Item 7a   Quantitative And Qualitative Disclosures
                    About Market Risk. . . . . . . . . . . . . . . 12

          Item 8    Financial Statements And Supplementary Data. . 13

          Item 9    Changes In And Disagreements With Accountants
                    On Accounting And Financial Disclosure . . . . 13

                                      PART III

          Item 10   Directors And Executive Officers Of The
                    Registrant . . . . . . . . . . . . . . . . . . 14

          Item 11   Executive Compensation . . . . . . . . . . . . 14

          Item 12   Security Ownership Of Certain Beneficial
                    Owners And Management. . . . . . . . . . . . . 14

          Item 13   Certain Relationships And Related Transactions 14

                                       PART IV

          Item 14   Exhibits, Financial Statement Schedules And
                    Reports On Form 8-K. . . . . . . . . . . . . . 15

          Item 1.  Business

          General

               J & J Snack Foods Corp. (the "Company" or "J & J") manufactures
          nutritional snack foods and distributes frozen beverages which it
          markets nationally to the food service and retail supermarket
          industries.  Its principal snack food products are soft pretzels
          marketed primarily under the brand name SUPERPRETZEL and frozen juice
          treats and desserts marketed primarily under the LUIGI'S, ICEE and
          MINUTE MAID* brand names.  J & J believes it is the largest
          manufacturer of soft pretzels in the United States. The Company
          markets frozen beverages to the food service industry under the brand
          names ICEE and ARCTIC BLAST in the United States, Mexico and Canada.
          Other snack food products include churros (an Hispanic pastry),
          funnel cake, popcorn and bakery products.

               The Company's sales are made primarily to food service customers
          including snack bar and food stand locations in leading chain,
          department, discount, warehouse club and convenience stores; malls
          and shopping centers; fast food outlets; stadiums and sports arenas;
          leisure and theme parks; movie theatres; independent retailers; and
          schools, colleges and other institutions. The Company's retail
          supermarket customers are primarily supermarket chains.  The
          Company's restaurant group sells direct to the public through its
          chains of specialty snack food retail outlets, BAVARIAN PRETZEL
          BAKERY and PRETZEL GOURMET, located primarily in the Mid-Atlantic
          States.

               The Company was incorporated in 1971 under the laws of the State
          of New Jersey.

               The Company operates in two business segments: snack foods and
          frozen beverages.

          Products in the Snack Foods Segment

          Soft Pretzels

          The Company's soft pretzels are sold under many brand names; some of
          which are: SUPERPRETZEL, MR. TWISTER, SOFT PRETZEL BITES, SOFTSTIX,
          SOFT PRETZEL BUNS, HOT KNOTS, DUTCH TWIST, TEXAS TWIST and SANDWICH
          TWIST and; to a lesser extent, under private labels.  The Company
          sells its soft pretzels to the food service and the retail
          supermarket industries and direct to the public through its
          restaurant group, which operates BAVARIAN PRETZEL BAKERY and PRETZEL
          GOURMET, our chain of specialty snack food retail outlets. The
          Company's soft pretzels qualify under USDA regulations as the
          nutritional equivalent of bread for purposes of the USDA school lunch
          * Minute Maid is a registered trademark of The Coca-Cola Company

                                              1

          program, thereby enabling a participating school to obtain partial
          reimbursement of the cost of the Company's soft pretzels from the
          USDA. Soft pretzel sales, including those sold through the Company's
          retail stores, amounted to 27% and 29% of theCompany's revenue in
          fiscals 2001 and 2000, respectively.

               The Company's soft pretzels are manufactured according to a
          proprietary formula.  Soft pretzels, ranging in size from one to ten
          through the Company's retail stores, amounted to 27% and 29% of the
          Company's revenue in fiscals 2001 and 2000, respectively.ounces in
          weight are shaped and formed by the Company's proprietary twister
          machines.  These soft pretzel tying machines are automated, high
          speed machines for twisting dough into the traditional pretzel shape.
          Soft pretzels in customized shapes and sizes and with fillings and
          toppings are extruded or shaped by hand.  Soft pretzels, after
          processing, are primarily quick-frozen in either raw or baked form
          and packaged for delivery.

               The Company's food service marketing program includes supplying
          ovens, mobil merchandisers, display cases, warmers and similar
          merchandising equipment to the retailer to prepare and promote the
          sale of soft pretzels.  Some of this equipment is proprietary,
          including combination warmer and display cases that reconstitute
          frozen soft pretzels while displaying them, thus eliminating the need
          for an oven.  The Company retains ownership of the equipment placed
          in customer locations and, as a result, customers are not required to
          make an investment in equipment.

          Frozen Juice Treats and Desserts

               The Company's frozen juice treats and desserts are marketed
          under the LUIGI'S, ICEE, MINUTE MAID, HI-C* , SHAPE-UPS, and MAMA
          TISH'S brand names to the food service and to the retail supermarket
          industries.  Frozen juice treat and dessert sales were 20% and 17% of
          the Company's revenue in fiscal years 2001 and 2000, respectively.

               The Company's SHAPE-UPS, MINUTE MAID and HI-C frozen juice and
          fruit bars are manufactured from an apple or pear juice base to which
          water, sweeteners, coloring (in some cases) and flavorings are added.
          The juice bars contain two to three ounces of apple or pear juice and
          the minimum daily requirement of vitamin C, and qualify as
          reimbursable items under the USDA school lunch program.  The juice
          bars are produced in various flavors and are packaged in a sealed
          push-up paper container referred to as the Milliken M-pak, which the
          Company believes has certain sanitary and safety advantages.

               LUIGI'S Real Italian Ice and MAMA TISH'S Italian Ice and
          Sorbets are sold to the foodservice and to the retail supermarket
          * Hi-C is a registered trademark of The Coca-Cola Company

                                           2

          industries. They are manufactured from water, sweeteners and fruit
          juice concentrates in various flavors and are packaged in plastic
          cups and in squeeze up tubes.

               ICEE Squeeze Tubes are sold to the foodservice and to the retail
          supermarket industries.  Designed to capture the carbonated frozen
          taste of a traditional ICEE drink, they are packaged in three and
          four ounce squeeze up tubes.

               MINUTE MAID soft frozen lemonade is sold to the foodservice and
          to the retail supermarket industries and is packaged in squeeze up
          tubes and cups.

          Churros

               The Company sells frozen churros under the TIO PEPE'S brand name
          to both the food service and retail supermarket industries. Churro
          sales were 4% of the Company's sales in both fiscals 2001 and 2000,
          respectively. Churros are Hispanic donuts in stick form which the
          Company produces in several sizes according to a proprietary formula.
          The churros are deep fried, frozen and packaged.  At food service
          point-of-sale they are reheated and topped with a cinnamon sugar
          mixture. The Company also sells fruit and creme filled churros. The
          Company supplies churro merchandising equipment similar to that used
          for its soft pretzels.

          Baked Goods

               The Company has a contract and private label bakery business
          which manufactures cookies, muffins, donuts and other baked goods for
          third parties. In addition, the Company produces and markets these
          products under its own brand names, including MRS. GOODCOOKIE, CAMDEN
          CREEK BAKERY and PRETZELCOOKIE.  Baked goods sales amounted to 16%
          and 13% of the Company's sales in fiscals 2001 and 2000,
          respectively.

          Other Products

               The Company also markets to the food service industry and direct
          to the public other products including soft drinks, funnel cakes sold
          under the FUNNEL CAKE FACTORY brand name, popcorn sold under the
          AIRPOPT brand name, as well as smaller amounts of various other food
          products.

          Products in the Frozen Beverage Segment

          Frozen Beverages

               The Company markets frozen beverages to the food service
          industry primarily under the names ICEE and ARCTIC BLAST in the
          United States, Mexico and Canada.  The Company sells direct to the

                                            3

          public through its restaurant group, which operates BAVARIAN PRETZEL
          BAKERY and PRETZEL GOURMET, our chain of specialty snack food retail
          outlets. Frozen beverage business sales amounted to 30% of revenue in
          fiscal 2001 and 33% of revenue in fiscal 2000.  Under the Company's
          marketing program, it installs frozen beverage dispensers at customer
          locations and thereafter services the machines, arranges to supply
          customers with ingredients required for production of the frozen
          beverages, and supports customer retail sales efforts with in-store
          promotions and point-of-sale materials. In most cases, the Company
          retains ownership of its dispensers and, as a result, customers are
          not required to make an investment in equipment or arrange for the
          ingredients and supplies necessary to produce and market the frozen
          beverages.  In fiscal 1999 the Company began providing installation
          and maintenance service only to a large quick service restaurant and
          others, which resulted in the increase of Customer Owned beverage
          dispensers beginning in 1999.

               Each new customer location requires a frozen beverage dispenser
          supplied by the Company or by the customer.  Company supplied
          dispensers are purchased from outside vendors, built new or rebuilt
          by the Company at an approximate cost of $6,000 each. The following
          shows the number of Company owned and customer owned frozen beverage
          dispensers at customer locations at the dates indicated:

                                 Company Owned   Customer Owned   Total
          September 25, 1999        18,100           4,300      22,400
          September 30, 2000        19,500           9,400      28,900
          September 29, 2001        20,600          10,000      30,600

               The Company has the rights to market and distribute frozen
          beverages under the name ICEE to all of the Continental United
          States, except for portions of eleven states.

          Customers

               The Company sells its products to two principal customer groups:
          food service and retail supermarkets. The primary products sold to
          the food service group are soft pretzels, frozen beverages, frozen
          juice treats and desserts, churros and baked goods.  The primary
          products sold to the retail supermarket industry are soft pretzels
          and frozen juice treats and desserts.  Additionally, the Company
          sells soft pretzels, frozen beverages and various other food products
          direct to the public through its restaurant group, which operates
          BAVARIAN PRETZEL BAKERY and PRETZEL GOURMET, our chain of specialty
          snack food retail outlets.

               The Company's customers in the food service industry include
          snack bars and food stands in chain, department and discount stores
          such as Kmart, Wal-Mart and Target; malls and shopping centers; fast
          food outlets; stadiums and sports arenas; leisure and theme parks

                                            4

          such as Disneyland, Walt Disney World, Opryland, Universal Studios,
          Sea World, Six Flags, Hershey Park and Busch Gardens; convenience
          stores such as 7-Eleven, Circle K, AM/PM, White Hen Pantry and Wawa;
          movie theatres; warehouse club stores such as Sam's Club, Costco and
          B.J.'s; schools, colleges and other institutions; and independent
          retailers such as Mrs. Fields. Food service concessionaires
          purchasing soft pretzels and other products from the Company for use
          in sports arenas and for institutional meal services include ARAMARK,
          Volume Services America and Sportservice.   Machines and machine
          parts are sold to other food and beverage companies.  Within the food
          service industry, the Company's products are purchased by the
          consumer primarily for consumption at the point-of-sale.

               The Company sells its products to over 90% of supermarkets in
          the United States.  Products sold to retail supermarket customers are
          primarily soft pretzel products, including SUPERPRETZEL, LUIGI'S Real
          Italian Ice and MAMA TISH'S Italian Ice and sorbets, MINUTE MAID
          Juice Bars and Soft Frozen Lemonade, ICEE Squeeze Up Tubes and TIO
          PEPE'S churros. Within the retail supermarket industry, the Company's
          frozen and prepackaged products are purchased by the consumer for
          consumption at home.

          Marketing and Distribution

               The Company has developed a national marketing program for its
          products. For food service customers, this marketing program includes
          providing ovens, mobile merchandisers, display cases, warmers, frozen
          beverage dispensers and other merchandising equipment for the
          individual customer's requirements and point-of-sale materials as
          well as participating in trade shows and in-store demonstrations.
          The Company's ongoing advertising and promotional campaigns for its
          retail supermarket products include trade shows, newspaper
          advertisements with coupons, in-store demonstrations, billboards and,
          periodically, television advertisements.

               The Company's products are sold through a network of about 130
          food brokers and over 1,000 independent sales distributors and the
          Company's own direct sales force.  For its snack food products, the
          Company maintains warehouse and distribution facilities in
          Pennsauken, Bellmawr and Bridgeport, New Jersey; Vernon (Los Angeles)
          California; Scranton, Pittsburgh, Hatfield and Lancaster,
          Pennsylvania; Carrollton (Dallas), Texas; and Solon, Ohio. Frozen
          beverages are distributed from 96 Company managed warehouse and
          distribution facilities located in 41 states, Mexico and Canada which
          allow the Company to directly service its customers in the
          surrounding areas.  The Company's products are shipped in
          refrigerated and other vehicles from the Company's manufacturing and
          warehouse facilities on a fleet of Company operated tractor-trailers,
          trucks and vans, as well as by independent carriers.

                                            5

          Seasonality

               The Company's sales are seasonal because frozen beverage sales
          and frozen juice treats and desserts sales are generally higher
          during the warmer months and sales of the Company's retail stores are
          generally higher in the Company's first quarter during the holiday
          shopping season.

          Trademarks and Patents

               The Company has numerous trademarks, the most important of which
          are SUPERPRETZEL, DUTCH TWIST, TEXAS TWIST, MR. TWISTER, SOFT PRETZEL
          BITES and SOFTSTIX for its soft pretzel products; FROSTAR, SHAPE-UPS,
          MAZZONE'S, MAMA TISH'S and LUIGI'S for its frozen juice treats and
          desserts; TIO PEPE'S for its churros; ARCTIC BLAST for its frozen
          beverages; FUNNEL CAKE FACTORY for its funnel cake products, and MRS.
          GOODCOOKIE and CAMDEN CREEK for its baked goods. The trademarks, when
          renewed and continuously used, have an indefinite term and are
          considered important to the Company as a means of identifying its
          products.

               The Company markets frozen beverages under the trademark ICEE in
          all of the continental United States, except for portions of eleven
          states, and in Mexico and Canada.  Additionally, the Company has the
          international rights to the trademark ICEE.

               The Company has numerous patents related to the manufacturing
          and marketing of its products.

          Supplies

               The Company's manufactured products are produced from raw
          materials which are readily available from numerous sources.  With
          the exception of the Company's soft pretzel twisting equipment and
          funnel cake production equipment, which are made for J & J by
          independent third parties, and certain specialized packaging
          equipment, the Company's manufacturing equipment is readily available
          from various sources. Syrup for frozen beverages is purchased from
          The Coca-Cola Company, the Pepsi Cola Company, and Western Syrup
          Company. Cups, straws and lids are readily available from various
          suppliers. Parts for frozen beverage dispensing machines are
          manufactured internally and purchased from other sources.  Frozen
          beverage dispensers are purchased from IMI Cornelius, Inc.

          Competition

               Snack food and baked goods markets are highly competitive.  The
          Company's principal products compete against similar and different
          food products manufactured and sold by numerous other companies,
          some of which are substantially larger and have greater resources
          than the Company. As the soft pretzel, frozen juice treat and

                                            6

          dessert, baked goods and related markets grow, additional competitors
          and new competing products may enter the markets. Competitive factors
          in these markets include product quality, customer service, taste,
          price, identity and brand name awareness, method of distribution and
          sales promotions.

               The Company believes it is the only national distributor of soft
          pretzels. However, there are numerous regional and local
          manufacturers of food service and retail supermarket soft pretzels.
          Competition is also increasing in that there are several chains of
          retail pretzel stores that have aggressively expanded over the past
          several years. These chains compete with the Company's products.

               In Frozen Beverages the Company competes directly with other
          frozen beverage companies.  These include several companies which
          have the right to use the ICEE name in portions of eleven states.
          There are many other regional frozen beverage competitors throughout
          the country and one large retail chain which uses its own frozen
          beverage brand.

               The Company competes with large soft drink manufacturers for
          counter and floor space for its frozen beverage dispensing machines
          at retail locations and with products which are more widely known
          than the ICEE and ARCTIC BLAST frozen beverages.

               The Company competes with a number of other companies in the
          frozen juice treat and dessert and baked goods markets.

          Employees

          The Company had approximately 2,200 full and part time employees as
          of September 29, 2001. Certain production and distribution
          employees at the Pennsauken, New Jersey plant are covered by a
          collective bargaining agreement which expires in September 2002.  The
          Company considers its employee relations to be good.

                                            7

          Item 2.  Properties

               The Company's primary east coast manufacturing facility is
          located in Pennsauken, New Jersey in a 70,000 square foot building on
          a two acre lot.  Soft pretzels and churros are manufactured at this
          company-owned facility which also serves as the Company's corporate
          headquarters. This facility operates at approximately 80% of
          capacity. The Company leases a 101,200 square foot building adjacent
          to its manufacturing facility in Pennsauken, New Jersey through March
          2012.  The Company has constructed a large freezer within this
          facility for warehousing and distribution purposes.  The warehouse
          has a utilization rate of 60-90% depending on product demand.  The
          Company also leases through September 2011 16,000 square feet of
          office and warehouse space located next to the Pennsauken, New Jersey
          plant.

               The Company owns a 150,000 square foot building on eight acres
          in Bellmawr, New Jersey.  Approximately 30% of the facility is leased
          to a third party.  The remainder is used by the Company to
          manufacture some of its products including funnel cake, pretzels and
          cookies.

               The Company's primary west coast manufacturing facility is
          located in Vernon (Los Angeles), California.  It consists of a
          137,000 square foot facility in which soft pretzels, churros and
          various lines of baked goods are produced and warehoused.  Included
          in the 137,000 square foot facility is a 30,000 square foot freezer
          used for warehousing and distribution purposes which was constructed
          in 1996.  The facility is leased through November 2010.  The Company
          leases an additional 15,000 square feet of warehouse space, adjacent
          to its manufacturing facility, through May 2002. The manufacturing
          facility operates at approximately 60% of capacity.

               The Company owns a 52,700 square foot building located on five
          acres in Chicago Heights, Illinois which is presently for sale or
          lease.

               The Company owns a 46,000 square foot frozen juice treat and
          dessert manufacturing facility located on three acres in Scranton,
          Pennsylvania. The facility, which was expanded from 26,000 square
          feet in 1998, operates at approximately 60% of capacity.

               The Company leases a 29,635 square foot soft pretzel
          manufacturing facility located in Hatfield, Pennsylvania.  The lease
          runs through June 2017. The facility operates at approximately two
          thirds of capacity.

               The Company leases a 19,200 square foot soft pretzel
          manufacturing facility located in Carrollton, Texas.  The lease
          runs through April 2004.  The facility operates at less than 50% of
          capacity.

                                            8

               The Company's fresh bakery products manufacturing facility and
          offices are located in Bridgeport, New Jersey in two buildings
          totaling 94,320 square feet.  The buildings are leased through
          December 2011. The manufacturing facility operates at approximately
          50% of capacity.

               The Company's Bavarian Pretzel Bakery headquarters and warehouse
          and distribution facilities are located in a 11,000 square foot owned
          building in Lancaster, Pennsylvania.

               The Company owns a 25,000 square foot facility located on 11
          acres in Hatfield, Pennsylvania which is leased to a third party.

               The Company also leases approximately 100 warehouse and
          distribution facilities in 41 states, Mexico and Canada.

          Item 3.  Legal Proceedings

               The Company has no material pending legal proceedings, other
          than ordinary routine litigation incidental to the business, to which
          the Company or any of its subsidiaries is a party or of which any of
          their property is subject.

          Item 4.  Submission Of Matters To A Vote Of Security Holders

               None.

                                            9

                          EXECUTIVE OFFICERS OF THE REGISTRANT

               The following is a list of the executive officers of the Company
          and their principal past occupations or employment.  All such persons
          serve at the pleasure of the Board of Directors and have been elected
          to serve until the Annual Meeting of Shareholders on February 5, 2002
          or until their successors are duly elected.

                Name          Age            Position

          Gerald B. Shreiber   60       Chairman of the Board, President,
                                        Chief Executive Officer and
                                        Director
          Dennis G. Moore      46       Senior Vice President, Chief
                                        Financial Officer, Secretary,
                                        Treasurer and Director
          Robert M. Radano     52       Senior Vice President, Sales,
                                        Chief Operating Officer and
                                        Director
          Dan Fachner          41       President of The ICEE Company
                                        Subsidiary

               Gerald B. Shreiber is the founder of the Company and has served
          as its Chairman of the Board, President, and Chief Executive Officer
          since its inception in 1971.  His term as a director expires in 2005.

               Dennis G. Moore joined the Company in 1984.  He served in
          various controllership functions prior to becoming the Chief
          Financial Officer in June 1992.  His term as a director expires in
          2002.

               Robert M. Radano joined the Company in 1972 and in May 1996  was
          named Chief Operating Officer of the Company.  Prior to becoming
          Chief Operating Officer, he was Senior Vice President, Sales
          responsible for national foodservice sales of J & J.  His term as a
          director expires in 2005.

               Dan Fachner has been an employee of ICEE-USA Corp., which was
          acquired by the Company in May 1987, since 1979. He was named Senior
          Vice President of The ICEE Company in April 1994 and became President
          in May 1997.

                                           10

                                       PART II

          Item 5.  Market For Registrant's Common Stock And
                     Related Stockholder Matters

               The Company's common stock is traded on the over-the-counter
          market on the NASDAQ National Market System under the symbol JJSF.
          The following table sets forth the high and low final sale price
          quotations as reported by NASDAQ for the common stock for each
          quarter of the years ended September 30, 2000 and September 29, 2001.

                                                         High       Low

          Fiscal 2000
             First quarter                              22.75      15.50
             Second quarter                             21.88      16.81
             Third quarter                              20.50      14.00
             Fourth quarter                             19.00      12.50

          Fiscal 2001
             First quarter                              18.50      12.50
             Second quarter                             17.88      15.00
             Third quarter                              23.79      16.50
             Fourth quarter                             24.10      14.82

               On November 30, 2001, there were 8,650,458 shares of common
          stock outstanding. Those shares were held by approximately 2,200
          beneficial shareholders and shareholders of record.

               The Company has never paid a cash dividend on its common stock
          and does not anticipate paying cash dividends in the foreseeable
          future.

          Item 6.  Selected Financial Data

               The information set forth under the caption "Financial
          Highlights" of the 2001 Annual Report to Shareholders is incorporated
          herein by reference.

          Item 7.  Management's Discussion And Analysis Of
                     Financial Condition And Results Of Operations

               The information set forth under the caption "Management's
          Discussion and Analysis of Financial Condition and Results of
          Operations" of the 2001 Annual Report to Shareholders is incorporated
          herein by reference.

                                           11

          Item 7a. Quantitative And Qualitative Disclosures
                   About Market Risk

               The following is the Company's quantitative and qualitative
          analysis of its financial market risk:

          Interest Rate Sensitivity

               The table below provides information about the Company's
          derivative financial instruments and other financial instruments
          as of September 29, 2001 that are sensitive to changes in interest
          rates.  These instruments include debt obligations and interest
          rate swaps.  For debt obligations, the table presents principal
          cash flows and related weighted-average interest rates by expected
          maturity dates. For interest rate swaps, the table presents
          notional amounts and weighted-average interest rates by expected
          (contractual) maturity dates.  The notional amounts are used to
          calculate the contractual payments to be exchanged under the swap
          contract. Weighted-average variable rates are based on implied
          forward rates in the yield curve at the reporting date.

                                               Expected Maturity Date
                                              ($ in thousands)
                                                           There         Fair
                        2002   2003   2004    2005   2006  after   Total  Value
Liabilities
 Long-term debt
  Fixed rate          $  115  $ 368 $    - $     - $    - $    - $   483 $   483
   Average interest
    rate               9.50%  9.27%      -       -      -      -   9.32%
  Variable rate            -      -      - $28,000      -      - $28,000 $28,000
   Average interest
    rate                   -      -      -   3.00%      -      -   3.00%

Interest Rate Swaps
 Receive variable/pay
  fixed              $ 8,000 $2,000 $    - $     - $    - $    - $10,000 $     -
  Average pay rate     3.58%  3.58%      -       -      -      -   3.58%
  Average receive
   rate                6.11%  6.11%      -       -      -      -   6.11%

          Interest Rate Risk

               The Company holds long-term debt with variable interest rates
          indexed to LIBOR, which exposes it to the risk of increased
          interest costs if interest rates rise.  To reduce the risk related
          to unfavorable interest rate movements, the Company enters into
          interest rate swap contracts to pay a fixed rate and receive a
          variable rate that is indexed to LIBOR. The ratio of the swap
          notional amount to the principal amount of variable rate debt
          issued changes periodically based on the Company's ongoing
          assessment of the future trend in interest rate movements.  At
          September 29, 2001, this ratio was 25 percent and no change in the
          ratio is expected at the current time.  The percentage of variable
          rate debt fixed under interest rate swap contracts is expected to
          decrease as scheduled debt payments are made.

                                           12

              The Company's most significant raw material requirements include
          flour, shortening, corn syrup, chocolate, and macadamia nuts. The
          Company attempts to minimize the effect of future price fluctuations
          related to the purchase of raw materials primarily through forward
          purchasing to cover future manufacturing requirements, generally for
          periods from 1 to 24 months. Futures contracts are not used in
          combination with forward purchasing of these raw materials. The
          Company's procurement practices are intended to reduce the risk of
          future price increases, but also may potentially limit the ability to
          benefit from possible price decreases.

          Foreign Exchange Rate Risk

               The Company has not entered into any forward exchange contracts
          to hedge its foreign currency rate risk as of September 29, 2001
          because it does not believe its foreign exchange exposure is
          significant.

          Item 8.  Financial Statements And Supplementary Data

               The following consolidated financial statements of the Company
          set forth in the 2001 Annual Report to Shareholders are incorporated
          herein by reference:

               Consolidated Balance Sheets as of September 29, 2001 and
                  September 30, 2000
               Consolidated Statements of Earnings for the fiscal years ended
                  September 29, 2001, September 30, 2000 and September 25,
                  1999
               Consolidated Statement of Stockholders' Equity for the three
                  fiscal years ended September 29, 2001
               Consolidated Statements of Cash Flows for the fiscal years
                  ended September 29, 2001, September 30, 2000 and September
                  25, 1999
               Notes to Consolidated Financial Statements
               Report of Independent Certified Public Accountants

          Item 9.  Changes In And Disagreements With Accountants On
                   Accounting And Financial Disclosure

               None.

                                              13

                                      PART III

          Item 10.  Directors And Executive Officers Of The Registrant

               Information concerning directors, appearing under the captions
          "Information Concerning Nominee For Election To Board" and
          "Information Concerning Continuing Directors And Executive Officers"
          in the Company's Proxy Statement filed with the Securities and
          Exchange Commission in connection with the Annual Meeting of
          Shareholders to be held on February 8, 2002, is incorporated herein
          by reference.  Information concerning the executive officers is
          included on page 10 following Item 4 in Part I hereof.

          Item 11.  Executive Compensation

               Information concerning executive compensation appearing in the
          Company's Proxy Statement under the caption "Management Remuneration"
          is incorporated herein by reference.

          Item 12.  Security Ownership Of Certain Beneficial Owners And
                         Management

               Information concerning the security ownership of certain
          beneficial owners and management appearing in the Company's Proxy
          Statement under the caption "Principal Shareholders" is incorporated
          herein by reference.

          Item 13.  Certain Relationships And Related Transactions

               Not applicable.

                                              14

                                         PART IV

          Item 14.  Exhibits, Financial Statement Schedules And
                    Reports On Form 8-K

           (a) Financial Statements

               The following are incorporated by reference in Part II of this
          report:

               Report of Independent Certified Public Accountants
               Consolidated Balance Sheets as of September 29, 2001 and
                  September 30, 2000
               Consolidated Statements of Earnings for the fiscal years ended
                  September 29, 2001, September 30, 2000 and September 25,
                  1999
               Consolidated Statement of Stockholders' Equity for the three
                  fiscal years ended September 29, 2001
               Consolidated Statements of Cash Flows for the fiscal years ended
                  September 29, 2001, September 30, 2000 and September 25,
                  1999
               Notes to Consolidated Financial Statements

               Financial Statement Schedule

                    The following are included in Part IV of this report:

                                                                  Page
                    Report of Independent Certified Public
                       Accountants on Schedule                     19
                    Schedule:
                      II.  Value and Qualifying Accounts           20

               All other schedules are omitted either because they are not
          applicable or because the information required is contained in the
          financial statements or notes thereto.

              Exhibits

               3.1  Amended and Restated Certificate of Incorporation filed
                    February 28, 1990. (Incorporated by reference from the
                    Company's Form 10-Q dated May 4, 1990.)

               3.2  Amended and Restated Bylaws adopted May 15, 1990.
                    (Incorporated by reference from the Company's Form 10-Q
                    dated August 3, 1990.)

                                            15

               4.3  Loan Agreement dated as of December 4, 2001 by and
                    among J & J Snack Foods Corp. and Certain of its
                    Subsidiaries and Citizens Bank of Pennsylvania, as
                    Agent. (Page 21.)

               10.1 Proprietary Exclusive Manufacturing Agreement dated
                    July 17, 1984 between J & J Snack Foods Corp. and Wisco
                    Industries, Inc.(Incorporated by reference from the
                    Company's Form S-1 dated February 4, 1986, file no. 33-
                    2296).

               10.2*J & J Snack Foods Corp. Stock Option Plan.
                    (Incorporated by reference from the Company's Form S-8
                    dated July 24, 1992, file no. 33-50036.)

               10.3*J & J Snack Foods Corp. 401(k) Profit Sharing Plan, As
                    Amended, Effective January 1, 1989.  (Incorporated by
                    reference from the Company's 10-K dated December 18,
                    1992.)

               10.4*First, Second and Third Amendments to the J & J Snack
                    Foods Corp. 401(k) Profit Sharing Plan.  (Incorporated
                    by reference from the Company's 10-K dated December 19,
                    1996).

               10.6 Lease dated September 24, 1991 between J & J Snack
                    Foods Corp. of New Jersey and A & H Bloom Construction
                    Co. for the 101,200 square foot building next to the
                    Company's manufacturing facility in Pennsauken, New
                    Jersey. (Incorporated by reference from the Company's
                    Form 10-K dated December 17, 1991).

               10.7 Lease dated August 29, 1995 between J & J Snack Foods
                    Corp. and 5353 Downey Associated Ltd for the lease of
                    the Vernon, CA facility. (Incorporated by reference
                    from the Company's Form 10-K dated December 21, 1995).

               10.8*J & J Snack Foods Corp. Employee Stock Purchase Plan
                    (Incorporated by reference from the Company's Form S-8
                    dated May 16, 1996).

               10.9*Amendments to the J & J Snack Foods Corp. Stock Option
                    Plan and the J & J Snack Foods Corp. Non-Statutory
                    Stock Option Plan for Non-Employee Directors and Chief
                    Executive Officer. (Incorporated by reference from the
                    Company's Definitive Proxy Statement dated December 15,
                    1999.)

               13.1 Company's 2001 Annual Report to Shareholders (except
                    for the captions and information thereof expressly
                    incorporated by reference in this Form 10-K, the Annual

                                         16

                    Report to Shareholders is provided solely for the
                    information of the Securities and Exchange Commission
                    and is not deemed "filed" as part of the Form 10-K.)
                    (Page 105.)

               22.1 Subsidiaries of J & J Snack Foods Corp. (Page 138.)

               24.1 Consent of Independent Certified Public Accountants.
                    (Page 139.)

          *Compensatory Plan

          (b) Reports on Form 8-K

             No reports on Form 8-K have been filed by the Company during the
          last quarter of the period covered by this report.

                                           17

                                       SIGNATURES

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

                                            J & J SNACK FOODS CORP.

          December 21, 2001                  By /s/ Gerald B. Shreiber
                                                Gerald B. Shreiber,
                                                Chairman of the Board,
                                                President, Chief Executive
                                                Officer and Director

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

          December 21, 2001                /s/ Robert M. Radano
                                            Robert M. Radano, Senior Vice
                                            President, Sales, Chief Operating
                                            Officer and Director

          December 21, 2001                /s/ Dennis G. Moore
                                            Dennis G. Moore, Senior Vice
                                            President, Chief Financial
                                            Officer and Director

          December 21, 2001                /s/ Stephen N. Frankel
                                            Stephen N. Frankel, Director

          December 21, 2001                 /s/ Peter G. Stanley
                                            Peter G. Stanley, Director

          December 21, 2001                /s/ Leonard M. Lodish
                                            Leonard M. Lodish, Director

                                           18

                       REPORT OF INDEPENDENT CERTIFIED PUBLIC
                               ACCOUNTANTS ON SCHEDULE

          Board of Directors
          J & J Snack Foods Corp.

              In connection with our audit of the consolidated financial

          statements of J & J Snack Foods Corp. and Subsidiaries referred to in

          our report dated November 6, 2001 which is included in the Annual

          Report to Shareholders and incorporated by reference in Part II of

          this form, we have also audited Schedule II for each of the three

          fiscal years in the period ended September 29, 2001 (52 weeks, 53

          weeks and 52 weeks).  In our opinion, this schedule presents fairly,

          in all material respects, the information required to be set forth
          therein.

                                       GRANT THORNTON LLP

          Philadelphia, Pennsylvania
          November 6, 2001

                                           19

        SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

                                        Opening  Charged to              Closing
Year        Description                 balance   expense   Deduction    Balance

2001 Allowance for doubtful accounts $1,573,000  $438,000 $339,000(1) $1,672,000

2000 Allowance for doubtful accounts    806,000 1,384,000  617,000(1)  1,573,000

1999 Allowance for doubtful accounts    597,000   321,000  112,000(1)    806,000

          (1) Write-off uncollectible accounts receivable.

                                         20

EXHIBIT 4.3

                                   LOAN AGREEMENT

                                    BY AND AMONG

                              J & J SNACK FOODS CORP.,

            THE SUBSIDIARIES OF J & J SNACK FOODS CORP.  SIGNATORY HERETO

                             THE BANKS SIGNATORY HERETO

                                         AND

                            CITIZENS BANK OF PENNSYLVANIA
                               AS AGENT FOR SUCH BANKS

                                  DECEMBER 4, 2001

                                   LOAN AGREEMENT

               AGREEMENT, made this 4th day of December, 2001, by and

          among:

               J & J SNACK FOODS CORP., a New Jersey corporation;

               The Subsidiary Borrowers of Parent that have executed the

          signature pages hereto; and

               The Banks that have executed the signature pages hereto;

          and

               CITIZENS  BANK  OF  PENNSYLVANIA,  a  Pennsylvania  state-

          chartered bank, as Agent for the Banks;

                                W I T N E S S E T H:

               WHEREAS, Parent and the Subsidiary Borrowers wish to obtain
          loans from the Banks in the aggregate principal sum of up to
          Fifty Million and 00/100 ($50,000,000.00) Dollars, and the Banks
          are willing to make such loans to Parent and the Subsidiary
          Borrowers in an aggregate principal amount of up to such sum on
          the terms and conditions hereinafter set forth;

               NOW, THEREFORE, the parties hereto agree as follows:

                                      ARTICLE 1

                                     Definitions
               As used in this Agreement, terms defined in the recitals
          hereto shall have the meanings therein defined and the following
          terms shall have the following meanings:

                    ABR Loans:  Loans that bear interest at a rate based
          upon the Alternate Base Rate.

                    Acquisition:  any acquisition by any Borrower of all
          or a substantial portion of the Capital Stock, assets and/or
          properties of another Person, pursuant to and in accordance with
          the terms of an Acquisition Agreement.

                    Acquisition Agreement:  any agreement by and between a
          Borrower and another Person with respect to such Borrower's
          acquisition of all or a substantial portion of the assets and/or
          properties of such other Person and/or all or a substantial
          portion of the issued and outstanding Capital Stock of another
          Person owned by such other Person, including all exhibits,
          annexes and schedules thereto, and all amendments, modifications
          and supplements thereof

                    Acquisition Cost:  with respect to any otherwise
          Permitted Acquisition, the sum of (i) all cash consideration
          paid or agreed to be paid by the acquiror to make such
          Acquisition (inclusive of payments of such person of the
          seller's professional fees and expenses and other out-of-pocket
          expenses in connection therewith), plus (ii) the fair market
          value of all non-cash consideration paid of such acquiror in
          connection therewith, plus (iii) an amount equal to the
          principal or stated amount of all liabilities assumed or
          incurred by such acquiror in connection therewith, plus (iv) any
          optional or mandatory capital contributions made to such entity
          by such acquiror.  The principal or stated amount of any
          liability assumed or incurred by an acquiror in connection with
          an Acquisition which is a contingent liability shall be an
          amount equal to the stated amount of such liability or, if the
          same is not stated, the maximum reasonably anticipated amount
          payable by such acquiror in respect thereof as determined by
          such acquiror in good faith.

                    Additional Costs:  as defined in subsection 2.22(b)
          hereof.

                    Affected Loans:  as defined in Section 2.25 hereof.

                    Affected Type: as defined in Section 2.25 hereof.

                    Affiliate:  as to any Person, any other Person that
          directly or indirectly controls, or is under common control
          with, or is controlled by, such Person.  As used in this
          definition, control" (including, with its correlative meanings,
          "controlled by" and "under common control with") shall mean
          possession, directly or indirectly, of power to direct or cause
          the direction of management or policies (whether through
          ownership of securities or partnership or other ownership
          interests, by contract or otherwise), provided that, in any
          event: (i) any Person that owns directly or indirectly 5% or
          more of the securities having ordinary voting power for the
          election of directors or other governing body of a corporation
          or 5% or more of the partnership or other ownership interests of
          any other Person (other than as a limited partner of such other
          Person) will be deemed to control such corporation or other
          Person; and (ii) each controlling shareholder, director and
          officer of a Borrower shall be deemed to be an Affiliate of the
          Borrowers.

                                         3

                    Affiliate Advances: as to any Borrower, all loans,
          advances and other distributions to and Investments in any
          officer, director, employee, Affiliate and/or Subsidiary of such
          Borrower, excluding salary, bonuses and benefits paid to
          employees of such Borrower in the ordinary course of such
          Borrower's business.

                    Agency Fee:  as defined in subsection 2.7(c) hereof.

                    Agent:  Citizens Bank of Pennsylvania, in its capacity
          as Agent for the Banks, together with its successors in such
          capacity.

                    Alternate  Base Rate: the higher of (i) the Prime Rate
          and (ii) the Federal Funds Rate plus 0.50%.

                    Applicable Lending Office:  with respect to each Bank,
          with respect to each type of Loan, the Lending Office as
          designated for such type of Loan below its name on the signature
          pages hereof or such other office of such Bank or of an
          affiliate of such Bank as such Bank may from time to time
          specify to the Agent and the Parent as the office at which its
          Loans of such type are to be made and maintained.

                    Applicable Margin:  with respect to the unpaid
          principal balance of ABR Loans and LIBOR Loans, and the face
          amount of all outstanding Letters of Credit, in each case at all
          times during which the applicable Pricing Level set forth below
          is in effect, the percentage set forth below next to such
          Pricing Level and under the applicable column

                           Applicable       Applicable       Applicable
                           Margin for       Margin for       Margin for
          Pricing          ABR Loans        LIBOR Loans      Letters of
          Level                                               Credit

          Pricing          0.125            0.500            0.500
          Level I

          Pricing          0.125            0.625            0.625
          Level II

          Pricing          0.125            0.750            0.750
          Level III

          Pricing          0.375            0.875            0.875
          Level IV

          In each case, the determination of the Applicable Margin
          pursuant to the table set forth above shall be made on a
          quarterly basis based on an examination of the financial
          statements of the Borrowers delivered pursuant to and in
          compliance with Section 5.1 or Section 5.2 hereof, which

                                         4

          financial statements, whether annual or quarterly, shall be (A)
          audited in the case of financial statements furnished pursuant
          to Section 5.1 and (B) certified by the chief financial officer
          of Parent in the case of financial statements furnished pursuant
          to Section 5.2 and shall indicate that there exists no Default
          or Event of Default hereunder.  Each determination of the
          Applicable Margin shall be effective five days following the
          date on which the financial statements on which such
          determination was based were received by the Agent.  In the
          event that financial statements for the four full fiscal
          quarters most recently completed prior to such date of
          determination either: (i) have not been delivered to the Agent
          in compliance with Section 5.1 or 5.2 hereof, or (ii) if
          delivered, do not comply in form or substance with Section 5.1
          or 5.2 hereof (in the sole judgment of the Agent), then the
          Agent may determine, in its reasonable judgment, the ratio
          referred to above that would have been in effect as at such
          date, and, consequently, the Applicable Margin in effect for the
          period commencing on such date.

                    Applicable Period:  as defined in Section 7.15 hereof.

                    Assignment and Acceptance:  an agreement in the form
          of Exhibit B hereto.

                    Bank and Banks:  the banks and other financial
          institutions that have executed the signature pages hereto
          together with each bank and any other financial institution that
          becomes a Bank pursuant to the terms of this Agreement.

