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CONFIDENTIAL

WACHOVIA BANK, NATIONAL ASSOCIATION

WACHOVIA CAPITAL MARKETS, LLC

One Wachovia Center

301 South College Street

Charlotte, North Carolina 28288

June 28, 2006

Winn-Dixie Stores, Inc.

5050 Edgewood Court

Jacksonville, Florida 32254-3699

Attention:    Bennett L. Nussbaum

                      Senior Vice President & Chief Financial Officer

$725,000,000 Credit Facility

Commitment Letter

Ladies and Gentlemen:

Wachovia Bank, National Association (“Bank”) is pleased to confirm the
commitment of Bank to provide, and Wachovia Capital Markets, LLC (“WCM”, and
together with Bank, “Wachovia”), is pleased to confirm the commitment of WCM to
structure, arrange and syndicate, a senior secured revolving loan and letter of
credit facility in the amount of $725,000,000 (the “Credit Facility”) based upon
and subject to the terms and conditions set forth in this letter and the Summary
of Principal Terms and Conditions attached as Exhibit A hereto (the “Term
Sheet”, and together with Exhibit B hereto and this letter, collectively, the
“Commitment Letter”) and in the fee letter of even date herewith (the “Fee
Letter”), in each case upon the effective date of a plan of reorganization (the
“Plan”) in the jointly-administered bankruptcy case filed by Winn-Dixie Stores,
Inc. (the “Company”) and certain of its subsidiaries under Chapter 11 of the
United States Bankruptcy Code currently pending in the United States Bankruptcy
Court for the Middle District of Florida, Jacksonville Division (the “Chapter 11
Case”).

The Company hereby appoints WCM and WCM hereby agrees, acting alone or through
or with affiliates selected by it, to act as the sole lead arranger and the sole
bookrunner for the Credit Facility in connection with arranging a syndicate of
banks and financial institutions (collectively, the “Lenders”) acceptable to WCM
in good faith in consultation with the Company to provide all or a portion of
the Credit Facility. Bank will act as lead lender as well as administrative and
collateral agent for the Credit Facility (in such capacity, “Agent”).

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In connection with the efforts of WCM to form a syndicate of financial
institutions to become Lenders under the Credit Facility, the Company and its
subsidiaries agree to use their commercially reasonable efforts to actively
assist in achieving a syndication that is satisfactory to WCM in good faith. It
is understood and agreed that WCM will manage, in consultation with the Company,
all aspects of the syndication, including, without limitation, decisions as to
the final allocation of the commitments, when commitments will be accepted, the
selection of proposed Lenders and titles among the Lenders. WCM may use its
affiliates to assist in the syndication of the Credit Facility and may allocate
fees payable to it and such affiliates in such manner as it and its affiliates
may agree. WCM may share with any of its affiliates and advisors any information
related to the Company, its subsidiaries and the transactions contemplated under
this Commitment Letter on a confidential basis. Subject to the approval of the
Bankruptcy Court (as defined in the Term Sheet), the Company (for itself and its
subsidiaries) agrees that the arrangements with WCM will be on an exclusive
basis and that the Company and its subsidiaries will not negotiate with, engage,
solicit, confer with or otherwise consult with any other financial institution
or entity regarding the Credit Facility or any other proposed senior first lien
or second lien credit facility for the Company and its subsidiaries in
connection with the financing of the Plan. Except as otherwise agreed to in
writing by Wachovia, no other agents, co-agents, arrangers, bookrunners or book
managers will be appointed or used by the Company or its subsidiaries in
connection with the financing pursuant to a senior credit facility.

The Company agrees, and agrees to cause its subsidiaries, (i) to cooperate with
and assist Wachovia in its efforts, both prior and subsequent to closing to
syndicate the Credit Facility to Lenders, and, in connection therewith, to make
the management of the Company reasonably available for due diligence meetings
with prospective Lenders and (ii) to provide, and use its commercially
reasonable efforts to cause the agents, accountants, investment bankers and
other advisors of the Company and its subsidiaries to provide all information,
including financial projections, as may be reasonably deemed necessary by
Wachovia to prepare materials with information for submission to potential
Lenders, including an information memorandum to be used in connection with the
syndication of the Credit Facility.

The Company hereby represents, warrants and covenants that (i) all information,
other than Projections (as defined below), which has been or is hereafter made
available to Wachovia or any prospective Lender by or on behalf of the Company
or any of its representatives in connection with the business of the Company and
its subsidiaries and the Plan (“Information”) is and will be complete and
correct in all material respects as of the date made available to Wachovia or
such prospective Lender and does not and will not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements contained therein not materially misleading and (ii) all financial
projections concerning the Company and its subsidiaries that have been or are
hereafter made available to Wachovia or prospective Lenders by the Company or
any of its representatives (the “Projections”) have been or will be prepared in
good faith based upon reasonable assumptions. The Company agrees to furnish to
Wachovia such Information and Projections as Wachovia may reasonably request and
to supplement the Information and the Projections from time to time until the
closing date of the Credit Facility so that the representation, warranty and
covenant in the preceding sentence is correct on the closing date of the Credit
Facility. In arranging and syndicating the Credit Facility, Wachovia will be
using and relying on the Information and the Projections without responsibility
for independent verification thereof.

 

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The Credit Facility will be available pursuant to the terms and conditions of an
amendment and restatement of the Existing Credit Agreement (as defined in the
Term Sheet) or a new credit agreement (as Agent shall determine in consultation
with the Company) and other definitive loan documentation incorporating
provisions that are customary in similar financings by the Bank or otherwise
determined by the Bank in good faith to be appropriate in the context of the
contemplated transactions or consistent with the terms of the existing
arrangements of the Company in its current working capital financing for which
Wachovia is the agent. Certain of those terms and conditions are specified in
the Term Sheet.

The Company will promptly reimburse Wachovia for all reasonable costs and
expenses incurred by Wachovia in connection with its continuing review of the
transaction and the preparation and negotiation of this Commitment Letter
(including any amendment or modification hereto), and the loan documentation and
the syndication of the Credit Facility, including reasonable attorneys’ fees and
legal expenses, appraisal and similar fees, environmental assessments, filing
and search charges, recording taxes and field examination expenses (including
the then standard per diem charges per person per day plus reasonable and
documented out-of-pocket expenses for the field examiners of Wachovia in the
field and in the office, including travel, hotel and all other reasonable
out-of-pocket expenses) and including all CUSIP fees for registration with the
Standard & Poor’s CUSIP Service Bureau (the “CUSIP Bureau”), in each case
whether or not the Credit Facility closes. As of the date hereof, based on the
appraisals and field examinations previously conducted by Wachovia, Wachovia
estimates that the costs and expenses to be incurred by Wachovia in connection
with the third party appraisals with respect to inventory and pharmacy scripts
of the Company and its subsidiaries related to the Credit Facility for the
period from the date hereof through the closing date should not be more than
$60,000 and the costs and expenses to be incurred by Wachovia in connection with
an updated field examination of the Company and its subsidiaries related to the
Credit Facility for the period from the date hereof through the closing date
should not be more than $60,000.

All such charges and expenses are to be paid to Wachovia upon demand, together
with such advance funds on account of such charges and expenses as Wachovia may
from time to time request in good faith or Wachovia may require that the Company
pay such charges directly, including as to appraisals and leasehold reports.
Wachovia has the right to apply to such charges and expenses any sums received
from or on behalf of the Company or any of its subsidiaries or at its option to
charge the existing loan account of the Company or its subsidiaries maintained
by Bank as agent under the existing credit facility of the Company. The
arrangements with respect to such charges after the closing of the Credit
Facility will be governed by the terms of the loan documentation.

