include is a preprocessor directive that includes the standard library header file "stdlib.h" in the C program. This header file contains various functions and declarations that are needed for memory allocation, process control, and other operations.

The declaration of 'exit' is a function declaration that is provided by the "stdlib.h" header file. The 'exit' function is used to terminate the program and return a status code to the operating system.

By including the 'stdlib.h' header file and providing the declaration of 'exit', we ensure that the necessary functions and declarations are available for use in the C program. This allows us to use the 'exit' function to gracefully terminate the program when needed.