                    Borrower:  Parent or any Subsidiary Borrower.

                    Borrowers:    Parent  and  the  Subsidiary  Borrowers
          collectively.

                    Borrowing Notice: as defined in Section 2.2 hereof.

                    Business Day:  any day other than Saturday, Sunday or
          any other day on which commercial banks in Pennsylvania are
          authorized or required to close under the laws of the
          Commonwealth of Pennsylvania.

                    Capital Expenditures:  for any period, the aggregate
          amount of all payments made during such period by any Borrower
          directly or indirectly for the purpose of acquiring,
          constructing or maintaining fixed assets, real property or
          equipment that, in accordance with GAAP, would be added as a
          debit to the fixed asset account of such Borrower, including,
          without limitation, all amounts paid or payable during such
          period with respect to Capitalized Lease Obligations and
          interest that are required to be capitalized in accordance with
          GAAP.

                                         5

                    Capitalized Lease:  any lease, the obligations to pay
          rent or other amounts under which, constitute Capitalized Lease
          Obligations.

                    Capitalized Lease Obligations:  as to any Borrower,
          the obligations of such Borrower to pay rent or other amounts
          under a lease of (or other agreement conveying the right to use)
          real and/or personal property which obligations are required to
          be classified and accounted for as a capital lease on a balance
          sheet of such Borrower under GAAP and, for purposes of this
          Agreement, the amount of such obligations shall be the
          capitalized amount thereof, determined in accordance with GAAP.

                    Capital Stock:  as to any Borrower, all shares,
          interests, partnership interests, limited liability company
          interests, participations, rights in or other equivalents
          (however designated) of such Borrower's equity (however
          designated) and any rights, warrants or options exchangeable for
          or convertible into such shares, interests, participations,
          rights or other equity.

                    Cash:  as to any Borrower, such Borrower's cash and
          cash equivalents, as defined in accordance with GAAP.

                    CERCLA:  the Comprehensive Environmental Response,
          Compensation and Liability Act of 1980, 42 U.S.C. 9601, et seq.

                    Citizens:  Citizens Bank of Pennsylvania, a
          Pennsylvania state-chartered bank, in its capacity as a Bank
          hereunder.

                    Code:  the Internal Revenue Code of 1986, as it may be
          amended from time to time.

                    Commitment:  as to each Bank, the amount set forth
          opposite such Bank's name on the signature pages hereof under
          the caption "Commitment" as such amount is subject to reduction
          in accordance with the terms hereof.

                    Commitment Fee: as defined in subsection 2.7(a)
          hereof.

                    Commitment Termination Date:  December 1, 2004,
          subject to earlier termination as provided in this Agreement.

                    Compliance Certificate: a certificate executed by the
          president and chief financial or accounting officer of Parent to
          the effect that: (i) as of the effective date of the
          certificate, no Default or Event of Default under this Agreement
          exists or would exist after giving effect to the action intended
          to be taken by the Borrowers as described in such certificate,
          including, without limitation, that the covenants set forth in
          Section 6.9 hereof would not be breached after giving effect to

                                         6

          such action, together with a calculation in reasonable detail,
          and in form satisfactory to the Agent, of such compliance, and
          (ii) the representations and warranties contained in Article 3
          hereof are true and with the same effect as though such
          representations and warranties were made on the date of such
          certificate, except for changes in the ordinary course of
          business none of which, either singly or in the aggregate, have
          had a Material Adverse Effect.

                    Controlled Group:  all members of a controlled group
          of corporations and all trades or businesses (whether or not
          incorporated) under common control which, together with the
          Borrowers, are treated as a single employer under Section
          414(b), 414(c) or 414(m) of the
          Code and Section 4001 (a)(2) of ERISA.

                    Credit Period:  the period commencing on the date of
          this Agreement and ending on the Commitment Termination Date.

                    Debt Instrument: as defined in subsection 8.4(a)
          hereof.

                    Default:  an event which with notice or lapse of time,
          or both, would constitute an Event of Default.

                    Defined Contribution Plan: a plan which is not covered
          by Title IV of ERISA or subject to the minimum funding standards
          of Section 412 of the Code and which provides for an individual
          account for each participant and for benefits based solely on
          the amount contributed to the participant's account, and any
          income, expenses, gains and losses, and any forfeitures of
          accounts of other participants which may be allocated to such
          participant's account.

                    Disposal:  the discharge, deposit, injection, dumping,
          spilling, leaking or placing of any hazardous materials into or
          on any land or water so that such hazardous materials or
          constituent thereof may enter the environment or be emitted into
          the air or discharged into any waters, including ground waters.

                    Dollars and $:  lawful money of the United States of
          America.

                    Domestic Subsidiary:  each direct and indirect
          Subsidiary of Parent organized under the laws of the United
          States of America or a state thereof.

                    Drawing Date: as defined in Section 2.15(c) hereof.

                    EBIT:  the sum of the net income of Parent and its
          Subsidiaries on a consolidated basis (as determined in
          accordance with GAAP), plus, to the extent subtracted in

                                         7

          determining such net income, the provision for income tax
          expense and the Interest Expense.

                    EBITDA:  with respect to Parent and its Subsidiaries
          on a consolidated basis for any period, the sum of (i) net
          income (as determined in accordance with GAAP), (ii) Interest
          Expense, (iii) depreciation and amortization, and (iv) Federal,
          state and local income taxes, in each case of the Borrower and
          its Subsidiaries on a consolidated basis for such period,
          computed in accordance with GAAP.

                    Eligible Assignee: a commercial bank or other
          financial institution organized under the laws of the United
          States of America or any state and having a combined capital and
          surplus of at least $500,000,000.

                    Employee Benefit Plan:  any employee benefit plan
          within the meaning of Section 3(3) of ERISA which (a) is
          maintained for employees of the Borrowers or any of its ERISA
          Affiliates or (b) has at any time within the preceding six (6)
          years been maintained for employees of any Loan Party or any
          current or former ERISA Affiliate.

                    Employee Welfare Benefit Plan:  any employee benefit
          plan within the meaning of Section 3(l) of ERISA.

                    Environmental Laws and Regulations:  all federal,
          state and local environmental, health and safety laws,
          regulations, ordinances, orders, judgments and decrees
          applicable to any Borrower or any other Loan Party, or any of
          their respective assets or properties.

                    Environmental Liability:  any liability under any
          applicable Environmental Laws and Regulations for any disposal,
          release or threatened release of a Hazardous Substance pollutant
          or contaminant as those terms are defined under CERCLA, and any
          liability which would require a removal, remedial or response
          action, as those terms are defined under CERCLA, by any Person
          or any environmental regulatory body having jurisdiction over
          any Borrower or any other Loan Party and/or any liability
          arising under any Environmental Laws and Regulations for any
          Borrower's or any other Loan Party's failure to comply with such
          laws and regulations, including without limitation, the failure
          to comply with or obtain any applicable environmental permit.

                    Environmental Proceeding:  any judgment, action,
          proceeding or investigation pending before any court or
          governmental authority, with respect to any Borrower or any
          other Loan Party and arising under or relating to any
          Environmental Laws and Regulations.

                                         8

                    ERISA:  the Employee Retirement Income Security Act of
          1974, as it may be amended from time to time, and the
          regulations promulgated thereunder.

                    ERISA Affiliate:  with respect to any Loan Party, any
          corporation, person or trade or business which is a member of a
          group which is under common control with any Loan Party, who
          together with any Loan Party, is treated as a single employer
          within the meaning of Sections 414(b) - (o) of the Code and, if
          applicable, Sections 4001(a)(14) and (b) of ERISA.

                    Event of Default: as defined in Article 8 hereof.

                    Facility Usage: shall mean at any time the sum of the
          Loans outstanding and Letter of Credit Outstandings.

                    Federal Funds Rate: for any day, the weighted average
          of the rates on overnight federal funds transactions with member
          banks of the Federal Reserve System arranged by federal funds
          brokers as published by the Federal Reserve Bank of New York for
          such day, or if such day is not a Business Day, for the next
          preceding Business Day (or, if such rate is not so published for
          any such day, the average rate charged to the Agent on such day
          on such transactions as reasonably determined by the Agent).

                    Fee(s):  as defined in subsection 2.7(d) hereof.

                    Financial Statements:  with respect to Parent, its
          consolidated: (i) audited Balance Sheet as at September 30,
          2000, together with the related audited Income Statement and
          Statement of Changes in Financial Position Cash Flow for the
          fiscal year then ended, and (ii) unaudited Balance Sheet as at
          June 30, 2001, together with the related unaudited Income
          Statement and Statement of Changes in Financial Position Cash
          Flow for the nine-month period then ended; provided that to the
          extent such financial statements are not the most recent
          financial statements furnished by the Borrowers pursuant to
          Section 5.1 or 5.2 of this Agreement, "Financial Statements"
          shall mean the most recent of the applicable consolidated and/or
          consolidating financial statements furnished by the Borrowers
          pursuant to such Section 5.1 or 5.2.

                    Fixed Base Rate:  with respect to any LIBOR Loan for
          any Interest Period therefor, LIBOR, as reasonably determined by
          the Agent.

                    Fixed Charge Coverage Ratio: as at any time of
          determination, the ratio of the following for the most recently
          completed four fiscal quarters of Parent: (i) EBIT to (ii)
          Interest Expense, each with respect to such most recently
          completed four fiscal quarters of Parent.

                                         9

                    Fixed Rate:  for any LIBOR Loan for any Interest
          Period therefor, the rate per annum (rounded upwards, if
          necessary, to the nearest 1/100 of 1%) determined by the Agent
          to be equal to (i) the Fixed Base Rate for such Loan for such
          Interest Period; divided by (ii) 1.00 minus the Reserve
          Requirement, if any, for such Loan for such Interest Period.
          The Agent shall use its best efforts to advise Parent of the
          Fixed Rate as soon as practicable after each change in the Fixed
          Rate; provided however, that the failure of the Agent to so
          advise Parent on any one or more occasions shall not affect the
          rights of the Banks or the Agent or the obligations of the
          Borrowers hereunder.

                    Foreign Subsidiary: each direct and indirect
          Subsidiary of Parent that is not a Domestic Subsidiary.

                    Frontage Fee: as defined in Section 2.7(c) hereof.

                    GAAP:  generally accepted accounting principles,
          consistently applied.
                    Governmental Acts:  as defined in Section 2.15(k)
          hereof.

                    Hazardous Materials: any toxic chemical, Hazardous
          Substances, contaminants or pollutants, medical wastes,
          infectious wastes, or hazardous wastes.

                    Hazardous Substance: as set forth in Section 101(14)
          of CERCLA or comparable provisions of state or local law.

                    Hazardous Waste: as set forth in the Resource
          Conservation and Recovery Act, 42 U.S.C. 9603(5), and the
          Environmental Protection Agency's implementing regulations, or
          state or local law.

                    Indebtedness:  with respect to any Borrower, all: (i)
          liabilities or obligations, direct and contingent, which in
          accordance with GAAP would be included in determining total
          liabilities as shown on the liability side of a balance sheet of
          such Borrower at the date as of which Indebtedness is to be
          determined, including, without limitation, contingent
          liabilities that in accordance with such principles, would be
          set forth in a specific Dollar amount on the liability side of
          such balance sheet, and Capitalized Lease Obligations of such
          Borrower; (ii) liabilities or obligations of others for which
          such Borrower is directly or indirectly liable, by way of
          guaranty (whether by direct guaranty, suretyship, discount,
          endorsement, agreement to purchase or advance or keep in funds
          or other agreement having the effect of a guaranty) or
          otherwise; (iii) liabilities or obligations secured by Liens on
          any assets of such Borrower, whether or not such liabilities or
          obligations shall have been assumed by it; and (iv) liabilities
          or obligations of such Borrower, direct or contingent, with

                                        10

          respect to letters of credit issued for the account of such
          Borrower and bankers acceptances created for such Borrower.

                    Insolvency Proceeding: with respect to any Person, (a)
          any case, action or proceeding with respect to such Person (i)
          before any court or any other Official Body under any
          bankruptcy, insolvency, reorganization or other similar Law now
          or hereafter in effect, or (ii) for the appointment of a
          receiver, liquidator, assignee, custodian, trustee,
          sequestrator, conservator (or similar official) of such Person
          or otherwise relating to liquidation, dissolution, winding-up or
          relief of such Person, or (b) any general assignment for the
          benefit of creditors, composition, marshaling of assets for
          creditors, or other, similar arrangement in respect of such
          Person's creditors generally or any substantial portion of its
          creditors; undertaken under any Law.

                    Interest Expense:  with respect to Parent and its
          Subsidiaries for the applicable period of determination thereof,
          the interest expense of Parent and its Subsidiaries during such
          period determined on a consolidated basis in accordance with
          GAAP.

                    Interest Period:  with respect to any LIBOR Loan, each
          period commencing on the date such Loan is made or converted
          from a Loan or Loans of another type, or the last day of the
          next preceding Interest Period with respect to such Loan, and
          ending on the same day in the first, second, third or sixth
          calendar month thereafter, as the Borrowers may select as
          provided in Section 2.2 hereof, except that each such Interest
          Period that commences on the last LIBOR Business Day of a
          calendar month (or on any day for which there is no numerically
          corresponding day in the appropriate subsequent calendar month)
          shall end on the last LIBOR Business Day of the appropriate
          subsequent calendar month.

                    Notwithstanding the foregoing: (i) each Interest
          Period that would otherwise end on a day that is not a LIBOR
          Business Day shall end on the next succeeding LIBOR Business Day
          or, if such next succeeding  LIBOR Business Day falls in the
          next succeeding calendar month, on the next preceding LIBOR
          Business Day); (ii) no more than seven Interest Periods shall be
          in effect at the same time; (iii) notwithstanding clause (iv)
          below, any Interest Period for any type of Loan that commences
          before the Commitment Termination Date shall end no later than
          the Commitment Termination Date; and (iv) no Interest Period
          shall have a duration of less than one month.  In the event that
          the Borrowers fail to select the duration of any Interest Period
          for any Loan within the time period and otherwise as provided in
          Section 2.2 hereof, such Loan will be automatically converted
          into an ABR Loan on the last day of the preceding Interest
          Period for such Loan.

                                        11

                    Interest Rate Contracts:  interest rate swap
          agreements, interest rate cap agreements, interest rate collar
          agreements, interest rate insurance and other agreements or
          arrangements designed to provide protection against fluctuation
          in interest rates, in each case, in form and substance
          satisfactory to the Agent and, in each case, with counter-
          parties satisfactory to the Agent.

                    Investment:  by any Borrower:

                    (a)  the amount paid or committed to be paid, or the
          value of property or services contributed or committed to be
          contributed, by such Borrower for or in connection with the
          acquisition by such Borrower of any stock, bonds, notes,
          debentures, partnership or other ownership interests or other
          securities of any other Person; and

                    (b)  the amount of any advance, loan or extension of
          credit by such Borrower, to any other Person, or guaranty or
          other similar obligation of such Borrower with respect to any
          Indebtedness of such other Person, and (without duplication) any
          amount committed to be advanced, loaned, or extended by such
          Borrower to any other Person, or any amount the payment of which
          is committed to be assured by a guaranty or similar obligation
          by such Borrower for the benefit of, such other Person.

                    IRS: Internal Revenue Service.

                    Joinder: an agreement in the form of Exhibit C hereto.

                    Latest Balance Sheet: as defined in subsection 3.9(a)
          hereof.

                    Law: any law (including common law), constitution,
          statute, treaty, regulation, rule, ordinance, opinion, release,
          ruling, order, injunction, writ, decree or award of any Official
          Body.

                    Leases:  leases and subleases (other than Capitalized
          Leases), licenses for the use of real property, easements,
          grants, and other attachment rights and similar instruments
          under which a Borrower has the right to use real or personal
          property or rights of way.

                    Letter of Credit: as defined in Section 2.15 hereof.

                    Letter of Credit Borrowing: an extension of credit
          resulting from a drawing under any Letter of Credit which shall
          not have been reimbursed on the date when made and shall not
          have been converted into an ABR Loan under Section 2.15(c).

                    Letter of Credit Fee: as defined in Section 2.7(c)
          hereof.

                                        12

                    Letter of Credit Outstandings: at any time the sum of
          (i) the aggregate undrawn face amount of all then outstanding
          Letters of Credit and (ii) the aggregate amount of all unpaid
          and then outstanding Reimbursement Obligations.

                    Leverage Ratio: the ratio of (i) the Borrowers' Total
          Funded Debt as at the time of determination, to (ii) the
          Borrowers' EBITDA with respect to the most recently completed
          four fiscal quarters of Parent, each measured on a consolidated
          basis.

                    LIBOR:  shall mean for any day during each Interest
          Period the per annum rate of interest (computed on a basis of a
          year of 360 days and actual days elapsed) estimated in good
          faith by the Agent in accordance with its usual procedures
          (which determination shall be conclusive) to be the average of
          the rate per annum for deposits, in an amount of U.S. Dollars
          comparable to the amount of principal relating to such Interest
          Period and having maturities comparable to such Interest Period,
          offered to major money center banks in the London interbank
          market at or about 11:00 a.m., London time, two (2) London
          business days prior to such Interest Period.

                    LIBOR Business Day: a Business Day on which dealings
          in Dollar deposits are carried out in the London interbank
          market.

                    LIBOR Loans: all Loans the interest on which is
          calculated on the basis of the rate referred to in the
          definition of Fixed Base Rate.

                    Lien:  any mortgage, deed of trust, pledge, security
          interest, encumbrance, lien or charge of any kind (including any
          agreement to give any of the foregoing), any conditional sale or
          other title retention agreement, any lease in the nature of any
          of the foregoing, and the filing of or agreement to give any
          financing statement under the Uniform Commercial Code of any
          jurisdiction.

                    Loan(s):  as defined in Section 2.1 hereof and
          including, without limitation, all ABR Loans made by the Banks
          pursuant to Section 2.15(c) hereof and all Letter of Credit
          Borrowings made pursuant to Section 2.15(e) hereof.  Loans of
          different types made or converted from Loans of other types on
          the same day (or of the same type but having different Interest
          Periods) shall be deemed to be separate Loans for all purposes
          of this Agreement.

                    Loan Documents:  this Agreement, the Notes and all
          other documents executed and delivered in connection herewith or
          therewith, including all amendments, modifications and
          supplements of or to all such documents.

                                        13

                    Loan Party:  each Borrower, any Domestic Subsidiary of
          a Borrower that has not yet become a Borrower pursuant to
          Section 7.13 hereof, and any other Person (other than the Banks
          and the Agent) which now or hereafter executes and delivers to
          any Bank or the Agent any
          Loan Document.

                    Material Adverse Effect:  a material adverse effect
          on: (i) the business, condition (financial or otherwise),
          assets, liabilities or operations of the Borrowers taken as a
          whole, (ii) the ability of the Borrowers (taken as a whole) to
          perform their obligations under any Loan Document to which the
          Borrowers are a party, or (iii) the validity or enforceability
          of this Agreement or the other Loan Documents or the rights or
          remedies of the Banks and/or the Agent hereunder or thereunder.

                    Multiemployer Plan: a "multiemployer plan" as defined
          in Section 4001(a)(3) of ERISA to which any Loan Party or any
          ERISA Affiliate is making, or is accruing an obligation to make,
          contributions or has made, or been obligated to make,
          contributions within the preceding six (6) years.

                    New Type Loans:  as defined in Section 2.25 hereof.

                    Non-Material Office: an office maintained by a
          Subsidiary of Parent that is utilized primarily as a sales
          office.

                    Note(s):   as defined in Section 2.4 hereof.

                    Obligations:  collectively, all of the Indebtedness,
          liabilities and obligations of the Borrowers to the Banks and
          the Agent, whether now existing or hereafter arising, whether or
          not currently contemplated, including, without limitation, those
          arising under the Loan
          Documents.

                    Official Body: any national, federal, state, local or
          other government or political subdivision or any agency,
          authority, bureau, central bank, commission, department or
          instrumentality of either, or any court, tribunal, grand jury or
          arbitrator, in each case whether foreign or domestic.

                    Parent:  J & J Snack Foods Corp., a New Jersey
          corporation.

                    Participation Advance: with respect to any Bank, such
          Bank's payment in respect of its participation in a Letter of
          Credit Borrowing according to its Ratable Share pursuant to
          Section 2.15(e) hereof.

                    Payor:  as defined in Section 2.19 hereof

                                        14

                    PBGC:  Pension Benefit Guaranty Corporation.

                    Pension Plan:  at any time an employee pension benefit
          plan that is covered by Title IV of ERISA or subject to the
          minimum funding standards under Section 412 of the Code and is
          maintained either: (i) by a Borrower or any ERISA Affiliate for
          employees of such Borrower, or by such Borrower for any ERISA
          Affiliate, or (ii) pursuant to a collective bargaining agreement
          or any other arrangement under which more than one employer
          makes contributions and to which such Borrower or any ERISA
          Affiliate is then making or accruing an obligation to make
          contributions or has within the preceding five (5) plan years
          made contributions.

                    Permitted Acquisition:  an Acquisition that satisfies
          each of the following
          conditions:(i) the entire business or assets acquired or
          business of the entity whose Capital Stock is acquired shall be
          substantially similar to a Borrower's line of business as
          conducted on the date hereof; (ii) the Acquisition Cost with
          respect to any one Acquisition shall not exceed $5,000,000;
          (iii) the Acquisition Cost of all Acquisitions the aggregate in
          any fiscal year of Parent which but for this clause would be
          Permitted Acquisitions shall not exceed $10,000,000; (iv) at the
          time of such Acquisition no Default or Event of Default exists
          and no Default or Event of Default would occur after giving
          effect to such Acquisition; (v) the Acquisition shall have the
          approval of the target company's board of directors (or similar
          governing body); (vi) the applicable Borrower shall have
          complied with any applicable state takeover law and any
          applicable super majority charter provisions; (vii) all
          governmental and third-party consents and approvals necessary in
          connection with each aspect of the Acquisition shall have been
          obtained (without the imposition of any unreasonable conditions)
          and shall remain in effect, except where the failure to obtain
          same could not reasonably be expected to have a Material Adverse
          Effect, all applicable waiting periods shall have expired or
          been terminated or waived without any material adverse action
          being taken by any authority having jurisdiction; and no law or
          regulation shall be applicable that restrains, prevents or
          imposes material adverse conditions upon any aspect of the
          Acquisition; and (viii) the Borrowers shall have delivered to
          the Agent, not less than 10 days prior to the consummation of
          such Acquisition, a certificate of a financial officer of the
          Borrower, in all respects reasonably satisfactory to the Agent
          and dated the date of such consummation, attaching a pro-forma
          compliance certificate (in a format satisfactory to the Bank)
          evidencing compliance with Section 6.9 of this Agreement (as the
          same may be amended from time to time) after giving effect to
          such Acquisition and based on the most recent financial
          statements delivered to the Bank pursuant to this Agreement;
          provided, that, as to such financial covenants (and any other

                                        15

          financial covenants now or hereafter applying to the facilities
          described in this Agreement), all of such covenants shall be
          deemed amended to require compliance as to the Borrowers with
          the entity acquired in the Acquisition.
                    Permitted Liens:  as to any Borrower: (i) pledges or
          deposits by such Borrower under workers' compensation laws,
          unemployment insurance laws, social security laws, or similar
          legislation, or good faith deposits in connection with bids,
          tenders, contracts (other than for the payment of Indebtedness
          of such Borrower), or leases to which such Borrower is a party,
          or deposits to secure public or statutory obligations of such
          Borrower or deposits of Cash or United States Government Bonds
          to secure surety, appeal, performance or other similar bonds to
          which such Borrower is a party, or deposits as security for
          contested taxes or import duties or for the payment of rent;
          (ii) Liens imposed by law, such as carriers', warehousemen's,
          materialmen's and mechanics' liens, or Liens arising out of
          judgments or awards against such Borrower with respect to which
          such Borrower at the time shall currently be prosecuting an
          appeal or proceedings for review; (iii) Liens for taxes not yet
          subject to penalties for non-payment and Liens for taxes the
          payment of which is being contested as permitted by Section 6.6
          hereof; (iv) minor survey exceptions, minor encumbrances,
          easements or reservations of, or rights of, others for rights of
          way, highways and railroad crossings, sewers, electric lines,
          telegraph and telephone lines and other similar purposes, or
          zoning or other restrictions as to the use of real properties;
          and (v) Liens incidental to the conduct of the business of such
          Borrower or to the ownership of such Borrower's property that
          were not incurred in connection with Indebtedness of such
          Borrower, all of which Liens referred to in the preceding clause
          (v) do not in the aggregate materially detract from the value of
          the properties to which they relate or materially impair their
          use in the operation of the business taken as a whole of such
          Borrower, and as to all the foregoing only to the extent arising
          and continuing in the ordinary course of business.

                    Person:  an individual, a corporation, a limited
          liability company, a partnership, a joint venture, a trust or
          unincorporated organization, a joint stock company or other
          similar organization, a government or any political subdivision
          thereof, a court, or any other legal entity, whether acting in
          an individual, fiduciary or other capacity.

                    Plan:  at any time an employee pension benefit plan
          that is covered by Title IV of ERISA or subject to the minimum
          funding standards under Section 412 of the Code and is either:
          (i) maintained by a Borrower or any member of the Controlled
          Group for employees of a Borrower, or by a Borrower for any
          other member of such Controlled Group, or (ii) maintained
          pursuant to a collective bargaining agreement or any other
          arrangement under which more than one employer makes
          contributions and to which a Borrower or any member of the

                                        16

          Controlled Group is then making or accruing an obligation to
          make contributions or has within the preceding five plan years
          made contributions.

                    Post-Default Rate: (i) in respect of any Loans a rate
          per annum equal to: (x) if such Loans are ABR Loans, 2% above
          the Alternate Base Rate as in effect from time to time plus the
          Applicable Margin for ABR Loans (but in no event less than the
          interest rate in effect on the due date), or (y) if such Loans
          are LIBOR Loans, 2% above the rate of interest in effect thereon
          at the time of the Event of Default that resulted in the Post-
          Default Rate being instituted until the end of the then current
          Interest Period therefor and, thereafter, 2% above the Alternate
          Base Rate as in effect from time to time plus the Applicable
          Margin for ABR Loans (but in no event less than the interest
          rate in effect on the due date); and (ii) in respect of other
          amounts payable by the Borrowers hereunder (other than interest)
          not paid when due (whether at stated maturity, by acceleration
          or otherwise), a rate per annum during the period commencing on
          the due date until such other amounts are paid in full equal to
          2% above the Alternate Base Rate as in effect from time to time
          plus the Applicable Margin for ABR Loans (but in no event less
          than the interest rate in effect on the due date).

                    Pricing Level:  Pricing Level I, Pricing Level II,
          Pricing Level III, or Pricing Level IV, as applicable.

                    Pricing Level I: the applicable Pricing Level at any
          time when the Leverage Ratio is less than or equal to 0.75 to
          l.00.

                    Pricing Level II:  the applicable Pricing Level at any
          time when the Leverage Ratio is greater than 0.75 to 1.00 but
          less than or equal to 1.25 to 1.00.

                    Pricing Level III:  the applicable Pricing Level at
          any time when the Leverage Ratio is greater than 1.25 to 1.00
          but less than or equal to 1.75 to 1.00.

                    Pricing Level IV:  the applicable Pricing Level at any
          time when the Leverage Ratio is greater than 1.75 to 1.00 but
          less than or equal to 2.25 to 1.00.

                    Primary Subsidiary Borrowers:  the Subsidiary
          Borrowers listed on Schedule
          3.1hereto as "Primary Subsidiary Borrowers".

                    Prime Rate:  the variable per annum rate of interest,
          calculated on the basis of a 360  day basis but charged on the
          actual number of days elapsed, equal to the rate of interest
          announced  from time to time by Citizens as its prime rate of
          interest at the Principal Office.  The Prime Rate is a reference
          rate and does not necessarily represent the lowest or best rate

                                        17

          being charged by Citizens to any borrower.  Each Borrower
          acknowledges that Citizens may regularly make domestic
          commercial loans at rates of interest less than the rate of
          interest referred to in the preceding sentence.  Each change in
          any interest rate provided for herein based upon the Prime Rate
          resulting from a change in the Prime Rate shall take effect as
          of the effective date of such change in the Prime Rate.

                    Principal Office:  the principal office of Citizens
          presently located at Mellon Gateway Center, 3025 Chemical Road,
          Suite 300, Plymouth Meeting, Pennsylvania 19462-1739.

                    Projections:  consolidated projections of Parent and
          its subsidiaries (in a format reasonably satisfactory to the
          Agent) prepared on the basis of the assumptions accompanying
          them and reflect as of the date thereof Parent's good faith
          projections, after reasonable analysis, of the matters set forth
          therein, based on such assumptions.

                    Purchase Money Security Interest:  as defined in
          subsection 7.2(c) hereof

                    Quarterly Dates:  the first day of each January,
          April, July and October, the first of which shall be the first
          such day after the date of this Agreement, provided that, if any
          such date is not a LIBOR Business Day, the relevant Quarterly
          Date shall be the next succeeding LIBOR Business Day (or, if the
          next succeeding LIBOR Business Day falls in the next succeeding
          calendar month, then on the next preceding LIBOR Business Day).

                    Ratable Share: the proportion that a Bank's Commitment
          bears to the Commitments of all of the Banks.

                    Regulation D: Regulation D of the Board of Governors
          of the Federal Reserve System, as the same may be amended or
          supplemented from time to time.

                    Regulatory Change:  as to any Bank, any change after
          the date of this Agreement in United States federal, state or
          foreign laws or regulations (including Regulation D and the laws
          or regulations that designate any assessment rate relating to
          certificates of deposit or otherwise (including the "Assessment
          Rate" if applicable to any Loan)) or the adoption or making
          after such date of any interpretations, directives or requests
          applying to a class of banks, including such Bank, of or under
          any United States federal, state or foreign laws or regulations
          (whether or not having the force of law) by any court or
          governmental or monetary authority charged with the
          interpretation or administration thereof.

                    Reimbursement Obligation: as defined in Section
          2.15(c) hereof.

                                        18

                    Release:   as set forth in Section 101(22) of CERCLA
          or state or local law.

                    Required Banks:  at any time while no Loans are
          outstanding hereunder, Banks having at least 51 % of the
          aggregate amount of the Commitments and, at any time while Loans
          are outstanding hereunder, Banks holding at least 51% of the
          outstanding aggregate principal amount of the Loans hereunder.

                    Required Payment:  as defined in Section 2.19 hereof.

                    Reserve Requirement:  for any LIBOR Loans for any
          quarterly period (or, as the case may be, shorter period) as to
          which interest is payable hereunder, the rate (rounded upward to
          the nearest 1/100 of 1%), as determined in good faith by the
          Agent (which determination shall be conclusive), as representing
          for such period the maximum effective percentage (or if more
          than one such percentage shall be applicable for such period,
          the daily average of such percentages for those days in such
          period during which any such percentage shall be so applicable)
          as prescribed by the Board of Governors of the Federal Reserve
          System (or any successor) for determining the reserve
          requirements (including without limitation supplemental,
          marginal and emergency reserve requirements) for the Banks with
          respect to liabilities or assets consisting of or including
          "Eurocurrency Liabilities" (as such term is defined in
          Regulation D of the Board of Governors of the Federal Reserve
          System, as in effect from time to time).  Without limiting the
          effect of the foregoing, the Reserve Requirement shall reflect
          any other reserves required to be maintained by such depository
          institutions by reason of any Regulatory Change against: (i) any
          category of liabilities that includes deposits by references to
          which the Fixed Base Rate for LIBOR Loans is to be determined as
          provided in the definition of "Fixed Base Rate" in this Article
          1, or (ii) any category of extensions of credit or other assets
          that include LIBOR Loans.

                    Standby Letter of Credit: a Letter of Credit issued to
          support obligations of one or more of the Borrowers, contingent
          or otherwise, which finance the working capital and business
          needs of such Borrower(s) incurred in the ordinary course of
          business.

                    Subordinated Debt:  unsecured Indebtedness for money
          borrowed in an amount satisfactory to the Required Banks which
          does not permit any payment or prepayment of the principal
          amount thereof or any interest accrued thereon prior to the
          payment in full of the Obligations and that is subordinated to
          such prior payment and is otherwise subordinated thereto under
          terms satisfactory in form and substance to the Required Banks,
          as evidenced by the Agent's written consent thereto given prior
          to the creation of such Indebtedness.

                                        19

                    Subsidiary:  with respect to any Person, any
          corporation, partnership or joint venture whether now existing
          or hereafter organized or acquired: (i) in the case of a
          corporation, of which a majority of the securities having
          ordinary voting power for the election of directors (other than
          securities having such power only by reason of the happening of
          a contingency) are at the time owned by such Person and/or one
          or more Subsidiaries of such Person, or (ii) in the case of a
          partnership or joint venture in which such Person is a general
          partner or joint venturer or of which a majority of the
          partnership or other ownership interests are at the time owned
          by such Person and/or one or more of its Subsidiaries.  Unless
          the context otherwise requires, references in this Agreement to
          "Subsidiary" or "Subsidiaries" shall be deemed to be references
          to a direct or indirect Subsidiary or Subsidiaries of Parent.

                    Subsidiary Borrower and Subsidiary Borrowers:  the
          Domestic Subsidiaries that have executed the signature pages
          hereto together with each Domestic Subsidiary that becomes a
          Borrower pursuant to the terms of this Agreement.

                    Tangible Net Worth:  the sum of capital surplus,
          earned surplus, Subordinated Debt and capital stock, minus
          deferred charges, intangibles, Affiliate Advances and treasury
          stock, all as determined in accordance with GAAP.

                    Termination Event:  any one of the following:

                    (a)  a "Reportable Event" described in Section 4043 of
          ERISA and the regulations issued thereunder;

                    (b)  the withdrawal of any Loan Party or any ERISA
          Affiliate from a Pension Plan during a plan year in which it was
          a "substantial employer" as defined in Section 4001(a)(2) of
          ERISA or was deemed such under Section 4068(f) of ERISA; or

                    (c)  the termination of a Pension Plan, the filing of
          a notice of intent to terminate a Pension Plan or the treatment
          of a Pension Plan amendment as a termination under Section 4041
          of ERISA;

                    (d)  the institution of proceedings to terminate a
          Pension Plan by the PBGC;

                    (e)  any other event or condition which would
          constitute grounds under Section 4042(a) of ERISA for the
          termination of, or the appointment of a trustee to administer,
          any Pension Plan;

                    (f)  the partial or complete withdrawal of any Loan
          Party or any ERISA Affiliate from a Multiemployer Plan;

                                        20

                    (g)  the imposition of a Lien pursuant to Section 412
          of the Code or Section 302 of ERISA;

                    (h)  any event or condition which results in the
          reorganization or insolvency of a Multiemployer Plan under
          Section 4241 or Section 4245 of ERISA, respectively; or

                    (i)  any event or condition which results in the
          termination of a Multiemployer Plan under Section 4041A of ERISA
          or the institution by the PBGC of proceedings to terminate a
          Multiemployer Plan under Section 4042 of ERISA.

                    Total Commitment:  the aggregate obligation of the
          Banks to make Loans hereunder not exceeding Fifty Million and
          00/100 ($50,000,000.00) Dollars, as the same shall and/or may be
          increased or reduced pursuant to Sections 2.1, 2.2 and 2.8
          hereof.

                    Total Funded Debt:  at any date of determination, the
          aggregate funded Indebtedness (as determined in accordance with
          GAAP) and Capitalized Lease Obligations of Parent and its
          Subsidiaries on a consolidated basis in accordance with GAAP, on
          such date.

                    Unused Commitment:  as at any date, for each Bank, the
          difference, if any, between: (i) the amount of such Bank's
          Commitment as in effect on such date, and (ii) the sum of (A)
          the then aggregate outstanding principal amount of all Loans
          made by such Bank and (B) such Bank's Ratable Share of all
          Letter of Credit Outstandings.

          Any accounting terms used in this Agreement that are not
          specifically defined herein shall have the meanings customarily
          given to them in accordance with GAAP as in effect on the date
          of this Agreement, except that references in Article 5 to such
          principles shall be deemed to refer to such principles as in
          effect on the date of the financial statements delivered
          pursuant thereto.

                             ARTICLE 2Commitments; Loans

               Section 2.1    Loans .
               Each Bank hereby severally agrees, on the terms and subject
          to the conditions of this Agreement, to make loans (individually
          a "Loan" and, collectively, the "Loans") to the Borrowers during
          the Credit Period to and including the Commitment Termination
          Date in an aggregate principal amount at any one time
          outstanding up to, but not exceeding, the Commitment of such
          Bank as then in effect less such Bank's Ratable Share of Letter
          of Credit Outstandings.  Subject to the terms of this Agreement,
          during the Credit Period the Borrowers may borrow, repay (
          provided that repayment of LIBOR Loans shall be subject to the

                                        21

          provisions of Section 2.26 hereof and the term of any such LIBOR
          Loan shall be one, two, three or six months) and reborrow up to
          the amount of the Total Commitment (after giving effect to the
          mandatory and voluntary reductions required and permitted
          herein) by means of ABR Loans or LIBOR Loans, and during such
          period and thereafter until the date of the payment in full of
          all of the Loans, the Borrowers may convert Loans of one type
          into Loans of another type (as provided in Section 2.21 hereof).

                                        22

               Section 2.2    Notices Relating to Loans .

               A Borrower shall give the Agent written notice of each
          termination or reduction of the Commitments, each borrowing,
          conversion and prepayment of each Loan and of the duration of
          each Interest Period applicable to each LIBOR Loan (in each
          case, a "Borrowing Notice").   Each such written notice shall be
          irrevocable and shall be effective only if received by the Agent
          not later than 11 a.m., New Jersey time, on the date that is:

                    (a)  In the case of each notice of termination or
          reduction, three Business Days prior to the date of the related
          termination or reduction.

                    (b)  In the case of each notice of borrowing or
          prepayment of, or conversion into, ABR Loans, one Business Day
          prior to the date of the related termination, reduction,
          borrowing, prepayment or conversion; and

                    (c)  In the case of each notice of borrowing or
          prepayment of, or conversion into, LIBOR Loans, or the duration
          of an Interest Period for LIBOR Loans, two LIBOR Business Days
          prior to the date of the related borrowing, prepayment, or
          conversion or the first day of such Interest Period.

          Each such notice of termination or reduction shall specify the
          amount thereof.  Each such notice of borrowing, conversion or
          prepayment shall specify the amount (subject to Section 2.1
          hereof) and type of Loans to be borrowed, converted or prepaid
          (and, in the case of a conversion, the type of Loans to result
          from such conversion), the date of borrowing, conversion or
          prepayment (which shall be: (x) a Business Day in the case of
          each borrowing or prepayment of ABR Loans, and (y) a LIBOR
          Business Day in the case of each borrowing or prepayment of
          LIBOR Loans and each conversion of or into a LIBOR Loan).  Each
          such notice of the duration of an Interest Period shall specify
          the Loans to which such Interest Period is to relate.  The Agent
          shall notify the Banks of the content of each such Borrowing
          Notice promptly after its receipt thereof.

               Section 2.3    Disbursement of Loan Proceeds .

               The Borrowers shall give the Agent notice of each borrowing
          hereunder as provided in Section 2.2 hereof.  Not later than
          11:00 a.m., Pennsylvania time, on the date specified for each
          borrowing hereunder, each Bank shall transfer to the Agent, by
          wire transfer or otherwise, but in any event in immediately
          available funds, the amount of the Loan to be made by it on such
          date, and the Agent, upon its receipt thereof, shall disburse
          such sum to the Borrowers by depositing the amount thereof in an
          account of any Borrower maintained with the Agent.

               Section 2.4    Notes .

                                        23

                    (a)  The Loans made by each Bank shall be evidenced by
          a single promissory note of the Borrowers, payable on a joint
          and several basis, in substantially the form of Exhibit A hereto
          (each, a "Note" and collectively, the "Notes").  Each Note shall
          be dated the date of the initial borrowing of the Loans under
          this Agreement, shall be payable to the order of such Bank in a
          principal amount equal to such Bank's Commitment as originally
          in effect, and shall otherwise be duly completed.  The Notes
          shall be payable as provided in Sections 2.1 and 2.5 hereof.

                    (b)  Each Bank shall enter on a schedule attached to
          its Note a notation with respect to each Loan made hereunder of
          (i) the date and principal amount thereof, (ii) each payment and
          prepayment of principal thereof, (iii) whether the interest rate
          is initially to be determined in accordance with subsection
          2.6(a)(i) or 2.6(a)(ii) hereof, and (iv) the Interest Period, if
          applicable.  The failure of any Bank to make a notation on the
          schedule to its Note as aforesaid shall not limit or otherwise
          affect the obligation of the Borrowers to repay the Loans in
          accordance with their respective terms as set forth herein.