The Company and its subsidiaries agree to jointly and severally indemnify and
hold harmless Wachovia, and each director, officer, employee, attorney, advisor,
agent and affiliate of Wachovia (each such person or entity referred to
hereafter in this paragraph as an “Indemnified Person”) from any losses (other
than lost profits), claims, costs, damages, expenses or liabilities (or actions,
suits or proceedings, including any inquiry or investigation, with respect
thereto) to which any Indemnified Person may become subject, insofar as such
losses, claims, costs, damages, expenses or liabilities (or actions, suits, or
proceedings, including any inquiry or investigation, with respect thereto) arise
out of, relate to, or result from, this Commitment Letter,

 

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the Fee Letter, the Credit Facility or the other transactions contemplated
hereby and thereby and to reimburse upon demand each Indemnified Person for any
and all legal and other expenses incurred in connection with investigating,
preparing to defend or defending any such loss (other than lost profits), claim,
cost, damage, expense or inquiry or investigation, with respect thereto;
provided, that, the Company shall have no obligation to any Indemnified Person
under this indemnity provision for liabilities to the extent that such
liabilities are determined by a final, nonappealable judgment of a court of
competent jurisdiction to have resulted from the gross negligence or willful
misconduct of such Indemnified Person. The foregoing provisions of this
paragraph shall be in addition to any right that an Indemnified Person shall
have at common law or otherwise. The obligations of the Company set forth in
this paragraph and the immediately preceding two paragraphs are subject to the
approval of the Bankruptcy Court.

This Commitment Letter is addressed solely to the Company and is not intended to
confer any obligations to or on, or benefits to or on, any third party. No
Indemnified Person shall be liable for any damages arising from the use by
others of Information or other materials obtained through internet, Intralinks
or other similar transmission systems in connection with the Credit Facility,
except to the extent such damages are determined by a final, nonappealable
judgment of a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of such Indemnified Person. In addition,
neither the Company nor any Indemnified Person shall be responsible or liable
for special, indirect, consequential, incidental or punitive damages which may
be alleged as a result of this Commitment Letter or the Fee Letter.

Except as set forth below, this Commitment Letter and the Fee Letter and the
contents of such documents shall not be disclosed by the Company or its
subsidiaries to any third party without the prior written consent of Wachovia.
Notwithstanding the foregoing, (a) this Commitment Letter (but not the Fee
Letter) may be filed with the Bankruptcy Court in connection with a motion of
the Company to seek approval of this Commitment Letter or the Credit Facility,
(b) the Fee Letter may be disclosed on a confidential and “need to know” basis
to the Company’s attorneys, financial advisors and accountants, and to the
Official Creditors’ Committee appointed in the Chapter 11 Case (the
“Committee”), provided, that, to the extent such documents and information is
disclosed to the Committee, the Company and the Committee shall enter into a
confidentiality agreement with Wachovia, which shall be in form and substance
satisfactory to Wachovia in good faith, and (c) the Fee Letter may be disclosed
on a confidential and “need to know” basis to the United States Trustee subject
to such confidentiality arrangements as Wachovia and the Company require. In no
event shall any third party be entitled to rely upon this Commitment Letter or
the Fee Letter.

The Company acknowledges and agrees that Wachovia may share with its affiliates
any information relating to the Credit Facility or the Company or its
subsidiaries. The Company further acknowledges and agrees to the disclosure by
Wachovia of information relating to the Credit Facility (i) to Gold Sheets and
other publications, with such information to consist of deal terms and other
information customarily found in such publications and that Wachovia may
otherwise use the corporate name and logo of the Company in “tombstones” or
other advertisements or public statements and (ii) in connection with obtaining
a published CUSIP from the CUSIP Bureau.

 

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This Commitment Letter will be of no force and effect unless a counterpart
hereof is accepted and agreed to by the Company and, as so accepted and agreed
to, received by Wachovia by 5:00 p.m. in New York City on June 29, 2006,
together with the Fee Letter as duly authorized, executed and delivered by the
Company. The commitment of Wachovia under this Commitment Letter, if timely
accepted and agreed to by the Company, will terminate upon the earliest of
(i) effectiveness of the Plan, (ii) the agreement to undertake or acceptance of
a commitment by the Company or any of its subsidiaries for any debt or equity
financing in lieu of all or any portion of the Credit Facility in any
transaction other than a transaction led or arranged by Wachovia or any of its
affiliates, or as otherwise agreed to in writing by Wachovia, (iii) the
occurrence of a Material Adverse Change (as defined in Exhibit B hereto) or a
material adverse effect on the feasibility of the Plan or the transactions
contemplated hereby, and (iv) as of the close of business on December 31, 2006,
if the initial borrowings under the Credit Facility have not occurred on or
prior to such date. All indemnities and obligations of the Company and its
subsidiaries hereunder shall be joint and several and shall survive the
termination of this Commitment Letter or the commitment of Wachovia hereunder,
unless and until provisions relating to such indemnities and obligations are
superseded and replaced by corresponding provisions that are contained in the
definitive loan documentation governing the Credit Facility that shall have been
executed by the parties thereto. Following any termination hereof, the Credit
Facility will require reapproval by the credit committee of Wachovia even if
Wachovia and its agents and counsel and other advisors continue to work on the
transaction. Such reapproval, if obtained, may result in different terms or
conditions, or the determination not to consummate the transaction.

This Commitment Letter contains the entire commitment of Wachovia for this
transaction and, upon acceptance by the Company, supersedes all prior proposals,
commitment letter, negotiations, discussions and correspondence. This Commitment
Letter may not be contradicted by evidence of any alleged oral agreement. No
party has been authorized by Wachovia to make any oral or written statements
inconsistent with this Commitment Letter.

This Commitment Letter may be executed in any number of counterparts, each of
which shall be an original, and all of which, when taken together, shall
constitute one agreement. Delivery of an executed signature page of this
Commitment Letter by facsimile transmission or other electronic means shall be
effective as delivery of a manually executed counterpart hereof.

This Commitment Letter may not be assigned by the Company without the prior
written consent of Wachovia and may not be assigned by Wachovia without the
prior written consent of the Company; provided, that, no such consent of the
Company shall be required in connection with an assignment by Wachovia to an
affiliate of Wachovia. This Commitment Letter may not be amended, waived or
modified, except in writing signed by Wachovia and the Company. This Commitment
Letter is governed by and construed in accordance with the laws of the State of
New York, but excluding any principles of conflicts of law or other rule of law
that would cause the application of the law of any jurisdiction other than the
State of New York.

WACHOVIA AND THE COMPANY EACH WAIVES ITS RIGHT TO A JURY TRIAL IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR IN ANY WAY RELATING TO THIS COMMITMENT LETTER OR
THE TRANSACTIONS REFERRED TO IN THIS COMMITMENT LETTER.

 

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All of the reimbursement, indemnification and confidentiality obligations of the
parties set forth in this Commitment Letter shall survive the expiration or
termination of this Commitment Letter and shall remain in full force and effect
regardless of whether the Credit Facility closes, unless and until provisions
relating to such reimbursement, indemnification and confidentiality obligations
are superseded and replaced by corresponding provisions that are contained in
the definitive loan documentation governing the Credit Facility that shall have
been executed by the parties thereto.

All references to the term “good faith” used herein (including the Term Sheet)
when applicable to Agent shall mean, notwithstanding anything to the contrary
contained herein, honesty-in-fact in the conduct or transaction concerned and
observance of reasonable commercial standards of fair dealing based on how an
asset-based lender with similar rights providing a credit facility of the type
set forth herein would act in similar circumstances at the time with the
information then available to it.

If the Company accepts and agrees to the foregoing, please so indicate by
executing and returning the enclosed copy of this Commitment Letter for itself
and its subsidiaries to Wachovia, together with the Fee Letter.

 

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We look forward to continuing to work with you to complete this transaction.

 

Very truly yours,

 

WACHOVIA BANK,

 

WACHOVIA CAPITAL MARKETS, LLC

NATIONAL ASSOCIATION

 

Kimberley A. Quinn

 

Kimberley A. Quinn

Senior Vice President

 

Managing Director

ACCEPTED on this              day

of June, 2006:

 

WINN-DIXIE STORES, INC.,

for itself and its subsidiaries.

 

By:

 

 

 

Title:

 

 

 

 

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EXHIBIT A

Winn-Dixie, Inc.

$725,000,000 Senior Secured Revolving Credit Facility (the “Credit Facility”)

Summary of Principal Terms and Conditions

June 28, 2006

Capitalized terms used below have the meaning assigned to such terms in the
Credit Agreement, dated February 23, 2005, by and among Wachovia Bank, National
Association, as agent, certain other agents parties thereto, the lenders parties
thereto, Borrowers and certain of their subsidiaries (the “Existing Credit
Agreement”), except as otherwise provided herein.

 

Borrowers:    Winn-Dixie Stores, Inc. (“Administrative Borrower”), its
subsidiaries that are Borrowers under the Existing Credit Agreement and one or
more new special purpose subsidiaries of Administrative Borrower (collectively,
the “SPE”) to be formed to own the real property of Borrowers and Guarantors
(whether owned or leased). Guarantors:    The direct or indirect U.S.
subsidiaries of Administrative Borrower (other than the Insurance Captive) that
are not Borrowers. Sole Lead Arranger and Sole Bookrunner:    Wachovia Capital
Markets, LLC (“WCM”). Administrative and Collateral Agent:    Wachovia Bank,
National Association (“Agent”). Lenders:    Wachovia and such other financial
institutions that may become parties to the financing arrangements as Lenders as
WCM may determine in good faith in consultation with the Company. It is
anticipated that WCM will first seek to have those institutions that are lenders
under the Existing Credit Agreement become Lenders under the Credit Facility and
will otherwise review with the Company any other institutions that it may
solicit to be Lenders. Letter of Credit Issuer:    Wachovia Bank, National
Association. Credit Facility:    $725,000,000 (“Maximum Credit”) consisting of
revolving loans (“Revolving Loans”) subject to the Borrowing Base and other
terms described below, with a portion of the Credit Facility available for
letters of credit arranged for by Agent (“LCs”) with a sublimit on LCs
outstanding at any time of $300,000,000.

 

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At its option, Administrative Borrower may, not less than thirty (30) days prior
to the closing of the Credit Facility, upon notice to and after consultation
with Agent, elect to reduce the amount of the Maximum Credit but in no event to
an amount less than $600,000,000.

 

Revolving Loans may be drawn, repaid and reborrowed.

 

Each voluntary prepayment of Revolving Loans shall be without premium or
penalty, subject to funding losses set forth in the Existing Credit Agreement.

Accordion Feature:    Borrowers shall have the option (to be exercised no more
than three (3) times during the term of the Credit Facility) to increase the
Maximum Credit by up to $100,000,000 in increments of not less than $25,000,000,
subject to additional commitments from existing and/or new Lenders and subject
to other terms and conditions to be agreed. Borrowing Base:    Revolving Loans
and LCs to Borrowers based on:    Upon its execution of the Commitment Letter,
Administrative Borrower will specify to WCM in writing which of the following
Borrowing Base alternatives should be included in the Loan Documents:    Option
1:   

(a)     the lesser of (i) 70% multiplied by the value of Eligible Inventory
consisting of finished goods (other than Perishable Inventory) or (ii) 90% of
the Net Recovery Percentage of such Eligible Inventory multiplied by the value
thereof; plus

  

(b)     the lesser of (i) 70% multiplied by the value of Eligible Inventory
consisting of Perishable Inventory, (ii) 90% of the Net Recovery Percentage of
such Perishable Inventory multiplied by the value thereof, or (iii) $85,000,000,
plus

  

(c)     the lesser of: (i) the sum of (A) 90% of the Net Amount of Eligible
Pharmacy Receivables (other than Medicare/Medicaid Pharmacy Receivables) and
(B) 90% of the Net Amount of Eligible Credit Card Receivables or
(ii) $35,000,000; plus

 

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(d)     the lesser of: (i) 80% of the Net Amount of Eligible Pharmacy
Receivables consisting of Medicare/ Medicaid Pharmacy Receivables or
(ii) $10,000,000; plus

  

(e)     the lesser of (i) 90% multiplied by the Net Recovery Percentage of the
Eligible Pharmacy Scripts or (ii) $70,000,000, subject to adjustment as provided
in the Existing Credit Agreement; plus

  

(f)      the Leasehold Availability; plus

  

(g)     the Real Property Availability; minus

  

(h)    applicable reserves.

  

or      

   Option 2:   

(a)     the lesser of (i) 70% multiplied by the value of Eligible Inventory
consisting of finished goods (other than Perishable Inventory) or (ii) 90% of
the Net Recovery Percentage of such Eligible Inventory multiplied by the value
thereof; plus

  

(b)     the lesser of (i) 70% multiplied by the value of Eligible Inventory
consisting of Perishable Inventory, (ii) 90% of the Net Recovery Percentage of
such Perishable Inventory multiplied by the value thereof, or (iii) $85,000,000,
plus

  

(c)     the lesser of: (i) the sum of (A) 90% of the Net Amount of Eligible
Pharmacy Receivables (other than Medicare/Medicaid Pharmacy Receivables) and
(B) 90% of the Net Amount of Eligible Credit Card Receivables or
(ii) $35,000,000; plus

  

(d)     the lesser of: (i) 80% of the Net Amount of Eligible Pharmacy
Receivables consisting of Medicare/ Medicaid Pharmacy Receivables or
(ii) $10,000,000; plus

  

(e)     the lesser of (i) 90% multiplied by the Net Recovery Percentage of the
Eligible Pharmacy Scripts or (ii) $70,000,000, subject to adjustment as provided
in the Existing Credit Agreement; plus

 

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(f)      the Leasehold Availability; plus

  

(g)     the Real Property Availability; plus

  

(h)     the lesser of the following (the “FILO Availability”): (i) the sum of
(A) the lesser of (1) 10% multiplied by the value of Eligible Inventory
consisting of finished goods (other than Perishable Inventory) or (2) 10% of the
Net Recovery Percentage of such Eligible Inventory multiplied by the value
thereof, which percentages may be adjusted to a lesser amount after the receipt
of the inventory appraisals referred to below, plus (B) the lesser of (1) 10%
multiplied by the value of Eligible Inventory consisting of Perishable
Inventory, or (2) 10% of the Net Recovery Percentage of such Perishable
Inventory multiplied by the value thereof, which percentages may be adjusted to
a lesser amount after the receipt of the inventory appraisals referred to below,
or (ii) $50,000,000; minus

  

(i)      applicable reserves.

  

Revolving Loans based on the FILO Availability (“FILO Revolving Loans”) shall be
deemed to be the first Revolving Loans made and shall be the last Revolving
Loans repaid, such that the FILO Revolving Loans are “first-in-last-out”.