               Section 2.5    Payment Applications .

                    (a)  The Loans: (i) shall be repaid as and when
          necessary to cause the aggregate principal amount of the Loans
          outstanding not to exceed each Bank's Commitment, as reduced
          pursuant to Section 2.8 hereof, and (ii) may be repaid at any
          time and from time to time, in whole or in part, without premium
          or penalty, upon prior written notice to the Agent as provided
          in Section 2.2 hereof, in integral multiples of $500,000 and any
          amount so repaid may, subject to the terms and conditions
          hereof, including the borrowing limitation imposed by the
          Commitments, be reborrowed hereunder during the Credit Period;
          provided however, that: (A) LIBOR Loans repaid prior to the last
          day of an Interest Period for such Loans shall be subject to the
          payment of any yield maintenance fee required by Section 2.26
          hereof, and (B) all repayments of Loans or any portion thereof
          shall be made together with payment of all interest accrued on
          the amount repaid through the date of such repayment.

                    (b)  Except as set forth in Sections 2.22, 2.23 and
          2.25 hereof, all payments and repayments made pursuant to the
          terms hereof shall be applied first to ABR Loans, and shall be
          applied to LIBOR Loans only to the extent any such payment
          exceeds the principal amount of ABR Loans outstanding at the
          time of such payment.

                    (c)  The Borrower may request a LIBOR Loan only if
          same would not result in the Interest Period with respect to
          such LIBOR Loan extending beyond the Commitment Termination
          Date.

                                        24

               Section 2.6    Interest .

                    (a)  The Borrowers shall pay to the Agent for the
          account of each Bank interest on the unpaid principal amount of
          each Loan made by such Bank for the period commencing on the
          date of such Loan until such Loan shall be paid in full, at the
          following rates per annum:

                                        25

                         (i)  During such periods that such Loan is a ABR
          Loan, the Alternate
          Base Rate plus the Applicable Margin; and

                         (ii) During such periods that such Loan is a
          LIBOR Loan, for each Interest Period relating thereto, the Fixed
          Rate for such Loan for such Interest Period plus the Applicable
          Margin for such Loan.

                    (b)  Notwithstanding the foregoing, whenever an Event
          of Default has occurred and is continuing, the Borrowers shall
          pay interest on any Loan, and on any other amount payable by the
          Borrower hereunder (to the extent permitted by law) for the
          period commencing on the occurrence of such Event of Default
          until such Event of Default has been cured or waived as
          acknowledged in writing by the Agent at the applicable Post-
          Default Rate.

                    (c)  Except as provided in the next sentence, accrued
          interest on each Loan shall
          be payable: (i) in the case of an ABR Loan, monthly on the first
          day of each month commencing
          with the first such date occurring after the date of each such
          Loan, (ii) in the case of a LIBOR Loan, on the last day of each
          Interest Period for such Loan (and, if such Interest Period
          exceeds three months' duration, quarterly, commencing on the
          first quarterly anniversary of the first day of such Interest
          Period), and (iii) in the case of any Loan, upon the payment or
          prepayment thereof or the conversion thereof into a Loan of
          another type (but only on the principal so paid, prepaid or
          converted).  Interest that is payable at the Post-Default Rate
          shall be payable from time to time on demand of the Agent.
          Promptly after the establishment of any interest rate provided
          for herein or any change therein, the Agent will notify the
          Banks and a Borrower thereof; provided, however, the failure of
          the Agent to so notify a Borrower or the Banks shall not affect
          the obligations of the Borrowers hereunder or under any of the
          Notes in any respect.

               Section 2.7    Fees .

                    (a)  The Borrowers shall, jointly and severally, pay
          to the Agent for the account of each Bank a commitment fee (the
          "Commitment Fee") on the daily average amount of such Bank's
          Unused Commitment, for the period from the date hereof to and
          including the earlier of the date such Bank's Commitment is
          terminated or the Commitment Termination Date, in an amount
          equal to the total Unused Commitment for such Bank multiplied by
          a rate per annum equal to 0.25%.  The accrued Commitment Fee
          shall be payable quarterly on the Quarterly Dates and on the
          earlier of the date the Commitments are terminated or the
          Commitment Termination Date, and, in the event the Borrowers

                                        26

          reduce the Commitment as provided in Section 2.8 hereof, on the
          effective date of such reduction.

                    (b)  The Borrowers shall, jointly and severally,  pay
          to the Agent an agency fee (the "Agency Fee") for services
          rendered by the Agent in its capacity as Agent hereunder in the
          amount and in the manner provided in that certain letter
          agreement between Parent and the Agent dated November 15, 2001
          (as such letter agreement may be amended, modified, replaced or
          supplemented from time to time).

                    (c)  The Borrowers shall, jointly and severally, pay
          (i) to the Agent for the ratable account of the Banks a fee (the
          "Letter of Credit Fee") equal to the Applicable Margin for
          Letters of Credit as calculated under Section 4.1.1(ii), and
          (ii) to the Agent for its own account a fronting fee (the
          "Frontage Fee") equal to 1/8% per annum, which fees shall be
          computed on the daily average Letters of Credit Outstanding
          based on a year of 360 days and shall be payable quarterly in
          arrears commencing with the first Business Day of each January,
          April, July and October following issuance of each Letter of
          Credit and on the Commitment Termination Date.  The Borrowers
          shall also, jointly and severally, pay to the Agent for the
          Agent's sole account the Agent's then in effect customary fees
          and administrative expenses payable with respect to the Letters
          of Credit as the Agent may generally charge or incur from time
          to time in connection with the issuance, maintenance,
          modification (if any), assignment or transfer (if any),
          negotiation, and administration of Letters of Credit.

                    (d)  The Commitment Fee, the Agency Fee, the Frontage
          Fee and the Letter of Credit Fee are hereinafter sometimes
          referred to individually as a "Fee" and collectively as the
          "Fees".

               Section 2.8    Changes in Commitment .

               The Borrowers shall be entitled to terminate or reduce the
          Commitments provided that Parent shall give notice of such
          termination or reduction to the Banks as provided in Section 2.2
          hereof and that any partial reduction of the Commitments shall
          be in an aggregate amount equal to $5,000,000 or an integral
          multiple of $1,000,000 for amounts in excess thereof.  Any such
          termination or reduction shall be permanent and irrevocable.
          Any reduction of the Total Commitment pursuant to this Section
          2.8 shall reduce permanently, on a pro rata basis, the amount of
          each Bank's Commitment then in effect, and (ii) shall be
          accompanied by a prepayment of the Loans outstanding and/or a
          termination and/or payment of the Letter of Credit Outstandings
          (as applicable) to the extent, if any, that the Facility Usage
          exceeds the amount of the Total Commitment as then reduced,
          together with payment in full of all accrued interest on the
          amount so prepaid to and including the dates of each such

                                        27

          prepayment, and payment in full of any amounts payable pursuant
          to Section 2.26 in connection therewith, and the payment in full
          of any unpaid Fees then accrued hereunder.  Any termination of
          the Total Commitment shall be accompanied by a prepayment in
          full of the Loans outstanding and a termination and/or payment
          in full of all Letter of Credit Outstandings (as applicable),
          together with payment in full of all accrued interest thereon to
          and including the date of prepayment, payment in full of any
          amounts payable pursuant to Section 2.26 in connection
          therewith, and payment in full of any unpaid Fees then accrued
          hereunder.

               Section 2.9    Use of Proceeds of Loans .

               The proceeds of the Loans hereunder may be used by the
          Borrowers to refinance existing Indebtedness owing to Fleet
          National Bank, National City Bank and Mellon Bank, N.A. and to
          provide availability for general corporate purposes, including
          working capital, capital expenditures, Permitted Acquisitions
          and permitted stock repurchases.

               Section 2.10   Computations .

               Interest on all Loans and each Fee shall be computed on the
          basis of a year of 360 days and actual days elapsed (including
          the first day but excluding the last) occurring in the period
          for
          which payable.

               Section 2.11   Minimum Amounts of Borrowings, Conversions,
          Prepayments and Interest Periods .

               Except for borrowings, conversions and prepayments that
          exhaust the full remaining amount of the Commitments (in the
          case of borrowings) or result in the conversion or prepayment of
          all Loans of a particular type (in the case of conversions or
          prepayments) or conversions made pursuant to Section 2.21,
          subsection 2.22(b) or Section 2.24 hereof, each borrowing from
          each Bank, each conversion of Loans of one type into Loans of
          another type and each prepayment of principal of Loans hereunder
          shall be in an amount at least equal to $100,000  in the case of
          ABR Loans or in integral multiples of $100,000 for amounts in
          excess thereof and $500,000 in the case of LIBOR Loans or in
          integral multiples of $100,000 for amounts in excess thereof
          (borrowings, conversions and prepayments of different types of
          Loans at the same time hereunder to be deemed separate
          borrowings, conversions and prepayments for purposes of the
          foregoing, one for each type).

                                        28

               Section 2.12   Time and Method of Payments .

               All payments of principal, interest, Fees and other amounts
          (including indemnities) payable by the Borrowers hereunder shall
          be made in Dollars, in immediately available funds, to the Agent
          at the Principal Office not later than 11:00 a.m., New Jersey
          time, on the date on which such payment shall become due (and
          the Agent or any Bank for whose account any such payment is to
          be made may, but shall not be obligated to, debit the amount of
          any such payment that is not made by such time to any ordinary
          deposit account of any Borrower with the Agent or such Bank, as
          the case may be).  Additional provisions relating to payments
          are set forth in Section 10.3 hereof.  Each payment received by
          the Agent hereunder for the account of a Bank shall be paid
          promptly to such Bank, in like funds, for the account of such
          Bank's Applicable Lending Office for the Loan in respect of
          which such payment is made.

               Section 2.13   Lending Offices .

               The Loans of each type made by each Bank shall be made and
          maintained at such Bank's Applicable Lending Office for Loans of
          such type.

                                        29

               Section 2.14   Several Obligations .

               The failure of any Bank to make any Loan to be made by it
          on the date specified therefor shall not relieve the other Banks
          of their respective obligations to make their Loans on such
          date, but no Bank shall be responsible for the failure of the
          other Banks to make Loans to be made by
          such other Banks.

               Section 2.15    Letter of Credit Subfacility.

                    (a)  A Borrower may request the issuance of a letter
          of credit (each a "Letter of Credit") on behalf of itself or
          another Borrower by delivering to the Agent a completed
          application and agreement for letter of credit in such form as
          the Agent may specify from time to time by no later than 10:00
          a.m., Philadelphia time, at least three (3) Business Days, or
          such shorter period as may be agreed to by the Agent, in advance
          of the proposed date of issuance.  Each Letter of Credit shall
          be a Standby Letter of Credit.  Subject to the terms and
          conditions hereof and in reliance on the agreements of the other
          Banks set forth in this Section 2.15, the Agent will issue a
          Letter of Credit provided that each Letter of Credit shall (i)
          have a maximum maturity of twelve (12) months from the date of
          issuance, and (ii) in no event expire later than one Business
          Day prior to the Commitment Termination Date and providing that
          in no event shall (i) the Letter of Credit Outstandings exceed,
          at any one time, $5,000,000 or (ii) the Facility Usage exceed,
          at any one time, the aggregate Commitments of the Banks then in
          effect.

                    (b)  Immediately upon the issuance of each Letter of
          Credit, each Bank shall be deemed to, and hereby irrevocably and
          unconditionally agrees to, purchase from the Agent a
          participation in such Letter of Credit and each drawing
          thereunder in an amount equal to such Bank's Ratable Share of
          the maximum amount available to be drawn under such Letter of
          Credit and the amount of such drawing, respectively.

                    (c)  In the event of any request for a drawing under a
          Letter of Credit by the beneficiary or transferee thereof, the
          Agent will promptly notify the Borrowers.  The Borrowers shall,
          jointly and severally, reimburse (such obligation to reimburse
          the Agent shall sometimes be referred to as a "Reimbursement
          Obligation") the Agent prior to 12:00 noon, Philadelphia time on
          each date that an amount is paid by the Agent under any Letter
          of Credit (each such date, an "Drawing Date") in an amount equal
          to the amount so paid by the Agent.  In the event the Borrowers
          fail to reimburse the Agent for the full amount of any drawing
          under any Letter of Credit by 11:00 a.m., Philadelphia time, on
          the Drawing Date, the Agent will promptly notify each Bank
          thereof, and the Borrowers shall be deemed to have requested
          that an ABR Loan be made by the Banks pursuant to Section 2.1

                                        30

          hereof in the full amount of the Reimbursement Obligation then
          outstanding, to be disbursed on the Drawing Date under such
          Letter of Credit, subject to the amount of the unutilized
          portion of the aggregate Commitments of the Banks then in effect
          and subject to the conditions set forth in Section 4.2 hereof
          other than any notice requirements.  Any notice given by the
          Agent pursuant to this Section 2.15(c) may be oral if
          immediately confirmed in writing; provided that the lack of such
          an immediate confirmation shall not affect the conclusiveness or
          binding effect of such notice.

                    (d)  Each Bank shall upon any notice pursuant to
          Section 2.15(c) make available to the Agent an amount in
          immediately available funds equal to its Ratable Share of the
          amount of the drawing, whereupon the participating Banks shall
          (subject to Section 2.15(e) each be deemed to have made an ABR
          Loan to the Borrowers in that amount.  If any Bank so notified
          fails to make available to the Agent for the account of the
          Agent the amount of such Bank's Ratable Share of such drawing by
          2:00 p.m., Philadelphia time on the Drawing Date, then interest
          shall accrue on such Bank's obligation to make such payment,
          from the Drawing Date to the date on which such Bank makes such
          payment, at a rate per annum equal to the Federal Funds Rate in
          effect from time to time during such period.  The Agent will
          promptly give notice of the occurrence of the Drawing Date, but
          failure of the Agent to give any such notice on the Drawing Date
          or in sufficient time to enable any Bank to effect such payment
          on such date shall not relieve such Bank from its obligation
          under this Section 2.15(d) (other than interest during the
          period it was not aware of such drawing).

                    (e)  With respect to any Reimbursement Obligation that
          is not converted into an ABR Loan to the Borrowers in whole or
          in part as contemplated by Section 2.15(c) because of the
          Borrowers' failure to satisfy the conditions set forth in
          Section 4.2 (other than any notice requirements) or for any
          other reason, the Borrowers shall be deemed to have incurred
          from the Agent a Letter of Credit Borrowing in the amount of
          such drawing.  Such Letter of Credit Borrowing shall be due and
          payable on demand (together with interest) and shall bear
          interest at the rate per annum applicable to the ABR Loans or,
          if applicable, the Default Rate.  Each Bank's payment to the
          Agent pursuant to Section 2.15(d) shall be deemed to be a
          payment in respect of its participation in such Letter of Credit
          Borrowing and shall constitute a Participation Advance from such
          Bank in satisfaction of its participation obligation under this
          Section 2.15.

                    (f)  Upon (and only upon) receipt by the Agent for its
          account of immediately available funds from the Borrowers (i) in
          reimbursement of any payment made by the Agent under the Letter
          of Credit with respect to which any Bank has made a
          Participation Advance to the Agent, or (ii) in payment of

                                        31

          interest on such a payment made by the Agent under such a Letter
          of Credit, the Agent will pay to each Bank, in the same funds as
          those received by the Agent, the amount of such Bank's Ratable
          Share of such funds, except the Agent shall retain the amount of
          the Ratable Share of such funds of any Bank that did not make a
          Participation Advance in respect of such payment by Agent.

                    (g)  If the Agent is required at any time to return to
          any Borrower, or to a trustee, receiver, liquidator, custodian,
          or any official in any Insolvency Proceeding, any portion of the
          payments made by any Borrower to the Agent pursuant to Section
          2.15(f) in reimbursement of a payment made under the Letter of
          Credit or interest or fee thereon, each Bank shall, on demand of
          the Agent, forthwith return to the Agent the amount of its
          Ratable Share of any amounts so returned by the Agent plus
          interest thereon from the date such demand is made to the date
          such amounts are returned by such Bank to the Agent, at a rate
          per annum equal to the Federal Funds Rate in effect from time to
          time.

                    (h)  Each Borrower agrees to be bound by the terms of
          the Agent's application and agreement for letters of credit and
          the Agent's written regulations and customary practices relating
          to letters of credit, though such interpretation may be
          different from the such Borrower's own.  In the event of a
          conflict between such application or agreement and this
          Agreement, this Agreement shall govern.  It is understood and
          agreed that, except in the case of  gross negligence or willful
          misconduct, the Agent shall not be liable for any error,
          negligence and/or mistakes, whether of omission or commission,
          in following any Borrower's instructions or those contained in
          the Letters of Credit or any modifications, amendments or
          supplements thereto.

                    (i)  In determining whether to honor any request for
          drawing under any Letter of Credit by the beneficiary thereof,
          the Agent shall be responsible only to determine that the
          documents and certificates required to be delivered under such
          Letter of Credit have been delivered and that they comply on
          their face with the requirements of such Letter of Credit.

                    (j)  Each Bank's obligation in accordance with this
          Agreement to make the ABR Loans or Participation Advances, as
          contemplated by this Section 2.15, as a result of a drawing
          under a Letter of Credit, and the Obligations of the Borrowers
          to reimburse the Agent upon a draw under a Letter of Credit,
          shall be absolute, unconditional and irrevocable, and shall be
          performed strictly in accordance with the terms of this Section
          2.15 under all circumstances, including the following
          circumstances:

                         (i)  any set-off, counterclaim, recoupment,
                              defense or other right which such Bank may

                                        32

                              have against the Agent, the Borrowers or any
                              other Person for any reason whatsoever;

                         (ii) the failure of any Borrower or any other
                              Person to comply, in connection with a
                              Letter of Credit Borrowing, with the
                              conditions set forth in this Agreement for
                              the making of an ABR Loan hereunder, it
                              being acknowledged that such conditions are
                              not required for the making of a Letter of
                              Credit Borrowing and the obligation of the
                              Banks to make Participation Advances under
                              this Section 2.15;

                              (iii)     any lack of validity or
                              enforceability of any Letter of Credit;

                         iv)  the existence of any claim, set-off, defense
                              or other right which any Borrower or any
                              Bank may have at any time against a
                              beneficiary or any transferee of any Letter
                              of Credit (or any Persons for whom any such
                              transferee may be acting), the Agent or any
                              Bank or any other Person or, whether in
                              connection with this Agreement, the
                              transactions contemplated herein or any
                              unrelated transaction (including any
                              underlying transaction between any Borrower
                              or Subsidiaries of a Borrower and the
                              beneficiary for which any Letter of Credit
                              was procured);

                              (v)  any draft, demand, certificate or other
                              document presented under any Letter of
                              Credit proving to be forged, fraudulent,
                              invalid or insufficient in any respect or
                              any statement therein being untrue or
                              inaccurate in any respect even if the Agent
                              has been notified thereof,

                              (vi) payment by the Agent under any Letter
                              of Credit against presentation of a demand,
                              draft or certificate or other document which
                              does not comply with the terms of such
                              Letter of Credit;

                              (vii)     any adverse change in the
                              business, operations, properties, assets,
                              condition (financial or otherwise) or
                              prospects of any Borrower or Subsidiaries of
                              a Borrower;

                                        33

                              (viii)    any breach of this Agreement or
                              any other Loan Document by any party
                              thereto;

                              (ix) the occurrence or continuance of an
                              Insolvency Proceeding with respect to any
                              Borrower;

                              (x)  the fact that an Event of Default or a
                              Default shall have occurred and be
                              continuing;

                              (xi) the fact that the Commitment
                              Termination Date shall have passed or this
                              Agreement or the Commitments hereunder shall
                              have been terminated; and

                              (xii)     any other circumstance or
                              happening whatsoever, whether or not similar
                              to any of the foregoing; provided that each
                              Bank's obligation to make ABR Loans under
                              this Section 2.15 is subject to the
                              conditions set forth in Section 4.2.

                    (k)  In addition to amounts payable as provided in
          Article 10 hereof, the Borrowers hereby, jointly and severally,
          agree to protect, indemnify, pay and save harmless the Agent and
          the Banks from and against any and all claims, demands,
          liabilities, damages, losses, costs, charges and expenses
          (including reasonable fees, expenses and disbursements of
          counsel and allocated costs of internal counsel) which the Agent
          or the Banks may incur or be subject to as a consequence, direct
          or indirect, of (i) the issuance of any Letter of Credit, other
          than as a result of (A) the gross negligence or willful
          misconduct of the Agent as determined by a final judgment of a
          court of competent jurisdiction or (B) subject to the following
          clause (ii), the wrongful dishonor by the Agent of a proper
          demand for payment made under any Letter of Credit (except upon
          the request of the Borrowers), or (ii) the failure of the Agent
          to honor a drawing under any such Letter of Credit as a result
          of any act or omission, whether rightful or wrongful, of any
          present or future de jure or de facto government or governmental
          authority (all such acts or omissions herein called
          "Governmental Acts").

                    (l)  (i)  As between any Borrower and the Agent, such
          Borrower assumes all risks of the acts and omissions of, or
          misuse of the Letters of Credit by, the respective beneficiaries
          of such Letters of Credit.  In furtherance and not in limitation
          of the foregoing, the Agent shall not be responsible for: (A)
          the form, validity, sufficiency, accuracy, genuineness or legal
          effect of any document submitted by any party in connection with
          the application for an issuance of any such Letter of Credit,

                                        34

          even if it should in fact prove to be in any or all respects
          invalid, insufficient, inaccurate, fraudulent or forged (even if
          the Agent shall have been notified thereof); (B) the validity or
          sufficiency of any instrument transferring or assigning or
          purporting to transfer or assign any such Letter of Credit or
          the rights or benefits thereunder or proceeds thereof, in whole
          or in part, which may prove to be invalid or ineffective for any
          reason; (C) the failure of the beneficiary of any such Letter of
          Credit, or any other party to which such Letter of Credit may be
          transferred, to comply fully with any conditions required in
          order to draw upon such Letter of Credit or any other claim of
          any Borrower against any beneficiary of such Letter of Credit,
          or any such transferee, or any dispute between or among any
          Borrower and any beneficiary of any Letter of Credit or any such
          transferee; (D) errors, omissions, interruptions or delays in
          transmission or delivery of any messages, by mail, cable,
          telegraph, telex or otherwise, whether or not they be in cipher;
          (E) errors in interpretation of technical terms; (F) any loss or
          delay in the transmission or otherwise of any document required
          in order to make a drawing under any such Letter of Credit or of
          the proceeds thereof; (G) the misapplication by the beneficiary
          of any such Letter of Credit of the proceeds of any drawing
          under such Letter of Credit; or (H) any consequences arising
          from causes beyond the control of the Agent, including any
          Governmental Acts, and none of the above shall affect or impair,
          or prevent the vesting of, any of the Agent's rights or powers
          hereunder.

                         (ii)  In furtherance and extension and not in
          limitation of the specific provisions set forth above, any
          action taken or omitted by the Agent under or in connection with
          the Letters of Credit issued by it or any documents and
          certificates delivered thereunder, if taken or omitted in good
          faith, shall not put the Agent under any resulting liability to
          the Borrowers or any Bank.

               Section 2.16   Intentionally Omitted .

               Section 2.17   Intentionally Omitted .

               Section 2.18   Pro Rata Treatment Among Banks .
               Except as otherwise provided herein: (i) each borrowing
          from the Banks under Section 2.1 hereof will be made from the
          Banks and each payment of each Fee (other than the Agency Fee
          and the Frontage Fee) shall be made for the account of the Banks
          pro rata according to their respective Unused Commitments; (ii)
          each partial reduction of the Total Commitment shall be applied
          to the Commitments of the Banks pro rata according to each
          Bank's respective Commitment; (iii) each conversion of Loans of
          a particular type under Section 2.21 hereof (other than
          conversions provided for by Section 2.24 or 2.25 hereof) will be
          made pro rata among the Banks holding Loans of such type

                                        35

          according to the respective principal amounts of such Loans held
          by such Banks; (iv) each payment and prepayment of principal of
          or interest on Loans of a particular type will be made to the
          Agent for the account of the Banks holding Loans of such type
          pro rata in accordance with the respective unpaid principal
          amounts of such Loans held by such Banks; and (v) Interest
          Periods for Loans of a particular type shall be allocated among
          the Banks holding Loans of such type pro rata according to the
          respective principal amounts of such Loans held by such Banks.

               Section 2.19   Non-Receipt of Funds by the Agent .

               Unless the Agent shall have been notified by a Bank or a
          Borrower (the "Payor") prior to the date on which such Bank is
          to make payment to the Agent of the proceeds of a Loan to be
          made by it hereunder or the Borrowers are to make a payment to
          the Agent for the account of one or more of the Banks, as the
          case may be (such payment being herein called the "Required
          Payment"), which notice shall be effective upon receipt, that
          the Payor does not intend to make the Required Payment to the
          Agent, the Agent may assume that the Required Payment has been
          made and may, in reliance upon such assumption (but shall not be
          required to), make the amount thereof available to the intended
          recipient on such date and, if the Payor has not in fact made
          the Required Payment to the Agent, the recipient of such payment
          shall, on demand, repay to the Agent the amount made available
          to it together with interest thereon in respect of each day
          during the period commencing on the date such amount was so made
          available by the Agent until the date the Agent recovers such
          amount at a rate per annum equal to the Federal Funds Rate for
          such day (when the recipient is a Bank) or equal to the rate of
          interest applicable to such Loan (when the recipient is a
          Borrower).

               Section 2.20   Sharing of Payments and Set-Off Among Banks
          .

               If a Bank shall effect payment of any principal of or
          interest on Loans held by it under this Agreement through the
          exercise of any right of set-off (including without limitation
          pursuant to Section 10.5 hereof), banker's lien, counterclaim or
          similar right, it shall promptly purchase from the other Banks
          participations in the Loans held by the other Banks in such
          amounts, and make such other adjustments from time to time as
          shall be equitable, to the end that all the Banks shall share
          the benefit of such payment pro rata in accordance with the
          unpaid principal and interest on the Loans held by each of them.
          To such end all the Banks shall make appropriate adjustments
          among themselves (by the resale of participations sold or
          otherwise) if such payment is rescinded or must otherwise be
          restored.  Each Borrower agrees that any Bank so purchasing a
          participation in the Loans held by the other Banks may exercise
          all rights of set-off, banker's lien, counterclaim or similar

                                        36

          rights with respect to such participation as fully as if such
          Bank were a direct holder of Loans in the amount of such
          participation.  Nothing contained herein shall require any Bank
          to exercise any such right or shall affect the right of any Bank
          to exercise and retain the benefits of exercising, any such
          right with respect to any other indebtedness or obligation of
          the Borrowers.

               Section 2.21   Conversions of Loans .

               The Borrowers shall have the right to convert Loans of one
          type into Loans of another type from time to time, provided
          that: (i) a Borrower shall give the Agent notice of each such
          conversion as provided in Section 2.2 hereof; (ii) LIBOR Loans
          may be converted only on the last day of an Interest Period for
          such Loans; and (iii) except as required by Sections 2.22 or
          2.25 hereof, no ABR Loan may be converted into a LIBOR Loan if
          on the proposed date of conversion a Default or an Event of
          Default exists.  The Agent shall use its best efforts to notify
          a Borrower of the effectiveness of such conversion, and the new
          interest rate to which the converted Loans are subject, as soon
          as practicable after the conversion; provided, however, that any
          failure to give such notice shall not affect the Borrowers'
          obligations, or the Agent's or the Banks' rights and remedies,
          hereunder in any way whatsoever.

               Section 2.22   Additional Costs; Capital Requirements .

                    (a)  In the event that any existing or future law or
          regulation, guideline or interpretation thereof, by any court or
          administrative or governmental authority (foreign or domestic)
          charged with the administration thereof, or compliance by any
          Bank with any request or directive (whether or not having the
          force of law) of any such authority shall impose, modify or deem
          applicable or result in the application of, any capital
          maintenance, capital ratio or similar requirement against loan
          commitments made by any Bank hereunder, and the result of any
          event referred to above is to impose upon any Bank or increase
          any capital requirement applicable as a result of the making or
          maintenance of, such Bank's Commitment or the obligation of the
          Borrowers hereunder with respect to such Commitment (which
          imposition of capital requirements may be determined by each
          Bank's reasonable allocation of the aggregate of such capital
          increases or impositions), then, upon demand made by such Bank
          as promptly as practicable after it obtains knowledge that such
          law, regulation, guideline, interpretation, request or directive
          exists and determines to make such demand, the Borrowers shall
          immediately pay to such Bank from time to time as specified by
          such Bank additional amounts which shall be sufficient to
          compensate such Bank for such imposition of or increase in
          capital requirements together with interest on each such amount
          at a rate per annum during the period (x) commencing on the date
          demanded until ten days thereafter equal to the Alternate Base

                                        37

          Rate as in effect from time to time plus the Applicable Margin
          for ABR Loans and (y) commencing on the date that is ten days
          after the date demanded until payment in full thereof at the
          Post-Default Rate.  A certificate setting forth in reasonable
          detail the amount necessary to compensate such Bank as a result
          of an imposition of or increase in capital requirements
          submitted by such Bank to a Borrower shall be conclusive, absent
          manifest error, as to the amount thereof.  For purposes of this
          Section 2.22, all references to any "Bank" shall be deemed to
          include any participant in such Bank's Commitment.

                    (b)  In the event that any Regulatory Change shall:
          (i) change the basis of taxation of any amounts payable to any
          Bank under this Agreement or the Notes in respect of any Loans
          including, without limitation, LIBOR Loans (other than taxes
          imposed on the overall net income of such Bank for any such
          Loans by the United States of America or the jurisdiction in
          which such Bank has its principal office); or (ii) impose or
          modify any reserve, Federal Deposit Insurance Corporation
          premium or assessment, special deposit or similar requirements
          relating to any extensions of credit or other assets of, or any
          deposits with or other liabilities of, such Bank (including any
          of such Loans or any deposits referred to in the definition of
          "Fixed Base Rate" in Article I hereof); or (iii) impose any
          other conditions affecting this Agreement in respect of Loans,
          including, without limitation, LIBOR Loans (or any of such
          extensions of credit, assets, deposits or liabilities); and the
          result of any event referred to in clause (i), (ii) or (iii)
          above shall be to increase such Bank's costs of making or
          maintaining any Loans, including, without limitation, LIBOR
          Loans, or its Commitment, or to reduce any amount receivable by
          such Bank hereunder in respect of any of its LIBOR Loans, or its
          Commitment (such increases in costs and reductions in amounts
          receivable are hereinafter referred to as "Additional Costs")
          in each case, only to the extent that such Additional Costs are
          not included in the Fixed Base Rate applicable to such LIBOR
          Loans, then, upon demand made by such Bank as promptly as
          practicable after it obtains knowledge that such a Regulatory
          Change exists and determines to make such demand (a copy of
          which demand shall be delivered to the Agent), the Borrowers
          shall pay to such Bank from time to time as specified by such
          Bank, additional amounts which shall be sufficient to compensate
          such Bank for such increased cost or reduction in amounts
          receivable by such Bank from the date of such change, together
          with interest on each such amount at a rate per annum during the
          period (x) commencing on the date demanded until ten days
          thereafter equal to the Alternate Base Rate as in effect from
          time to time plus the Applicable Margin for ABR Loans and (y)
          commencing on the date that is ten days after the date demanded
          until payment in full thereof at the Post-Default Rate.  All
          references to any "Bank" shall be deemed to include any
          participant in such Bank's Commitment.

                                        38

                    (c)  Without limiting the effect of the foregoing
          provisions of this Section 2.22, in the event that, by reason of
          any Regulatory Change, any Bank either: (i) incurs Additional
          Costs based on or measured by the excess above a specified level
          of the amount of a category of deposits or other liabilities of
          such Bank which includes deposits by reference to which the
          interest rate on LIBOR Loans is determined as provided in this
          Agreement or a category of extensions of credit or other assets
          of such Bank which includes LIBOR Loans, or (ii) becomes subject
          to restrictions on the amount of such a category of liabilities
          or assets that it may hold, then, if such Bank so elects by
          notice to a Borrower (with a copy to the Agent), the obligation
          of such Bank to make, and to convert Loans of any other type
          into, LIBOR Loans hereunder shall be suspended until the date
          such Regulatory Change ceases to be in effect (and all Loans of
          such type then outstanding shall be converted into ABR Loans in
          accordance with Sections 2.21 and 2.25 hereof).

                    (d)  Determinations by any Bank for purposes of this
          Section 2.22 of the effect of any Regulatory Change on its costs
          of making or maintaining Loans or on amounts receivable by it in
          respect of Loans, and of the additional amounts required to
          compensate such Bank in respect of any Additional Costs, shall
          be set forth in writing in reasonable detail and shall be
          conclusive, absent manifest error.

               Section 2.23   Limitation on Types of Loans .

               Anything herein to the contrary notwithstanding, if, on or
          prior to the determination of an interest rate for any LIBOR
          Loans for any Interest Period therefor, the Required Banks
          reasonably determine (which determination shall be conclusive):

                    (a)  by reason of any event affecting the money
          markets in the United States of America or the London interbank
          market, quotations of interest rates for the relevant deposits
          are not being provided in the relevant amounts or for the
          relevant maturities for purposes of determining the rate of
          interest for such Loans under this Agreement; or

                    (b)  the rates of interest referred to in the
          definition of "Fixed Base Rate" in Article I hereof upon the
          basis of which the rate of interest on any LIBOR Loans for such
          period is determined, do not accurately reflect the cost to the
          Banks of making or maintaining such
          Loans for such period, then the Agent shall give a Borrower and
          each Bank prompt notice thereof (and shall thereafter give a
          Borrower and each Bank prompt notice of the cessation, if any,
          of such condition), and so long as such condition remains in
          effect, the Banks shall be under no obligation to make LIBOR
          Loans or to convert any ABR Loans into LIBOR Loans and the
          Borrowers shall, on the last day(s) of the then current Interest
          Period(s) for the outstanding LIBOR Loans affected, either

                                        39

          prepay such LIBOR Loans in accordance with Section 2.11 hereof
          or convert such LIBOR Loans into ABR Loans in accordance with
          Section 2.21 hereof.

               Section 2.24   Illegality .

               Notwithstanding any other provision in this Agreement, in
          the event that it becomes unlawful for any Bank or its
          Applicable Lending Office to: (i) honor its obligation to make
          LIBOR Loans hereunder, or (ii) maintain LIBOR Loans hereunder,
          then such Bank shall promptly notify a Borrower thereof (with a
          copy to the Agent), describing such illegality in reasonable
          detail (and shall thereafter promptly notify a Borrower and the
          Agent of the cessation, if any, of such illegality), and such
          Bank's obligation to make LIBOR Loans and to convert other types
          of Loans into LIBOR Loans hereunder shall, upon written notice
          given by such Bank to a Borrower, be suspended until such time
          as such Bank may again make and maintain LIBOR Loans and such
          Bank's outstanding LIBOR Loans shall be converted into ABR Loans
          in accordance with Sections 2.21 and 2.25 hereof.

               Section 2.25   Certain Conversions pursuant to Sections
          2.22 and 2.24.

               If the Loans of any Bank of a particular type (Loans of
          such type are hereinafter referred to as "Affected Loans" and
          such type is hereinafter referred to as the "Affected Type") are
          to be converted pursuant to Section 2.22 or 2.24 hereof, such
          Bank's Affected Loans shall be converted into ABR Loans, or
          LIBOR Loans, as the case may be (the "New Type Loans") on the
          last day(s) of the then current Interest Period(s) for the
          Affected Loans (or, in the case of a conversion required by
          subsection 2.22(b) or Section 2.24 hereof, on such earlier date
          as such Bank may specify to a Borrower with a copy to the Agent)
          and, until such Bank gives notice as provided below that the
          circumstances specified in Section 2.22 or 2.24 hereof that gave
          rise to such conversion no longer exist:

                    (a)  to the extent that such Bank's Affected Loans
          have been so converted, all payments and prepayments of
          principal that would otherwise be applied to such Affected Loans
          shall be applied instead to its New Type Loans;

                    (b)  all Loans that would otherwise be made by such
          Bank as Loans of the Affected Type shall be made instead as New
          Type Loans and all Loans of such Bank that would otherwise be
          converted into Loans of the Affected Type shall be converted
          instead into (or shall remain as) New Type Loans; and

                    (c)  if Loans of any of the Banks other than such Bank
          that are the same type as the Affected Type are subsequently
          converted into Loans of another type (which type is other than
          New Type Loans), then such Bank's New Type Loans shall be

                                        40

          automatically converted on the conversion date into Loans of
          such other type to the extent necessary so that, after giving
          effect thereto, all Loans held by such Bank and the Banks whose
          Loans are so converted are held pro rata (as to principal
          amounts, types and, to the extent applicable, Interest Periods)
          in accordance with their respective Commitments.

               Section 2.26   Yield Maintenance .

                    The Borrowers shall pay to the Agent for the account
          of each Bank, upon the request of such Bank through the Agent,
          such amount or amounts as shall be sufficient (in the reasonable
          opinion of such Bank) to compensate it for any loss, cost, or
          expense incurred as a result of. (i) any payment of a LIBOR Loan
          on a date other than the last day of the Interest Period for
          such Loan; (ii) any failure by a Borrower to borrow a LIBOR Loan
          on the date specified by a Borrower's written notice; or (iii)
          any failure of a Borrower to pay a LIBOR Loan on the date for
          payment specified in a Borrower's written notice.  Without
          limiting the foregoing, the Borrowers shall pay to the Agent for
          the account of each such Bank, a "yield maintenance fee" in an
          amount computed as follows: The current rate for United States
          Treasury securities (bills on a discounted basis shall be
          converted to a bond equivalent) with a maturity date closest to
          the term chosen pursuant to the Fixed Rate Election as to which
          the prepayment is made, shall be subtracted from the Fixed Rate
          in effect at the time of prepayment.  If the result is zero or a
          negative number, there shall be no yield maintenance fee.  If
          the result is a positive number, then the resulting percentage
          shall be multiplied by the amount of the principal balance being
          prepaid.  The resulting amount shall be divided by 360 and
          multiplied by the number of days remaining in the term chosen
          pursuant to the Fixed Rate Election as to which the prepayment
          is made.  Said amount shall be reduced to present value
          calculated by using the above referenced United States Treasury
          securities rate and the number of days remaining in the term
          chosen pursuant to the Fixed Rate Election as to which
          prepayment is made.  The resulting amount shall be the yield
          maintenance fee due to each such Bank upon the payment of a
          LIBOR Loan.  Each reference in this paragraph to "Fixed Rate
          Election" shall mean the election by a Borrower of a Loan to
          bear interest based on the Fixed Rate.  If by reason of an Event
          of Default, the Agent and/or the Banks elect to declare the
          Loans and/or the Notes to be immediately due and payable, then
          any yield maintenance fee with respect to a LIBOR Loan shall
          become due and payable in the same manner as though the
          Borrowers have exercised such right of prepayment.

                       ARTICLE 3Representations and Warranties

               Each Borrower hereby represents and warrants to the Banks
          and the Agent that:

                                        41

               Section 3.1    Organization .

                    (a)  Each Borrower and each other Loan Party is duly
          organized and validly existing under the laws of its state of
          organization and has the power to own its assets and to transact
          the business in which it is presently engaged and in which it
          proposes to be engaged.  Schedule 3.1 hereto accurately and
          completely lists, as to each Borrower and each Subsidiary and
          each other Loan Party: (i) the state of incorporation or
          organization of each such entity, and the type of legal entity
          that each of them is, (ii) as to each of them that is a
          corporation, the classes and number of authorized and
          outstanding shares of capital stock of each such corporation,
          and the owners of such outstanding shares of capital stock,
          (iii) as to each of them that is a legal entity other than a
          corporation (but not a natural person), the type and amount of
          equity interests authorized and outstanding of each such entity,
          and the owners of such equity interests, and (iv) the business
          in which each of such entities is engaged.  All of the foregoing
          shares or other equity interests that are issued and outstanding
          have been duly and validly issued and are fully paid and non-
          assessable, and are owned by the Borrowers referred to on
          Schedule 3.1, free and clear of any Lien except as otherwise
          provided for herein.  Except as set forth on Schedule 3.1, there
          are no outstanding warrants, options, contracts or commitments
          of any kind entitling any Person to purchase or otherwise
          acquire any shares of Capital Stock or other equity interests of
          any Borrower or any Subsidiary or any other Loan Party nor are
          there outstanding any securities that are convertible into or
          exchangeable for any shares of capital stock or other equity
          interests of any Borrower or any Subsidiary or any other Loan
          Party.  Except as set forth on Schedule 3.1, neither any
          Borrower nor any Subsidiary nor any other Loan Party has any
          Subsidiary.  Each Subsidiary Borrower is a wholly owned
          Subsidiary of J&J Snack Foods Investment Corp. and J&J Snack
          Foods Investment Corp. is a wholly owned Subsidiary of Parent.
          Schedule 3.1 hereto accurately and completely lists each of the
          Primary Subsidiary Borrowers, which are those Subsidiary
          Borrowers that together with Parent accounted for not less than
          90% of Parent's consolidated net income (as determined in
          accordance with GAAP) for Parent's fiscal year ending September
          30, 2001.