 

The amount of the “Net Recovery Percentage” is determined based on the projected
recovery of the applicable category of Eligible Inventory and Eligible Pharmacy
Scripts, in the case of inventory on a “going out of business sale” basis and in
the case of pharmacy scripts on a “net orderly liquidation value” basis, in each
case net of estimated liquidation expenses, all as set forth in the most recent
appraisal of such inventory or pharmacy scripts, as the case may be, in form and
containing assumptions and appraisal methods satisfactory to Agent in good faith
by an appraiser acceptable to Agent, on which Agent and Lenders are expressly
permitted to rely.

 

The term “Medicare/Medicaid Pharmacy Receivables” means Pharmacy Receivables
arising pursuant to goods sold by Borrowers to eligible Medicare or Medicaid
beneficiaries to be paid by a satisfactory fiscal intermediary or by another
governmental authority under Medicare or Medicaid.

 

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The term “Leasehold Availability” means the lesser of $100,000,000 or an amount
equal to 60% of the “estimated gross leasehold value” of the Eligible Leasehold
Property as set forth in the most recent Leasehold Report of the leasehold
properties in form and containing assumptions and valuation methods satisfactory
to Agent in good faith by DJM Asset Management, LLC or such other valuation firm
acceptable to Agent, on which Agent and Lenders are expressly permitted to rely,
received prior to the date hereof; provided, that, the Leasehold Availability
shall be recalculated and adjusted annually based upon the then most recent
acceptable Leasehold Report received by Agent to an amount equal to the lesser
of $100,000,000 or the amount equal to 60% of the “estimated gross leasehold
value” of the Eligible Leasehold Property as set out in such Leasehold Report.

 

For purposes of the definition of the term “Leasehold Availability”, the term
“estimated gross leasehold value” is as determined pursuant to the applicable
Financial Modeling of Values of Leasehold Interests prepared by DJM Asset
Management, LLC (each, a “Leasehold Report”).

 

The term “Real Property Availability” means the lesser of $65,000,000 or an
amount equal to 65% of the fair market value of the Eligible Real Property as
set forth in the most recent appraisal of such real property in form and
containing assumptions and appraisal methods satisfactory to Agent in good faith
by an appraiser acceptable to Agent, on which Agent and Lenders are expressly
permitted to rely, received by Agent prior to the date hereof, provided, that,
the Real Property Availability shall be recalculated and adjusted annually based
upon the then most recent acceptable appraisal received by Agent to an amount
equal to the lesser of $65,000,000 or the amount equal to 65% of the fair market
value of the Eligible Real Property as set out in such appraisal.

Eligibility:    Eligible Inventory consists of finished goods held for resale in
the ordinary course of the business of a Borrower, in each case which are
acceptable to the Agent in good faith based on the criteria to be set forth in
the Loan Documents (which shall be consistent with the criteria set forth in the
Existing Credit Agreement). In general,

 

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Eligible Inventory does not include (i) raw materials; (ii) inventory at
premises other than those owned and controlled by any Borrower (except subject
to certain conditions set forth in the Loan Documents); (iii) inventory subject
to a security interest or lien in favor of any person other than the Agent
except specified liens and other permitted liens that are subject to an
intercreditor agreement in form and substance satisfactory to the Agent in good
faith between the holder of such security interest or lien and the Agent;
(iv) obsolete or slow moving inventory; (v) inventory which is not subject to
the first priority, valid and perfected security interest of the Agent; (vi)
returned, damaged and/or defective inventory; (vii) inventory purchased or sold
on consignment, (viii) pharmaceuticals, tobacco and alcohol which such Borrower
is not duly licensed to sell or with respect to which such Borrower is not
complying with any duly issued license, and (ix) other criteria to be set out in
the Loan Documents consistent with the criteria set forth in the Existing Credit
Agreement.

 

Eligible Pharmacy Receivables means pharmacy receivables owed to any Borrower,
in each case that are acceptable to the Agent in good faith based on the
criteria to be set forth in the Loan Documents (which shall be consistent with
the criteria set forth in the Existing Credit Agreement). In general, pharmacy
receivables shall be Eligible Pharmacy Receivables if (i) such pharmacy
receivables arise from the actual and bona fide sale and delivery of
prescription drugs by such Borrower in the ordinary course of its business which
transactions are completed in accordance with the terms and provisions contained
in any documents related thereto; (ii) such pharmacy receivables are not unpaid
more than thirty (30) days after the original invoice; (iii) such pharmacy
receivables do not arise from sales on consignment, guaranteed sale, sale and
return, sale on approval, or other terms under which payment by the account
debtor may be conditional or contingent; (iv) the chief executive office of the
account debtor with respect to such pharmacy receivables is located in the
United States of America or Canada; (v) there are no facts, events or
occurrences known to any Borrower or the Agent which would impair the validity,
enforceability or collectability of such pharmacy receivables; (vi) such
pharmacy receivables are subject to the first priority, valid and perfected
security interest of the Agent; and (vii) other criteria to be set out in the
Loan Documents consistent with the criteria set forth in

 

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the Existing Credit Agreement. The eligibility of Medicare/Medicaid Pharmacy
Receivables will be determined by the Agent in good faith pursuant to criteria
to be set forth in the Loan Documents (which shall be consistent with Agent’s
customary criteria for the eligibility of Medicare and Medicaid receivables)
following the completion of Agent’s updated field examination and due diligence
with respect to Medicare/Medicaid Pharmacy Receivables.

 

Eligible Credit Card Receivables and the net amounts thereof will be determined
by the Agent in good faith pursuant to criteria to be set forth in the Loan
Documents (which shall be consistent with Agent’s customary criteria for the
eligibility of credit card receivables). In general, credit card receivables
shall not be Eligible Credit Card Receivables if (i) such receivables are unpaid
more than 10 days after the original transaction giving rise to such
receivables, (ii) such receivables are owed by a credit card processor or credit
card issuer where there is a default under the terms of the arrangements of a
Borrower with such credit card processor or issuer, as the case may be, or where
there is a default or other event or circumstance where such credit card
processor or issuer has the right to suspend or terminate payments to a Borrower
or to establish reserves against amounts otherwise payable to a Borrower, (iii)
receivables owing by a credit card processor or issuer where such processor or
issuer has not entered into an agreement with Agent acknowledging Agent’s
security interest in such receivables and agreeing to follow the instructions of
Agent with respect to payments (except as to American Express, Agent shall only
require a letter from Borrowers and Guarantors to American Express in form and
substance satisfactory to Agent in good faith), (iv) receivables that are not
subject to the first priority, valid and perfected security interest of the
Agent, and (v) those other credit card receivables that do not constitute
collateral acceptable to Agent in good faith for lending purposes pursuant to
criteria established by Agent in good faith and set forth in the Loan Documents
(which shall be consistent with Agent’s customary criteria for the eligibility
of credit card receivables).

 

Eligible Pharmacy Scripts means pharmacy scripts owned by any Borrower, in each
case which are acceptable to the Agent in good faith based on the criteria to be
set forth in the Loan Documents (which shall be consistent with the

 

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criteria set forth in the Existing Credit Agreement). In general, Eligible
Pharmacy Scripts will not include (i) pharmacy scripts for which the Borrowers’
pharmacy store computer and phone systems, in the Agent’s determination, (A) are
inadequate to facilitate the sale of prescriptions to a potential purchaser and
(B) do not facilitate the transfer of pharmacy prescriptions files to a
potential purchaser; (ii) pharmacy scripts subject to a security interest or
lien in favor of any person other than the Agent except certain specified liens
permitted in the Loan Documents or that are subject to an intercreditor
agreement in form and substance satisfactory to the Agent in good faith between
the holder of such security interest or lien and the Agent; (iii) pharmacy
scripts that are not in a form that may be sold or otherwise transferred or are
subject to regulatory restrictions on the transfer thereof that are not
acceptable to the Agent in good faith and (iv) other criteria to be set out in
the Loan Documents consistent with the criteria set forth in the Existing Credit
Agreement.

 

Eligible Leasehold Property will be determined by Agent in good faith pursuant
to general criteria that will be set forth in the Loan Documents (which shall be
consistent with the criteria set forth in the Existing Credit Agreement). In
general, Eligible Leasehold Property will include a real property leasehold:
(i) that is leased by the SPE; (ii) that is not subject to a security interest,
lien or mortgage in favor of any person other than the Agent except designated
permitted liens and other liens permitted in the Loan Documents that are subject
to an intercreditor agreement in form and substance satisfactory to Agent in
good faith between the holder of such security interest, lien or mortgage and
Agent; (iii) that does not prohibit a mortgage or other encumbrance on the
leasehold interest of the SPE; (iv) for which Agent shall have received the
following items, each in form and substance satisfactory to the Agent in good
faith, if so requested by Agent in good faith, (A) a valid and perfected first
priority leasehold mortgage in favor of Agent upon such leasehold property
(subject to designated permitted liens); (B) if required in the jurisdiction
where the leased premises are located, evidence that fixture filings naming
Agent, as secured party, and the SPE, as debtor, have been filed with respect to
such leasehold property; (C) leasehold title insurance policies in favor of
Agent with endorsements as required by Agent (as to leaseholds having an
aggregate appraised value of approximately $100,000,000 as set forth in the
April 2006 Leasehold Report); and (D) that satisfies such other conditions as
the parties agree.

 

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   Eligible Real Property will be determined by Agent in good faith pursuant to
general criteria that will be set forth in the Loan Documents (which shall be
consistent with the criteria set forth in the Existing Credit Agreement). In
general, Eligible Real Property will include real property: (i) that is owned in
fee simple by the SPE; (ii) that is not subject to a security interest, lien or
mortgage in favor of any person other than the Agent except designated permitted
liens and other liens permitted in the Loan Documents that are subject to an
intercreditor agreement in form and substance satisfactory to Agent in good
faith between the holder of such security interest, lien or mortgage and Agent;
(iii) for which Agent shall have received the following items, each in form and
substance satisfactory to the Agent in good faith, if so requested by Agent, (A)
a valid and perfected first priority mortgage in favor of Agent upon such real
property (subject to designated permitted liens); (B) if required in the
jurisdiction where the leased premises are located, evidence that fixture
filings naming Agent, as secured party, and the SPE, as debtor, have been filed
with respect to such real property; (C) mortgagee title insurance policies with
endorsements required by Agent; (D) an ALTA survey; and (E) that satisfies such
other conditions as the parties agree. Reserves:    Such amounts as Agent may
from time to time establish and revise in good faith, without duplication,
reducing the amount of Revolving Loans, and LCs that would otherwise be
available to the Borrowers under the lending formula(s) provided for herein: (i)
to reflect events, conditions, contingencies or risks which, as determined by
the Agent in good faith, adversely affect, or would have a reasonable likelihood
of adversely affecting, (A) the eligible borrowing base assets or any other
property which is security for the obligations or its value, (B) the assets,
business or financial condition of any Borrower or Guarantor or (C) the security
interests and other rights of the Agent or any Lender in the eligible borrowing
base assets or any other property which is security for the obligations
(including the enforceability, perfection and priority thereof), (ii) to reflect
the Agent’s good faith belief (whether based on the receipt or discovery of new
information, any change, occurrence or development with

 

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  respect to previously furnished information, or otherwise) that any collateral
report or financial information furnished by or on behalf of any Borrower or
Guarantor to the Agent is, has become or may have been incomplete, inaccurate or
misleading in any material respect, (iii) to fully reflect LCs (to the extent
that the Agent has not received cash collateral in respect thereof on terms and
conditions satisfactory to Agent in good faith), (iv) to reflect (A) past due
payables which are outstanding more than sixty (60) days past the invoice date
as of such time, (B) past due accruals which are outstanding more than sixty
(60) days past the receipt of inventory related to such accrual as of such time,
in excess of $10,000,000, (C) past due rent payments which are outstanding more
than thirty (30) days past due as of such time, and (D) real estate taxes which
are past due and delinquent, and (v) to reflect any claims due and payable on
the effective date of the Plan or as soon as practicable thereafter but in any
event within twenty (20) days thereafter and that are not paid on the effective
date of the Plan and $1,000,000 (or such lesser amount as may be required) to
fund the “Claim Reduction Fund” set forth in the Plan, such aggregate amount to
be reduced from time to time to reflect payments in respect of such claims
referred to above in this clause (v). In addition, without limiting any other
rights of Agent and Lenders, reserves may be established at Agent’s option in
good faith to reflect a reduction in the value of the Eligible Leasehold
Property and/or the Eligible Real Property either as the result of the sale or
other disposition thereof, as a result of the actual or projected diminution in
the value of the Eligible Leasehold Property and/or Eligible Real Property set
forth in the most recent Leasehold Report or appraisal thereof, as applicable,
from the immediately preceding Leasehold Report or appraisal thereof, as
applicable, but in any event, with respect to a reserve established against
Leasehold Availability or Real Property Availability, only to the extent that
such reduction has not been reflected in a reduction in the Leasehold
Availability or Real Property Availability, as applicable, pursuant to a
Leasehold Report or appraisal, as applicable, following the closing date. To the
extent that the Agent (a) has reflected in the lending formulas used to
establish the Borrowing Base any circumstance, condition, event or contingency
in a manner satisfactory to the Agent in good faith or (b) may revise the
lending formulas used to determine the Borrowing Base or establish new criteria
or revise existing criteria for any of

 

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   the eligible Borrowing Base assets so as to address any circumstances,
condition, event or contingency in a manner satisfactory to the Agent in good
faith, in each case the Agent shall not establish a Reserve for the same
purpose. Collateral:    To secure all obligations of Borrowers and Guarantors to
Agent and Lenders, Agent shall have first priority, perfected security interests
in and liens upon the Collateral, but as to priority, subject to such liens as
are permitted under the Loan Documents (which shall be consistent with the liens
permitted under the Existing Credit Agreement) that have priority over the
security interests and liens of Agent under applicable law. The term
“Collateral” shall mean all of each Borrower’s and Guarantor’s present and
future accounts, contract rights, general intangibles (including, without
limitation, all trademarks, patents and other intellectual property, tax
refunds, choses in action, franchises, licenses and other rights and
agreements), deposit accounts, letters of credit, letter-of-credit rights,
supporting obligations, chattel paper, documents, instruments (including any
notes receivable and stock and other equity interests in all subsidiaries
(including, without limitation, the newly formed subsidiary referred to above),
except as to the stock or other equity interests of controlled foreign
corporations as determined under the Internal Revenue Code for the stock or
other equity interests of such corporations in excess of 65% thereof),
investment property, inventory, equipment, fixtures and other goods, real
property (owned and leased) and all products and proceeds of any of the
foregoing. Use of Proceeds:    The proceeds of the Revolving Loans under the
Credit Facility will be used by Borrowers to pay allowed administrative expenses
and allowed claims in accordance with the Plan, costs, expenses and fees in
connection with the Credit Facility and for working capital and general
corporate purposes of Borrowers. Term:    5 years from date of closing
(“Maturity Date”). Interest Rates:   

Borrowers may elect that all or portions of the Revolving Loans bear interest
at:

 

(a)     the Applicable Margin plus the ABR; or

 

(b)     the Applicable Margin plus the Adjusted Eurodollar Rate.