                    (b)  Each Borrower and each other Loan Party is in
          good standing in its state of organization and in each state in
          which it is qualified to do business.  There are no
          jurisdictions other than as set forth on Schedule 3.1 hereto in
          which the character of the properties owned or proposed to be
          owned by any Borrower or any Subsidiary or any other Loan Party
          or in which the transaction of the business of any Borrower or
          any Subsidiary or any other Loan Party as now conducted or as
          proposed to be conducted requires or will require any Borrower
          or any Subsidiary or any other Loan Party to qualify to do

                                        42

          business and as to which failure so to qualify could have a
          Material Adverse Effect.

                    (c)  With respect to each Foreign Subsidiary, (i) each
          office maintained by each such Foreign Subsidiary is a Non-
          Material Office, (ii) such Foreign Subsidiaries do not own real
          and/or personal property that has a fair market value in excess
          of $750,000 with respect to all such property owned by such
          Foreign Subsidiaries in the aggregate, and (iii) such Foreign
          Subsidiaries do not in the aggregate account for more than 5% of
          Parent's consolidated net income (as determined in accordance
          with GAAP) for Parent's fiscal year ending September 30, 2001.

               Section 3.2    Power, Authority, Consents .

               Each Borrower and each other Loan Party has the power to
          execute, deliver and perform the Loan Documents to be executed
          by it.  Each Borrower has the power to borrow hereunder and has
          taken all necessary corporate action to authorize the borrowing
          hereunder on the terms and conditions of this Agreement.  Each
          Borrower and each other Loan Party has taken all necessary
          action, corporate or otherwise, to authorize the execution,
          delivery and performance of the Loan Documents to be executed by
          it.  No consent or approval of any Person (including, without
          limitation, any stockholder of any corporate Loan Party or any
          partner in any partnership Loan Party), no consent or approval
          of any landlord or mortgagee, no waiver of any Lien or right of
          distraint or other similar right and no consent, license,
          certificate of need, approval, authorization or declaration of
          any governmental authority, bureau or agency, is or will be
          required in connection with the execution, delivery or
          performance by any Borrower or any other Loan Party, or the
          validity, enforcement or priority, of the Loan Documents, except
          as set forth on Schedule 3.2 hereto, each of which either has
          been duly and validly obtained on or prior to the date hereof
          and is now in full force and effect, or is designated on
          Schedule 3.2 as waived by the Required Banks.

               Section 3.3    No Violation of Law or Agreements .

               The execution and delivery by each Borrower and each other
          Loan Party of each Loan Document to which it is a party and
          performance by it hereunder and thereunder, will not violate any
          provision of law and will not, except as set forth on Schedule
          3.2 hereto, conflict with or result in a breach of any order,
          writ, injunction, ordinance, resolution, decree, or other
          similar document or instrument of any court or governmental
          authority, bureau or agency, domestic or foreign, or any
          certificate of incorporation or by-laws of any Borrower or any
          other corporate Loan Party or partnership agreement or other
          organizational document or instrument of any Loan Party that is
          not a corporation, or create (with or without the giving of
          notice or lapse of time, or both) a default under or breach of

                                        43

          any agreement, bond, note or indenture to which any Borrower or
          any other Loan Party is a party, or by which any of them is
          bound or any of their respective properties or assets is
          affected, or result in the imposition of any Lien of any nature
          whatsoever upon any of the properties or assets owned by or used
          in connection with the business of any Borrower or any other
          Loan Party.

               Section 3.4     Due Execution, Validity, Enforceability .

               This Agreement and each other Loan Document to which any
          Loan Party is a party has been duly executed and delivered by
          the Loan Party that is a party thereto and each constitutes the
          valid and legally binding obligation of such Borrower or such
          other Loan Party that is a party thereto, enforceable in
          accordance with its terms, except as such enforcement may be
          limited by applicable bankruptcy, insolvency, reorganization,
          moratorium, or other similar laws, now or hereafter in effect,
          relating to or affecting the enforcement of creditors' rights
          generally and except that the remedy of specific performance and
          other equitable remedies are subject to judicial discretion.

               Section 3.5    Properties .

               All of the properties and assets owned by each Borrower and
          each Subsidiary and each other Loan Party are owned by each of
          them, respectively, free and clear of any Lien of any nature
          whatsoever, except as permitted by Section 7.2 hereof.

               Section 3.6     Judgements, Actions, Proceedings .

               Except as set forth on Schedule 3.6 hereto, there are no
          outstanding judgments, actions or proceedings, including,
          without limitation, any Environmental Proceeding, pending before
          any court or governmental authority, bureau or agency, with
          respect to or, to the best of each Borrower's knowledge,
          threatened against or affecting any Borrower or any Subsidiary
          or any other Loan Party, involving, in the case of any court
          proceeding, a claim in excess of $250,000, nor, to the best of
          each Borrower's knowledge, is there any reasonable basis for the
          institution of any such action or proceeding that is probable of
          assertion, nor are there any such actions or proceedings in
          which any Borrower or any Subsidiary or any other Loan Party is
          a plaintiff or complainant.

               Section 3.7    No Defaults, Compliance With Laws .

               Except as set forth on Schedule 3.7 hereto, no Borrower nor
          any Subsidiary nor any other Loan Party is in default under any
          agreement, ordinance, resolution, decree, bond, note, indenture,
          order or judgment to which it is a party or by which it is
          bound, or any other agreement or other instrument by which any
          of the properties or assets owned by it or used in the conduct

                                        44

          of its business is affected, which default could have a Material
          Adverse Effect.  Each Borrower and each Subsidiary has complied
          and is in compliance in all respects with all applicable laws,
          ordinances and regulations, resolutions, ordinances, decrees and
          other similar documents and instruments of all courts and
          governmental authorities, bureaus and agencies, domestic and
          foreign, including, without limitation, all applicable
          provisions of the Americans with Disabilities Act (42 U.S.C.
          12101-12213) and the regulations issued thereunder and all
          applicable Environmental Laws and Regulations, non-compliance
          with which could have a Material Adverse Effect.
               Section 3.8    Burdensome Documents .

               Except as set forth on Schedule 3.8 hereto, no Borrower nor
          any of the other Loan Parties is a party to or bound by, nor are
          any of the properties or assets owned by any Borrower or any
          other Loan Party used in the conduct of their respective
          businesses affected by, any agreement, ordinance, resolution,
          decree, bond, note, indenture, order or judgment, including,
          without limitation, any of the foregoing relating to any
          Environmental Liability, that materially and adversely affects
          their respective businesses, assets or conditions, financial or
          otherwise.

               Section 3.9    Financial Statements; Projections .

                    (a)  Each of the Financial Statements is correct and
          complete and presents fairly the consolidated financial position
          of Parent and its Subsidiaries taken as a whole, and each other
          entity to which it relates, as at its date, and has been
          prepared in accordance with GAAP.  No Borrower nor any of the
          Subsidiaries, nor any other entity to which any of the Financial
          Statements relates, has any material obligation, liability or
          commitment, direct or contingent (including, without limitation,
          any Environmental Liability), that is not reflected in the
          Financial Statements and if it were reflected in the Financial
          Statements would result in a Material Adverse Effect.  There has
          been no change in the financial position or operations of Parent
          or any of its Subsidiaries or any other entity to which any of
          the Financial Statements relates since the date of the latest
          balance sheet included in the Financial Statements (the "Latest
          Balance Sheet") that has resulted or may result in a Material
          Adverse Effect.  Parent's fiscal year is the twelve-month period
          ending on September 30th in each year.

                    (b)  The Projections have been prepared on the basis
          of the assumptions accompanying them and reflect as of the date
          thereof Parent's good faith projections, after reasonable
          analysis, of the matters set forth therein, based on such
          assumptions.

               Section 3.10   Tax Returns .

                                        45

               Each Borrower and each Subsidiary has filed all federal,
          state and local tax returns required to be filed by it and has
          not failed to pay any taxes, or interest and penalties relating
          thereto, on or before the due dates thereof.  Except to the
          extent that reserves therefor are reflected in the Financial
          Statements: (i) there are no material federal, state or local
          tax liabilities of Parent or any Subsidiary due or to become due
          for any tax year ended on or prior to the date of the Latest
          Balance Sheet relating to such entity, whether incurred in
          respect of or measured by the income of such entity, that are
          not properly reflected in the Latest Balance Sheet relating to
          such entity, and (ii) there are no material claims pending or,
          to the knowledge of any Borrower, proposed or threatened against
          any Borrower or any Subsidiary for past federal, state or local
          taxes, except those, if any, as to which proper reserves are
          reflected in the Financial Statements.

               Section 3.11   Intangible Assets .

               Each Borrower possesses all patents, trademarks, service
          marks, trade names, and copyrights, and rights with respect to
          the foregoing, necessary to conduct its business as now
          conducted and as proposed to be conducted, without any conflict
          with the patents, trademarks, service marks, trade names, and
          copyrights and rights with respect to the foregoing, of any
          other Person, and each of such patents, trademarks, service
          marks, trade names, copyrights and rights with respect thereto,
          together with any pending applications therefor, are listed on
          Schedule 3.11 hereto.

               Section 3.12   Regulation U .

               No part of the proceeds received by any Borrower or any
          Subsidiary from the Loans will be used directly or indirectly
          for: (a) any purpose other than as set forth in Section 2.9
          hereof, or (b) the purpose of purchasing or carrying, or for
          payment in full or in part of Indebtedness that was incurred for
          the purposes of purchasing or carrying, any "margin stock", as
          such term is defined in 221.3 of Regulation U of the Board of
          Governors of the Federal Reserve System, 12 C.F.R., Chapter 11,
          Part 221.

               Section 3.13   Intentionally Omitted .

               Section 3.14   Full Disclosure .

               None of the Financial Statements, the Projections, nor any
          certificate, opinion, or any other statement made or furnished
          in writing to the Agent or any Bank by or on behalf of any
          Borrower or any of the Subsidiaries or any other Loan Party in
          connection with this Agreement or the transactions contemplated
          herein, contains any untrue statement of a material fact, or
          omits to state a material fact necessary in order to make the

                                        46

          statements contained therein or herein not misleading, as of the
          date such statement was made.  There is no fact known to any
          Borrower that has, or would in the now foreseeable future have,
          a Material Adverse Effect, which fact has not been set forth
          herein, in the Financial Statements, the Projections, or any
          certificate, opinion or other written statement so made or
          furnished to the Agent or the Banks.

               Section 3.15   Licenses and Approvals .

               Each Borrower and each of the Subsidiaries has all
          necessary licenses, permits and governmental authorizations,
          including, without limitation, licenses, permits and
          authorizations arising under or relating to Environmental Laws
          and Regulations, to own and operate its properties and to carry
          on its business as now conducted.

               Section 3.16   Labor Disputes; Collective Bargaining
          Agreements; Employee Grievances .

               Except as set forth on Schedule 3.16 hereto: (a) there are
          no collective bargaining agreements or other labor contracts
          covering any Borrower or any Subsidiary; (b) no such collective
          bargaining agreement or other labor contract will expire during
          the term of this Agreement; (c) no union or other labor
          organization is seeking to organize, or to be recognized as
          bargaining representative for, a bargaining unit of employees of
          any Borrower or any Subsidiary; (d) there is no pending or
          threatened strike, work stoppage, material unfair labor practice
          claim or charge, arbitration or other material labor dispute
          against or affecting any Borrower or any Subsidiary or their
          representative employees; (e) there has not been, during the
          five (5) year period prior to the date hereof, a strike, work
          stoppage, material unfair labor practice claim or charge,
          arbitration or other material labor dispute against or affecting
          any Borrower or any
          Subsidiary or any of their representative employees, and (f)
          there are no actions, suits, charges, demands, claims,
          counterclaims or proceedings pending or, to the best of each
          Borrower's knowledge, threatened against any Borrower or any of
          the Subsidiaries, by or on behalf of, or with, its employees,
          other than employee grievances arising in the ordinary course of
          business that are not, in the aggregate, material.

               Section 3.17   Intentionally Omitted .

               Section 3.18   ERISA .

                    (a)  Except as disclosed on Schedule 3.18 hereto, no
          Employee Benefit Plan, including without limitation, any
          Multiemployer Plan, exists or has ever existed and neither any
          Loan Party nor any ERISA Affiliate is a participating employer
          in any Employee Benefit Plan in which more than one employer

                                        47

          makes contributions as described in Sections 4063 and 4064 of
          ERISA.  Except as disclosed on Schedule 3.18, no Loan Party nor
          any ERISA Affiliate has any contingent liability with respect to
          any post-retirement benefit under any Employee Welfare Benefit
          Plan which is a welfare plan (as defined in Section 3(l) of
          ERISA), other than liability for health plan continuation
          coverage described in Part 6 of Title I of ERISA, which together
          with any disclosed liability on Schedule 3.18, would not result
          in liability to any Loan Party or ERISA Affiliate.  The
          Borrowers have given to the Agent true and complete copies of
          all the following: (i) each Employee Benefit Plan and related
          trust agreement (including all amendments and commitments with
          respect to such Employee Benefit Plan or trust) which any Loan
          Party or ERISA Affiliate maintains or is committed to contribute
          to as of the date hereof and the most recent summary plan
          description, actuarial report, determination letter issued by
          the IRS and Form 5500 filed in respect of each such Employee
          Benefit Plan; and (ii) a listing of all of the Multiemployer
          Plans to which any Loan Party or ERISA Affiliate contributes or
          is committed to contribute and the aggregate amount of the most
          recent annual contributions required to be made to each such
          Multiemployer Plan, together with any information which has been
          provided to any Loan Party or ERISA Affiliate regarding
          withdrawal liability under any Multiemployer Plan and the
          collective bargaining agreement pursuant to which such
          contribution is required to be made.
                    (b)  Each Employee Benefit Plan complies, in both form
          and operation in all material respects, with its terms, ERISA
          and the Code including, without limitation, Code Section 4980B,
          and no condition exists or event has occurred with respect to
          any such plan which would result in the incurrence by any Loan
          Party or ERISA Affiliate of any material liability, fine or
          penalty.  No Loan Party nor any ERISA Affiliate has incurred any
          liability to the PBGC which remains outstanding other than the
          payment of premiums, and there are no premiums which have become
          due which are unpaid.  No Loan Party nor any ERISA Affiliate has
          engaged in any transaction which could subject it to liability
          under Section 4069 or Section 4212(c) of ERISA.  Each Employee
          Benefit Plan. related trust agreement, arrangement and
          commitment of each Loan Party and ERISA Affiliate is legally
          valid and binding in full force and effect.  Each Employee
          Benefit Plan that is intended to be qualified under Section
          401(a) of the Code has been determined by the IRS to be so
          qualified, and each trust related to such plan has been
          determined to be exempt under Section 501(a) of the Code.  To
          the knowledge of any Loan Party, nothing has occurred or is
          expected to occur that would adversely affect the qualified
          status of the Employee Benefit Plan or any related trust
          subsequent to the issuance of such determination letter.  No
          Employee Benefit Plan is being audited or investigated by any
          government agency or subject to any pending or threatened claim
          or suit.

                                        48

                    (c)  Each Pension Plan currently meets and always has
          met the minimum funding standard of Section 302 of ERISA and
          Section 412 of the Code (without regard to any funding waiver).
          All contributions or payments due and owing as required by
          Section 302 of ERISA, Section 412 of the Code or the terms of
          any Pension Plan have been made by the due date for such
          contributions or payments.  With respect to each Multiemployer
          Plan, each Loan Party and each ERISA Affiliate has paid or
          accrued all contributions pursuant to the terms of the
          applicable collective bargaining agreement required to be paid
          or accrued by it.  With respect to each Pension Plan, the market
          value of assets (exclusive of any contribution due to the
          Pension Plan) equals or exceeds the present value of benefit
          liabilities as of the latest actuarial valuation date for such
          plan (but not prior to 12 months prior to the date hereof),
          determined on the basis of a shutdown of the company in
          accordance with actuarial assumptions used by the PBGC in
          single-employer plan terminations and since its last valuation
          date, there have been no amendments to such plan that materially
          increased the present value of accrued benefits nor any other
          material adverse changes in the funding status of such plan.
          Neither any Loan Party nor any ERISA Affiliate is required to
          provide security to a Pension Plan pursuant to Section 307 of
          ERISA or Section 401(a)(29) of the Code.

                    (d)  Neither any Loan Party nor any ERISA Affiliate
          nor any fiduciary of any
          Employee Benefit Plan has engaged in a prohibited transaction
          under Section 406 of ERISA or
          Section 4975 of the Code.  The execution, delivery and
          performance of the terms of any agreements that are related to
          this transaction will not constitute a prohibited transaction
          under the aforementioned sections.

                                        49

                    (e)  No Termination Event has occurred or is
          reasonably expected to occur.

                    (f)  None of the following "reportable events" are
          which subject to the 30-day notice requirement of Section
          4043(b) of ERISA in respect of any of the Pension Plans has
          occurred: (i) an inability to pay benefits when due, (ii)
          bankruptcy or insolvency of the sponsor of the Pension Plan,
          (iii) liquidation or dissolution of the sponsor of the Pension
          Plan, (iv) a failure to meet the minimum funding standards, or
          (v) certain transactions involving a change of employer.  No
          Loan Party has received any notice from the PBGC that any of the
          Pension Plans is being involuntarily terminated or from the
          Secretary of the Treasury of the United States of America that
          any partial or full termination of any of the Employee Benefit
          Plans has occurred and no event shall have occurred, and there
          shall exist as of the date hereof no condition or set of
          circumstances which present a material risk of the involuntary
          termination of any of the Pension Plans.

                    (g)  There are no agreements which will provide
          payments to any officer, employee, shareholder or highly
          compensated individual which will be "parachute payments" under
          Section 28OG of the Code that are nondeductible to any Loan
          Party and which will be subject to the tax under Section 4999 of
          the Code for which any Loan Party would have a material
          withholding liability.

                    (h)  All references to a Borrower or Loan Party in
          this Section 3.18 or in any other Section of this Agreement
          relating to ERISA shall be deemed to refer to each Borrower or
          Loan Party, as applicable, and any other entity which is
          considered an ERISA Affiliate.

                          ARTICLE 4Conditions to the Loans

               Section 4.1    Conditions to Initial Loans .
               The obligation of each Bank to make the initial Loan to be
          made by it hereunder shall be subject to the fulfillment (to the
          satisfaction of the Agent) of the following conditions
          precedent:

                    (a)  The Borrowers shall have executed and delivered
          to each Bank their Note.

                    (b)  The Borrowers shall have paid to the Agent the
          Agency Fee.

                    (c)  Blank Rome Comisky & McCauley, counsel to the
          Borrowers, shall have
          delivered its opinion to, and in form and substance reasonably
          satisfactory to, the Agent.

                                        50

                    (d)  The Agent shall have received copies of the
          following:

                         (i)  All of the consents, approvals and waivers
          refer to on Schedule 3.2 hereto (except only those which, as
          stated on Schedule 3.2, shall not be delivered);
                         (ii) The certificates of incorporation of each
          Borrower, certified by the Secretary of State of their
          respective states of incorporation;

                         (iii)     The by-laws of each Borrower, certified
          by their respective secretaries;

                         (iv) All corporate action taken by each Borrower
          to authorize the execution, delivery and performance of each of
          the Loan Documents and the transactions contemplated thereby,
          certified by their respective secretaries;

                         (v)  Good standing certificates generally as of
          dates not more than twenty (20) days prior to the date of the
          initial Loan, with respect to Parent and each Primary Subsidiary
          Borrower, from the Secretary of State of their respective states
          of incorporation;

                         (vi) An incumbency certificate (with specimen
          signatures) with
          respect to each Borrower; and

                         (vii)     Evidence of property and casualty
          insurance and liability insurance.

                    (e)  (i)  Each Borrower shall have complied and shall
          then be in compliance with all of the terms, covenants and
          conditions of this Agreement;

                         (ii) After giving effect to the initial Loan,
          there shall exist no Default or Event of Default hereunder;

                         (iii)     The representations and warranties
          contained in Article 3 hereof shall be true and correct on the
          date hereof; and

                         (iv) The Agent shall have received a Compliance
          Certificate dated the date hereof certifying, inter alia, that
          the conditions set forth in this subsection 4.1(e) are satisfied
          on such date.

                    (f)  All legal matters incident to the initial Loans
          shall be satisfactory to counsel to the Agent.

                                        51

               Section 4.2    Conditions to Subsequent Loans .

               The obligation of each Bank to make each Loan subsequent to
          its initial Loan shall be subject to the fulfillment (to the
          satisfaction of the Agent) of the following conditions
          precedent:

                    (a)  The Agent shall have received a Borrowing Notice
          in accordance with Section 2.3 hereof together with a
          certification that:

                         (i)  The representations and warranties made by
          the Borrowers herein or which are contained in any certificate,
          document or financial or other statement furnished at any time
          under or in connection herewith, shall be correct on and as of
          the borrowing date for such Loan as if made on and as of such
          date; and

                         (ii) No Default or Event of Default shall have
          occurred and be continuing on the date a Loan is to be made or
          after giving effect to the Loan to be made on such date.

                    (b)  All legal matters incident to such Loan shall be
          satisfactory to counsel for the Agent.

          ARTICLE 5Delivery of Financial Reports, Documents and Other

          Information.
               While the Commitments are outstanding, and, in the event
          any Loan remains outstanding, so long as any Borrower is
          indebted to the Banks or the Agent and until payment in full of
          the Notes and full and complete performance of all of their
          other obligations arising hereunder, the Borrowers shall deliver
          to each Bank:

               Section 5.1    Annual Financial Statements and
          Projections.

               Annually, as soon as available, (i) but in any event within
          ninety (90) days after the last day of each of its fiscal years,
          a consolidated and consolidating balance sheet of Parent and the
          Subsidiaries as at such last day of the fiscal year, and
          consolidated and consolidating statements of income and retained
          earnings and statements of cash flow, for such fiscal year, each
          prepared in accordance with GAAP, in reasonable detail, and
          audited and certified without qualification by Grant Thornton,
          LLP, or another firm of independent certified public accountants
          satisfactory to the Agent,  as fairly presenting the financial
          position and the results of operations of Parent and the
          Subsidiaries as at and for the year ending on its date and as
          having been prepared in accordance with GAAP, and (ii) on or

                                        52

          before each November 15th, Projections for the then upcoming
          fiscal year.

               Section 5.2    Quarterly Financial Statements .

               As soon as available, but in any event within forty-five
          (45) days after the end of the Parent's first three fiscal
          quarterly periods, a consolidated and consolidating balance
          sheet of Parent and the Subsidiaries as of the last day of such
          quarter and consolidated and consolidating statements of income
          and retained earnings and statements of cash flow, for such
          quarter, and on a comparative basis figures for the
          corresponding period of the immediately preceding fiscal year,
          all in reasonable detail, each such statement to be certified in
          a certificate of the chief financial or accounting officer of
          Parent as accurately presenting the financial position and the
          results of operations of Parent and the Subsidiaries as at its
          date and for such quarter and as having been prepared in
          accordance with GAAP (subject to year-end audit adjustments).
               Section 5.3    Compliance Information.

               Promptly after a written request therefor, such other
          financial data or information evidencing compliance with the
          requirements of this Agreement, the Notes and the other Loan
          Documents, as any Bank may reasonably request from time to time.

               Section 5.4    No Default Certificate .

               At the same time as it delivers the financial statements
          required under the provisions of Sections 5.1 and 5.2 hereof, a
          certificate of the president and the chief financial or
          accounting officer of Parent to the effect that no Event of
          Default hereunder and that no default under any other agreement
          to which any Borrower or any of the Subsidiaries is a party or
          by which it is bound, or by which, to the best knowledge of any
          Borrower or any Subsidiary, any of its properties or assets,
          taken as a whole, may be materially affected, and no event
          which, with the giving of notice or the lapse of time, or both,
          would constitute such an Event of Default or default, exists,
          or, if such cannot be so certified, specifying in reasonable
          detail the exceptions, if any, to such statement.  Such
          certificate shall be accompanied by a detailed calculation
          indicating compliance with the covenants contained in Sections
          6.9 and 7.13 hereof.

               Section 5.5    Certificate of Accountants .

               At the same time as it delivers the financial statements
          required under the provisions of Section 5.1 hereof, a
          certificate of the independent certified public accountants of
          Parent addressed specifically to both Parent and the Agent to
          the effect that during the course of their audit of the
          operations of Parent and its condition as of the end of the

                                        53

          fiscal year, nothing has come to their attention which would
          indicate that a Default or an Event of Default hereunder has
          occurred or that there was any violation of the covenants of the
          Borrowers contained in Section 6.9 or Article 7 of this
          Agreement, or, if such cannot be so certified, specifying in
          reasonable detail the exceptions, if any, to such statement.

               Section 5.6    Accountants' Reports .

               Promptly upon receipt thereof, copies of each management
          letter and each other written report submitted to any and/or all
          of the Borrowers by its independent accountants in connection
          with any annual or interim audit or review of the books of
          Parent and/or all or any of the Borrowers made by such
          accountants.

               Section 5.7    Copies of Documents .

               Promptly upon their becoming available, and in all events
          within ten (10) days of any such filing, copies of any: (i)
          financial statements, projections, non-routine reports, notices
          (other than routine correspondence), requests for waivers and
          proxy statements, in each case, delivered by any Borrower or any
          of the Subsidiaries to any lending institution other than the
          Banks; (ii) correspondence or notices received by any Borrower
          from any federal, state or local governmental authority that
          regulates the operations of the Borrowers or any of its
          Subsidiaries, relating to an actual or threatened change or
          development that would be materially adverse to any Borrower or
          any Subsidiary; (iii) registration statements and any amendments
          and supplements thereto, and any regular and periodic reports,
          if any, filed by any Borrower or any of its Subsidiaries with
          any securities exchange or with the Securities and Exchange
          Commission or any governmental authority succeeding to any or
          all of the functions of the said Commission and (iv) letters of
          comment or correspondence sent to any Borrower or any of its
          Subsidiaries by any such securities exchange or such Commission
          in relation to any Borrower or any of its Subsidiaries.

               Section 5.8    Notices of Defaults .

               Promptly, notice of the occurrence of any Default or Event
          of Default, or any event that would constitute or cause a
          material adverse change in the condition, financial or
          otherwise, or the operations of any Borrower or any of the
          Subsidiaries.

               Section 5.9    ERISA Notices and Requests .

               Notice of each of the following within ten (10) days after
          such event or occurrence:

                                        54

                    (a)   any Loan Party or ERISA Affiliate knowing or
          having reason to know that a Termination Event has occurred or
          that a Defined Contribution Plan has been terminated or
          partially terminated, together with a written statement by the
          appropriate chief financial officer setting forth the details of
          such event;

                    (b)   the filing of a request for a funding waiver by
          any Loan Party or ERISA Affiliate with respect to any Pension
          Plan, and a copy of such request and all communications received
          by any Loan Party or ERISA Affiliate with respect to such
          request;

                    (c)   receipt by any Loan Party or ERISA Affiliate of
          a notice of the PBGC's intent to terminate a Pension Plan, and a
          copy of such notice;

                    (d)  the failure of any Loan Party or ERISA Affiliate
          to make a required installment or payment under Section 302 of
          ERISA or Section 412 of the Code by the applicable due date
          thereof, together with a written notice of such failure;

                    (e)  any Loan Party or ERISA Affiliate knowing or
          having reason to know that a prohibited transaction (as defined
          in Section 406 of ERISA or Section 4975 of the Code) has
          occurred with respect to any Employee Benefit Plan, and a
          written statement by the appropriate chief financial officer
          setting forth the details of such transaction and the action
          taken with respect thereto;

                    (f)  any increase in the benefits of any existing
          Employee Benefit Plan or the establishment of any new Employee
          Benefit Plan or the commencement of contributions to any
          Employee Benefit Plan to which any Loan Party or ERISA Affiliate
          had not theretofore been contributing, together with a written
          notice of such occurrence;

                    (g)  receipt by any Loan Party or ERISA Affiliate of
          any favorable or unfavorable determination letter from the IRS
          regarding the qualification of a Pension Plan under Section
          401(a) of the Code, together with a copy of such letter;

                    (h)  the filing of an annual report (Form 5500
          series), including Schedule B thereto, filed by any Loan Party
          or ERISA Affiliate with respect to an Employee Benefit Plan,
          together with a copy of such report;

                    (i)  receipt by any Loan Party or ERISA Affiliate of
          an actuarial report for any Pension Plan, together with a copy
          of such report;

                    (j)   receipt by any Loan Party or ERISA Affiliate of
          all correspondence with the PBGC, the Secretary of Labor of the

                                        55

          United States of America or any representative of the IRS with
          respect to any Employee Benefit Plans, relating to an actual or
          threatened change or development which would be materially
          adverse to any Borrower or any ERISA Affiliate; and

                    (k)  receipt by any Loan Party or ERISA Affiliate of
          any correspondence from a Multiemployer Plan with respect to
          withdrawal liability.

               Section 5.10   Intentionally Omitted .

               Section 5.11   Additional Information .
               Such other information regarding the business, affairs and
          condition of the Borrowers and the Subsidiaries as the Agent,
          may from time to time reasonably request.

                          ARTICLE 6 Affirmative Covenants.

               While the Commitments are outstanding, and, in the event
          any Loan remains outstanding, so long as any Borrower is
          indebted to the Banks or the Agent, and until payment in full of
          the Notes and full and complete performance of all of their
          other obligations arising hereunder, the Borrowers shall and
          shall cause each Subsidiary to:

               Section 6.1    Books and Records .

               Keep proper books of record and account in a manner
          reasonably satisfactory to the Agent in which full, true and
          correct entries shall be made of all dealings or transactions in
          relation to its business and activities.
               Section 6.2    Inspections and Audits .

               Permit the Banks to make or cause to be made (at the
          expense of the Banks except that, after the occurrence of and
          during the continuance of an Event of Default, at the Borrowers'
          expense), inspections and audits of any books, records and
          papers of each Borrower and each of the Subsidiaries and to make
          extracts therefrom and copies thereof, or to make inspections
          and examinations of any properties and facilities of the
          Borrowers and the Subsidiaries, on reasonable
          notice, at all such reasonable times and as often as any Bank
          may reasonably require, in order to assure that the Borrowers
          are and will be in compliance with its obligations under the
          Loan Documents or to evaluate the Banks' investment in the then
          outstanding Notes.

               Section 6.3    Maintenance and Repairs .

               Maintain in good repair, working order and condition,
          subject to normal wear and tear, all

                                        56

          material properties and assets from time to time owned by it and
          used in or necessary for the operation of its business, and make
          all reasonable repairs, replacements, additions and improvements
          thereto.

               Section 6.4    Continuance of Business .

               Do, or cause to be done, all things reasonably necessary to
          preserve and keep in full force and effect its corporate
          existence and all permits, rights and privileges necessary for
          the proper conduct of its business and continue to engage in the
          same line of business and comply in all material respects with
          all applicable laws, regulations and orders.

               Section 6.5    Copies of Corporate Documents .

               Subject to the prohibitions set forth in Section 7.12
          hereof, promptly deliver to the Agent copies of any amendments
          or modifications to its and any Subsidiary's certificate of
          incorporation and by-laws, certified with respect to the
          certificate of incorporation by the Secretary of State of its
          state of incorporation and, with respect to the by-laws, by the
          secretary or assistant secretary of such corporation.

               Section 6.6    Perform Obligations .

               Pay and discharge all of its material obligations and
          liabilities, including, without limitation, all taxes,
          assessments and governmental charges upon its income and
          properties when due, unless and to the extent only that such
          obligations, liabilities, taxes, assessments and governmental
          charges shall be contested in good faith and by appropriate
          proceedings and that, to the extent required by GAAP then in
          effect, proper and adequate book reserves relating thereto are
          established by the Borrowers, or, as the case may be, by the
          appropriate Subsidiary, and then only to the extent that a bond
          is filed in cases where the filing of a bond is necessary to
          avoid the creation of a Lien against any of its properties.
               Section 6.7    Notice of Litigation .

               Promptly notify the Agent in writing of any litigation,
          legal proceeding or dispute, other than disputes in the ordinary
          course of business or, whether or not in the ordinary course of
          business, involving amounts in excess of Two Hundred Fifty
          Thousand ($250,000) Dollars, affecting any Borrower or any
          Subsidiary whether or not fully covered by insurance, and
          regardless of the subject matter thereof (excluding, however,
          any actions relating to workers' compensation claims or
          negligence claims relating to use of motor vehicles, if fully
          covered by insurance, subject to deductibles and general
          liability claims of less than $5,000,000 fully covered by
          insurance).

                                        57

               Section 6.8         Insurance .

               (i)  Maintain with responsible insurance companies
          acceptable to the Agent such insurance on such of its
          properties, in such amounts and against such risks as is
          customarily maintained by similar businesses; (ii) file with the
          Agent upon its request a detailed list of the insurance then in
          effect, stating the names of the insurance companies, the
          amounts and rates of the insurance, the dates of the expiration
          thereof and the properties and risks covered thereby and (iii)
          carry all insurance available through the PBGC or any private
          insurance companies covering its obligations to the PBGC.

               Section 6.9    Financial Covenants .

               Have or maintain, on a consolidated basis, at all times:
                    (a)  A ratio of total liabilities (as determined in
          accordance with GAAP) to Tangible Net Worth of not more than 2.0
          to 1.0.

                    (b)  Tangible Net Worth of more than the sum of (i)
          $70,000,000, plus (ii) beginning with Parent's fiscal quarter
          ending December 31, 2001 and with respect to each fiscal quarter
          of Parent thereafter, 50% of the Borrowers' consolidated net
          income (determined in accordance with GAAP), on a cumulative
          basis and without any reduction for loss for each such fiscal
          quarter.

                    (c)  A Leverage Ratio of not more than 2.25 to 1.0.

                    (d)  A Fixed Charge Coverage Ratio of not less than
                         1.5 to 1.0.

                    (e)  A positive net income (after subtracting Interest
          Expense and Federal, state and local income tax expense) for
          each fiscal year of the Parent.

                                        58

               Section 6.10   Notice of Certain Events .

                    (a)  Promptly notify the Agent in writing of the
          occurrence of any Reportable Event, as defined in Section 4043
          of ERISA, if a notice of such Reportable Event is required under
          ERISA to be delivered to the PBGC within 30 days after the
          occurrence thereof, together with a description of such
          Reportable Event and a statement of the action the Loan Party or
          the ERISA Affiliate intends to take with respect thereto,
          together with a copy of the notice thereof given to the PBGC.

                    (b)  Promptly notify the Agent in writing if any Loan
          Party or ERISA Affiliate receives an assessment of withdrawal
          liability in connection with a complete or partial withdrawal
          with respect to any Multiemployer Plan, together with a
          statement of the action that such Loan Party or ERISA Affiliate
          intends to take with respect thereto.

                    (c)  Promptly notify the Agent in writing if any
                         Borrower or any other Loan Party
          receives:  (i) any notice of any violation or administrative or
          judicial complaint or order having been filed or about to be
          filed against such Borrower or such other Loan Party alleging
          violations of any Environmental Law and Regulation, or (ii) any
          notice from any governmental body or any other Person alleging
          that such Borrower or such other Loan Party is or may be subject
          to any Environmental Liability; and promptly upon receipt
          thereof, provide the Agent with a copy of such notice together
          with a statement of the action such Borrower or such other Loan
          Party intends to take with respect thereto.

               Section 6.11   Comply with ERISA .

               Materially comply with all applicable provisions of ERISA
          and the Code now or hereafter in effect.

                                        59

               Section 6.12   Environmental Compliance .

               Operate all property owned, operated or leased by it in
          compliance with all Environmental Laws and Regulations, such
          that no material Environmental Liability arises under any
          Environmental Laws and Regulations, which would result in a Lien
          on any property of any Borrower or any other Loan Party;
          provided, however, that in the event that any such claim is made
          or any such Environmental Liability arises, the Borrower or such
          other Loan Party shall (subject to such Borrower's or such Loan
          Party's right to contest such claim in good faith and at its own
          expense by appropriate legal proceedings; provided, however,
          that during such contest, such Borrower or such other Loan Party
          shall, at the option of the Agent, provide security satisfactory
          to the Agent, assuring the discharge of such Borrower's or such
          Loan Party's obligation thereunder and of any additional
          interest charge, penalty or expense arising from or incurred as
          a result of such contest), at its own cost and expense, in a
          timely manner, immediately satisfy such claim or Environmental
          Liability.

                                        60

               Section 6.13   Certain Subsidiary Matters .

                    (a)  With respect to each fiscal year of Parent,
          ensure that Persons that are the Borrowers account for not less
          than 95% of Parent's consolidated net income (as determined in
          accordance with GAAP).

                    (b)  With respect to each Foreign Subsidiary, ensure
          that (i) each office maintained by each such Foreign Subsidiary
          is a Non-Material Office, (ii) such Foreign Subsidiaries do not
          own real and/or personal property that has a fair market value
          in excess of $750,000 with respect to all such property owned by
          such Foreign Subsidiaries in the aggregate and (iii) with
          respect to any fiscal year of Parent, such Foreign Subsidiaries
          do not in the aggregate account for more than 5% of Parent's
          consolidated net income (as determined in accordance with GAAP).

                            ARTICLE 7 Negative Covenants
               While the Commitments are outstanding, and, in the event
          any Loan remains outstanding, so long as any Borrower is
          indebted to the Banks or the Agent and until payment in full of
          the Notes and full and complete performance of all of their
          other obligations arising hereunder, no Borrower shall and shall
          not permit any of its Subsidiaries to do, agree to do, or permit
          to be done, any of the following:

               Section 7.1    Indebtedness .
               Create, incur, permit to exist or have outstanding any
          Indebtedness, except the following Indebtedness (so long as,
          after giving effect to the incurrence of such Indebtedness, no
          Default or Event of Default would exist):

                    (a)  Indebtedness of the Borrowers to the Banks and
          the Agent and under this Agreement and the Notes;

                    (b)  Indebtedness incurred in connection with a
          Permitted Acquisition; provided that the amount thereof at any
          one time outstanding with respect to all Permitted Acquisitions
          in the aggregate shall not exceed $3,000,000;

                    (c)  Taxes, assessments and governmental charges, non-
          interest bearing accounts payable and accrued liabilities, in
          any case not more than 90 days past due from the original due
          date thereof, and non-interest bearing deferred liabilities
          other than for borrowed money (e.g., deferred compensation and
          deferred taxes), in each case incurred and continuing in the
          ordinary course of business;

                    (d)  As set forth on Schedule 7.1 hereto; and

                                        61

                    (e)  Other Indebtedness; provided that the amount
          thereof at any one time outstanding with respect to all such
          other Indebtedness shall not exceed $1,000,000; provided that,
          notwithstanding the foregoing, the aggregate amount of
          Indebtedness permitted to be outstanding pursuant to subsection
          7.1(b) and this subsection 7.1(e) shall not in the aggregate
          exceed $3,000,000.
               Section 7.2    Liens .

               Create, or assume or permit to exist, any Lien on any of
          the properties or assets of any Borrower or any of its
          Subsidiaries, whether now owned or hereafter acquired, except:

                    (a)  Permitted Liens;

                    (b)  Purchase money mortgages or security interests,
          conditional sale arrangements and other similar security
          interests, on motor vehicles and equipment acquired by any
          Borrower or any Subsidiary (hereinafter referred to individually
          as a "Purchase Money Security Interest") with the proceeds of
          the Indebtedness permitted by subsection 7.1(e) hereof;
          provided, however, that:

                         (i)  The transaction in which any Purchase Money
          Security Interest is proposed to be created is not then
          prohibited by this Agreement;

                         (ii) Any Purchase Money Security Interest shall
          attach only to the property or asset acquired in such
          transaction and shall not extend to or cover any other assets or
          properties of any Borrower or, as the case may be, a Subsidiary;

                         (iii)     The Indebtedness secured or covered by
          any Purchase Money Security Interest shall not exceed the lesser
          of the cost or fair market value of the property or asset
          acquired and shall not be renewed, extended or prepaid from the
          proceeds of any borrowing by any Borrower or any Subsidiary; and

                         (iv) The Indebtedness secured or covered by any
          Purchase Money Security Interest shall not exceed the amount of
          Indebtedness permitted by subsections 7.1(b) or 7.1(e) hereof
          (including the proviso at the end of Section 7.1);

                    (c)  The interests of the lessor under any Capitalized
                         Lease;

                    (d)  As set forth on Schedule 7.2 hereto; and

                    (e)  With the prior written consent of the Agent and
                         the Required Banks (which
          consent shall not be unreasonably withheld), Liens on property
          acquired pursuant to a Permitted Acquisition; provided, however,
          that:

                                        62

                         (i)  Any such Lien shall attach only to the
          property or asset acquired in such Permitted Acquisition and
          shall not extend to or cover any other assets or properties of
          any Borrower or, as the case may be, a Subsidiary; and

                         (ii) The Indebtedness secured or covered by any
          such Lien shall not exceed the lesser of the cost or fair market
          value of the property or asset acquired and shall not be
          renewed, extended or prepaid from the proceeds of any borrowing
          by any Borrower or any Subsidiary; and

                         (iii)     The Indebtedness secured or covered by
          any such Lien shall not exceed the amount of Indebtedness
          permitted by subsection 7.1(b) or Section 7.1(e) hereof
          (including the proviso at the end of Section 7.1).