 

A-11

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Revolving Loans for which interest is calculated using the ABR are referred to
herein as “Base Rate Loans” and for which interest is calculated using the
Adjusted Eurodollar Rate are referred to herein as “Eurodollar Rate Loans”.

 

The Applicable Margin is determined based on Quarterly Average Excess
Availability as set forth on Schedule 1 to this Exhibit A. Except as otherwise
provided in Schedule 1 hereto, the Applicable Margin will be calculated and
established each fiscal quarter and remain in effect until adjusted thereafter
after the end of the next fiscal quarter.

 

“ABR” means the higher of (i) the rate of interest publicly announced by
Wachovia Bank, National Association as its “prime rate”, subject to each
increase or decrease in such prime rate, effective as of the date of any such
change or (ii) the federal funds effective rate from time to time plus .50%.

 

“Adjusted Eurodollar Rate” means the rate of interest (rounded upwards, if
necessary, to the nearest 1/100th) appearing on Telerate Page 3750 (or any
successor page) as the London interbank offered rate for deposits in US Dollars
for a term comparable to the applicable period of one, two, three or six months
as selected by Borrowers (but if more than one rate is specific on such Telerate
page, the rate will be an arithmetic average of all such rates), and in each
case subject to the reserve percentage prescribed by governmental authorities;
provided, that, (i) no more than six (6) interest periods may be in effect at
any one time, (ii) no more than two (2) interest periods of six months may be in
effect at any one time, and (iii) in no event will the aggregate amount of
Eurodollar Rate Loans with an interest period of six months exceed 50% of the
total amount of Eurodollar Rate Loans.

 

All interest will be computed on basis of actual days elapsed over a 360 day
year (or 365/366 days, in the case of Loans for which the ABR is used), payable
monthly in arrears and may be charged by Agent to any Borrower’s loan account.
Default rates are as set forth on Schedule 1 hereto.

 

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Unused Line Fee:    .25% per annum on the amount by which the Maximum Credit
exceeds the average monthly balance of Revolving Loans and LCs outstanding,
payable monthly in arrears, computed on the actual number of days elapsed over a
360 day year. Letter of Credit Fees    1.00% on the daily outstanding balance of
commercial LCs and the applicable percentage of the Applicable Margin for
Eurodollar Rate Loans (as adjusted from time to time as set forth above) on the
daily outstanding balance of standby LCs, in each case payable monthly in
arrears, computed on the actual number of days elapsed over a 360 day year.
Applicable bank fees, opening charges and arranging fees (which shall be in
amounts consistent with those payable pursuant to the Existing Credit Agreement)
are in addition to such fees and may be charged to the loan account of Borrowers
maintained by Agent. Loan Documentation:    Definitive loan documentation
(collectively, the “Loan Documents”), including, without limitation, a loan and
security agreement, supplemental security agreements, pledge agreements,
mortgages, guarantees, control agreements, intercreditor and subordination
agreements, UCC financing statements, opinion letters of counsel to Borrowers
and Guarantors, and related documents, each in form and substance satisfactory
to Agent in good faith.    All of the Loan Documents will be prepared or
approved by Agent and counsel to Agent and incorporate Agent’s customary terms
and provisions, including, without limitation, the absence of any default as a
condition to all Revolving Loans and LCs, the right to establish reserves
against loan availability (consistent with such right set forth in the Existing
Credit Agreement) and such other provisions as may be required by Agent in good
faith in the context of the transactions contemplated hereby. Representations
and Warranties:    To include, but not be limited to (with exceptions,
materiality thresholds and cure periods to be agreed upon by the parties):
representations and warranties concerning: the Collateral; corporate existence
and good standing (or as to Florida, active status), power and authority;
accuracy of financial information; absence of material adverse changes as of the
date of closing; locations of jurisdiction of incorporation, chief executive
office and Collateral; priority of Agent’s security interests; ownership of

 

A-13

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   properties, and absence of other liens (except as specifically agreed to by
Agent); filing of tax returns and payment of taxes; absence of material
litigation or investigations; compliance with other agreements and applicable
law, regulation, etc.; identification of bank accounts; environmental matters;
employee benefit matters; accuracy and completeness of information furnished to
Agent; and survival and continuing nature of representations and warranties
(which shall be deemed made as of the date of each credit extension).
Affirmative Covenants:    To include, but not be limited to (with exceptions,
materiality thresholds and cure periods to be agreed upon by the parties):
maintenance of corporate existence and rights; requirements for new locations;
compliance with laws; performance of obligations; maintenance of properties in
good repair; maintenance of appropriate and adequate insurance; Agent’s rights
to inspect books and properties (but without any limitation on the number of
field examinations if an Event of Default exists or the dollar amount for which
Borrowers are liable on the field examination charges); payment of taxes and
claims; delivery of financial statements, financial projections and other
information; collateral reporting, notices, appraisal and leasehold reporting
requirements, including (i) the right to obtain appraisals of the inventory and
pharmacy scripts up to two times in any twelve month period (or more frequently
if Excess Availability is less than $125,000,000 or upon an Event of Default)
and (ii) to obtain Leasehold Reports of the leaseholds and appraisals of the
owned real property one time in any twelve month period (or more frequently if
Excess Availability is less than $125,000,000 or upon an Event of Default); the
requirement that Borrowers and Guarantors maintain Excess Availability at all
times of not less than $50,000,000; the transfer to the SPE of all Leasehold
Property (other than the Leasehold Property that has value as set forth in the
April 2006 Leasehold Report which shall have been transferred as provided in
clause (d) of Exhibit B hereto) within sixty (60) days after the closing date;
and the granting of leasehold mortgages on the Leasehold Property not subject to
leasehold mortgages at closing within sixty (60) days after the closing date
(other than the seventeen (17) of the Leasehold Property as referred to in
clause (e) of Exhibit B).

 

A-14

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Collateral reporting will include, so long as Excess Availability is not less
than $125,000,000 and no Event of Default exists, a monthly borrowing base
report, in form satisfactory to Agent in good faith, which shall include, among
other things, summaries as to accounts and inventory and reports of new
purchases of inventory consisting of produce, dairy, meat and seafood or other
categories or departments of inventory specified by Agent, with more frequent
reporting and in such form as Agent may specify if Excess Availability is less
than $125,000,000 or if an Event of Default exists.

 

With respect to collections and the transfer thereof to Agent pursuant to
control agreements with the banks at which such accounts are maintained, which
shall be in form and substance acceptable to Agent in good faith, so long as
there is no Event of Default and Excess Availability is greater than
$125,000,000, Agent will instruct such banks to remit amounts deposited in the
blocked accounts to the operating accounts of Borrowers.

 

In addition, Borrowers shall not be required to prefund ACH transfers up to the
amount of $50,000,000 outstanding at any time; provided, that, (i) there shall
be no Event of Default, (ii) Excess Availability shall not be less than
$125,000,000 for more than five (5) consecutive business days; (iii) Excess
Availability shall not have been less than $125,000,000 on more than three (3)
separate occasions during the term of the Credit Facility; and (iv) Excess
Availability shall not be less than $120,000,000.