               Section 7.3    Guaranties .

               Except as set forth on Schedule 7.1 hereto, assume,
          endorse, be or become liable for, or guarantee, the obligations
          of any Person, except (i) by the endorsement of negotiable
          instruments for deposit or collection in the ordinary course of
          business; and (ii) guarantees by a Borrower of Indebtedness of
          another Borrower permitted by Section 7.1 hereof.  For the
          purposes hereof, the term "guarantee" shall include any
          agreement, whether such agreement is on a contingency or
          otherwise, to purchase, repurchase or otherwise acquire
          Indebtedness of any other Person, or to purchase, sell or lease,
          as lessee or lessor, property or services, in any such case
          primarily for the purpose of enabling another Person to make
          payment of Indebtedness, or to make any payment (whether as an
          advance, capital contribution, purchase of an equity interest or
          otherwise) to assure a minimum equity, asset base, working
          capital or other balance sheet or financial condition, in
          connection with the Indebtedness of another Person, or to supply
          funds to or in any manner invest in another Person in connection
          with such Person's Indebtedness.

               Section 7.4    Mergers, Acquisitions .

               Merge or consolidate with any Person (whether or not any
          Borrower or any Subsidiary is the surviving entity), or acquire
          all or substantially all of the assets or any of the Capital
          Stock of any Person except for Permitted Acquisitions.

               Section 7.5    Redemptions; Distributions .

                    (a)  At any time a Default or Event of Default has
          occurred and is continuing or would result therefrom, purchase,
          redeem, retire or otherwise acquire, directly or indirectly, or
          make any sinking fund payments with respect to, any shares of
          any class of stock of any Borrower or any Subsidiary now or

                                        63

          hereafter outstanding or set apart any sum for any such purpose;
          or

                    (b)  Declare or pay any dividends or make any
          distribution of any kind on any Borrower's outstanding stock, or
          set aside any sum for any such purpose, except that (i) a
          Subsidiary Borrower may declare or pay any dividend to Parent
          and (ii) a Borrower may declare or pay any dividend payable
          solely in shares of its common stock; provided, however, that no
          Default or Event of Default has occurred and is then continuing
          or would result from the declaration or payment of any such
          dividend.

               Section 7.6    Stock  Issuance .

               Issue any additional shares or any right or option to
          acquire any shares, or any security convertible into any shares,
          of preferred stock of any Borrower or any Subsidiary.

               Section 7.7    Changes in Business .

               Make any material change in its business, or in the nature
          of its operation, or liquidate or dissolve itself (or suffer any
          liquidation or dissolution), or convey, sell, lease, assign,
          transfer or otherwise dispose of any of its property, assets or
          business except dispositions of obsolete equipment and other
          dispositions in the ordinary course of business and for a fair
          consideration or dispose of any shares of stock or any
          Indebtedness, whether now owned or hereafter acquired, or
          discount, sell, pledge, hypothecate or otherwise dispose of
          accounts receivable.

               Section 7.8    Prepayments.

               Make any voluntary or optional prepayment of any
          Indebtedness for borrowed money incurred or permitted to exist
          under the terms of this Agreement, other than Indebtedness
          evidenced by the Notes, unless and to the extent refinanced with
          new long term Indebtedness on terms (including amortization and
          maturity) at least as favorable to the Borrowers as the
          Indebtedness being prepaid; provided, however, that no Default
          or Event of Default has occurred and is then continuing or would
          result from any such payment.

               Section 7.9    Investments .

               Make, or suffer to exist, any Investment in any Person,
          including, without limitation, any shareholder, director,
          officer or employee of any Borrower or any of the Subsidiaries,
          except (and so long as at the time such Investment is made no
          Default or Event of Default then exists or would result from the
          making of such Investment):

                                        64

                    (a)  Investments in:

                         (i)  obligations issued or guaranteed by the
          United States of America;

                         (ii) certificates of deposit, bankers acceptances
          and other "money market instruments" issued by any bank or
          trust company organized under the laws of the United States of
          America or any State thereof and having capital and surplus in
          an aggregate amount of not less than $100,000,000;

                         (iii)     open market commercial paper bearing
          the highest credit rating issued by Standard & Poor's
          Corporation or by another nationally recognized credit rating
          agency maturing or being due or payable in full not more than180
          days after the date of the Borrower's or the Subsidiary's, as
          applicable, acquisition thereof;

                         (iv) repurchase agreements entered into with any
          bank or trust company organized under the laws of the United
          States of America or any State thereof and having capital and
          surplus in an aggregate amount of not less than $100,000,000
          relating to United States of America government obligations
          maturing or being due or payable in full not more than180 days
          after the date of the Borrower's or the Subsidiary's, as
          applicable, acquisition thereof;

                         (v)  shares of "money market funds", each having
          net assets of not less than $100,000,000; in each case maturing
          or being due or payable in full not more than180 days after the
          date of the Borrower's or the Subsidiary's, as applicable,
          acquisition thereof; and

                         (vi) accounts receivable arising out of sales of
          inventory in the ordinary course of business;

                    (b)  Investments in Subsidiaries that are acquired
          pursuant to a Permitted Acquisition; provided such Subsidiary
          becomes a Borrower pursuant to Section 7.13 of this Agreement;

                    (c)  Other Investments; provided, that, the amount of
          all such other Investments at any one time outstanding shall not
          exceed $500,000 in the aggregate with respect to all such other
          Investments;

                    (d)  Investments by any Borrower in any other
                         Borrower;

                    (e)  Arm's-length transactions among Affiliates; and

                    (f)  Dispositions of obsolete equipment and other
          dispositions of assets in the ordinary course of business.

                                        65

               Section 7.10   Fiscal Year .

                         Change its fiscal year.

               Section 7.11   ERISA Obligations .
                    (a)  Permit the occurrence of any Termination Event,
          or the occurrence of a termination or partial termination of a
          Defined Contribution Plan which would result in a liability to
          any Loan Party or ERISA Affiliate; or

                    (b)  Permit the present value of all benefit
          liabilities under all Pension Plans to exceed the current value
          of the assets of such Pension Plans allocable to such benefit
          liabilities; or

                    (c)  Permit any accumulated deficiency (as defined in
          Section 302 of ERISA and Section 412 of the Code) with respect
          to any Pension Plan, whether or not waived; or

                    (d)  Fail to make any contribution or payment to any
          Multiemployer Plan which any Loan Party or ERISA Affiliate may
          be required to make under any agreement relating to such
          Multiemployer Plan, or any law pertaining thereto which results
          in or is likely to result in any liability; or

                    (e)  Engage, or permit any Loan Party or ERISA
          Affiliate to engage, in any prohibited transaction under Section
          406 of ERISA or Section 4975 of the Code, for which a civil
          penalty pursuant to Section 502(i) of ERISA or a tax pursuant to
          Section 4975 of the Code is imposed; or

                    (f)  Engage or permit any Loan Party or ERISA
          Affiliate to engage, in any breach of fiduciary duty under Part
          4 of Title I of ERISA; or

                    (g)  Permit the establishment of any Employee Benefit
          Plan providing postretirement welfare benefits or establish or
          amend any Employee Benefit Plan which establishment or amendment
          could result in liability to any Loan Party or ERISA Affiliate
          or increase the obligation of any Loan Party or ERISA Affiliate
          to a Multiemployer Plan which liability or increase,
          individually or together with all similar liabilities and
          increases, is material to any Loan Party or ERISA Affiliate; or

                    (h)  Permit any Loan Party or ERISA Affiliate to be or
                         become obligated to the
          PBGC other than in respect of annual premium payments; or

                    (i)  Fail, or permit any Loan Party or ERISA Affiliate
          to fail, to establish, maintain and operate each Employee
          Benefit Plan in compliance in all material respects with the

                                        66

          provisions of ERISA, the Code and all other applicable laws and
          the regulations and interpretations thereof.

               Section 7.12   Amendments of Documents .

               Modify, amend, supplement or terminate, or agree to modify,
          amend, supplement or terminate, its certificate of incorporation
          or by-laws.

               Section 7.13   Additional Subsidiaries .

                    Not allow any Domestic Subsidiary to be acquired or
          established by any Borrower after the date of this Agreement
          unless and until the Borrowers shall have caused such new
          Domestic Subsidiary to become a Borrower hereunder and in
          connection therewith shall execute, and shall have caused such
          new Domestic Subsidiary to execute, a Joinder and any other
          documentation reasonably requested by the Agent, which may
          include amendments to this Agreement.

               Section 7.14   Double Negative Pledge .

                    No Borrower shall enter into any agreement which
          prohibits or limits the ability of any Borrower to create,
          incur, assume or suffer to exist any Lien upon any of its
          property or revenues, whether now owned or hereafter acquired.

               Section 7.15   Intentionally Omitted .

               Section 7.16   Intentionally Omitted .
               Section 7.17   Transactions with Affiliates .

               Except as expressly permitted by this Agreement, directly
          or indirectly: (a) make any Investment in any of its Affiliates
          that is not a Borrower; (b) transfer, sell, lease, assign or
          otherwise dispose of any assets to any of its Affiliates that is
          not a Borrower; (c) merge into or consolidate with or purchase
          or acquire assets from any of its Affiliates that is not a
          Borrower; or (d) enter into any other transaction directly or
          indirectly with or for the benefit of any of its Affiliates that
          is not a Borrower (including, without limitation, guarantees and
          assumptions of obligations of such an Affiliate); provided,
          however, that: (i) payments on Investments expressly permitted
          by Section 7.9 hereof may be made, (ii) any Affiliate of a
          Borrower who is a natural person may serve as an employee or
          director of any Borrower and receive reasonable compensation for
          his services in such capacity, and (iii) any Borrower may enter
          into any transaction with any of its Affiliates that is not a
          Borrower providing for the leasing of property, the rendering or
          receipt of services or the purchase or sale of product,
          inventory and other assets in the ordinary course of business if
          the monetary or business consideration arising therefrom would

                                        67

          be substantially as advantageous to such Borrower as the
          monetary or business consideration that would obtain in a
          comparable arm's length transaction with a Person not an
          Affiliate of a Borrower.

               Section 7.18   Hazardous Material .

                    (a)  Cause or permit:

                         (i)  any Hazardous Material to be placed, held,
          located or disposed of, on, under or at any real property owned
          by a Borrower or any part thereof, except for such Hazardous
          Materials that are necessary for any Borrower's or any
          Subsidiary's or any tenant's operation of its business thereon
          and which shall be used, stored, treated and disposed of in
          compliance with all applicable Environmental Laws and
          Regulations; or

                         (ii) such real property or any part thereof to be
          used as a collection, storage, treatment or disposal site for
          any Hazardous Material.
                    (b)  Each Borrower and each Subsidiary acknowledges
          and agrees that the Agent and the Banks shall have no liability
          or responsibility for either:

                         (i)  damage, loss or injury to human health, the
          environment or natural resources caused by the presence,
          disposal, release or threatened release of Hazardous Materials
          on any part of such real property; or

                         (ii) abatement and/or clean-up required under any
          applicable Environmental Laws and Regulations for a release,
          threatened release or disposal of any Hazardous Materials
          located at such real property or used by or in connection with
          any Borrower's or any Subsidiary's or any such tenant's
          business.

                             ARTICLE 8
                           Events of Default

               If any one or more of the following events ("Events of
          Default") shall occur and be continuing, the Commitments shall
          terminate and the entire unpaid balance of the principal of and
          interest on the Notes outstanding and all other obligations and
          Indebtedness of any and/or all of the Borrowers to the Banks and
          the Agent arising hereunder and under the other Loan Documents
          shall immediately become due and payable upon written notice to
          that effect given to a Borrower by the Agent (except that in the
          case of the occurrence of any Event of Default described in
          Section 8.6 no such notice shall be required), without
          presentment or demand for payment, notice of non-payment,
          protest or further notice or demand of any kind, all of which
          are expressly waived by each Borrower:

                                        68

               Section 8.1    Payments .

                    (a)  Failure to make any payment of interest upon any
          Note or to make any payment of any Fee within five days of when
          due; or

                    (b)  Failure to make any payment or mandatory
          prepayment of principal upon any
          Note when due; or

               Section 8.2    Certain Covenants .

                    (a)  Failure to perform or observe any of the
          agreements of any Borrower or any
          Subsidiary contained in Section 6.9 hereof; or

                    (b)  Failure to perform or observe any of the
          agreements of any Borrower or any
          Subsidiary contained in Article 7 hereof; provided, that, the
          failure to perform or observe any of such agreements of any
          Borrower or any Subsidiary has or may result in a Material
          Adverse Effect; or

                                        69

               Section 8.3    Other Covenants .

                    (a)  Failure by any Borrower to (i) perform or observe
          any of the agreements of
          any Borrower or any Subsidiary contained in Article 7 hereof
          that has not or may not result in a
          Material Adverse Effect and (ii) perform or observe any other
          term, condition or covenant of this Agreement not covered by any
          of the other Events of Default set forth in this Article 8 or of
          any of the other Loan Documents to which it is a party, in each
          case which shall remain unremedied for a period of 30 days after
          notice thereof shall have been given to a Borrower by the Agent;
          or

                    (b)  Failure by any Loan Party other than a Borrower
          to perform or observe any term, condition or covenant of any of
          the Loan Documents to which it or he is a party, which shall
          remain unremedied for a period of 30 days after notice thereof
          shall have been given to a Borrower by the Agent; or

               Section 8.4    Other Defaults .

                    (a)  Failure to perform or observe any term, condition
          or covenant of any bond, note, debenture, loan agreement,
          indenture, guaranty, trust agreement, mortgage or similar
          instrument to which any Borrower or any Subsidiary is a party or
          by which it is bound, or by which any of its properties or
          assets may be affected (a "Debt Instrument"), so that, as a
          result of any such failure to perform, the Indebtedness included
          therein or secured or covered thereby may be declared due and
          payable prior to the date on which such Indebtedness would
          otherwise become due and payable; or

                    (b)  Any event or condition referred to in any Debt
          Instrument shall occur or fail to occur, so that, as a result
          thereof, the Indebtedness included therein or secured or covered
          thereby may be declared due and payable prior to the date on
          which such Indebtedness would otherwise become due and payable;
          or

                    (c)  Failure to pay any Indebtedness for borrowed
          money due at final maturity or
          pursuant to demand under any Debt Instrument;

          provided, however that the provisions of this Section 8.4 shall
          not be applicable to any Debt Instrument that on the date this
          Section 8.4 would otherwise be applicable thereto, relates to or
          evidences Indebtedness in a principal amount of less than Five
          Hundred Thousand ($500,000) Dollars; or

               Section 8.5    Representations and Warranties .

                                        70

               Any representation or warranty made in writing to the Banks
          or the Agent in any of the Loan Documents or in connection with
          the making of the Loans, or any certificate, statement or report
          made or delivered in compliance with this Agreement, shall have
          been false or misleading in any material respect when made or
          delivered; or
               Section 8.6    Bankruptcy .

                    (a)  Any Borrower or any Subsidiary shall make an
          assignment for the benefit of creditors, file a petition in
          bankruptcy, be adjudicated insolvent, petition or apply to any
          tribunal for the appointment of a receiver, custodian, or any
          trustee for it or him or a substantial part of its or his
          assets, or shall commence any proceeding under any bankruptcy,
          reorganization, arrangement, readjustment of debt, dissolution
          or liquidation law or statute of any jurisdiction, whether now
          or hereafter in effect, or any Borrower or any Subsidiary shall
          take any corporate action to authorize any of the foregoing
          actions; or there shall have been filed any such petition or
          application, or any such proceeding shall have been commenced
          against it or him, that remains undismissed for a period of
          sixty (60) days or more; or any order for relief shall be
          entered in any such proceeding; or any Borrower or any
          Subsidiary by any act or omission shall indicate its or his
          consent to, approval of or acquiescence in any such petition,
          application or proceeding or the appointment of a custodian,
          receiver or any trustee for it or him or any substantial part of
          any of its or his properties, or shall suffer any custodianship,
          receivership or trusteeship to continue undischarged for a
          period of sixty (60) days or more; or

                    (b)  Any Borrower or any Subsidiary shall generally
          not pay its or his debts as such debts become due; or

                    (c)  Any Borrower or any Subsidiary shall have
          concealed, removed, or permitted to be concealed or removed, any
          part of its or his property, with intent to hinder, delay or
          defraud its or his creditors or any of them or made or suffered
          a transfer of any of its or his property that may be fraudulent
          under any bankruptcy, fraudulent conveyance or similar law; or
          shall have made any transfer of its or his property to or for
          the benefit of a creditor at a time when other creditors
          similarly situated have not been paid; or shall have suffered or
          permitted, while insolvent, any creditor to obtain a Lien upon
          any of its or his property through legal proceedings or
          distraint that is not vacated within sixty (60) days from the
          date thereof; or

               Section 8.7    Judgements .

               Any judgment against any Borrower or any Subsidiary or any
          attachment, levy or

                                        71

          execution against any of its properties for any amount in excess
          of Two Hundred Fifty Thousand
          ($250,000) Dollars shall remain unpaid, unstayed on appeal,
          undischarged, unbonded or undismissed for a period of sixty (60)
          days or more; or

               Section 8.8    ERISA .

                    (a)  The termination of any Plan or the institution by
          the PBGC of proceedings for the involuntary termination of any
          Plan, in either case, by reason of, or that results or could
          result in, a "material accumulated funding deficiency" under
          Section 412 of the Code ; or

                    (b)  Failure by any Borrower to make required
          contributions, in accordance with the applicable provisions of
          ERISA, to each of the Plans hereafter established or assumed by
          it; or

               Section 8.9    Ownership of Stock .

               Gerald Shreiber (or, in the event of his death, his estate,
          legal representative or heirs) shall at any time own,
          beneficially and of record, less than 10% in the aggregate of
          all of the issued and outstanding shares of Capital Stock of
          Parent having ordinary voting rights for the election of
          directors; or

               Section 8.10   Management .

               Gerald Shreiber shall cease for any reason whatsoever,
          including, without limitation, death or disability (as such
          disability shall be determined in the sole and absolute judgment
          of the Agent) to be and continuously perform the duties of chief
          executive officer of Parent or, if such cessation shall occur as
          a result of the death or such disability, no successor
          satisfactory to the Agent, in its sole discretion, shall have
          become and shall have commenced to perform the duties of chief
          executive officer of Parent within one hundred twenty (120) days
          after such cessation; provided, however, that if any
          satisfactory successor shall have been so elected and shall have
          commenced performance of such duties within such period, the
          name of such successor or successors shall be deemed to have
          been inserted in place of Gerald Shreiber in this Section 8.10.

                                 ARTICLE 9The Agent

               Section 9.1    Appointment, Powers and Immunities .

               Each Bank hereby irrevocably appoints and authorizes the
          Agent to act as its agent hereunder and under the other Loan
          Documents with such powers as are specifically delegated to the
          Agent by the terms of this Agreement and the other Loan

                                        72

          Documents together with such other powers as are reasonably
          incidental thereto.  The Agent shall have no duties or
          responsibilities except those expressly set forth in this
          Agreement and the other Loan Documents and shall not be a
          trustee for any Bank.  The Agent shall not be responsible to the
          Banks for any recitals, statements, representations or
          warranties contained in this Agreement, or the other Loan
          Documents in any certificate or other document referred to or
          provided for in, or received by any of them under, this
          Agreement or the other Loan Documents, or for the value,
          validity, effectiveness, genuineness, enforceability or
          sufficiency of this Agreement or the other Loan Documents or any
          other document referred to or provided for herein or therein or
          for the collectibility of the Loans or for any failure by any
          Borrower or any of the other Loan Parties to perform any of its
          obligations hereunder or under the other Loan Documents.  The
          Agent may employ agents and attorneys-in-fact and shall not be
          answerable, except as to money or securities received by it or
          its authorized agents, for the negligence or misconduct of any
          such agents or attorneys-in-fact selected by it with reasonable
          care.  Neither the Agent nor any of its directors, officers,
          employees or agents shall be liable or responsible for any
          action taken or omitted to be taken by it or them hereunder or
          the other Loan Documents or in connection herewith or therewith,
          except for its or their own gross negligence or willful
          misconduct.

               Section 9.2    Reliance by Agent .

               The Agent shall be entitled to rely upon any certification,
          notice or other communication (including any thereof by
          telephone, telex, telegram or cable) believed by it to be
          genuine and correct and to have been signed or sent by or on
          behalf of the proper person or persons, and upon advice and
          statements of legal counsel, independent accountants and other
          experts selected by the Agent.  As to any matters not expressly
          provided for by this Agreement or the other Loan Documents, the
          Agent shall in all cases be fully protected in acting, or in
          refraining from acting, hereunder or the other Loan Documents in
          accordance with instructions signed by the Required Banks, and
          such instructions of the Required Banks and any action taken or
          failure to act pursuant thereto shall be binding on all of the
          Banks.

               Section 9.3    Events of Default .

               The Agent shall not be deemed to have knowledge of the
          occurrence of a Default (other
          than the non-payment of principal of or interest on Loans)
          unless the Agent has received notice
          from a Bank or a Borrower specifying such Default and stating
          that such notice is a "Notice of Default".  In the event that
          the Agent receives such a notice of the occurrence of a Default,

                                        73

          the Agent shall give notice thereof to the Banks (and shall give
          each Bank notice of each such nonpayment).  The Agent shall
          (subject to Section 9.7 hereof) take such action with respect to
          such Default as shall be directed by the Required Banks.

               Section 9.4    Rights as a Bank .

               With respect to its Commitment and the Loans made by it,
          the Agent in its capacity as a Bank hereunder shall have the
          same rights and powers hereunder as any other Bank and may
          exercise the same as though it were not acting as the Agent, and
          the term "Bank" or "Banks" shall, unless the context otherwise
          indicates, include the Agent in its individual capacity.  The
          Agent and its Affiliates may (without having to account therefor
          to any Bank) accept deposits from, lend money to and generally
          engage in any kind of banking, trust or other business with the
          Borrowers or their Affiliates, as if it were not acting as the
          Agent, and the Agent may accept fees and other consideration
          from the Borrowers or their Affiliates, for services in
          connection with this Agreement or any of the other Loan
          Documents or otherwise without having to account for the same to
          the Banks.

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               Section 9.5    Indemnification .

               The Banks shall indemnify the Agent (to the extent not
          reimbursed by the Borrowers under Sections 10.1 and 10.2
          hereof), ratably in accordance with the aggregate principal
          amount of the Loans made by the Banks (or, if no Loans are at
          the time outstanding, ratably in accordance with their
          respective Commitments), for any and all liabilities,
          obligations, losses, damages, penalties, actions, judgments,
          suits, costs, expenses or disbursements of any kind and nature
          whatsoever that may be imposed on, incurred by or asserted
          against the Agent in any way relating to or arising out of this
          Agreement or any of the other Loan Documents or any other
          documents contemplated by or referred to herein or therein or
          the transactions contemplated by or referred to herein or
          therein or the transactions contemplated hereby and thereby
          (including, without limitation, the costs and expenses that the
          Borrowers are obligated to pay under Sections 10.1 and 10.2
          hereof, but excluding, unless a Default has occurred and is
          continuing, normal administrative costs and expenses incident to
          the performance of its agency duties hereunder) or the
          enforcement of any of the terms hereof, or of any such other
          documents, provided that no Bank shall be liable for any of the
          foregoing to the extent they arise from the gross negligence or
          willful misconduct of the party to be indemnified.

               Section 9.6    Non-Reliance on Agent and other Banks .

               Each Bank agrees that it has, independently and without
          reliance on the Agent or any
          other Bank, and based on such documents and information as it
          has deemed appropriate, made its
          own credit analysis of each Borrower and decision to enter into
          this Agreement and that it will, independently and without
          reliance upon the Agent or any other Bank, and based on such
          documents and information as it shall deem appropriate at the
          time, continue to make its own analysis and decisions in taking
          or not taking action under this Agreement or the other Loan
          Documents.  The Agent shall not be required to keep itself
          informed as to the performance or observance by any Borrower of
          this Agreement or the other Loan Documents or any other document
          referred to or provided for herein or therein or to inspect the
          properties or books of any Borrower.  Except for notices,
          reports and other documents and information expressly required
          to be furnished to the Banks by the Agent hereunder or under the
          other Loan Documents, the Agent shall not have any duty or
          responsibility to provide any Bank with any credit or other
          information concerning the affairs, financial condition or
          business of any Borrower, that may come into the possession of
          the Agent or any of its Affiliates.

               Section 9.7    Failure to Act .

                                        75

               Except for action expressly required of the Agent
          hereunder, the Agent shall in all cases
          be fully justified in failing or refusing to act hereunder or
          thereunder unless it shall be indemnified to its satisfaction by
          the Banks against any and all liability and expense that may be
          incurred by it by reason of taking or continuing to take any
          such action.

                                        76

               Section 9.8    Resignation or Removal of Agent .

               Subject to the appointment and acceptance of a successor
          Agent as provided below, the
          Agent may resign at anytime by giving not less than 30 days'
          prior written notice thereof to the Banks and a Borrower and the
          Agent may be removed at any time with or without cause by the
          Required Banks.  Upon any such resignation or removal, the
          Required Banks shall have the right to appoint a successor
          Agent.  If no successor Agent shall have been so appointed by
          the Required Banks and shall have accepted such appointment
          within 30 days after the retiring Agent's giving of notice of
          resignation or the Required Banks' removal of the retiring
          Agent, then the retiring Agent may, on behalf of the Banks,
          after consultation with Parent, appoint a successor Agent which
          shall be a bank that has an office in New Jersey with a combined
          capital and surplus of at least $100,000,000.  Upon the
          acceptance of any appointment as Agent hereunder by a successor
          Agent, such successor Agent shall thereupon succeed to and
          become vested with all the rights, powers, privileges and duties
          of the retiring Agent, and the retiring Agent shall be
          discharged from its duties and obligations hereunder.  After any
          retiring Agent's resignation or removal hereunder as Agent, the
          provisions of this Article 9 shall continue in effect for its
          benefit in respect of any actions taken or omitted to be taken
          by it while it was acting as the Agent.

               Section 9.9      Sharing of Payments.

                    (a)  Prior to any acceleration by the Agent and the
          Banks of the Obligations:

                         (i)  in the event that any Bank shall obtain
          payment in respect of a Note, or interest thereon, whether
          voluntarily or involuntarily, and whether through the exercise
          of a right of banker's lien, set-off or counterclaim against any
          Borrower or any other Loan Party or otherwise, in a greater
          proportion than any such payment obtained by any other Bank in
          respect of the corresponding Note held by it, then the Bank so
          receiving such greater proportionate payment shall purchase for
          cash from the other Bank or Banks such portion of each such
          other Bank's or Banks' Loan as shall be necessary to cause such
          Bank receiving the proportionate overpayment to share the excess
          payment with each Bank; and

                         (ii) in the event that any Bank shall obtain
          payment in respect of any Interest Rate Contract to which such
          Bank is a party, whether voluntarily or involuntarily, and
          whether through the exercise of a right of banker's lien, set-
          off or counterclaim against any Borrower or any other Loan Party
          or otherwise, such Bank shall be permitted to retain the full
          amount of such payment and shall not be required to share such
          payment with any other Bank.

                                        77

                    (b)  Upon or following any acceleration by the Agent
          and the Banks of the Obligations, in the event that any Bank
          shall obtain payment in respect of a Note, or interest thereon,
          whether voluntarily or involuntarily, and whether through the
          exercise of a right of banker's lien, set-off or counterclaim
          against any Borrower or any other Loan Party or otherwise, in a
          greater proportion than any such payment obtained by any other
          Bank in respect of the aggregate amount of the corresponding
          Note held by such Bank and any Interest Rate Contract to which
          such Bank is a party, then the Bank so receiving such greater
          proportionate payment, shall purchase for cash from the other
          Bank or Banks such portion of each such other Bank's or Banks'
          Loan, as shall be necessary to cause such Bank receiving the
          proportionate overpayment to share the excess payment ratably
          with each Bank.  For the purposes of this subsection 9.9(b),
          payments on Notes received by each Bank shall be in the same
          proportion as the proportion of (A) the sum of:  (x) the
          Obligations owing to such Bank in respect of the Note held by
          such Bank, plus (y) the Obligations owing to such Bank in
          respect of Interest Rate Contracts to which such Bank is party,
          if any, to (B) the sum of:  (x) the Obligations owing to all of
          the Banks in respect of all of the Notes, plus (y) the
          Obligations owing to all of the Banks in respect of all Interest
          Rate Contracts to which any Bank is a party;

          provided, however, that, with respect to subsections 9.9(a)(i)
          and (b) above, if all or any portion of such excess payment or
          benefits is thereafter recovered from the Bank that received the
          proportionate overpayment, such purchase of Loans or payment of
          benefits, as the case may be, shall be rescinded, and the
          purchase price and benefits returned, to the extent of such
          recovery, but without interest.

                         ARTICLE 10Miscellaneous Provisions

               Section 10.1   Fees and Expenses; Indemnity .

               The Borrowers will promptly pay all costs of the Agent in
          preparing the Loan Documents and all costs and expenses of the
          issue of the Notes and of the Borrowers' and the other Loan
          Parties' performance of and compliance with all agreements and
          conditions contained herein on its part to be performed or
          complied with (including, without limitation, all costs of
          filing or recording any assignments, mortgages, financing
          statements and other documents and all appraisal and
          environmental review fees and expenses), and the reasonable fees
          and expenses and disbursements of counsel to the Agent in
          connection with the preparation, execution and delivery,
          administration, interpretation and enforcement of this
          Agreement, the other Loan Documents and all other agreements,
          instruments and documents relating to this transaction, the
          consummation of the transactions contemplated by all such

                                        78

          documents, the preservation of all rights of the Banks and the
          Agent, the negotiation, preparation, execution and delivery of
          any amendment, modification or supplement of or to, or any
          consent or waiver under, any such document (or any such
          instrument that is proposed but not executed and delivered) and
          with any claim or action threatened, made or brought against any
          of the Banks or the Agent arising out of or relating to any
          extent to this Agreement, the other Loan Documents or the
          transactions contemplated hereby or thereby (other than a claim
          or action resulting from the gross negligence, willful
          misconduct, or intentional violation of law by the Agent and or
          the Banks).  In addition, the Borrowers will promptly pay all
          costs and expenses (including, without limitation, reasonable
          fees and disbursements of counsel) suffered or incurred by each
          Bank in connection with its enforcement of the payment of the
          Notes held by it or any other sum due to it under this Agreement
          or any of the other Loan Documents or any of its other rights
          hereunder or thereunder.  In addition to the foregoing, each
          Borrower shall indemnify each Bank and the Agent and each of
          their respective directors, officers, employees, attorneys,
          agents and Affiliates against, and hold each of them harmless
          from, any loss, liabilities, damages, claims, costs and expenses
          (including reasonable attorneys' fees and disbursements)
          suffered or incurred by any of them arising out of, resulting
          from or in any manner connected with, the execution, delivery
          and performance of each of the Loan Documents, the Loans and any
          and all transactions related to or consummated in connection
          with the Loans (other than as a result of the gross negligence,
          willful misconduct or intentional violation of law by the Agent
          and/or the Banks), including, without limitation, losses,
          liabilities, damages, claims, costs and expenses suffered or
          incurred by any Bank or the Agent or any of their respective
          directors, officers, employees, attorneys, agents or Affiliates
          arising out of or related to any Environmental Liability or
          Environmental Proceeding, or in investigating, preparing for,
          defending against, or providing evidence, producing documents or
          taking any other action in respect of any commenced or
          threatened litigation, administrative proceeding or
          investigation under any federal securities law or any other
          statute of any jurisdiction, or any regulation, or at common law
          or otherwise against the Agent, the Banks or any of their
          officers, directors, affiliates, agents or Affiliates, that is
          alleged to arise out of or is based upon: (i) any untrue
          statement or alleged untrue statement of any material fact of
          any Borrower and its affiliates in any document or schedule
          filed with the Securities and Exchange Commission or any other
          governmental body; (ii) any omission or alleged omission to
          state any material fact required to be stated in such document
          or schedule, or necessary to make the statements made therein,
          in light of the circumstances under which made, not misleading;
          (iii) any acts, practices or omission or alleged acts, practices
          or omissions of any Borrower or its agents related to the making
          of any acquisition, purchase of shares or assets pursuant

                                        79

          thereto, financing of such purchases or the consummation of any
          other transactions contemplated by any such acquisitions that
          are alleged to be in violation of any federal securities law or
          of any other statute, regulation or other law of any
          jurisdiction applicable to the making of any such acquisition,
          the purchase of shares or assets pursuant thereto, the financing
          of such purchases or the consummation of the other transactions
          contemplated by any such acquisition; or (iv) any withdrawals,
          termination or cancellation of any such proposed acquisition for
          any reason whatsoever.  The indemnity set forth herein shall be
          in addition to any other obligations or liabilities of the
          Borrowers to the Agent and the Banks hereunder or at common law
          or otherwise.  The provisions of this Section 10.1 shall survive
          the payment of the Notes and the termination of this Agreement.

               Section 10.2   Taxes .

               If, under any law in effect on the date of the closing of
          any Loan hereunder, or under any retroactive provision of any
          law subsequently enacted, it shall be determined that any
          Federal, state or local tax is payable in respect of the
          issuance of any Note, then the Borrowers will pay any such tax
          and all interest and penalties, if any, and will indemnify the
          Banks and the Agent against and save each of them harmless from
          any loss or damage resulting from or arising out of the
          nonpayment or delay in payment of any such tax.  If any such tax
          or taxes shall be assessed or levied against any Bank or any
          other holder of a Note, such Bank, or such other holder, as the
          case may be, may notify a Borrower and make immediate payment
          thereof, together with interest or penalties in connection
          therewith, and shall thereupon be entitled to and shall receive
          immediate reimbursement therefor from the Borrower.
          Notwithstanding any other provision contained in this Agreement,
          the covenants and agreements of the Borrowers in this Section
          10.2 shall survive payment of the Notes and the termination of
          this Agreement.

               Section 10.3   Payments .

                    (a)  As set forth in Article 2 hereof, all payments by
          the Borrowers on account of principal, interest, fees and other
          charges (including any indemnities) shall be made to the Agent
          at the Principal Office of the Agent, in lawful money of the
          United States of America in immediately available funds, by wire
          transfer or otherwise, not later than 11:00 A.M. New Jersey time
          on the date such payment is due.  Any such payment made on such
          date but after such time shall, if the amount paid bears
          interest, be deemed to have been made on, and interest shall
          continue to accrue and be payable thereon until, the next
          succeeding Business Day.  If any payment of principal or
          interest becomes due on a day other than a Business Day, such
          payment may be made on the next succeeding Business Day and such
          extension shall be included in computing interest in connection

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          with such payment.  Upon payment in full of any Note, the Bank
          holding such Note shall mark the Note "Paid" and return it to a
          Borrower.

                    (b)  All payments hereunder and under the Notes shall
          be made without set-off or counterclaim.

               Section 10.4   Survival of Agreements and Representations;
          Construction .

               All agreements, representations and warranties made herein
          shall survive the delivery of this Agreement and the Notes.  The
          headings used in this Agreement and the table of contents are
          for convenience only and shall not be deemed to constitute a
          part hereof All uses herein of the masculine gender or of
          singular or plural terms shall be deemed to include uses of the
          feminine or neuter gender, or plural or singular terms, as the
          context may require.

               Section 10.5   Set-off of Deposits .

               Each Borrower hereby agrees that, in addition to (and
          without limitation of) any right of set-off, banker's lien or
          counterclaim a Bank may otherwise have, each Bank shall be
          entitled, at its option, to offset balances held by it at any of
          its offices against any principal of or interest on any of its
          Loans hereunder, or any Fee payable to it, that is not paid when
          due (regardless of whether such balances are then due to a
          Borrower), in which case it shall promptly notify a Borrower and
          the Agent thereof, provided that its failure to give such notice
          shall not affect the validity thereof.  Furthermore, at any
          time, after the occurrence and during the continuance of any
          Event of Default, without demand or notice, the Agent or any
          Bank may set off any and all deposits or other sums at any time
          credited by or due from the Agent or any Bank or any Affiliate
          of the Agent or any Bank to the Borrower and/or any other Loan
          Party, whether now existing or hereafter arising, whether in
          regular or special depository accounts or otherwise or any part
          thereof and apply the same to any of the Obligations of the
          Borrowers and/or any other Loan Party even though unmatured and
          regardless of the adequacy of any other collateral securing the
          Obligations.
               Section 10.6   Modifications, Consents and Waivers .

                    (a)  Notwithstanding anything to the contrary
          contained in any Loan Document, with the written consent of the
          Required Banks, the Agent and the Borrowers may, from time to
          time, enter into written amendments, supplements or
          modifications thereof and, with the consent of the Required
          Banks, the Agent on behalf of the Banks, may execute and deliver
          to any such parties a written instrument waiving or consenting
          to the departure from, on such terms and conditions as the Agent
          may specify in such instrument, any of the requirements of the

                                        81

          Loan Documents or any Default or Event of Default and its
          consequences; provided, however, that no such amendment,
          supplement, modification, waiver or consent shall:

                         (i)  without the written consent of all of the
          Banks (A) increase the Commitment of any Bank, (B) extend the
          Credit Period, (C) reduce the rate or amount, or extend the time
          of payment, of any Fee , (D) reduce the rate or amount of, or
          extend the time of payment of, interest on any Loan or any Note,
          (E) reduce the amount, or extend the time of payment of any
          installment or other payment of principal on any Loan or any
          Note, (F) decrease or forgive the principal amount of any Loan
          or any Note, (G) consent to any assignment or delegation by any
          Borrower of any of its rights or obligations under any Loan
          Document; (H) change the provisions of Section 2.22, 2.24, 2.26
          or this Section 10.6, (I) change the definition of "Required
          Banks", or any provision of this Agreement requiring the consent
          or approval of all the Banks, (J) change the several nature of
          the Banks' obligations, (K) change any provision governing the
          sharing of payments and liabilities among the Banks, or (L)
          release all or substantially all of the obligations of any
          Borrower under any Loan Document; and

                         (ii) without the written consent of the Agent,
          amend, modify or waive any provision of Article 9 or otherwise
          change any of the rights or obligations of the Agent under any
          Loan Document.

                    (b)   No modification, amendment or waiver of or with
          respect to any provision of this Agreement, any Notes, or any of
          the other Loan Documents and all other agreements, instruments
          and documents delivered pursuant hereto or thereto, nor consent
          to any departure of any Borrower from any of the terms or
          conditions thereof, shall in any event be effective unless it
          shall be in writing and signed by the Agent and the Banks whose
          consent is required as provided above.  Upon full execution, any
          such amendment, supplement, modification, waiver or consent
          shall apply equally to the Agent, each Bank and each Borrower
          and shall be binding upon Borrower, the Banks, the Agent and all
          future holders of the Notes.  In the case of any waiver, each
          Borrower, the Banks and the Agent shall be restored to their
          former position and rights hereunder and under the outstanding
          Notes and other Loan Documents to the extent provided for in
          such waiver, any such waiver or consent shall be effective only
          in the specific instance and for the purpose for which given and
          any Default or Event of Default waived shall not extend to any
          subsequent or other Default or Event of Default, or impair any
          right consequent thereon.  No consent to or demand on any
          Borrower in any case shall, of itself, entitle it to any other
          or further notice or demand in similar or other circumstances.
               Section 10.7   Remedies Cumulative, Counterclaims .

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               Each and every right granted to the Agent and the Banks
          hereunder or under any other document delivered hereunder or in
          connection herewith, or allowed it by law or equity, shall be
          cumulative and may be exercised from time to time.  No failure
          on the part of the Agent or any Bank or the holder of any Note
          to exercise, and no delay in exercising, any right shall operate
          as a waiver thereof, nor shall any single or partial exercise of
          any right preclude any other or future exercise thereof or the
          exercise of any other right.  The due payment and performance of
          the Obligations shall be without regard to any counterclaim,
          right of offset or any other claim whatsoever that any Borrower
          may have against any Bank or the Agent and without regard to any
          other obligation of any nature whatsoever that any Bank or the
          Agent may have to any Borrower, and no such counterclaim or
          offset shall be asserted by any Borrower (unless such
          counterclaim or offset would, under applicable law, be
          permanently and irrevocably lost if not brought in such action)
          in any action, suit or proceeding instituted by any Bank or the
          Agent for payment or performance of the Obligations.

               Section 10.8   Further Assurances .

               At any time and from time to time, upon the request of the
          Agent, each Borrower shall execute, deliver and acknowledge or
          cause to be executed, delivered and acknowledged, such further
          documents and instruments and do such other acts and things as
          the Agent may reasonably request in order to fully effect the
          purposes of this Agreement, the other Loan Documents and any
          other agreements, instruments and documents delivered pursuant
          hereto or in connection with the Loans.

               Section 10.9   Notices .

               All notices, requests, reports and other communications
          pursuant to this Agreement shall be in writing, either by letter
          (delivered by hand or commercial messenger service or sent by
          certified mail, return receipt requested, except for routine
          reports delivered in compliance with Article 5 hereof which may
          be sent by ordinary first-class mail) or telegram or telecopy,
          addressed as follows:

                    (a)  If to any Borrower:

                              c/o J & J Snack Foods Corp.
                              6000 Central Highway
                              Pennsauken, NJ 08109
                              Attention: Mr. Dennis Moore, Chief Financial
          Officer
                              Telecopier No.: (856) 488-7587

                         with a copy to:

                                        83

                              Blank Rome Comisky & McCauley
                              Woodland Falls Corporate Park
                              210 Lake Drive East
                              Cherry Hill, NJ 08002
                              Attention: A. Fred Ruttenberg, Esq.
                              Telecopier No.: (856) 779-7647

                    (b)  If to any Bank:

                              To its address set forth below its
                              name on the signature pages hereof,
                              with a copy to the Agent; and

                    (c)  If to the Agent:

                              Citizens Bank of Pennsylvania, as Agent
                              Citizens Corporate Financing
                              Citizens Gateway Center
                              3025 Chemical Road, Suite 300
                              Plymouth Meeting, PA 19462-1739
                              Attention:   Devon L. Starks
                              Telecopier No.: (610) 941-4136

                              with a copy (other than in the case
                              of Borrowing Notices and reports
                              and other documents delivered in
                              compliance with Article 5 hereof) to:

                              Archer & Greiner, P.C.
                              One Centennial Square
                              Haddonfield, New Jersey 08033
                              Attention: Terence J. Fox, Esq.
                              Telecopier No.: (856) 354-3030

          Any notice, request, demand or other communication hereunder
          shall be deemed to have been given on: (x) the day on which it
          is telecopied to such party at its telecopier number specified
          above (provided such notice shall be effective only if followed
          by one of the other methods of delivery set forth herein) or
          delivered by receipted hand or such commercial messenger service
          to such party at its address specified above, or (y) on the
          third Business Day after the day deposited in the mail, postage
          prepaid, if sent by mail, or (z) on the day it is delivered to
          the telegraph company, addressed as aforesaid, if sent by
          telegraph.  Any party hereto may change the person, address or
          telecopier number to whom or which notices are to be given
          hereunder, by notice duty given hereunder; provided, however
          that any such notice shall be deemed to have been given
          hereunder only when actually received by the party to which it
          is addressed.

               Section 10.10  Counterparts .

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               This Agreement may be signed in any number of counterparts
          with the same effect as if the signatures thereto and hereto
          were upon the same instrument.

               Section 10.11  Severability .

               The provisions of this Agreement are severable, and if any
          clause or provision hereof shall be held invalid or
          unenforceable in whole or in part in any jurisdiction, then such
          invalidity or unenforceability shall affect only such clause or
          provision, or part thereof, in such jurisdiction and shall not
          in any manner affect such clause or provision in any other
          jurisdiction, or any other clause or provision in this Agreement
          in any jurisdiction.  Each of the covenants, agreements and
          conditions contained in this Agreement is independent and
          compliance by the Borrowers with any of them shall not excuse
          non-compliance by the Borrowers with any other.  All covenants
          hereunder shall be given independent effect so that if a
          particular action or condition is not permitted by any of such
          covenants, the fact that it would be permitted by an exception
          to, or be otherwise within the limitations of, another covenant
          shall not avoid the occurrence of a Default or an Event of
          Default if such action is taken or condition exists.

               Section 10.12  Binding Effect; No Assignment or Delegation
          by Borrowers .

               This Agreement shall be binding upon and inure to the
          benefit of each Borrower and its successors and to the benefit
          of the Banks and the Agent and their respective successors and
          assigns.  The rights and obligations of the Borrowers under this
          Agreement shall not be assigned or delegated without the prior
          written consent of the Agent, and any purported assignment or
          delegation without such consent shall be void.

               Section 10.13  Assignments and Participations by Banks .

                    (a)  Each Bank may, with the prior written consent of
          the Agent, the Borrowers and any Bank whose then outstanding
          Commitment is equal to or greater than fifty (50%) of more of
          the aggregate then outstanding Commitments (which such consents
          shall not be unreasonably withheld; provided that, at any time a
          Default or Event of Default has occurred and is continuing, the
          prior consent of any Borrower shall not be required), assign to
          one or more banks or other entities (other than a Bank or a
          Federal Reserve Bank) all or a portion of its rights and
          obligations under this Agreement (including, without limitation,
          all or a portion of its Commitment, the Loans owing to it, and
          the Note or Notes held by it); provided however, that: (i) each
          such assignment shall be of a constant, and not a varying,
          percentage of all of the assigning Bank's rights and obligations
          under this Agreement, (ii) the amount of the Commitment of the
          assigning Bank being assigned pursuant to each such assignment

                                        85

          (determined as of the date of the Assignment and Acceptance with
          respect to such assignment) shall in no event be less than
          $5,000,000 and shall be an integral multiple of $1,000,000 for
          amounts in excess thereof, and (iii) each such assignment shall
          be to an Eligible Assignee.  Upon such execution, delivery,
          acceptance and recording, from and after the effective date
          specified in each Assignment and Acceptance, which effective
          date shall be at least two Business Days after the execution
          thereof. (x) the assignee thereunder shall be a party hereto
          and, to the extent that rights and obligations hereunder have
          been assigned to it pursuant to such Assignment and Acceptance,
          have the rights and obligations of a Bank hereunder, and (y) the
          Bank assignor thereunder shall, to the extent that rights and
          obligations hereunder have been assigned by it pursuant to such
          Assignment and Acceptance, relinquish its rights and be released
          from its obligations under this Agreement (and, in the case of
          an Assignment and Acceptance covering all or the remaining
          portion of an assigning Bank's rights and obligations under this
          Agreement, such Bank shall cease to be a party hereto).

                    (b)  Each Bank may, with the prior written consent of
          the Agent (which consent shall not be unreasonably withheld),
          assign to one or more Affiliates of such Bank all or a portion
          of its rights and obligations under this Agreement (including,
          without limitation, all or a portion of its Commitment, the
          Loans owing to it, and the Note or Notes held by it); provided
          however, that: (i) each such assignment shall be of a constant,
          and not a varying, percentage of all of the assigning Bank's
          rights and obligations under this Agreement, (ii) the amount of
          the Commitment of the assigning Bank being assigned pursuant to
          each such assignment (determined as of the date of the
          Assignment and Acceptance with respect to such assignment) shall
          in no event be less than $5,000,000 and shall be an integral
          multiple of $1,000,000 for amounts in excess thereof, and (iii)
          each such assignment shall be to an Eligible Assignee.  Upon
          such execution, delivery, acceptance and recording, from and
          after the effective date specified in each Assignment and
          Acceptance, which effective date shall be at least two Business
          Days after the execution thereof. (x) the assignee thereunder
          shall be a party hereto and, to the extent that rights and
          obligations hereunder have been assigned to it pursuant to such
          Assignment and Acceptance, have the rights and obligations of a
          Bank hereunder, and (y) the Bank assignor thereunder shall, to
          the extent that rights and obligations hereunder have been
          assigned by it pursuant to such Assignment and Acceptance,
          relinquish its rights and be released from its obligations under
          this Agreement (and, in the case of an Assignment and Acceptance
          covering all or the remaining portion of an assigning Bank's
          rights and obligations under this Agreement, such Bank shall
          cease to be a party hereto).

                    (c)  Each Bank may assign to one or more Banks all or
          a portion of its rights and obligations under this Agreement

                                        86

          (including, without limitation, all or a portion of its
          Commitment, the Loans owing to it, and the Note or Notes held by
          it); provided however, that: (i) each such assignment shall be
          of a constant, and not a varying, percentage of all of the
          assigning Bank's rights and obligations under this Agreement,
          and (ii) the amount of the Commitment of the assigning Bank
          being assigned pursuant to each such assignment (determined as
          of the date of the Assignment and Acceptance with respect to
          such assignment) shall in no event be less than $5,000,000 and
          shall be an integral multiple of $1,000,000 for amounts in
          excess thereof.  Upon such execution, delivery, acceptance and
          recording, from and after the effective date specified in each
          Assignment and Acceptance, which effective date shall be at
          least two Business Days after the execution thereof. (x) the
          assignee thereunder shall be a party hereto and, to the extent
          that rights and obligations hereunder have been assigned to it
          pursuant to such Assignment and Acceptance, have the rights and
          obligations of a Bank hereunder, and (y) the Bank assignor
          thereunder shall, to the extent that rights and obligations
          hereunder have been assigned by it pursuant to such Assignment
          and Acceptance, relinquish its rights and be released from its
          obligations under this Agreement (and, in the case of an
          Assignment and Acceptance covering all or the remaining portion
          of an assigning Bank's rights and obligations under this
          Agreement, such Bank shall cease to be a party hereto).

                    (d)  By executing and delivering an Assignment and
          Acceptance, the Bank assignor thereunder and the assignee
          thereunder confirm to and agree with each other and the other
          parties hereto as follows: (i) other than as provided in such
          Assignment and Acceptance, such assigning Bank makes no
          representation or warranty and assumes no responsibility with
          respect to any statements, warranties or representations made in
          or in connection with this Agreement or the execution, legality,
          validity, enforceability, genuineness, sufficiency or value of
          this Agreement or any other instrument or document furnished
          pursuant hereto; (ii) such assigning Bank makes no
          representation or warranty and assumes no responsibility with
          respect to the financial condition of any Borrower or the
          performance or observance by any Borrower of any of its
          obligations under this Agreement or any other instrument or
          document furnished pursuant hereto; (iii) such assignee confirms
          that it has received a copy of this Agreement, together with
          copies of such financial statements and such other documents and
          information as it has deemed appropriate to make its own credit
          analysis and decision to enter into such Assignment and
          Acceptance; (iv) such assignee will, independently and without
          reliance upon the Agent, such assigning Bank or any other Bank
          and based on such documents and information as it shall deem
          appropriate at the time, continue to make its own credit
          decisions in taking or not taking action under this Agreement;
          (v) such assignee confirms that it is an Eligible Assignee; (vi)
          such assignee appoints and authorizes the Agent to take such

                                        87

          action as agent on its behalf and to exercise such powers under
          this Agreement as are delegated to the Agent by the terms
          hereof, together with such powers as are reasonably incidental
          thereto; and (vii) such assignee agrees that it will perform in
          accordance with their terms all of the obligations which by the
          terms of this Agreement are required to be performed by it as a
          Bank.

                    (e)   Upon its receipt of an Assignment and Acceptance
          executed by an assigning Bank and an assignee representing that
          it is an Eligible Assignee, together with any Note subject to
          such assignment, the Agent shall: (i) accept such Assignment and
          Acceptance, and (ii) give prompt notice thereof to a Borrower.
          Within five Business Days after its receipt of such notice, the
          Borrowers, at their own expense, shall execute and deliver to
          the Agent in exchange for the surrendered Note a new Note to the
          order of such Eligible Assignee in an amount equal to the
          Commitment assumed by it pursuant to such Assignment and
          Acceptance and, if the assigning Bank has retained a Commitment
          hereunder, a new Note to the order of the assigning Bank in an
          amount equal to the Commitment retained by it hereunder.  Such
          new Note shall be in an aggregate principal amount equal to the
          aggregate principal amount of such surrendered Note, shall be
          dated the effective date of such Assignment and Acceptance and
          shall otherwise be in substantially the form of Exhibit A
          hereto.

                    (f)  Each Bank may, without the prior consent of the
          other Banks or any Borrower, sell participations to one or more
          banks or other entities in all or a portion of its rights and
          obligations under this Agreement (including, without limitation,
          all or a portion of its Commitment), the Loans owing to it, and
          the Note held by it; provided, however, that: (i) such Bank's
          obligations under this Agreement (including, without limitation,
          its Commitment hereunder) shall remain unchanged, (ii) such Bank
          shall remain solely responsible to the other parties hereto for
          the performance of such obligations, (iii) such Bank shall
          remain the holder of any such Note for all purposes of this
          Agreement, and (iv) the Borrowers, the Agent and the other Banks
          shall continue to deal solely and directly with such Bank in
          connection with such Bank's rights and obligations under this
          Agreement.

                    (g)  Any Bank may, in connection with any assignment
          or participation or proposed assignment or participation
          pursuant to this Section 10.13, disclose to the assignee or
          participant or proposed assignee or participant, any information
          relating to the Borrowers furnished to such Bank by or on behalf
          of the Borrowers; provided that prior to any such disclosure,
          the assignee or participant or proposed assignee or participant
          shall agree to preserve the confidentiality of any confidential
          information relating to the Borrowers received by it from such
          Bank.

                                        88

                    (h)  Anything in this Section 10.13 to the contrary
          notwithstanding, any Bank may assign and pledge all or any
          portion of its Loans and its Notes to any Federal Reserve Bank
          (and its transferees) as collateral security pursuant to
          Regulation A of the Board of Governors of the Federal Reserve
          System and any Operating Circular issued by such Federal Reserve
          Bank.  No such assignment shall release the assigning Bank from
          its obligations hereunder.

               Section 10.14  Delivery of Tax Forms .

               Each Bank that is not organized under the laws of the
          United States or a state thereof shall:

                    (a)  deliver to a Borrower and the Agent, on or prior
          to the date of the execution and delivery of this Agreement: (i)
          two accurate and duly completed executed copies of United States
          IRS Form 1001 or 4224, or successor applicable form, as the case
          may be, and (ii) an accurate and complete IRS Form W-8 or W-9,
          or successor applicable form, as the case may be;

                    (b)  deliver to a Borrower and the Agent two further
          accurate and complete executed copies of any such form or
          certification on or before the date that any such form or
          certification expires or becomes obsolete and after the
          occurrence of any event requiring a change in the most recent
          form previously delivered by it to a Borrower; and

                    (c)  obtain such extensions of time for filing and
          completing such forms or certifications as may reasonably be
          requested by a Borrower or the Agent; unless in any such case an
          event (including, without limitation, any change in treaty, law
          or regulation) has occurred prior to the date on which any such
          delivery would otherwise be required which renders all such
          forms inapplicable or which would prevent such Bank from duly
          completing and delivering any such form with respect to it and
          such Bank so advises a Borrower and the Agent.  Such Bank shall
          certify: (i) in the case of a Form 1001 or 4224 that is required
          pursuant to subsection 10.14(a), that it is entitled to receive
          payments under this Agreement without deduction or withholding
          of any United States Federal income taxes; (ii) in the case of
          an IRS Form 1001 or 4224, that is provided pursuant to
          subsection 10.14(b), to the extent legally entitled to do so,
          that it is entitled to receive payments under this Agreement
          without, or at a reduced rate of, deduction or withholding of
          any United States Federal income taxes; and (iii) in the case of
          a Form W-8 or W-9, that it is entitled to an exemption from
          United States backup withholding tax.  Each Person not organized
          under the laws of the United States or a state thereof that is
          an assignee hereunder shall, prior to the effectiveness of the
          related transfer, be required to provide all of the forms and
          statements required pursuant to this subsection 10. 14.

                                        89

               Section 10.15  GOVERNING LAW; CONSENT TO JURISDICTION,
          WAIVER OF TRIAL BY JURY .

                    (a)  THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND ALL
          OTHER DOCUMENTS AND INSTRUMENTS EXECUTED AND DELIVERED IN
          CONNECTION HEREWITH AND THEREWITH, SHALL BE GOVERNED BY, AND
          CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE
          COMMONWEALTH OF PENNSYLVANIA WITHOUT REGARD TO ITS RULES
          PERTAINING TO CONFLICTS OF LAWS.

                    (b)  EACH BORROWER IRREVOCABLY CONSENTS THAT ANY LEGAL
          ACTION OR PROCEEDING AGAINST IT UNDER, ARISING OUT OF OR IN ANY
          MANNER RELATING TO THIS AGREEMENT, AND EACH OTHER LOAN DOCUMENT
          MAY BE BROUGHT IN ANY COURT OF THE COMMONWEALTH OF PENNSYLVANIA,
          OR IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT
          OF PENNSYLVANIA.  EACH BORROWER, BY THE EXECUTION AND DELIVERY
          OF THIS AGREEMENT, EXPRESSLY AND IRREVOCABLY ASSENTS AND SUBMITS
          TO THE PERSONAL JURISDICTION OF ANY OF SUCH COURTS IN ANY SUCH
          ACTION OR PROCEEDING.  EACH BORROWER FURTHER IRREVOCABLY
          CONSENTS TO THE SERVICE OF ANY COMPLAINT, SUMMONS, NOTICE OR
          OTHER PROCESS RELATING TO ANY SUCH ACTION OR PROCEEDING BY
          DELIVERY THEREOF TO IT BY HAND OR BY MAIL IN THE MANNER PROVIDED
          FOR IN SECTION 10.9 HEREOF.  EACH BORROWER HEREBY EXPRESSLY AND
          IRREVOCABLY WAIVES ANY CLAIM OR DEFENSE IN ANY SUCH ACTION OR
          PROCEEDING BASED ON ANY ALLEGED LACK OF PERSONAL JURISDICTION,
          IMPROPER VENUE OR FORUM NON CONVENIENS OR ANY SIMILAR BASIS.  NO
          BORROWER SHALL BE ENTITLED IN ANY SUCH ACTION OR PROCEEDING TO
          ASSERT ANY DEFENSE GIVEN OR ALLOWED UNDER THE LAWS OF ANY STATE
          OTHER THAN THE COMMONWEALTH OF PENNSYLVANIA UNLESS SUCH DEFENSE
          IS ALSO GIVEN OR ALLOWED BY THE LAWS OF THE COMMONWEALTH OF
          PENNSYLVANIA.  NOTHING IN THIS SECTION 10.15 SHALL AFFECT OR
          IMPAIR IN ANY MANNER OR TO ANY EXTENT THE RIGHT OF ANY BANK TO
          COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY
          BORROWER IN ANY JURISDICTION OR TO SERVE PROCESS IN ANY
          PERMITTED BY LAW.
                    (c)  EACH BORROWER, THE AGENT AND THE BANKS (BY
          ACCEPTANCE OF THE NOTES) MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY
          AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY, AND EACH
          BORROWER WAIVES THE RIGHT TO INTERPOSE ANY SETOFF OR
          COUNTERCLAIM, IN EACH CASE IN RESPECT OF ANY CLAIM BASED HEREON,
          ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR
          ANY OF THE OTHER LOAN DOCUMENTS CONTEMPLATED TO BE EXECUTED IN
          CONNECTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OR
          DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF
          ANY PARTY, INCLUDING, WITHOUT LIMITATION, ANY COURSE OF CONDUCT,
          COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF THE AGENT OR ANY
          BANK RELATING TO THE ADMINISTRATION OF THE LOANS AND/OR ANY
          OTHER CREDIT FACILITIES HEREUNDER OR THE ENFORCEMENT OF THE LOAN
          DOCUMENTS AND AGREE THAT NEITHER PARTY WILL SEEK TO CONSOLIDATE
          ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH JURY TRIAL CANNOT
          BE OR HAS NOT BEEN WAIVED.

                                        90

               Section 10.16  Entire Agreement .

               This Agreement and the other Loan Documents are intended by
          the parties as the final, complete and exclusive statement of
          the transactions evidenced thereby.  All prior or
          contemporaneous promises, agreements and understandings, whether
          oral or written, are deemed to be superceded by this Agreement
          and such other Loan Documents, and no party is relying on any
          promise, agreement or understanding not set forth in this
          Agreement or such other Loan Documents.

               Section 10.17  Interest Adjustment .

               All Loan Documents are hereby expressly limited so that in
          no contingency or event whatsoever, whether by reason of
          acceleration of maturity of the indebtedness evidenced hereby or
          otherwise, shall the amount paid or agreed to be paid to a Bank
          for the use or the forbearance of the indebtedness evidenced
          hereby exceed the maximum permissible under applicable law.  As
          used herein, the term "applicable law" shall mean the law in
          effect as of the date hereof; provided, however, that in the
          event there is a, change in the law which results in a higher
          permissible rate of interest, then the Loan Documents shall be
          governed by such new law as of its effective date.  In this
          regard, it is expressly agreed that it is the intent of each
          Borrower, the Agent and the Banks in the execution, delivery and
          acceptance of this Agreement to contract in strict compliance
          with the laws of the State of New Jersey from time to time in
          effect.  If, under or from any circumstances whatsoever,
          fulfillment of any provision hereof or of any of the Loan
          Documents at the time of performance of such provision shall be
          due, shall involve transcending the limit of such validity
          prescribed by applicable law, then the obligation to be
          fulfilled shall automatically be reduced to the limits of such
          validity, and if under or from circumstances whatsoever a Bank
          should ever receive as interest an amount which would exceed the
          highest lawful rate, such amount which would be excessive
          interest shall be applied to the reduction of the principal
          balance evidenced by a Note (in such manner as such Bank may
          determine in its sole discretion) and not to the payment of
          interest.  This provision shall control every other provision of
          each of the Loan Documents.

               Section 10.18  Lost Notes .

               Upon receipt of an affidavit of an officer of any Bank as
          to the loss, theft, destruction or mutilation of any Note
          payable to such Bank or any other Loan Document which is not of
          public record, and, in the case of any such loss, theft,
          destruction or mutilation, upon surrender and cancellation of
          such Note or other Loan Document, each Borrower will issue, in
          lieu thereof, a replacement Note or other Loan Document in the
          same principal amount thereof and otherwise of like tenor.

                                        91

               Section 10.19  Joint and Several Basis; Notices Binding .

               All Obligations of the Borrowers to the Agent and/or Bank
          under or in any way connected with the Loan Documents shall be
          on a joint and several basis and each Borrower shall be jointly
          and severally liable for all such Obligations.  It is expressly
          agreed that any notice sent by one or more Borrowers to the
          Agent and/or any Bank shall be binding on all the Borrowers and
          any notice sent by the Agent and/or any Bank to one or more
          Borrowers shall be binding upon each Borrower.

                     [BALANCE OF PAGE INTENTIONALLY LEFT BLANK.
                        SIGNATURE PAGES AND EXHIBITS FOLLOW]

                                        92

               IN WITNESS WHEREOF, the parties hereto have caused this
          Agreement to be duly executed on the date first above written.

                                        PARENT:

                                        J & J SNACK FOODS CORP.

               By:___________________________________
                                        Name:     Dennis G. Moore
                                        Title:    Senior Vice President

                                        SUBSIDIARY BORROWERS:

                                        BAKERS BEST SNACK FOODS CORP.
                                        FEDERAL PBC COMPANY
                                        THE ICEE COMPANY
                                        J&J RESTAURANT GROUP, INC.
                                        J&J SNACK FOODS SALES CORP.  OF
          TEXAS
                                        J&J SNACK FOODS CORP.  OF NEW
          JERSEY
                                        J&J SNACK FOODS SALES CORP.
                                        J&J SNACK FOODS CORP. OF
                                        PENNSYLVANIA
                                        J&J SNACK FOODS TRANSPORT CORP.
                                        J&J SNACK FOODS CORP.  OF
          CALIFORNIA
                                        J&J SNACK FOODS INVESTMENT CORP.
                                        J&J SNACK FOODS CORP./MIDWEST
                                        J&J SNACK FOODS CORP./MIA
          PRETZELS, INC.

               By:___________________________________
                                        Name:     Dennis G. Moore
                                        Title:    Vice President of each
                                        of the above Subsidiary Borrowers

                                        93

          Commitment:

          $25,000,000.00                Citizens Bank of Pennsylvania,
                                        as Agent and as a Bank

                                        By:_____________________________
                                          Name:
                                          Title:

                                        Lending Office for ABR
                                        Loans and LIBOR Loans:

                                        Citizens Bank of Pennsylvania
                                        Citizens Corporate Financing
                                        Citizens Gateway Center
                                        3025 Chemical Road, Suite 300
                                        Plymouth Meeting, PA 19462-1739
                                        Attention:   Devon L. Starks
                                        Telecopier No.: (610) 941-4136

                                        Address for Notices:

                                        Citizens Bank of Pennsylvania
                                        Citizens Corporate Financing
                                        Citizens Gateway Center
                                        3025 Chemical Road, Suite 300
                                        Plymouth Meeting, PA 19462-1739
                                        Attention:   Devon L. Starks
                                        Telecopier No.: (610) 941-4136

                                        94

          Commitment:

          $25,000,000.00                FIRST UNION NATIONAL BANK, as a
                                        Bank

               By:_________________________________
                                          Name:
                                          Title:

                                        Lending Office for ABR
                                        Loans and LIBOR Loans:

                                        First Union National Bank
                                        Commercial Banking
                                        FC-7-415-3-12
                                        600 Cuthbert Boulevard
                                        Haddon Township, New Jersey 08108
                                        Attention: Ellen Gibbin Dodell

                                        Address for Notices:

                                        First Union National Bank
                                        Commercial Banking
                                        FC-7-415-3-12
                                        600 Cuthbert Boulevard
                                        Haddon Township, New Jersey 08108
                                        Attention: Ellen Gibbin Dodell
                                        Telecopier: (856) 771-5860

          993186-5

                                        95

                                  TABLE OF CONTENTS

               Page

          LOAN AGREEMENT 1

          ARTICLE 1 - Definitions  1

          ARTICLE 2  - Commitments; Loans    -18-
               Section 2.1    Loans     -18-
               Section 2.2    Notices Relating to Loans     -19-
               Section 2.3    Disbursement of Loan Proceeds -19-
               Section 2.4    Notes     -19-
               Section 2.5    Payment Applications     -20-
               Section 2.6    Interest  -20-
               Section 2.7    Fees -21-
               Section 2.8    Changes in Commitment    -22-
               Section 2.9    Use of Proceeds of Loans -22-
               Section 2.10   Computations   -23-
               Section 2.11   Minimum Amounts of Borrowings, Conversions,
                         Prepayments and
                         Interest Periods    -23-
               Section 2.12   Time and Method of Payments   -23-
               Section 2.13   Lending Offices     -23-
               Section 2.14   Several Obligations -24-
               Section 2.15   Letter of Credit Subfacility  -24-
               Section 2.16   Intentionally Omitted    -28-
               Section 2.17   Intentionally Omitted    -28-
               Section 2.18   Pro Rata Treatment Among Banks     -28-
               Section 2.19   Non-Receipt of Funds by the Agent  -29-
               Section 2.20   Sharing of Payments and Set-Off Among Banks  -29-
               Section 2.21   Conversions of Loans     -30-
               Section 2.22   Additional Costs; Capital Requirements   -
                    30-
               Section 2.23   Limitation on Types of Loans  -32-
               Section 2.24   Illegality     -32-
               Section 2.25   Certain Conversions pursuant to Sections
                    2.22 and 2.24. -32-
               Section 2.26   Yield Maintenance   -33-

          ARTICLE 3 - Representations and Warranties   -34-
               Section 3.1    Organization   -34-
               Section 3.2    Power, Authority, Consents    -35-
               Section 3.3    No Violation of Law or Agreements  -35-
               Section 3.4    Due Execution, Validity, Enforceability  -
                    36-
               Section 3.5    Properties     -36-
               Section 3.6    Judgements, Actions, Proceedings   -36-
               Section 3.7    No Defaults, Compliance With Laws  -36-

                                         i

               Section 3.8    Burdensome Documents     -37-
               Section 3.9    Financial Statements; Projections  -37-
               Section 3.10   Tax Returns    -37-
               Section 3.11   Intangible Assets   -38-
               Section 3.12   Regulation U   -38-
               Section 3.13   Intentionally Omitted    -38-
               Section 3.14   Full Disclosure     -38-
               Section 3.15   Licenses and Approvals   -38-
               Section 3.16   Labor Disputes; Collective Bargaining
                    Agreements; Employee
                         Grievances     -39-
               Section 3.17   Intentionally Omitted    -39-
               Section 3.18   ERISA     -39-

          ARTICLE 4 -Conditions to the Loans -41-
               Section 4.1    Conditions to Initial Loans   -41-
               Section 4.2    Conditions to Subsequent Loans     -42-

          ARTICLE 5 - Delivery of Financial Reports, Documents and Other
               Information    -43-
               Section 5.1    Annual Financial Statements and    -43-
               Section 5.2    Quarterly Financial Statements     -43-
               Section 5.3    Compliance Information   -44-
               Section 5.4    No Default Certificate   -44-
               Section 5.5    Certificate of Accountants    -44-
               Section 5.6    Accountants' Reports     -44-
               Section 5.7    Copies of Documents -44-
               Section 5.8    Notices of Defaults -45-
               Section 5.9    ERISA Notices and Requests    -45-
               Section 5.10   Intentionally Omitted    -46-
               Section 5.11   Additional Information   -46-

          ARTICLE 6 - Affirmative Covenants  -46-
               Section 6.1    Books and Records   -46-
               Section 6.2    Inspections and Audits   -47-
               Section 6.3    Maintenance and Repairs  -47-
               Section 6.4    Continuance of Business  -47-
               Section 6.5    Copies of Corporate Documents -47-
               Section 6.6    Perform Obligations -47-
               Section 6.7    Notice of Litigation     -48-
               Section 6.8         Insurance -48-
               Section 6.9    Financial Covenants -48-
               Section 6.10   Notice of Certain Events -49-
               Section 6.11   Comply with ERISA   -49-
               Section 6.12   Environmental Compliance -49-
               Section 6.13   Certain Subsidiary Matters    -50-

          ARTICLE 7 - Negative Covenants     -50-
               Section 7.1    Indebtedness   -50-
               Section 7.2    Liens     -51-
               Section 7.3    Guaranties     -52-
               Section 7.4    Mergers, Acquisitions    -52-
               Section 7.5    Redemptions; Distributions    -52-

                                        ii

               Section 7.6    Stock  Issuance     -53-
               Section 7.7    Changes in Business -53-
               Section 7.9    Investments    -53-
               Section 7.10   Fiscal Year    -54-
               Section 7.11   ERISA Obligations   -54-
               Section 7.12   Amendments of Documents  -55-
               Section 7.13   Additional Subsidiaries  -55-
               Section 7.14   Double Negative Pledge   -56-
               Section 7.15   Intentionally Omitted    -56-
               Section 7.16   Intentionally Omitted    -56-
               Section 7.17   Transactions with Affiliates  -56-
               Section 7.18   Hazardous Material  -56-

          ARTICLE 8 - Events of Default -57-
               Section 8.1    Payments  -57-
               Section 8.2    Certain Covenants   -57-
               Section 8.3    Other Covenants     -58-
               Section 8.4    Other Defaults -58-
               Section 8.5    Representations and Warranties     -58-
               Section 8.6    Bankruptcy     -59-
               Section 8.7    Judgements     -59-
               Section 8.8    ERISA     -59-
               Section 8.9    Ownership of Stock  -60-
               Section 8.10   Management     -60-

          ARTICLE 9 - The Agent    -60-
               Section 9.1    Appointment, Powers and Immunities -60-
               Section 9.2    Reliance by Agent   -61-
               Section 9.3    Events of Default   -61-
               Section 9.4    Rights as a Bank    -61-
               Section 9.5    Indemnification     -62-
               Section 9.6    Non-Reliance on Agent and other Banks    -
                    62-
               Section 9.7    Failure to Act -62-
               Section 9.8    Resignation or Removal of Agent    -63-

          ARTICLE 10 - Miscellaneous Provisions   -64-
               Section 10.1   Fees and Expenses; Indemnity  -64-
               Section 10.2   Taxes     -65-
               Section 10.3   Payments  -66-
               Section 10.4   Survival of Agreements and Representations;
                    Construction   -66-
               Section 10.5   Set-off of Deposits -66-
               Section 10.6   Modifications, Consents and Waivers      -
                    64-
               Section 10.7   Remedies Cumulative-, Counterclaims      -
                    68-
               Section 10.8   Further Assurances  -68-
               Section 10.9   Notices   -68-
               Section 10.10  Counterparts   -70-
               Section 10.11  Severability   -70-
               Section 10.12  Binding Effect; No Assignment or Delegation
                    by Borrowers   -70-

                                       iii

               Section 10.13  Assignments and Participations by Banks  -
                    70-
               Section 10.14  Delivery of Tax Forms    -73-
               Section 10.15  GOVERNING LAW; CONSENT TO JURISDICTION,
                         WAIVER
                         OF TRIAL BY JURY    -74-
               Section 10.16  Entire Agreement    -75-
               Section 10.17  Interest Adjustment -75-
               Section 10.18  Lost Notes     -76-
               Section 10.19  Joint and Several Basis; Notices Binding -
                    76-

                                        iv

        EXHIBIT 13.1

         J&J Snack Foods
         6000 Central Highway
         Pennsauken, NJ  08109
         (856) 665-9533
         www.jjsnack.com

         2001 ANNUAL REPORT

         30 Years of Perfecting the Art of Snack Foods

         Caption for cover:
         Cover illustration derived from Creation of Adam by
         Michelangelo, Sistine Chapel, Vatican/Canali
         Photobank Milan/SuperStock.

         FINANCIAL HIGHLIGHTS

                                     Fiscal year ended in September
                            2001     2000      1999      1998      1997
                              (In thousands except per share data)
         Net Sales       $351,696 $318,490  $286,493  $261,456  $219,275
         Net Earnings     $11,876   $9,968   $14,264   $11,850    $8,159
         Total Assets    $224,481 $220,039  $213,680  $213,261  $136,827
         Long-Term Debt   $28,368  $42,481   $34,660   $48,199    $5,028
         Stockholders'
            Equity       $146,143 $133,274  $131,169  $119,681  $105,904

         Common Share Data
         Earnings Per
           Diluted Share    $1.36    $1.10     $1.50     $1.26      $.91
         Earnings Per Basic
           Share            $1.40    $1.13     $1.58     $1.32      $.93
         Book Value Per
           Share           $16.92   $15.64    $14.57    $13.25    $11.97
         Common Shares
           Outstanding
           At Year End     8,636     8,522     9,000     9,036     8,850

         Contents
         2001 in Review             1
         President's Letter         2
         Soft Pretzels              4
         Frozen Beverages           6
         Frozen Desserts            8
         More Snacks               10
         Family of Brands          12
         Financial Information     13
         Corporate Information     29

         President's Letter

         As I reflect proudly on our 30-year anniversary and
         the pride I share with our employees, friends and
         shareholders, I am overwhelmed with the assignment
         that I have as Founder, CEO and Chairman of J&J Snack
         Foods Corp.  And, after 30 years, or 360 months, or
         nearly 11,000 days of developing our classics, I find
         that both the company and I are just hitting our
         stride.  I'm not a painter and I'm certainly not an
         artist by any stretch of the imagination, but I have
         been using whatever creative talent and minimum
         artistic ability I possess to help create our own
         classics.  Our masterpieces.

         30th Anniversary -
         record sales and increased earnings

         Our fiscal year 2001 began with a weak start, but
         ended with a strong close.  Our summary sketch of the
         year's highlights include:
         * Net sales grew by 10% to $352 million - the 30th
           consecutive year of increased sales
         * Net income grew 19% to $11.9 million
         * Earnings per share increased 24% to $1.36
         * Book value climbed to $16.92 per share

         Maintaining the artistic criteria

         Many years ago, we established criteria for creating
         our own classics or masterpieces.  And, we still hold
         true to these criteria today.  The principles include
         selling quality niche products, being a low cost
         producer and establishing strong marketing and
         distribution channels in carrying these products to
         the marketplace.

         Perfecting the art of snack foods

         In addition to our financial results, our 30th
         anniversary year also included important achievements
         in further developing our niches as well as expanding
         our product lines and distribution channels.  In
         fiscal year 2001, we introduced our new "first-of-its-
         kind" PRETZEL FILLERS, a variety of specialty filled
         and topped soft pretzels.  Four flavors (Twisted
         Pizza, Hollerin' Jalape-o, Cinnamon Apple Harvest and
         Sweet Dream Cream Cheese) were successfully introduced
         in the second half of our fiscal year.  Sales of these
         national award-winning "Best In Show" soft pretzels
         have been good as the products are being well
         received.  We expect to build on this momentum in our
         new fiscal year.

         With the completion of our first full year of selling
         MINUTE MAID* licensed products, we began to deliver on
         the potential opportunities we envisioned for our
         long-term partnership with The Minute Maid Company.
         Together with new creations such as our LUIGI'S SWIRL,
         an improved softer texture for LUIGI'S Real Italian
         Ice, and favorable weather in our important summer
         selling months, we had a record year with our frozen
         desserts and juice bars.

         Overall, our Snack Food segment, including sharp
         increases from cookie sales, the Uptown Bakery group
         and retail supermarkets, helped to make this year's
         record sales volume.

         ICEE Frozen Beverages - a blend of colors

         The ICEE Company had another record year in sales and
         further enhanced its position as a mechanical service
         provider and supporting infrastructure partner in the
         growing critical equipment service area.  Aided by
         expanding new products such as SMOOTHEE by ICEE, JAVA
         FREEZE and FROZEN COCKTAILS, The ICEE Company now has
         product entries in multiple channels of our growing
         food service segment.  ICEE has been developing as a
         classic for even longer than our snack food products.
         And now, with an artist's touch, we are blending
         colors and light to increase and enhance its market
         presence.

         Our strengths - past, present and future

         It seems I have stated this before.  Simple but
         effective.  Niche products, low cost producer, strong
         sales and marketing.  Complemented by strategic
         alliances and partnerships with world-class companies.
         These are the criteria that have served us well in the
         past and present.  And more importantly, will continue
         to serve us for the future.

         Gallery of market leaders

         We are not yet The Louvre, but we do take pride in our
         own gallery of market leaders including SUPERPRETZEL;
         ICEE and frozen beverages; churros; funnel cakes; as
         well as frozen juice bars and our fast growing cookie
         segment.  At J&J Snack Foods, we have spent the past
         30 years perfecting the art of snack foods and
         beverages.  We will continue the process and momentum
         with the tremendous talent and experience our team has
         brought together.  I'm confident the succeeding years
         will be equally artistic. Pass the paintbrush please.

         Sincerely,

         Gerald B. Shreiber
         President and Chairman
         December 1, 2001

         *MINUTE MAID is a registered trademark of The
            Coca-Cola Company.

         Caption:

         J&J Snack Foods Corp. joins with millions of Americans
         in extending our deepest sympathy for the victims and
         all those affected by the September 11th attacks on
         our country.

         God Bless America.

         Portrait of Gerald B. Shreiber derived from Self
         Portrait by Vincent van Gogh, SuperStock.

         Soft Pretzels

         J&J Snack Foods is proud to be the world's largest
         manufacturer of soft pretzels - with over a billion
         produced each year! Our flagship brand, SUPERPRETZEL,
         America's Favorite Soft Pretzel, remains the clear
         category leader.

         SUPERPRETZEL - A one-of-a-kind original

         Thirty years ago, history was in the making as
         SUPERPRETZEL was born. It has since grown to become a
         full palette of creative soft pretzel products that
         continues to evolve to satisfy changing consumer
         tastes.

         For three decades, J&J has been masterful in leading
         snack food trends. And because today's lifestyles
         demand convenience, our innovative soft pretzel
         products have become the ideal snack for today's
         consumers, who are constantly on the move and looking
         for a grab-and-go snack. They enjoy our SUPERPRETZEL
         soft pretzels at tens-of-thousands of high-traffic
         locations across the country: malls and shopping
         centers; stadiums and sports arenas; amusement,
         leisure and theme parks; schools and colleges; movie
         theaters; business and industry cafeterias; fast food
         outlets; and supermarkets, chain, convenience and
         warehouse club stores.