Negative Covenants:    To include, but not be limited to (with exceptions,
materiality thresholds and cure periods to be agreed upon by the parties):
limitations on: dividends, redemptions and repurchases of capital stock;
incurrence of debt (including capital leases) and guarantees; repurchases or
prepayment of debt; creation or suffering of liens; loans, investments and
acquisitions; affiliate transactions; changes in business conducted; asset
sales, mergers and consolidations; capital expenditures; restrictions affecting
subsidiaries; opening new bank accounts. Financial Covenants:    Minimum EBITDA
in amounts and for periods to be agreed upon by the parties, which shall be
tested quarterly based on the four (4) immediately preceding fiscal quarters for
which Agent has received financial statements, except that the first four (4)
quarters following the closing date

 

A-15

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   shall be tested based upon Minimum EBITDA less capital expenditures in
amounts to be agreed upon by the parties for such period, provided, that,
compliance with such financial covenants shall not be required so long as Excess
Availability is greater than $75,000,000. Events of Default:    To include (with
grace and cure periods to be agreed upon by the parties), but not be limited to,
payment and performance defaults under any of the Loan Documents; cross-defaults
to other indebtedness in excess of an amount to be agreed to by the parties and
documents; breach of representations and warranties; insolvency, voluntary and
involuntary bankruptcy; the failure of Borrowers or Guarantors to comply in any
material respect with the Confirmation Order or any other applicable bankruptcy
order or stipulation; the Confirmation Order is revoked, remanded, vacated,
reversed, stayed, rescinded, modified, or amended on appeal; judgments and
attachments; revocation of any guaranty; dissolution (subject to certain
exceptions to be agreed upon by the parties); change in control; material
adverse change in the assets or business of Borrowers and Guarantors taken as a
whole. Conditions Precedent:    Those conditions precedent customarily required
by Agent in similar financings and any additional conditions precedent deemed
appropriate by Agent in good faith in the context of this transaction,
including, without limitation, those set forth on Exhibit B to the Commitment
Letter. Expenses and Indemnity:   

Borrowers will, from and after closing, and upon Agent’s demand, pay all of the
reasonable and documented out-of-pocket expenses and customary administrative
charges related to the Credit Facility incurred by Agent, including, without
limitation, reasonable collateral appraisal and reasonable leasehold reporting
fees, legal costs and expenses, filing and search charges, recording taxes and
field examination charges and expenses (including a charge at the then standard
rate of Agent per person per day for the examiners of Agent in the field and in
the office, plus other reasonable and documented out-of-pocket expenses).

 

Waivers to include, but not be limited to, waivers by Agent, Lenders and each
Borrower and Guarantor of its rights to jury trial and claims for special,
indirect or consequential damages in respect any breach or alleged breach by any
Agent, any Lender, any Borrower or Guarantor of any of the loan documentation.

 

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   Borrowers and Guarantors shall indemnify and hold harmless Agent and Lenders
and their respective directors, officers, agents, representatives and employees
from and against all losses, claims, damages, expenses, or liabilities
including, but not limited to, reasonable legal or other expenses incurred in
connection with investigating, preparing to defend, or defending any such loss,
claim, damage, expenses or liability, incurred in respect of the Credit
Facility, except as to any such indemnitee as a result of the gross negligence
or willful misconduct of such indemnitee as determined pursuant to a final,
non-appealable order of a court of competent jurisdiction. Governing Law:    New
York (excluding any principles of conflicts of law or other rule of law that
would cause the application of the law of any jurisdiction other than the State
of New York). USA PATRIOT Act:    Each Lender subject to the USA PATRIOT Act
(Title III of Pub.L. 107-56 (signed into law October 26, 2001) (the “Act”)
hereby notifies Borrowers and Guarantors that pursuant to the requirements of
the Act, it is required to obtain, verify and record information that identifies
each person or corporation who opens an account and/or enters into a business
relationship with it, which information includes the name and address of
Borrowers and Guarantors and other information that will allow such Lender to
identify such person in accordance with the Act. Borrowers and Guarantors are
hereby advised that this commitment is subject to satisfactory results of such
verification.

Each term used but not defined in this Exhibit A shall have the meaning assigned
to such term in the letter, dated of even date herewith, from Wachovia Bank,
National Association to Winn-Dixie Stores, Inc. to which this Exhibit A is
attached.

This Summary of Principal Terms and Conditions for the Credit Facility is not
meant to be, nor shall it be construed as an attempt to describe all of, or the
specific phrasing for, the provisions of the documentation. Rather, it is
intended only to outline certain principal terms to be included in the Loan
Documents.

 

A-17

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SCHEDULE 1

TO

EXHIBIT A TO COMMITMENT LETTER

1. The Applicable Margin for the interest rate and the percentages for the
letter of credit fee for standby LCs shall be the applicable percentage
calculated based on the percentage set forth in Tier 3 of the chart below until
the last day of the second (2nd) full fiscal quarter after closing. The
Applicable Margin will be calculated and established effective as of the first
day of the next fiscal quarter based on the Quarterly Average Excess
Availability for the fiscal quarter most recently ended prior thereto as set
forth on the chart below and will be adjusted as of the first day of each fiscal
quarter thereafter based on the Quarterly Average Excess Availability for the
fiscal quarter most recently ended prior thereto as set forth on the chart
below.

2. The term “Applicable Margin” as used in the Term Sheet means, at any time
(subject to paragraph 1 above), except for Revolving Loans based on FILO
Availability (determined as provided in paragraph 3 below), for all Revolving
Loans for which interest is calculated based on the ABR, the Applicable ABR Rate
Margin, for all Revolving Loans for which interest is calculated based on the
Adjusted Eurodollar Rate, the Applicable Eurodollar Rate Margin, and for Standby
LCs, the Applicable Standby LC Margin, in each case determined if the Quarterly
Average Excess Availability for the immediately preceding fiscal quarter is at
or within the amounts indicated for such percentage as of the last day of the
immediately preceding fiscal quarter as follows:

 

Tier

  

Quarterly Average

Excess Availability

  

Applicable Eurodollar

Rate Margin

   

Applicable ABR

Rate Margin

   

Applicable Standby

LC Margin

 

1

   Equal to or greater than $400,000,000    1.25 %   0 %   1.25 %

2

   Less than $400,000,000 and equal to or greater than $300,000,000    1.50 %  
0 %   1.50 %

3

   Less than $300,000,000 and equal to or greater than $200,000,000    1.75 %  
0 %   1.75 %

4

   Less than $200,000,000 and equal to or greater than $125,000,000    2.00 %  
.25 %   2.00 %

5

   Less than $125,000,000    2.25 %   .50 %   2.25 %

3. The Applicable Margin for Revolving Loans based on FILO Availability shall be
3.75% as to such Revolving Loans for which interest is calculated based on the
Adjusted Eurodollar Rate and 2.00% as to such Revolving Loans for which interest
is calculated based on the ABR.

 

A-18

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4. The term “Quarterly Average Excess Availability” shall mean, at any time, the
average of the aggregate amount of the Excess Availability plus the average of
the aggregate amount of Qualified Cash of Borrowers for the immediately
preceding fiscal quarter as calculated by Agent (absent manifest error). As used
herein, the term “Qualified Cash” shall mean the amount of unrestricted cash of
Borrowers that is (a) subject to the valid, enforceable and first priority
perfected security interest of Agent, (b) not subject to any other security
interest, pledge, lien, encumbrance or claim, (c) available to be used without
condition, restriction or limitation and (d) maintained in an investment account
at Wachovia pursuant to a deposit account control agreement or an investment
property control agreement, as the case may be, in form and substance
satisfactory to Agent in good faith, which provides that, among other things, no
amounts may be withdrawn or disbursed from such account to any person without
the prior written consent of Agent.