         Food Service... a valuable market

         Food Service soft pretzel sales grew this year with an
         important contribution from the November 2000
         acquisition of Uptown Bakeries, which manufactures an
         impressive collection of fresh bakery products
         including soft pretzels, bagels, donuts, muffins and
         cookies.

         The unveiling of PRETZEL FILLERS in May 2001 also
         contributed to the sales increase. These award-winning
         soft pretzels are the first of their kind.  This new
         generation of filled soft pretzel is available in four
         delicious varieties: Twisted Pizza, Hollerin' Jalape-
         o, Cinnamon Apple Harvest and Sweet Dream Cream
         Cheese. Introductory sales of PRETZEL FILLERS to
         sports arenas, theaters, schools and colleges,
         convenience stores, and business and industry channels
         are very encouraging. Like fine art, we expect their
         value to appreciate over time.

         A creative lesson for America's children

         Across the country, SUPERPRETZEL products continue to
         delight schoolchildren. Our shaped soft pretzels -
         including shamrocks, hearts, stars, and more - help
         create seasonal promotions in an artistic way. They're
         fun and delicious, and they satisfy bread requirements
         for the U.S.D.A. National School Lunch/Breakfast
         Program.  And now, kids can enjoy a lunchtime classic:
         PBJ CRUISERS, peanut butter and jelly-filled soft
         pretzels - introduced during the fourth quarter of
         fiscal 2001. They meet both bread and protein
         requirements!

         SUPERPRETZEL Smiles at the supermarket

         The SUPERPRETZEL brand, the market leader in the soft
         pretzel category, is the clear consumer choice. In
         fiscal 2001, soft pretzel sales grew, driven by a 10%
         sales spike for SUPERPRETZEL SOFTSTIX, our cheese-
         filled soft pretzel sticks co-branded with KRAFT*.

         Our Restaurant Group - which operates BAVARIAN PRETZEL
         BAKERY and PRETZEL GOURMET retail stores in the Mid-
         Atlantic region - played an increasing role in the
         development and marketing of some of our new products,
         including PRETZEL.FILLERS. Although sales declined by
         6%, primarily due to reduced mall traffic and store
         closings, the strategic use of this group provides
         quick access to new product analysis.

         *KRAFT and the KRAFT logo are registered trademarks
         owned and licensed by Kraft Foods, Inc.

         Caption:

         Derived from American Gothic by Grant Wood, Friends of
         the American Art Collection. All rights reserved by
         the Art Institute of Chicago and VAGA, New York, NY.

         Frozen Beverages

         The ICEE Company, our frozen beverage division and the
         world's largest distributor of frozen beverages, had
         another strong showing. Sales continued to grow in
         fiscal 2001. While maintaining
         its loyal customer base, ICEE continues to broaden its
         appeal with popular flavor additions such as sour
         green apple.

         The tools of the trade

         Served from our proprietary dispensing equipment, the
         ICEE brand is sold throughout the United States, and
         across the borders in Canada and Mexico, while other
         brands such as ARCTIC BLAST are also available. As a
         part of the ICEE experience, consumers can use either
         straws or spoons to savor these delicious carbonated
         and uncarbonated treats.

         So that consumers can enjoy one of our delicious
         frozen drinks wherever they choose, an additional
         1,500 new dispensing machines were installed
         nationwide this past fiscal year. Now 21,500 food
         service outlets make our refreshing ICEE frozen
         beverages available to the public... and more
         locations are being added every day. Many of the same
         outlets also offer our delicious SUPERPRETZEL soft
         pretzels and other J&J snack food products, making for
         a classic combo purchase!

         Mastering the art of service

         When your product depends on equipment and its
         performance for sales, service is critically
         important, and no one does it better than The ICEE
         Company. Our centralized Customer Service Center
         supports a nationwide network of branches and service
         technicians exhibiting state-of-the-art "Service
         Excellence". In fiscal 2001 we also expanded our
         network and infrastructure in order to perform service
         for other beverage and related food equipment
         providers and users as well.

         Frozen drinks and friends

         Our long-term marketing agreement with The Coca-Cola
         Company exemplifies the power of partners. The ICEE
         Company provides service for all frozen carbonated
         beverage dispensing machines in Burger King* locations
         across the country, while The Coca-Cola Company
         provides the syrup. We continue to partner with The
         Coca-Cola Company and look forward to creating
         exciting new beverage programs together.

         Capitalizing on promotional opportunities and
         successful merchandising are other time-tested
         components of ICEE's consumer appeal. Throughout the
         year we initiate account-specific themed promotions -
         made available nationally - including sweepstakes,
         major movie release tie-ins, and NFL** and
         NASCAR(r)*** cup promotions. Clearly, consumers can't
         resist the awe-inspiring graphics that stimulate
         impulse purchases in high-traffic locations every
         time.

         Uncarbonated and unbelievably good

         Sales of our frozen uncarbonated beverages - including
         SMOOTHEE by ICEE, JAVA FREEZE and FROZEN COCKTAILS -
         painted a pretty picture in fiscal 2001. SMOOTHEE by
         ICEE, made with real fruit juice and offered in a
         variety of flavors, is now a schooltime favorite...
         and gourmet coffee-flavored JAVA FREEZE exhibited
         popularity at snack bars. FROZEN COCKTAILS, created
         expressly for adults,
         can be enjoyed with or without alcohol at sports and
         entertainment venues everywhere. Try one for a taste
         sensation!

           *Burger King is a registered trademark of Burger
         King Corporation.
          **NFL is a registered trademark of The National
         Football League.
         ***NASCAR is a registered trademark of The National
         Association for Stock Car Auto Racing, Inc.

         Caption:

         Derived from Members of the Draper's Club by Rembrandt
         van Rijn, Rijksmuseum,  Amsterdam/SuperStock.

         Frozen Desserts

         There is no mistaking the smiles when it comes to
         J&J's recognizable and impressive brands of frozen
         desserts, which include LUIGI'S, ICEE, MINUTE MAID*,
         SHAPE UPS, CHILL and MAMA TISH'S. Sales were up
         significantly in fiscal 2001.

         Made for each other

         Our long-term partnership with The Minute Maid Company
         - which was forged in 1999 - provides J&J exclusive
         rights to manufacture, sell and distribute licensed
         frozen juice products under the MINUTE MAID brand
         name. Our frozen dessert business has enjoyed
         significant growth as a result.

         As part of this marketing agreement, we unveiled a
         brand-new, state-of-the-art water purification system
         in our Scranton, Pennsylvania facility. This 99.7%
         pure water ultrafiltration system ensures that the
         water that goes into our frozen desserts is as safe
         and pure as can be.

         Masterful results for food service

         New distribution, new product introductions and the
         February 2001 acquisition of CHILL brand fruit ice
         food service products produced a strong 16% increase
         in sales for the Food Service division. The CHILL
         brand reinforces the already strong J&J line-up,
         especially in leisure and theme accounts and at sports
         venues.

         More smiles at the store

         Fiscal 2001 was picture-perfect for retail supermarket
         sales, which increased 28%! LUIGI'S - the nation's
         top-selling brand of Italian ice - posted strong
         gains, helped by an improved, softer texture
         formulation and the successful test-market
         introduction of LUIGI'S SWIRL, two flavors swirled
         together into one delicious frozen treat. Look forward
         to more flavors and a national rollout in fiscal 2002.

         MINUTE MAID Juice Bars, MINUTE MAID Soft Frozen
         Lemonade and ICEE Squeeze Tubes all capitalized on
         their strong brand awareness with increased sales and
         distribution. Like fine art, their value to consumers
         will continue to appreciate.

         2001 was also a portrait of success for warehouse club
         store sales, due to a marked increase in sales of
         MINUTE MAID Soft Frozen Lemonade in particular, as
         well as ICEE, LUIGI'S and MAMA TISH'S brands.

         Style and substance at school

         With more than 80 million servings every year, SHAPE
         UPS frozen juice bars are far and away the #1 juice
         bar with America's schoolchildren. They proudly carry
         the Child Nutrition (CN) Label and fulfill juice
         requirements for the U.S.D.A. National School
         Lunch/Breakfast Program, making them the obvious
         choice for school food service directors nationwide.
         In the fourth quarter, we received extra credits for
         our fresh, new look and the addition of the MINUTE
         MAID brand name, so expect our grades to improve even
         more in 2002.

         *MINUTE MAID is a registered trademark of The Coca-
         Cola Company.

         Caption:

         Derived from Mona Lisa by Leonardo da Vinci, Musee du
         Louvre, Paris/SuperStock.

         More Snacks

         J&J continues to receive positive reviews for our
         gallery of other sweet and dreamy niche snack foods
         and bakery goods, including cookies, churros and
         funnel cakes. Our Los Angeles-based West Coast Bakery,
         which produces frozen cookie dough, commercial
         specialty baking products, contract private label
         products, and organically certified baked goods,
         turned in another solid performance in fiscal 2001,
         with a 4% sales increase.

         More hands in our cookie jar

         On the wings of a 20% sales increase in fiscal 2001,
         J&J continues to demonstrate skill and savvy in the
         expanding food service cookie market.

         Our wholesome MRS. GOODCOOKIE brand ascended to new
         heights this past year with increased sales and the
         introduction of individually wrapped cookies in an
         assortment of sizes and flavors. The cookie business
         also got a boost from our CAMDEN CREEK brand, our
         private label fundraising cookies and the distribution
         of cookies through Uptown Bakeries. Uptown has allowed
         J&J to enter the fresh bakery arena with lots of
         goodies - bagels, donuts, muffins and more. Thanks to
         our newly expanded food service sales and distribution
         base, the sky's the limit for potential future growth.

         Churros are churning ahead

         Capturing the essence of the Southwest, TIO PEPE'S
         churros - crispy, cinnamon, doughnut-like snacks -
         continue to broaden their appeal from their Hispanic
         roots into mainstream American culture. Fiscal 2001
         was encouraging, due to a 3% sales increase in our
         food service business led by widening acceptance of
         our fruit-filled churros.

         Our tasty fruit-filled churros are also helping us get
         a foothold in the promising school food service
         channel, as they satisfy both bread and fruit
         requirements for the U.S.D.A. National School
         Lunch/Breakfast Program. Children and food service
         directors alike are delighted they're on the menu.

         Sales in the retail supermarket provided the finishing
         touch for churros with an 11% sales increase in fiscal
         2001 due to increased consumption.

         Funnel cakes in fine form

         Our heavenly funnel cakes, available as frozen pre-
         cooked and pre-shaped or as make-your-own dry mix,
         continue their sweet success in food service. In fact,
         THE FUNNEL CAKE FACTORY brand funnel cakes crafted a
         12% sales gain this past year. They continue to make
         an impression in all the channels where they are sold,
         including theme and amusement parks, stadiums and
         arenas, fundraising and at special events. They also
         earn high grades with America's schoolchildren - as
         they meet bread requirements for the U.S.D.A. National
         School Lunch/Breakfast Program.

         J&J looks forward to refining the art of snack foods
         and beverages for decades to come - by viewing each of
         our products as a masterpiece. We thank everyone who
         has contributed to our first 30 years and look forward
         to creating new and exciting snack innovations in the
         years ahead.

         Caption:

         Derived from Sistine Madonna by Raphael, SuperStock.

         J&J Snack Foods Corp.
         FAMILY OF BRANDS

         Timeline:

         J&J Snack Foods Corp. is a classic portrait of "The
         American Dream". Follow our 30-year history of growth.

         1971
         * September 27 - Gerald B. Shreiber purchases J&J Soft
         Pretzel Co. at bankruptcy auction. J&J Snack Foods
         Corp. established in Pennsauken, NJ.

         1972
         * Los Angeles Branch opens. Business activity is
         initiated in Western U.S.

         1973
         * SUPERPRETZEL Soft Pretzel trademark registered.

         1974
         * J&J introduces animated carousel display cases.
         * Sales break $1 million mark.

         1975
         * Plant expanded, production capacity doubled.

         1976 - 77
         * National network of distributors developed. Soft
         pretzel markets expanded.

         1978
         * Acquisitions of two soft pretzel manufacturers give
         J&J a national presence:
           - Frampton Corp. - St. Louis, MO
           - Pretzel Man Corp. - Los Angeles, CA
         * "King Size" soft pretzels introduced.

         1980-81
         * Churro product acquired from subsidiary of Rapid
         American Corp. TIO PEPE'S Churros created.

         1982
         * Exclusive license rights for the manufacture and
         sale of AMF pretzel twisters acquired.

         1983-84
         * New building acquired and major expansion completed.
         Capacity increases fourfold.
         * Acquisition of BSP Soft Pretzel Co. (formerly
         Bachman Soft Pretzel Co.)
         * SUPER JUICE Juice Bar product line introduced.

         1985-86
         * J&J expands into retail supermarket business.
         * Company completes successful initial public offering
         of 600,000 shares. Stock is traded on NASDAQ.
         * DUTCHIE soft pretzel business acquired.
         * Southern Food Products acquired and western soft
         pretzel operations relocated to its facility in
         Vernon, CA.
         * Sales go over $25 million.

         1987
         * At first Annual Shareholders' Meeting, Gerald B.
         Shreiber, Chairman, announces $100 million sales goal
         by 1992.
         * Company completes successful $20 million Convertible
         Debenture offering.
         * Controlling interest in ICEE-USA is acquired, adding
         Frozen Carbonated Beverages to our niche products.
         * J&J acquires FROSTAR frozen novelties from Schwan's.
         * Sales climb to over $47 million.

         1988
         * J&J is recognized by Forbes magazine as one of the
         200 Best Small Companies in America.
         * Acquisitions of:
           - Trotter Soft Pretzel Co.
           - Western Syrup
           - American Snack Foods
           - MIA Products Co.

         1989
         * New generation of soft pretzel twisters developed.
         King size soft pretzel production automated.
         * $20 million Convertible Debentures converted to
         common stock 2 years after issuance.
         * LUIGI'S Real Italian Ice introduced to supermarkets.

         1990
         * Frozen Carbonated Beverage business expanded through
         the acquisition of Michigan Carbonic Company.

         1991
         * Company logo updated; retail SUPERPRETZEL package redesigned.
         * Additional common stock offering raises $29 million.
         * Company breaks $100 million sales mark.
         * J&J is again recognized by Forbes magazine.

         1992
         * SOFTSTIX Cheese Filled Soft Pretzel Sticks added to
         SUPERPRETZEL line.
         * ARCTIC BLAST frozen carbonated beverage introduced.

         1993
         * New 104,000 square foot state-of-the-art
         distribution center opened at Pennsauken facility.

         1994
         * Acquisitions of:
           - The Funnel Cake Factory, Inc.
           - Bavarian Soft Pretzels, Inc.

         1995
         * ICEE international rights acquired.

         1996
         * Acquisitions of:
           - Pretzel Gourmet Corp.
           - Mazzone Enterprises, Inc.
           - Bakers Best Snack Food Corp.
         * New frozen warehouse and distribution center opened
         in Vernon, CA.

         1997
         * Acquisitions of:
         - Pretzels, Inc.
         - Mama Tish's International Foods
         * Sales exceed $220 million.

         1998
         * J&J makes its biggest acquisition to date with
         National ICEE Corp.
         * Mrs. GoodCookie, a line of ready-to-bake cookies is
         introduced.

         1999
         * J&J acquires CAMDEN CREEK BAKERY.
         * Frozen novelties are introduced under the ICEE
         brand.

         2000
         * J&J launches a line of frozen desserts under the
         Minute Maid brand.
         * SUPERPRETZEL merchandiser/display is updated with a
         new look for the millennium.

         2001
         * J&J acquires Uptown Bakeries.
         * Pretzel Fillers, a new and unique line of
         filled and topped soft pretzels, are
           introduced.
         * Sales reach $352 million.

         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS

         In addition to historical information, this
         discussion and analysis contains forward-looking
         statements. The forward-looking statements
         contained herein are subject to certain risks and
         uncertainties that could cause actual results to
         differ materially from those projected in the
         forward-looking statements. Important factors
         that might cause such a difference include, but
         are not limited to, those discussed in the
         "Management's Discussion and Analysis of
         Financial Condition and Results of Operations."
         Readers are cautioned not to place undue reliance
         on these forward-looking statements, which
         reflect management's analysis only as of the date
         hereof. The Company undertakes no obligation to
         publicly revise or update these forward-looking
         statements to reflect events or circumstances
         that arise after the date hereof.

         RESULTS OF OPERATIONS

         Fiscal 2001 (52 weeks) Compared to Fiscal 2000
         (53 weeks)

         Net sales increased $33,206,000 or 10% to
         $351,696,000 in fiscal 2001 from $318,490,000 in
         fiscal 2000.

         Excluding sales resulting from acquisitions,
         sales increased 5% for the 52 weeks compared to
         the 53 weeks in fiscal 2000.

         The Company has two reportable segments, as
         disclosed in the notes to the consolidated
         financial statements: Snack Foods and Frozen
         Beverages. The Snack Foods segment manufactures
         and distributes snack foods and bakery items,
         which includes sales to food service customers,
         retail supermarkets and our restaurant group. The
         Frozen Beverages segment markets and distributes
         frozen beverage products. These segments are
         managed as strategic business units due to their
         distinct production processes and capital
         requirements.

         Snack Foods

         Sales to food service customers increased
         $22,726,000 or 19% to $140,911,000 in fiscal
         2001. Excluding sales resulting from
         acquisitions, sales would have increased
         approximately 4% for the year. Soft pretzel sales
         to the food service market increased 2% to
         $61,520,000 for the 2001 year. Excluding sales
         resulting from acquisitions, food service soft
         pretzel sales would have decreased approximately
         3%. Churro sales increased 3% to $11,478,000.
         Frozen juice bar and ices sales increased 16% to
         $33,558,000. Approximately 40% of the frozen
         juice bars and ices sales increase resulted from
         acquisitions. Sales of cookies to food service
         customers increased $2,346,000, or 20%, to
         $13,943,000 for the year.

         *Minute Maid is a registered trademark of The
         Coca-Cola Company.

         Sales of products to retail supermarkets
         increased $8,533,000 or 16% to $62,437,000 in
         fiscal 2001. Total soft pretzel sales to retail
         supermarkets were $26,336,000, an increase of 2%
         from fiscal 2000. Sales of our flagship
         SUPERPRETZEL brand soft pretzels increased 2% to
         $24,093,000. Sales of frozen juice bars and ices
         increased $8,113,000 or 28% to $36,935,000 in
         2001 from $28,822,000 in 2000 due to increased
         volume of LUIGI'S Real Italian Ice and the
         Company's MINUTE MAID* brand licensed products.

         Bakery sales increased $1,054,000 or 4% to
         $30,462,000 in fiscal 2001 due to increased unit
         sales across our customer base. Our Bavarian
         Pretzel Bakery restaurant group sales decreased
         6% to $12,043,000 for the year due to decreased
         mall traffic and the closing of unprofitable
         stores. All of the increases and decreases in
         sales throughout the Snack Foods segment were
         primarily the result of changes in unit volume.

         Frozen Beverages

         Frozen beverage and related product sales
         increased $1,672,000 or 2% to $105,843,000 in
         fiscal 2001. Beverage sales alone increased 2% to
         $89,930,000 for the year although gross profit on
         beverage sales was essentially unchanged for the
         year. Service and lease revenue increased
         $1,433,000, or 13% to $12,396,000 for the year.

         Consolidated

         Gross profit decreased to 49% of sales in 2001
         from 52% of sales in 2000. Approximately 85% of
         the decrease is due to the inclusion of Uptown
         Bakeries which has a low gross profit percentage
         relative to the balance of the Company's
         business.

         Total operating expenses increased $7,360,000 to
         $152,761,000 in fiscal 2001 and as a percentage
         of sales decreased to 43% in 2001 from 46% in
         2000. Marketing expenses decreased to 31% of
         sales in fiscal 2001 from 33% in 2000 because of
         the inclusion of Uptown Bakeries which had no
         significant marketing expenses. Distribution and
         administrative expenses were 8% and 4%,
         respectively, in both years.

         Operating income increased $1,737,000 or 9% to
         $20,549,000 in fiscal 2001.

         Operating income was impacted by higher property
         and casualty insurance costs of approximately
         $1,500,000 for the year. The higher costs were
         due to market conditions and the Company's claims
         experience.

         Interest expense increased $428,000 to $3,183,000
         in fiscal 2001 due to debt incurred to fund
         acquisitions and a $213,000 charge to writedown a
         swap agreement to fair value.

         Sundry income increased $1,476,000 to $833,000 in
         2001 compared to sundry expense of $643,000 in
         2000, primarily due to insurance gains and the
         settlement of certain litigation in 2001 compared
         to the writedown to its net realizable value of
         property held for sale in 2000.

         The effective income tax rate was 36% in fiscal
         2001 and 37% in fiscal 2000.Net earnings
         increased $1,908,000 or 19% in fiscal 2001 to
         $11,876,000 or $1.36 per fully diluted share.

         Fiscal 2000 (53 weeks) Compared to Fiscal 1999
         (52 weeks)

         Net sales increased $32,673,000 or 11% to
         $318,490,000 in fiscal 2000 from $286,493,000 in
         fiscal 1999.

         The Company has two reportable segments, as
         disclosed in the notes to the consolidated
         financial statements: Snack Foods and Frozen
         Beverages. The Snack Foods segment manufactures
         and distributes snack foods and bakery items,
         which includes sales to food service customers
         and retail supermarkets. The Frozen Beverages
         segment markets and distributes frozen beverage
         products. These segments are managed as strategic
         business units due to their distinct production
         processes and capital requirements.

         Snack Foods

         Sales to food service customers increased
         $4,978,000 or 4% to $118,185,000 in fiscal 2000.
         Soft pretzel sales to the food service market
         decreased 2% to $60,309,000 due primarily to
         lower unit sales to two customers. Churro sales
         decreased 8% to $11,162,000 due primarily to
         decreased unit sales to two customers. Frozen
         juice bar and ices sales increased 7% to
         $29,014,000. Sales of the Company's MINUTE MAID
         brand licensed products accounted for the frozen
         juice bars and ices sales increase. Sales of
         cookies to food service customers increased
         $4,471,000, or 63%, to $11,597,000 for the year
         due to the acquisition of the Camden Creek Bakery
         cookie business and increased unit sales.

         Sales of products to retail supermarkets
         increased $11,921,000 or 28% to $53,904,000 in
         fiscal 2000. Total soft pretzel sales to retail
         supermarkets were $25,721,000, an increase of 7%
         from fiscal 1999. Sales of our flagship
         SUPERPRETZEL brand soft pretzels, excluding
         SOFTSTIX, increased 3% to $19,340,000. An
         advertising program which began in last year's
         first quarter helped boost year ago pretzel
         sales. SOFTSTIX sales increased $1,203,000 or 40%
         to $4,234,000 from the previous year. Sales of
         frozen juice bars and ices increased $10,949,000
         or 61% to $28,822,000 in 2000 from $17,873,000 in
         1999 due primarily to the introduction of the
         Company's MINUTE MAID brand licensed products.

         Bakery sales increased $2,503,000 or 9% to
         $29,408,000 in fiscal 2000 due to increased unit
         sales across our customer base. Our Bavarian
         Pretzel Bakery restaurant group sales increased
         1% to $12,822,000 for the year.

         Frozen Beverages

         Frozen beverage and related product sales
         increased $12,422,000 or 14% to $104,171,000 in
         fiscal 2000. Beverage sales alone increased 12%
         to $88,421,000 for the year and gross profit on
         beverage sales increased 8%, or $4,694,000 for
         the year. Service and lease revenue increased
         $4,378,000 for the year.

         Consolidated

         Gross profit decreased to 52% of sales in 2000
         from 53% of sales in 1999. The gross profit
         percentage decrease is primarily attributable to
         cost overruns during start up manufacturing of
         our MINUTE MAID brand licensed products which was
         begun during the Company's second quarter, lower
         food service pretzel and churro sales, and lower
         gross profit percentages of the increased service
         and lease revenue of our frozen beverage
         business.

         Total operating expenses increased $18,834,000 to
         $145,401,000 in fiscal 2000 and as a percentage
         of sales increased to 46% in 2000 from 44% in
         1999. Marketing expenses increased to 33% of
         sales in fiscal 2000 from 32% in 1999 due to
         increased depreciation expense of frozen beverage
         dispensers, increased payroll and vehicle costs
         for the servicing of frozen beverage dispensers
         and establishing of reserves for trade
         receivables from movie theatre chains.
         Distribution expenses were 8% of sales in fiscal
         2000 and 1999. Administrative expenses were 4% of
         sales in both fiscal 2000 and 1999.

         Operating income decreased $6,151,000 or 25% to
         $18,812,000 in fiscal 2000.

         Without the impact of reserving for accounts
         receivable from movie theatre chains, operating
         income would have decreased $5,098,000 or 20% to
         $19,865,000 in fiscal 2000.

         Interest expense decreased $469,000 to $2,755,000
         in fiscal 2000 due to lower debt levels.

         Sundry expense increased $1,058,000 to $643,000
         in 2000 compared to sundry income of $415,000 in
         1999 primarily because of the writedown to its
         net realizable value of property held for sale in
         2000.

         The effective income tax rate was 37% in both
         fiscal 2000 and fiscal 1999.

         Net earnings decreased $4,296,000 or 30% in
         fiscal 2000 to $9,968,000 or $1.10 per fully
         diluted share.

         Without the impact of reserving for the trade
         receivables from movie theatre chains and the
         writedown of the property held for sale, net
         earnings in 2000 would have been $11,158,000 or
         $1.23 per diluted share.

         ACQUISITIONS, LIQUIDITY AND CAPITAL RESOURCES

         In November 2000, the Company acquired the assets
         of Uptown Bakeries for cash. Uptown Bakeries,
         located in Bridgeport, NJ, sells bakery items to
         the food service industry with approximate annual
         sales of $17,000,000.

         In February 1999, the Company acquired the Camden
         Creek Bakery cookie business from Schwan's Sales
         Enterprises, Inc., Marshall, MN for cash. Camden
         Creek sells frozen ready-to-bake cookies to the
         food service industry with approximate annual
         sales of $5,000,000.

         All of the Company's acquisitions were accounted
         for under the purchase method of accounting, and
         the operations are included in the consolidated
         financial statements from the respective
         acquisition date.

         The Company's future expected operating cash flow
         along with its borrowing capacity are its primary
         sources of liquidity. The Company believes that
         these sources are sufficient to fund future
         growth and expansion.

         Fluctuations in the value of the Mexican peso and
         the resulting revaluation of the net assets of
         the Company's Mexican frozen beverage subsidiary
         caused decreases of $25,000 and $15,000 in
         accumulated comprehensive income in the 2001 and
         2000 fiscal years, respectively, and an increase
         of $93,000 in fiscal year 1999. In 2001, sales of
         the Mexican subsidiary were $3,248,000 as
         compared to $2,967,000 in 2000.

         In fiscal year 2001, the Company purchased and
         retired 111,000 shares of its common stock at a
         cost of $1,431,000. In fiscal year 2000, the
         Company purchased and retired 614,000 shares of
         its common stock at a cost of $9,834,000. In
         fiscal year 1999, the Company purchased and
         retired 250,000 shares of its common stock at a
         cost of $5,625,000. The Company purchased the
         stock in 1999 from its President and Chief
         Executive Officer. Under a buyback authorization
         approved by the Board of Directors in December
         1999, 275,000 shares remain to be purchased at
         September 29, 2001.

         Subsequent to September 29, 2001 and prior to the
         issuance of these financial statements, the
         Company refinanced its general-purpose bank
         credit line. The outstanding balance under this
         facility was $23,000,000 at September 29, 2001.
         The new agreement provides for up to a
         $50,000,000 revolving credit facility repayable
         in three years, with the availability of
         repayments without penalty. The new agreement
         contains restrictive covenants and requires
         commitment fees in accordance with standard
         banking practice.

         In December 2001, the Company borrowed $5,000,000
         on its general-purpose bank credit line to pay
         off early its $5,000,000 7.25% redeemable
         economic development revenue bond payable
         December 2005.

         In June 1998, Statement of Financial Accounting
         Standards (SFAS) No. 133 "Accounting for
         Derivative Instruments and Hedging Activities"
         was issued. Subsequent to this statement, SFAS
         No. 137 was issued, which amended the effective
         date of SFAS No. 133 to be all fiscal quarters of
         all fiscal years beginning after June 15, 2000.
         In June 2000, SFAS 138 was issued, "Accounting
         for Certain Derivative Instruments and Certain
         Hedging Activities, an amendment of SFAS 133."
         SFAS 133, as amended by SFAS 138, requires that
         all derivative instruments be recorded on the
         balance sheet at their respective fair values.
         Changes in the fair value of derivatives are
         recorded each period in current earnings or other
         comprehensive income, depending on the
         designation of the hedge transaction. The Company
         adopted SFAS 133, as amended by SFAS 138, on
         October 1, 2000. Based on the Company's minimal
         use of derivatives, the adoption of this standard
         did not have a significant impact on earnings or
         financial position of the Company.

         In December 1999, the Securities and Exchange
         Commission issued Staff Accounting Bulletin No.
         101, Revenue Recognition in Financial Statements
         (SAB 101) which addresses certain criteria for
         revenue recognition. SAB 101, as amended by SAB
         101A and SAB 101B, outlines the criteria that
         must be met to recognize revenue and provides
         guidance for disclosures related to revenue
         recognition policies. The Company implemented the
         provisions of SAB 101 on October 1, 2000. The
         Company's revenue recognition policies complied
         with the guidance contained in SAB 101 and,
         therefore, the Company's results of operations
         were not materially affected.

         On June 29, 2001, SFAS No. 141, Business
         Combinations, and SFAS No. 142, Goodwill and
         Intangible Assets, were issued. These statements
         are expected to result in significant
         modifications relative to the Company's
         accounting for goodwill and other intangible
         assets. SFAS No. 141 requires that all business
         combinations initiated after June 30, 2001 must
         be accounted for under the purchase method of
         accounting. SFAS No. 141 was effective upon
         issuance. SFAS No. 142 includes requirements to
         test goodwill and indefinite lived intangible
         assets for impairment rather than amortize them.
         SFAS No. 142 is effective for fiscal years
         beginning after December 31, 2001 and early
         adoption is permitted for companies with fiscal
         years beginning after March 15, 2001 provided
         they have not issued their first quarter
         financial statements. The Company anticipates
         early adopting SFAS 142 on September 30, 2001 and
         expects to complete the measurement of any
         potential transitional impairment loss by the due
         date of its first quarter financial statements.
         If adopted, the Company will no longer amortize
         goodwill, thereby eliminating an annual
         amortization expense of approximately $2,700,000.

         Fiscal 2001 Compared to Fiscal 2000

         Trade receivables increased $2,533,000 or 7% to
         $35,501,000 in 2001 due primarily to the
         receivables of Uptown Bakeries, which was
         acquired in November 2000. Inventories increased
         $276,000 or 1% to $21,749,000 in 2001.

         Property, plant and equipment decreased
         $4,413,000 to $104,756,000 because expenditures
         for dispensers required for the expansion of the
         frozen beverage business, for ovens and portable
         merchandisers required for the expansion of the
         food service business and for the expansion and
         upgrading of production capability at the
         Company's manufacturing facilities was
         approximately $13,000,000 less than depreciation
         of existing assets which was partially offset by
         the property, plant and equipment acquired in the
         Uptown Bakeries acquisition.

         Goodwill, trademarks and rights, net of
         accumulated amortization decreased $1,070,000 to
         $47,698,000 due to amortization net of the
         acquisition of the Chill brand fruit ice license
         agreement.

         Accounts payable and accrued liabilities
         increased $5,039,000 in 2001 from $33,641,000 in
         2000 due primarily to an increase in income taxes
         payable resulting from a change in the due date
         of the September 15 federal estimated tax payment
         to October 1.

         Current maturities of long-term debt decreased by
         $2,071,000 to $115,000 and long-term debt, less
         current maturities decreased by $14,113,000 to
         $28,368,000 primarily due to the paydown of debt.

         Deferred income taxes increased by $888,000 to
         $9,228,000 which related primarily to disposals
         and depreciation of property, plant and
         equipment.

         Common stock increased $1,018,000 to $29,421,000
         in 2001 because of the exercise of incentive
         stock options and stock issued under the
         Company's stock purchase plan for employees, net
         of share repurchases.

         Net cash provided by operating activities
         increased $12,248,000 to $49,454,000 in 2001
         primarily due to increased net earnings,
         depreciation and amortization of fixed assets,
         deferred income taxes and accounts payable and
         accrued liabilities.

         Net cash used in investing activities decreased
         $6,995,000 to $28,088,000 in 2001 primarily due
         to decreased purchases of property, plant and
         equipment.

         Net cash used in financing activities increased
         $8,619,000 in 2001 to $15,308,000 from $6,689,000
         in 2000. The increase of $8,619,000 was the
         result of net paydown in borrowings in 2001 of
         $16,184,000 compared to an increase in borrowings
         of $1,793,000 in 2000 offset by a decrease of
         $8,403,000 in payments to repurchase common
         stock.

         Fiscal 2000 Compared to Fiscal 1999

         There were no short-term investments held to
         maturity at September 30, 2000 as compared to
         $924,000 at September 25, 1999 because the
         investment matured during fiscal year 2000.

         Trade receivables increased $1,564,000 or 5% to
         $32,968,000 in 2000 primarily due to receivables
         generated from sales of the Company's MINUTE MAID
         brand licensed products, introduced in fiscal
         year 2000. Inventories increased $5,286,000 or
         33% to $21,473,000 in 2000 primarily because of
         the introduction of the MINUTE MAID brand
         licensed products, parts required to service
         frozen beverage dispensers in over 7,000 Burger
         King* restaurants, and the start-up of cookie
         manufacturing on the East Coast.

         *Burger King is a registered trademark of Burger
         King Corporation.

         Property, plant and equipment increased
         $29,071,000 to $261,324,000 primarily because of
         expenditures for dispensers required for the
         expansion of the frozen beverage business, for
         ovens and portable merchandisers required for the
         expansion of the food service business and for
         the expansion and upgrading of production
         capability at the Company's manufacturing
         facilities.

         Goodwill, trademarks and rights, net of
         accumulated amortization decreased $2,053,000 to
         $48,768,000 due to amortization.

         Accounts payable and accrued liabilities
         increased $1,951,000 in 2000 from $31,690,000 in
         1999 due primarily to increased levels of
         business.

         Current maturities of long-term debt decreased by
         $6,028,000 to $2,186,000 and long-term debt, less
         current maturities increased by $7,821,000 to
         $42,481,000 because of the reclassification of
         debt due under an unsecured term loan and a
         general-purpose bank credit line which was
         refinanced subsequent to September 30, 2000 and
         prior to the issuance of these financial
         statements.

         Deferred income taxes increased by $638,000 to
         $8,340,000 which related primarily to disposals
         and depreciation of property, plant and
         equipment.

         Common stock decreased $7,848,000 in 2000 to
         $28,403,000 because of the repurchase and
         retirement of 614,000 shares of common stock, net
         of the exercise of incentive stock options and
         stock issued under the Company's stock purchase
         plan for employees.

         Net cash provided by operating activities
         decreased $11,162,000 to $37,206,000 in 2000
         primarily due to decreased net earnings, and
         increases in trade receivables and inventories.

         Net cash used in investing activities increased
         $6,464,000 to $35,083,000 in 2000 primarily due
         to increased purchases of property, plant and
         equipment.

         Net cash used in financing activities decreased
         $10,319,000 in 2000 to $6,689,000 from
         $17,008,000 in 1999. The decrease of $10,319,000
         was the result of an increase in borrowings in
         2000 of $1,793,000 compared to a net paydown of
         $13,748,000 in 1999 caused by an increase of
         $4,209,000 in payments to repurchase common stock
         in addition to the aforementioned reduction in
         net cash provided by operating activities and the
         increase in net cash used in investing
         activities.

                     CONSOLIDATED STATEMENTS OF EARNINGS

                                                         Fiscal year ended
                                  September 29, September 30, September 26,
                                          2001           2000     1999
                                       (52 weeks)    (53 weeks)  (52 weeks)
                               (in thousands, except per share information)

         Net Sales                       $351,696     $318,490  $286,493
         Cost of goods sold               178,386      154,277   134,963
              Gross profit                173,310      164,213   151,530
         Operating expenses
              Marketing                   110,323      104,784    90,563
              Distribution                 26,985       26,296    22,366
              Administrative               12,747       11,470    10,668
              Amortization of intangibles
               and deferred costs           2,706        2,851     2,970
                                          152,761      145,401   126,567
                   Operating income        20,549       18,812    24,963

         Other income (expenses)
              Investment income               356          409       487
              Interest expense             (3,183)      (2,755)   (3,224)
              Sundry                          833         (643)      415
                                           (1,994)      (2,989)   (2,322)
                   Earnings before
                       income taxes        18,555       15,823    22,641

         Income taxes                       6,679        5,855     8,377

                   NET EARNINGS           $11,876       $9,968   $14,264
         Earnings per diluted share         $1.36        $1.10     $1.50
         Weighted average number of
             diluted shares                 8,754        9,063     9,530
         Earnings per basic share           $1.40        $1.13     $1.58
         Weighted average number
             of basic shares                8,502        8,819     9,025

         The accompanying notes are an integral part of these statements.

                            CONSOLIDATED BALANCE SHEETS

                                         September 29,     September 30,
                                            2001 2000
                                 (in thousands,  except share amounts)
         Assets
         Current Assets
              Cash and cash equivalents         $7,437     $1,379
              Receivables
                   Trade, less allowances of
                   $1,672 and $1,573,
                   respectively                 35,501     32,968
                   Other                         1,517        658
              Inventories                       21,749     21,473
              Prepaid expenses and other         1,197      1,418
                   Total current assets         67,401     57,896

         Property, Plant and Equipment,
              at cost                          279,423    261,324
              Less accumulated depreciation
                   and amortization            174,667    152,155

         Other Assets                          104,756    109,169
              Goodwill, trademarks and rights,
              less accumulated amortization
              of $14,108 and $11,423,
              respectively                      47,698     48,768
              Long-term investment securities
              held to maturity                   1,515      1,620
              Sundry                             3,111      2,586
                                                52,324     52,974
                                              $224,481   $220,039

         Liabilities and Stockholders' Equity
         Current Liabilities
              Current maturities of
              long-term debt                      $115     $2,186
              Accounts payable                  24,515     24,913
              Accrued liabilities               16,047      8,728
                   Total current liabilities    40,677     35,827

         Long-Term Debt, less current
              maturities                        28,368     42,481
         Deferred Income Taxes                   9,228      8,340
         Other Long-Term Liabilities                65        117

         Stockholders' Equity
         Preferred stock, $1 par value; authorized,
              5,000,000 shares; none issued          -          -
         Common stock, no par value;
              authorized, 25,000,000 shares;
              issued and outstanding, 8,636,000
              and 8,522,000 respectively        29,421     28,403
         Accumulated other comprehensive loss   (1,641)    (1,616)
         Retained earnings                     118,363    106,487
                                               146,143    133,274
                                              $224,481   $220,039

         The accompanying notes are an integral part of these
         statements.

         CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

                                          Accumulated
                                             Other
                           Common Stock Comprehensive Retained
                                                                Comprehensive
                            Shares Amount   Loss  Earnings Total Income
                                         (in thousands)
         Balance at September 27,
             1998          9,036 $39,120 $(1,694) $82,255 $119,681
         Issuance of common
          stock upon exercise
          of stock options   200   2,487       -        -    2,487
         Issuance of common
          stock for employee
          stock purchase plan 14     269       -        -      269
         Foreign currency
          translation
          adjustment           -       -      93        -       93    $93
         Repurchase of common
          stock             (250) (5,625)      -        -   (5,625)
         Net earnings for
          the fiscal year
          ended September 25,
          1999                 -       -       -   14,264   14,264 14,264
         Comprehensive Income  -       -       -        -        -$14,357

         Balance at September 25,
             1999          9,000 $36,251 $(1,601) $96,519  $131,169
         Issuance of common
          stock upon exercise
          of stock options   118   1,688       -        -     1,688
         Issuance of common
          stock for employee
          stock purchase plan 18     298       -        -       298
         Foreign currency
          Translation
          adjustment           -       -     (15)       -       (15) $(15)
         Repurchase of common
          stock             (614) (9,834)      -        -    (9,834)
         Net earnings for
          the fiscal year
          ended September 30,
          2000                 -       -       -    9,968     9,968  9,968
         Comprehensive Income  -       -       -        -         - $9,953

         Balance at September 30,
             2000          8,522 $28,403 $(1,616)$106,487  $133,274
         Issuance of common
          stock upon exercise
          of stock options   207   2,194       -        -     2,194
         Issuance of common
          stock for employee
          stock purchase plan 18     255       -        -       255
         Foreign currency
          Translation
          adjustment           -       -     (25)       -       (25)  $(25)
         Repurchase of common
          stock             (111) (1,431)      -        -    (1,431)
         Net earnings for
          the fiscal year
          ended September 29,
          2001                 -       -       -   11,876    11,876  11,876
         Comprehensive Income  -       -       -        -         - $11,851

         Balance at September 29,
             2001          8,636 $29,421 $(1,641)$118,363  $146,143

         The accompanying notes are an integral part of this
         statement.

         CONSOLIDATED STATEMENTS OF CASH FLOWS

                                             Fiscal year ended
                                September 29, September 30, September 25,
                                        2001      2000      1999
                                    (52 weeks)(53 weeks)(52 weeks)
                                             (in thousands)
         Operating activities:
           Net earnings                $11,876   $9,968    $14,264
           Adjustments to reconcile
            net earnings to net cash
            provided by operating
            activities:
              Depreciation and
                amortization of
                fixed assets            30,170   26,947     24,179
              Amortization of
                intangibles and
                deferred costs           3,346    3,435      3,459
             (Gains) losses from
                disposals and write-
                downs of property
                and equipment             (330)     830        168
              Increase in deferred
                income taxes               888      638      3,315
              Changes in assets
                and liabilities,
                net of effects from
                purchase of companies:
                 (Increase) decrease
                   in accounts
                   receivable           (3,411)  (1,783)     2,609
                 (Increase) decrease
                   in inventories         (361)  (4,997)       700
                 Decrease (increase)
                   in prepaid expenses
                   and other               221     (288)        52
                 Increase (decrease)
                   in accounts payable
                   and  accrued
                   liabilities           7,055    2,456       (378)
              Net cash provided by
                operating activities    49,454   37,206     48,368

         Investing activities:
              Purchases of property,
                plant and equipment    (17,127) (34,928)   (26,606)
              Payments for purchase
                of companies, net of
                cash acquired and debt
                assumed                (11,330)  (1,280)    (2,336)
              Proceeds from investment
                securities held to
                maturity                   105    1,229        255
              Proceeds from disposal
                of property and
                equipment                  824      428        518
              Other                       (560)    (532)      (450)
              Net cash used in investing
                activities             (28,088) (35,083)   (28,619)

         Financing activities:
              Proceeds from borrowings  13,000   11,000      4,000
              Proceeds from issuance
                of common stock          2,307    1,352      2,365
              Payments to repurchase
                common stock            (1,431)  (9,834)    (5,625)
              Payments of long-term
                debt                   (29,184)  (9,207)   (17,748)
              Net cash used in financing
                activities             (15,308)  (6,689)   (17,008)

              Net increase (decrease)
                in cash and cash
                equivalents              6,058   (4,566)     2,741

         Cash and cash equivalents at
            beginning of year            1,379     5,945     3,204
         Cash and cash equivalents at
            end of year               $  7,437  $  1,379  $  5,945

         The accompanying notes are an integral part of these
         statements.

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

         NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         J & J Snack Foods Corp. and Subsidiaries (the Company)
         manufactures, markets and distributes a variety of
         nutritional snack foods and beverages to the food
         service and retail supermarket industries. A summary
         of the significant accounting policies consistently
         applied in the preparation of the accompanying
         consolidated financial statements follows.

         1. Principles of Consolidation

         The consolidated financial statements include the
         accounts of J & J Snack Foods Corp. and its wholly-
         owned subsidiaries. Intercompany balances and
         transactions have been eliminated in the
         consolidated financial statements.

         2. Revenue Recognition

         The Company recognizes sales and the related cost of
         sales at the time the products are shipped to
         customers or when its services are performed. The
         Company provides an allowance for doubtful
         receivables after taking into consideration
         historical experience and other factors.
         In December 1999, the Securities and Exchange
         Commission issued Staff Accounting Bulletin No. 101,
         Revenue Recognition in Financial Statements (SAB
         101) which addresses certain criteria for revenue
         recognition. SAB 101, as amended by SAB 101A and SAB
         101B, outlines the criteria that must be met to
         recognize revenue and provides guidance for
         disclosures related to revenue recognition policies.
         The Company implemented the provisions of SAB 101 on
         October 1, 2000. The Company's revenue recognition
         policies complied with the guidance contained in SAB
         101 and, therefore, the Company's results of
         operations were not materially affected.

         In September 2000, the Emerging Issues Task Force
         reached a consensus on Issue 00-10, "Accounting for
         Shipping and Handling Fees and Costs" (Issue 00-10).
         Issue 00-10 requires that all amounts billed to
         customers related to shipping and handling should be
         classified as revenues. In addition, Issue 00-10
         specifies that the classification of shipping and
         handling cost is an accounting policy decision that
         should be disclosed pursuant to APB 22, "Disclosure
         of Accounting Policies". The Company's product costs
         include amounts for shipping and handling;
         therefore, it charges its customers shipping and
         handling fees at the time the products are shipped
         or when its services are performed. The cost of
         shipping products to the customer is recognized at
         the time the products are shipped to the customer
         and is included in Distribution expenses.
         Accordingly, this consensus opinion had no effect on
         the Company's current and previous classifications.

         The Company also sells service contracts covering
         frozen beverage machines sold. The terms of coverage
         range between 12 and 60 months. The Company records
         deferred income on service contracts which is
         amortized by the straight-line method over the term
         of the contracts.

         During the years ended September 29, 2001 and
         September 30, 2000, the Company sold $1,329,000 and
         $1,090,000, respectively, of service contracts
         related to its frozen beverage machines. At
         September 29, 2001 and September 30, 2000, deferred
         income on service contracts was $466,000 and
         $85,000, respectively, of which $65,000 is included
         in other long-term liabilities as of September 29,
         2001 and the balance is reflected as short-term and
         included in accrued liabilities on the consolidated
         balance sheet. Service contract income of $948,000,
         $1,143,000 and $897,000 was recognized for the
         fiscal years ended 2001, 2000 and 1999,
         respectively.

         3. Foreign Currency

         Assets and liabilities in foreign currencies are
         translated into U.S. dollars at the rate of exchange
         prevailing at the balance sheet date. Revenues and
         expenses are translated at the average rate of
         exchange for the period. The cumulative translation
         adjustment is recorded as a separate component of
         stockholders' equity.

         4. Use of Estimates

         In preparing financial statements in conformity with
         accounting principles generally accepted in the
         United States of America, management is required to
         make estimates and assumptions that affect the
         reported amounts of assets and liabilities, the
         disclosure of contingent assets and liabilities at
         the date of the financial statements, and the
         reported amounts of revenues and expenses during the
         reporting period. Actual results could differ from
         those estimates.

         5. Cash Equivalents

         Cash equivalents are short-term, highly liquid
         investments with original maturities of three months
         or less.

         6. Concentrations of Credit Risk

         Concentrations of credit risk with respect to trade
         receivables are limited due to the dispersion of the
         Company's customers over different industries and
         geographies.

         7. Inventories

         Inventories are valued at the lower of cost
         (determined by the first-in, first-out method) or
         market.

         8. Investment Securities

         The Company classifies its investments in securities
         in one of two categories: held to maturity and
         available for sale. Debt securities that the Company
         has the positive intent and ability to hold to
         maturity are classified as held to maturity and are
         reported at amortized cost. The balance of its debt
         securities and any equity securities are classified
         as available for sale.

         Net unrealized gains and losses, if significant, on
         such securities, net of income tax, are reported as
         a separate component of stockholders' equity and
         excluded from the determination of net income.

         9. Depreciation and Amortization

         Depreciation of equipment and buildings is provided
         for by the straight-line and accelerated methods
         over the assets' estimated useful lives.
         Amortization of improvements is provided for by the
         straight-line method over the term of the lease or
         the assets' estimated useful life, whichever is
         shorter. Goodwill, trademarks and rights arising
         from acquisitions are amortized by the straight-line
         method over periods ranging from 5 to 40 years.
         Management reviews the realization of goodwill based
         upon past and expected performance of individual
         acquired businesses.

         The Company follows SFAS No. 121, "Accounting for
         the Impairment of Long-Lived Assets and for Long-
         Lived Assets to Be Disposed Of", which provides
         guidance on when to recognize and how to measure
         impairment losses of long-lived assets and certain
         identifiable intangibles and how to value long-lived
         assets to be disposed of.

         10. Fair Value of Financial Instruments

         The carrying values of the Company's short-term
         financial instruments, such as receivables and
         accounts payable, approximate their fair values,
         based on the short-term maturities of these
         instruments. The carrying values of long-term debt
         obligations, consisting primarily of unsecured term
         note and an unsecured general purpose credit line
         with interest rates based on current short-term
         market rates, approximate the fair value at
         September 29, 2001 and September 30, 2000.

         11. Income Taxes

         The Company accounts for its income taxes under the
         liability method. Under the liability method,
         deferred tax assets and liabilities are determined
         based on the difference between the financial
         statement and tax bases of assets and liabilities as
         measured by the enacted tax rates which will be in
         effect when these differences reverse. Deferred tax
         expense is the result of changes in deferred tax
         assets and liabilities.

         12. Earnings Per Common Share

         The Company follows SFAS No. 128, "Earnings Per
         Share" (EPS). This standard eliminated primary and
         fully diluted EPS and instead requires presentation
         of basic and diluted EPS in conjunction with the
         disclosure of the methodology used in computing such
         EPS. Basic EPS excludes dilution and is computed by
         dividing income available to common shareholders by
         the weighted average common shares outstanding
         during the period. Diluted EPS takes into
         consideration the potential dilution that could
         occur if securities (stock options) or other
         contracts to issue common stock were exercised and
         converted into common stock.

         13. Accounting for Stock-Based Compensation

         The Company follows SFAS No. 123, "Accounting for
         Stock-Based Compensation", which contains a fair
         value-based method for valuing stock-based
         compensation that entities may use, which measures
         compensation cost at the grant date based on the
         fair value of the award. Compensation is then
         recognized over the service period, which is usually
         the vesting period. The Company has chosen an
         alternative, permitted by the standard, to continue
         accounting for employee stock options and similar
         equity instruments under APB Opinion No. 25,
         "Accounting for Stock Issued to Employees."

         14. Advertising Costs

         Advertising costs are expensed as incurred. Total
         advertising expense was $5,451,000, $4,878,000, and
         $5,537,000 for the fiscal years 2001, 2000 and 1999,
         respectively.

         15. Interest Rate Risk Management

         As part of its risk management activities, the
         Company uses interest rate swaps to modify the
         interest rate characteristics of certain long-term
         obligations. The Company holds no other derivatives
         or similar instruments. The derivatives contracts
         are designated as hedges when acquired.

         They are expected to be effective economic hedges
         and have high correlation with the items being
         hedged at inception and throughout the hedge period.
         The variable interest rate of a swap contract is
         referenced to the same index as the variable
         interest rate of the debt being hedged.

         Interest rate swaps are accounted for using the
         accrual method, with an adjustment to interest
         expense in the income statement. The effects of swap
         positions are included in financing activities in
         the Statement of Cash Flows. Interest receivable or
         payable under the swap contracts is included in
         Receivables or Accounts Payable. Unrealized gains
         and losses on the swaps are not recognized in the
         balance sheet. Realized gains and losses from
         disposition or settlement of swap contracts are
         deferred on the balance sheet and amortized to
         interest expense over the appropriate period.

         If the hedged item is settled or terminated,
         deferred and/or unrecognized gains or losses on the
         hedging instrument on that date are recognized as an
         adjustment to the gain or loss on disposition or
         termination of the related hedged item. Future
         accruals on the swap and subsequent gains and losses
         on the swap or forward contract are included in
         income in the period they occur.

         16. Commodity Price Risk Management

         The Corporation's most significant raw material
         requirements include flour, shortening, corn syrup,
         chocolate and macadamia nuts. The Corporation
         attempts to minimize the effect of future price
         fluctuations related to the purchase of raw
         materials primarily through forward purchasing to
         cover future manufacturing requirements, generally
         for periods from 1 to 24 months. Futures contracts
         are not used in combination with forward purchasing
         of these raw materials. The Corporation's
         procurement practices are intended to reduce the
         risk of future price increases, but also may
         potentially limit the ability to benefit from
         possible price decreases.

         17. Comprehensive Income

         In fiscal year 1999, the Company adopted SFAS No.
         130, "Reporting Comprehensive Income". SFAS No. 130
         established standards for reporting and display of
         comprehensive income and its components in the
         financial statements. These financial statements
         were reclassified in fiscal year 1999 to reflect the
         provisions of SFAS No. 130.

         18. Segment Reporting

         In fiscal year 1999, the Company adopted SFAS No.
         131, "Disclosures about Segments of an Enterprise
         and Related Information". SFAS No. 131 superceded
         SFAS No. 14, "Financial Reporting for Segments of a
         Business Enterprise", replacing the "industry
         segment" approach with the "management approach".
         The management approach designates the internal
         organization that is used by management for making
         operating decisions and assessing performance as the
         source of the Company's reportable segments, as well
         as disclosures about products and services and major
         customers. The adoption of SFAS No. 131 did not
         affect the results of operations or the financial
         position of the Company.

         19. Recent Accounting Pronouncements

         In June 1998, Statement of Financial Accounting
         Standards (SFAS) No. 133 "Accounting for Derivative
         Instruments and Hedging Activities" was issued.
         Subsequent to this statement, SFAS No. 137 was
         issued, which amended the effective date of SFAS No.
         133 to be all fiscal quarters of all fiscal years
         beginning after June 15, 2000. In June 2000, SFAS
         138 was issued, "Accounting for Certain Derivative
         Instruments and Certain Hedging Activities, an
         amendment of SFAS 133". SFAS 133, as amended by SFAS
         138, requires that all derivative instruments be
         recorded on the balance sheet at their respective
         fair values. Changes in the fair value of
         derivatives are recorded each period in current
         earnings or other comprehensive income, depending on
         the designation of the hedge transaction. The
         Company adopted SFAS 133, as amended by SFAS 138, on
         October 1, 2000. Based on the Company's minimal use
         of derivatives, the adoption of this standard did
         not have a significant impact on earnings or
         financial position of the Company.

         On June 29, 2001, SFAS No. 141 "Business
         Combinations" and SFAS No. 142 "Goodwill and
         Intangible Assets" were issued. These statements are
         expected to result in significant modifications
         relative to the Company's accounting for goodwill
         and other intangible assets. SFAS No. 141 requires
         that all business combinations initiated after June
         30, 2001 must be accounted for under the purchase
         method of accounting. SFAS No. 141 was effective
         upon issuance. SFAS No. 142 includes requirements to
         test goodwill and indefinite lived intangible assets
         for impairment rather than amortize them. SFAS No.
         142 is effective for fiscal years beginning after
         December 31, 2001 and early adoption is permitted
         for companies with fiscal years beginning after
         March 15, 2001 provided they have not issued their
         first quarter financial statements. The Company
         anticipates early adopting SFAS 142 on September 30,
         2001 and expects to complete the measurement of any
         potential transitional impairment loss by the due
         date of its first quarter financial statements. If
         adopted, the Company will no longer amortize
         goodwill, thereby eliminating an annual amortization
         expense of approximately $2,700,000.

         20. Reclassifications

         Certain prior year financial statement amounts have
         been reclassified to be consistent with the
         presentation for the current year.

         NOTE B - ACQUISITIONS

         On November 20, 2000, the Company acquired the
         assets of Uptown Bakeries for cash. Uptown Bakeries,
         located in Bridgeport, NJ, sells fresh bakery
         products to the food service industry with
         approximate annual sales of $17 million.

         In February 1999, the Company acquired the Camden
         Creek Bakery cookie business from Schwan's Sales
         Enterprises, Inc., Marshall, MN. Camden Creek sells
         frozen ready-to-bake cookies to the food service
         industry with approximately $4.6 million of sales in
         1998.

         These acquisitions were accounted for under the
         purchase method of accounting, and the operations
         are included in the consolidated financial
         statements from the respective acquisition dates.

         NOTE C - INVESTMENT SECURITIES

         The amortized cost, gross unrealized gains and
         losses, and fair values of the Company's long-term
         investment securities held to maturity at September
         29, 2001 are summarized as follows:
                                            Gross      Gross
                               Amortized Unrealized Unrealized
                                  Cost     Gains     Losses  Fair Value
                                        (in thousands)
         Municipal government
              securities         $1,015     $  30     $  -     $1,045
         Other debt securities      500         -        -        500
                                 $1,515       $30     $  -     $1,545

         The amortized cost, gross unrealized gains and losses,
         and fair values of the Company's long-term investment
         securities available for sale and held to maturity at
         September 30, 2000 are summarized as follows:

                                            Gross      Gross
                               Amortized Unrealized Unrealized
                                  Cost     Gains     Losses     Fair Value
                                        (in thousands)
         Municipal government
              securities         $1,120      $   -    $ 64     $1,056
         Other debt securities      500          -       -        500
                                 $1,620      $   -     $64     $1,556

         The following table lists the maturities of long-
         term investment securities classified as held to
         maturity at September 29, 2001:

                                              Amortized
                                                 Cost    Fair Value
                                                  (in thousands)

         Due after one year through five years   $1,515    $1,545

         There were no proceeds from sales of securities in the
         past three years. The Company uses the specific
         identification method to determine the cost of
         securities sold.

         NOTE D - INVENTORIES

         Inventories consist of the following:

                                         September 29, September 30,
                                                  2001        2000
                                                 (in thousands)
         Finished goods                         $9,965     $10,714
         Raw materials                           2,509       2,136
         Packaging materials                     3,146       2,532
         Equipment parts and other               6,129       6,091
                                               $21,749     $21,473

         NOTE E - PROPERTY, PLANT AND EQUIPMENT

         Property, plant and equipment consist of the following:
                                September 29, September 30,     Estimated
                                      2001     2000   Useful Lives
                                         (in thousands)
         Land                         $756      $795    -
         Buildings                   5,456     5,586  15-39.5 years
         Plant machinery
              and equipment         85,312    75,817   5-10 years
         Marketing equipment       164,381   156,093      5 years
         Transportation equipment      796     2,043      5 years
         Office equipment            7,420     6,981    3-5 years
         Improvements               15,182    12,705   5-20 years
         Construction in progress      120     1,304    -
                                  $279,423  $261,324

         NOTE F - ACCRUED LIABILITIES

         Included in accrued liabilities is accrued
         compensation of $4,922,000 and $4,134,000 as of
         September 29, 2001 and September 30, 2000,
         respectively.

         NOTE G - LONG-TERM DEBT

         Subsequent to September 29, 2001 and prior to the
         issuance of these financial statements, the Company
         refinanced its general-purpose bank credit line. The
         outstanding balance under this facility was
         $23,000,000 at September 29, 2001. The new agreement
         provides for up to a $50,000,000 revolving credit
         facility repayable in three years, with the
         availability of repayments without penalty. The new
         agreement contains restrictive covenants and requires
         commitment fees in accordance with standard banking
         practice.

         Long-term debt consists of the following:
              September 29,  September 30,
              2001 2000
              (in thousands)
         Bank debt refinanced in 2001           $   -   $39,000

         $60,000,000 unsecured general-purpose
         bank credit line, with interest
         rate tied to LIBOR with interest
         payments due monthly (subject to
         financial covenants), subsequently
         refinanced as long-term, discussed
         above                                 23,000         -

         7.25% redeemable economic development
         revenue bonds payable December 2005;
         interest payable semiannually
         (subject to financial covenants);
         paid off December 2001                 5,000     5,000
         Other                                    483       667
                                               28,483    44,667
         Less current maturities                  115     2,186
                                              $28,368   $42,481

         Annual principal payments of long-term debt as of
         September 29, 2001 are as follows (in thousands):

              2002                     $115
              2003                      368
              2004                        -
              2005                   28,000
                                    $28,483

         NOTE H - INCOME TAXES

         Income tax expense is as follows:
                                   Fiscal year ended
                        September 29, September 30, September 25,
                                   2001       2000      1999
                                        (in thousands)
         Current
              U.S. Federal       $5,042     $4,697    $4,516
              Foreign                96         41        55
              State                 653        479       491
                                 $5,791     $5,217    $5,062
         Deferred
              U.S. Federal          816        606     3,046
              State                  72         32       269
                                    888        638     3,315
                                 $6,679     $5,855    $8,377

         The provisions for income taxes differ from the
         amounts computed by applying the federal income tax
         rate of approximately 34% to earnings before income
         taxes for the following reasons:

                                                 Fiscal year ended
                                September 29, September 30, September 25,
                                             2001      2000      1999
                                                 (in thousands)
         Income taxes at statutory rates    $6,309    $5,341    $7,698
         Increase (decrease) in taxes
           resulting from:
              State income taxes,
                   net of federal
                   income tax benefit          360       337       324
              Nontaxable income                (11)      (28)      (38)
              Other, net                        21       205       393
                                            $6,679    $5,855    $8,377

         Deferred tax assets and liabilities consist of the following:
                                       September 29,  September 30,
                                              2001     2000
                                             (in thousands)
         Deferred tax assets
              Vacation accrual                $483      $427
              Insurance accrual                899     1,162
              Allowances                     1,201     1,187
              Other, net                       407     1,062
                                             2,990     3,838

         Deferred tax liabilities
              Depreciation of property
                   and equipment            12,087    12,046
              Other, net                       131       132
                                            12,218    12,178
                                            $9,228    $8,340

         NOTE I - EARNINGS PER SHARE

         The Company's calculation of EPS is as follows:

                                  Fiscal year ended September 29, 2001
                                         Income      Shares   Per Share
                                      (Numerator) (Denominator) Amount
                                (in thousands, except per share amounts)

         Earnings Per Basic Share
         Net Income available to common
           stockholders                    $11,876    8,502     $1.40
         Effect of Dilutive Securities
         Options                                 -      252      (.04)
         Earnings Per Diluted Shares
         Net Income available to common
           stockholders plus assumed
           conversions                     $11,876    8,754     $1.36

         294,167 anti-dilutive weighted shares have been
         excluded in the computation of 2001 diluted EPS
         because the options' exercise price is greater than
         the average market price of the common stock.

                                  Fiscal year ended September 30, 2000
                                        Income        Shares  Per Share
                                      (Numerator) (Denominator) Amount
                                (in thousands, except per share amounts)

         Earnings Per Basic Share
         Net Income available to common
           stockholders                     $9,968    8,819     $1.13
         Effect of Dilutive Securities
         Options                                 -      244      (.03)
         Earnings Per Diluted Share
         Net Income available to common
           stockholders plus assumed
           conversions                      $9,968    9,063     $1.10

         241,363 anti-dilutive weighted shares have been
         excluded in the computation of 2000 diluted EPS
         because the options' exercise price is greater than
         the average market price of the common stock.

                                  Fiscal year ended September 25, 1999
                                        Income        Shares  Per Share
                                      (Numerator) (Denominator) Amount
                                 (in thousands, except per share amounts)
         Earnings Per Basic Share
         Net Income available to common
           stockholders                    $14,264    9,025     $1.58
         Effect of Dilutive Securities
         Options                                 -      505      (.08)
         Earnings Per Diluted Shares
         Net Income available to common
           stockholders plus assumed
           conversions                     $14,264    9,530     $1.50

         29,484 anti-dilutive weighted shares have been
         excluded in the computation of 1999 diluted EPS
         because the options' exercise price is greater than
         the average market price of the common stock.

         NOTE J - COMMITMENTS

         1. Lease Commitments
         The following is a summary of approximate future
         minimum rental commitments for noncancelable operating
         leases with terms of more than one year as of
         September 29, 2001:

              Plants and
              Offices   Equipment Total
              (in thousands)
         2002                   $4,966    $4,288   $9,254
         2003                    4,422     3,695    8,117
         2004                    3,861     2,588    6,449
         2005                    3,253       786    4,039
         2006 and thereafter    14,914       103   15,017
                               $31,416   $11,460  $42,876

         Total rent expense was $8,800,000, $9,330,000 and
         $8,547,000 for fiscal years 2001, 2000 and 1999,
         respectively.

         2. Other Commitments

         The Company is a party to litigation which management
         currently believes will not have a material adverse
         effect on the Company's financial condition or results
         of operations.

         NOTE K - CAPITAL STOCK

         Under share repurchase programs authorized by the
         Board of Directors, 275,000 shares remain to be
         repurchased. In fiscal year 2001, the Company
         purchased and retired 111,000 shares of its common
         stock at a cost of $1,431,000. In fiscal year 2000,
         the Company purchased and retired 614,000 shares of
         its common stock at a cost of $9,834,000. In fiscal
         year 1999, the Company purchased and retired 250,000
         shares of its common stock at a cost of $5,625,000.
         The Company purchased the stock in 1999 from its
         President and Chief Executive Officer.

         NOTE L - STOCK OPTIONS

         The Company has a Stock Option Plan (the "Plan").
         Pursuant to the Plan, stock options may be granted to
         officers and key employees of the Company which
         qualify as incentive stock options as well as stock
         options which are nonqualified. The exercise price of
         incentive stock options is at least the fair market
         value of the common stock on the date of grant. The
         exercise price for nonqualified options is determined
         by a committee of the Board of Directors. The options
         are generally exercisable after three years and expire
         no later than ten years from date of grant. There were
         2,000,000 shares reserved under the Plan; options for
         529,000 shares remain unissued as of September 29,
         2001.

         The Company has a nonqualified stock option plan for
         nonemployee directors and the Chief Executive Officer
         of the Company whereby a total of 440,000 shares of
         common stock may be issued. Under this plan, each
         nonemployee director is granted options to purchase
         3,000 shares of common stock, and the Chief Executive
         Officer is granted options to purchase 25,000 shares
         annually. The option price is equal to the fair market
         value of the common stock at the date of grant, and
         the options expire ten years after date of grant.
         Other nonqualified options have been issued to the
         Chief Executive Officer, directors and certain
         employees.

         The Company has adopted only the disclosure provisions
         of SFAS No. 123, "Accounting for Stock-Based
         Compensation". It applies APB No. 25 and related
         interpretations in accounting for its plans and does
         not recognize compensation expense for its stock-based
         compensation plans. Had compensation cost for the
         plans been determined based on the fair value of the
         options at the grant date consistent with SFAS No.
         123, the Company's net earnings and earnings per
         common share would have been reduced to the pro forma
         amounts indicated below:

                                            Fiscal year ended
                              September 29,   September 30, September 25,
                                       2001       2000       1999
                            (in thousands, except per share amounts)
         Net Earnings:
              As reported                 $11,876     $9,968    $14,264
              Pro forma                   $10,225     $8,609    $13,054
         Earnings Per Diluted Share:
              As reported                   $1.36      $1.10      $1.50
              Pro forma                     $1.17       $.95      $1.37

         These pro forma amounts may not be representative of
         future disclosures because they do not take into
         effect pro forma compensation expense related to
         grants before October 1, 1995. The fair value of these
         options is estimated on the date of grant using the
         Black-Scholes option pricing model with the following
         weighted-average assumptions for grants in fiscal
         2001, 2000 and 1999, respectively; expected volatility
         of 38% for fiscal year 2001 and 30% for years 2000 and
         1999; risk-free interest rates of 4.69%, 6.35% and
         6.21%; and expected lives ranging between 4.5 and 10
         years for all years.

         A summary of the status of the Company's option plans
         as of fiscal years 2001, 2000 and 1999 and the changes
         during the years ended on those dates is represented
         below:

                             Nonqualified
                   Incentive Stock Options  Stock Options

                                             Weighted-             Weighted-
                                    Stock     Average     Stock     Average
                                   Options   Exercise    Options   Exercise
                                 Outstanding    Price   Outstanding    Price
         Balance,
              September 27, 1998    896,333    $12.18     360,500     $12.41
                        Granted     241,860     21.87      34,000      21.75
                        Exercised  (149,960)    11.62     (62,000)     11.39
                        Cancelled   (37,574)    12.22           -          -
         Balance,
              September 25, 1999    950,659     14.67     332,500      13.56
                        Granted     186,334     13.68      34,000      15.94
                        Exercised  (113,253)    10.43     (10,500)      7.00
                        Cancelled  (108,446)    15.55           -          -
         Balance,
              September 30, 2000    915,294     14.92     356,000      13.99
                        Granted     182,333     21.24      34,000      20.60
                        Exercised  (195,800)    10.80     (34,000)     12.00
                        Cancelled   (21,000)    15.10           -          -
         Balance,
              September 29, 2001    880,827    $17.08     356,000     $14.75

         Exercisable Options,
              September 29, 2001    319,547                322,000

         The weighted-average fair value of incentive options
         granted during fiscal years ended September 29, 2001,
         September 30, 2000 and September 25, 1999 was $8.19,
         $4.93 and $9.22, respectively. The weighted-average
         fair value of nonqualified stock options granted
         during fiscal years ended September 29, 2001,
         September 30, 2000 and September 25, 1999 was $12.22,
         $8.95 and $13.75, respectively.

         The following table summarizes information about
         incentive stock options outstanding at September 29,
         2001:
                         Options Outstanding               Options Exercisable
                          Number     Weighted-               Number
                     Outstanding at  Average   Weighted-  Exercisable Weighted-
        Range of         September  Remaining    Average    September  Average
       Exercise Prices   29, 2001  Contractual   Exercise   29, 2001   Exercise
                                        Life       Price               Price
         $ 9.38-$14.00    291,250   4.72 years     $12.10    128,500   $11.24
         $15.38-$22.88    579,577   4.76 years     $19.40    191,047   $15.81
         $24.50            10,000   2.36 years     $24.50          -        -
                          880,827                 319,547

         The following table summarizes information about
         nonqualified stock options outstanding at September
         29, 2001:
                         Options Outstanding               Options Exercisable
                          Number     Weighted-               Number
                     Outstanding at  Average   Weighted-  Exercisable Weighted
         Range of        September  Remaining   Average   September  Average
       Exercise Prices   29, 2001  Contractual  Exercise    29,2001   Exercise
                                       Life       Price               Price
         $10.75-$15.94   254,000   3.81 years     $10.75    254,000    $10.75
         $19.25-$21.75   102,000   8.61 years     $20.53     68,000    $20.50
                         356,000                            322,000

         NOTE M - 401(K) PROFIT-SHARING PLAN

         The Company maintains a 401(k) profit-sharing plan for
         its employees. Under this plan, the Company may make
         discretionary profit-sharing and matching 401(k)
         contributions. Contributions of $866,000, $819,000 and
         $684,000 were made in fiscal years 2001, 2000 and
         1999, respectively.

         NOTE N - CASH FLOW INFORMATION

         The following is supplemental cash flow information:
              Fiscal year ended
                         September 29,  September 30,  September 25,
                                 2001           2000           1999
                                         (in thousands)
         Cash paid for:
              Interest         $2,966         $2,649         $3,231
              Income taxes        344          3,474          5,617

         NOTE O - SEGMENT REPORTING

         Using the guidelines set forth in SFAS No. 131, the
         Company has two reportable segments: Snack Foods and
         Frozen Beverages. Snack Foods manufactures and
         distributes snack foods and bakery items. Frozen
         Beverages markets and distributes frozen beverage
         products. The segments are managed as strategic
         business units due to their distinct production
         processes and capital requirements.

         The Company evaluates each segment's performance
         based on income or loss before taxes, excluding
         corporate and other unallocated expenses and non-
         recurring charges. Information regarding the
         operations in these reportable segments is as
         follows:

                                          Fiscal year ended
                               September 29,  September 30,  September 25,
                                     2001           2000           1999
                                                  (in thousands)
         Sales:
              Snack Foods          $245,853       $214,319      $194,744
              Frozen Beverages      105,843        104,171        91,749
                                   $351,696       $318,490      $286,493
         Depreciation and Amortization:
              Snack Foods           $16,195        $14,273       $13,039
              Frozen Beverages       17,321         16,109        14,599
                                    $33,516        $30,382       $27,638
         Income Before Taxes:
              Snack Foods           $14,833        $13,071       $17,227
              Frozen Beverages        3,722          2,752         5,414
                                    $18,555        $15,823       $22,641
         Capital Expenditures:
              Snack Foods            $6,941        $17,706       $12,332
              Frozen Beverages       10,186         17,222        14,274
                                    $17,127        $34,928       $26,606
         Assets:
              Snack Foods          $128,983       $117,244      $112,271
              Frozen Beverages       95,498        102,795       101,409
                                   $224,481       $220,039      $213,680

         NOTE P - QUARTERLY FINANCIAL DATA (UNAUDITED)

                          Fiscal year ended September 29, 2001
                                                             Net Earnings
                                                    Net      (Loss) Per
                                        Gross     Earnings   Diluted
                         Net Sales     Profit      (Loss)    Share(1)
                      (in thousands, except per share information)
         1st Quarter       $70,070     $34,018     $(693)      $(0.08)
         2nd Quarter        76,807      37,109       367         0.04
         3rd Quarter       100,970      50,562     5,778         0.65
         4th Quarter       103,849      51,621     6,424         0.72
         Total            $351,696    $173,310   $11,876        $1.33

                   Fiscal year ended September 30, 2000
                                                           Net Earnings
                                                               Per
                                        Gross        Net     Diluted
                         Net Sales     Profit      Earnings  Share(1)
                      (in thousands, except per share information)
         1st Quarter       $65,506     $32,125      $666        $0.07
         2nd Quarter        67,813      35,221       740         0.08
         3rd Quarter        88,888      46,364     5,010         0.56
         4th Quarter        96,283      50,503     3,552         0.41
         Total            $318,490    $164,213    $9,968        $1.12

         (1) Total of quarterly amounts do not necessarily
         agree to the annual report amounts due to separate
         quarterly calculations of weighted average shares
         outstanding.

         Report of Independent Certified Public Accountants

         Shareholders and Board of Directors
         J & J Snack Foods Corp.

         We have audited the accompanying consolidated balance
         sheets of J & J Snack Foods Corp. and Subsidiaries as
         of September 29, 2001 and September 30, 2000, and the
         related consolidated statements of earnings, changes
         in stockholders' equity and cash flows for each of
         the fiscal years in the three-year period ended
         September 29, 2001 (52 weeks, 53 weeks and 52 weeks,
         respectively). These financial statements are the
         responsibility of the Company's management. Our
         responsibility is to express an opinion on these
         financial statements based on our audits.

         We conducted our audits in accordance with auditing
         standards generally accepted in the United States of
         America. Those standards require that we plan and
         perform the audit to obtain reasonable assurance
         about whether the financial statements are free of
         material misstatement. An audit includes examining,
         on a test basis, evidence supporting the amounts and
         disclosures in the financial statements. An audit
         also includes assessing the accounting principles
         used and significant estimates made by management, as
         well as evaluating the overall financial statement
         presentation.

         We believe that our audits provide a reasonable basis
         for our opinion.
         In our opinion, the financial statements referred to
         above present fairly, in all material respects, the
         consolidated financial position of J & J Snack Foods
         Corp. and Subsidiaries as of September 29, 2001 and
         September 30, 2000, and the consolidated results of
         their operations and their consolidated cash flows
         for each of the fiscal years in the three-year period
         ended September 29, 2001 in conformity with
         accounting principles generally accepted in the
         United States of America.

         Grant Thornton LLP
         Philadelphia, Pennsylvania
         November 6, 2001

         Corporate Information

         Directors

         Gerald B. Shreiber
         Chairman of the Board, President and Chief Executive Officer

         Dennis G. Moore
         Senior Vice President,
         Chief Financial Officer,Secretary and Treasurer

         Robert M. Radano
         Senior Vice President and Chief Operating Officer

         Stephen N. Frankel
         President,
         Stephen N. Frankel Realtor, Inc.

         Peter G. Stanley
         Vice President,
         Emerging Growth Equities, Ltd.

         Leonard M. Lodish, Ph.D.
         Samuel R. Harrell Professor,
         Marketing Department of the Wharton School,
         University of Pennsylvania

         Officers

         Gerald B. Shreiber
         Chairman of the Board,
         President and Chief Executive Officer

         Dennis G. Moore
         Senior Vice President,
         Chief Financial Officer, Secretary and Treasurer

         Robert M. Radano
         Senior Vice President and Chief Operating Officer

         Paul L. Hirschman
         Vice President, Information Systems

         Officers of Subsidiary Companies

         J&J SNACK FOODS CORP. OF NEW JERSEY

         John Duckett
         Vice President, Service & Assembly

         Anthony P. Harrison II
         Vice President, Quality Control and Research & Development

         Michael Karaban
         Vice President, Marketing

         H. Robert Long
         Vice President, Distribution

         Milton L. Segal
         Vice President, Purchasing

         Don Smith
         Vice President,
         Research & Development, West

         Steven J. Taylor
         Vice President, Sales

         Thomas Weber
         Vice President, Operations

         MIA PRODUCTS

         T.J. Couzens
         Vice President/General Manager

         THE ICEE COMPANY

         Dan Fachner
         President

         Kent Galloway
         Vice President and Chief Financial Officer

         Joe Boulanger
         Vice President/General Manager
         Western Zone

         Lou Fiorentino
         Vice President/General Manager
         Eastern Zone

         Rick Naylor
         Vice President/General Manager
         Central Zone

         Rod Sexton
         Vice President of Service Operations

         ICEE DE MEXICO, S.A. DE C.V.

         Andres Gonzalez
         Vice President

         PRETZELS, INC.

         Gary Powell
         President

         Quarterly Common Stock Data
              Market Price

         Fiscal 2001    High Low
         1st Quarter    18.50     12.50
         2nd Quarter    17.88     15.00
         3rd Quarter    23.79     16.50
         4th Quarter    24.10     14.82

         Fiscal 2000    High Low
         1st Quarter    22.75     15.50
         2nd Quarter    21.88     16.81
         3rd Quarter    20.50     14.00
         4th Quarter    19.00     12.50

         Stock Listing

         The common stock of J&J Snack Foods Corp. is traded on
         the over-the-counter market on the NASDAQ National
         Market System with the symbol JJSF.

         Transfer Agent and Registrar
         American Stock Transfer & Trust Company
         6201 15th Avenue
         Brooklyn, NY 11219

         Independent Accountants
         Grant Thornton LLP
         Philadelphia, PA

         Counsel
         Blank, Rome, Comisky & McCauley LLP

         Annual Meeting
         The Annual Meeting of Shareholders is scheduled for
         Tuesday, February 5, 2002 at 10:00 a.m. at the Hilton
         at Cherry Hill, 2349 W. Marlton Pike, Cherry Hill,
         New Jersey.

         Form 10-K
         Copies of the Company's Annual Report to the
         Securities and Exchange Commission on Form 10-K may be
         obtained without charge by writing to:

         J&J Snack Foods Corp.
         6000 Central Highway
         Pennsauken, NJ  08109
         Attention: Dennis G. Moore

         Web Site
         www.jjsnack.com

            EXHIBIT 22.1 - SUBSIDIARIES OF J & J SNACK FOODS CORP.

                                                           Place of
                                                         Incorporation

                J & J Snack Foods Investment Corp.       Delaware

                The ICEE Company                         Delaware

                J & J Snack Foods Corp. of New Jersey    New Jersey

                J & J Snack Foods Corp. of California    California

                J & J Snack Foods Corp./Midwest          Illinois

                J & J Snack Foods Corp./Mia              Pennsylvania

                J & J Snack Foods Corp. of Pennsylvania  Pennsylvania

                J & J Snack Foods Sales Corp.            New Jersey

                J & J Snack Foods Sales Corp. of Texas   Texas

                J & J Snack Foods Transport Corp.        New Jersey

                ICEE-Canada, Inc.                        Canada

                ICEE de Mexico, S.A. De C.V.             Mexico

                J & J Restaurant Group, Inc.             Pennsylvania

                Bakers Best Snack Food Corp.             Pennsylvania

                Pretzels, Inc.                           Texas

                Federal PBC Company                      Pennsylvania

                                        138

            EXHIBIT 24.1

                     CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

                We have issued our reports dated November 6, 2001

            accompanying the consolidated financial statements and

            schedules incorporated by reference or included in the

            Annual Report of J & J Snack Foods Corp. and Subsidiaries

            on Form 10-K for the year ended September 29, 2001.  We

            hereby consent to the incorporation by reference of said

            reports in the Registration Statement of J & J Snack Foods

            Corp. and Subsidiaries on Forms S-8 (File No. 333-94795
,
            effective January 18, 2000, File No. 333-03833, effective

            May 16, 1996, File No. 33-87532, effective December 16,

            1994 and File No. 33-50036, effective July 24, 1992).

                                              GRANT THORNTON LLP

            Philadelphia, Pennsylvania
            December 13, 2001

                                         139