5. After an Event of Default under the Loan Documents, the applicable rates of
interest and rate for LC fees shall be increased by 2.00% per annum above the
then applicable pre-default rates. Such increased rate shall also be applicable
to Revolving Loans and LCs outstanding in excess of the loan availability or any
applicable limits, whether or not such excess(es) are permitted by Agent or any
Lender at any time. Such increased rates shall also apply to any obligations
owing to Agent and Lenders that are due and remain unpaid after the termination
of the Loan Documents.

 

A-19

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EXHIBIT B

Winn-Dixie, Inc.

$725,000,000 Senior Secured Credit Facility (the “Credit Facility”)

Conditions Precedent to Credit Facility

June 28, 2006

All capitalized terms used in this Exhibit B have the meaning assigned to such
terms in the Commitment Letter and the Term Sheet.

Those conditions precedent customarily required by Agent in similar financings
and any additional conditions precedent deemed appropriate by Agent in good
faith in the context of this transaction, including, without limitation, the
following:

 

(a)    Receipt by Agent of all financial information, projections, budgets,
business plans, cash flows and such other information as Agent shall request
from time to time, including (i) projected monthly balance sheets, income
statements, statements of cash flows and availability of Borrowers for the 2006
and 2007 fiscal years of Borrowers, (ii) projected annual balance sheets, income
statements, statements of cash flows and availability of Borrowers and
Guarantors through the end of the 2011 fiscal year of Borrowers, in each case as
to projections described in clauses (i) and (ii), with the results and
assumptions set forth in all of such projections in form and substance
satisfactory to Agent in good faith, and an opening pro forma balance sheet for
Borrowers and Guarantors in form and substance satisfactory to Agent in good
faith, (iii) any updates or modifications requested by Agent to the projected
financial statements of Borrowers and Guarantors previously received by Agent,
in each case in form and substance satisfactory to Agent in good faith, and
(iv) pro forma financial statements of Borrowers for the fiscal years ending
2004, 2005 and year to date for 2006 (and on a monthly basis for 2005 and 2006)
which, among other things, shall demonstrate pro forma EBITDA in amounts to be
agreed upon for the most recently ended twelve month periods. Agent acknowledges
receipt of the documents and information described in clauses (i), (ii) and (iv)
of this paragraph and that as of the date hereof such documents and information
are satisfactory to it. (b)    Agent’s completion of its due diligence, with
results satisfactory to Agent in good faith, including (i) receipt and review of
third party appraisals with respect to inventory and pharmacy scripts, in each
case in form and containing assumptions and appraisal methods satisfactory to
Agent in good faith by appraisers acceptable to Agent, addressed to Agent and on
which Agent and Lenders are expressly permitted to rely, (ii) receipt and review
of third party appraisals with respect to owned real estate and leasehold
reports with respect to leaseholds, in each case, in form and containing
assumptions and appraisal and valuation methods satisfactory to Agent in good
faith by appraisers and valuation firms acceptable to Agent, addressed to Agent
and on which Agent and Lenders are expressly permitted to

 

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   rely, (iii) an updated and current field examination of the business and
collateral of Borrowers and Guarantors in accordance with Agent’s customary
procedures and practices and as otherwise required by the nature and
circumstances of the businesses of Borrowers and Guarantors and
(iv) environmental audits of the owned real estate of Borrowers and Guarantors
conducted by an independent environmental engineering firm acceptable to Agent,
and in form, scope and methodology satisfactory to Agent in good faith. Agent
acknowledges receipt of the documents and information described in clauses (ii)
and (iv) of this paragraph and that as of the date hereof such documents and
information are satisfactory to it. Agent shall be satisfied in good faith with
the corporate and capital structure of Borrowers and Guarantors and with all
legal, tax, accounting, business and other matters relating to Borrowers after
giving effect to the Plan and the Credit Facility and Agent and its counsel will
have had the opportunity to conduct customary legal due diligence (the results
of which shall be satisfactory to Agent and its counsel in good faith). (c)   
No Material Adverse Change shall have occurred since May 31, 2006, provided,
that, commencing as of the date that is ten (10) business days after the receipt
by Agent of the 2006 10-K, instead of May 31, 2006, such date shall be June 28,
2006, so long as (i) within such ten (10) business day period, Agent shall not
have notified Administrative Borrower that Agent has determined in good faith
that a Material Adverse Change shall have occurred during the period commencing
on May 31, 2006 and ending on the date of the filing of the 2006 10-K with the
SEC, and (ii) no Material Adverse Change shall have occurred since May 31, 2006
that is not disclosed in the 2006 10-K. As used in the Commitment Letter and
this Exhibit B, (A) the term “Material Adverse Change” shall mean a material
adverse change in the business, operations, assets or financial condition of
Administrative Borrower and its subsidiaries (taken as a whole) since May 31,
2006, or June 28, 2006 as described in the 2006 10-K, as applicable, other than
any material adverse change relating to or resulting from any of the following,
so long as such change does not have a material adverse affect on the ability of
Borrowers and Guarantors to fulfill the obligations of Borrowers and Guarantors
to Agent and Lenders or the ability of Agent and Lenders to enforce the
obligations of Administrative Borrower and its subsidiaries to Agent and Lenders
or the ability of Agent and Lenders to enforce their respective rights and
remedies with respect to the Collateral: (1) changes in general economic
conditions or securities markets in general, (2) events, circumstances, changes
or effects that affect the retail food industry (except if Administrative
Borrower and its subsidiaries (taken as a whole) are disproportionately affected
thereby), (3) catastrophes, including hurricanes, earthquakes, hailstorms,
severe winter weather, floods, fires, tornadoes and other natural or man-made
disasters, (4) any changes after the date hereof in any and all domestic
(federal, state or local) or foreign laws, rules, regulations, orders, judgments
or decrees promulgated by any governmental authority, including those relating
to the protection of the environment, natural resources, and human health and
safety applicable to Administrative Borrower and its subsidiaries (taken as a
whole) or any of their respective properties or assets (except if Administrative
Borrower and its subsidiaries (taken as a whole) are disproportionately affected

 

B-2

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   thereby), (5) any outbreak or escalation of hostilities or war or any act of
terrorism, or (6) compliance with the Plan and the transactions contemplated
thereby, and (B) the term “2006 10-K” shall mean the annual report of
Administrative Borrower on Form 10-K for the fiscal year ended June 28, 2006 as
filed with the SEC. No defaults or events of default on the closing date under
any of the Loan Documents or on any other material debt or any material contract
of Borrowers or Guarantors shall exist. There shall be no material misstatements
in or omissions from the materials previously furnished to Agent by Borrowers
and Guarantors. Agent must be satisfied in good faith that any financial
statements delivered to it fairly present the business and financial conditions
of Borrowers and Guarantors. (d)    Administrative Borrower shall have formed
the SPE in accordance with applicable law and shall have executed and delivered
to Agent or its designee all agreements, documents and instruments, in form and
substance satisfactory to Agent in good faith, necessary or desirable to
transfer and cause its subsidiaries to transfer title to all of the owned Real
Property and all of the Eligible Leasehold Property of Administrative Borrower
and its subsidiaries to the SPE. (e)    Execution and delivery of the Loan
Documents by all parties thereto other than Agent, and including all consents,
waivers, acknowledgments and other agreements from third persons that Agent may
in good faith deem necessary or desirable (which shall include the consents,
waivers, acknowledgments and other agreements from third persons required
pursuant to the Existing Credit Agreement), in form and substance satisfactory
to Agent in good faith, and including delivery to Agent of each of the
following, each in form and substance satisfactory to Agent in good faith, (i)
all agreements, documents and instruments, necessary or desirable to grant to
Agent a valid and perfected first priority mortgage (subject to designated
permitted liens) in favor of Agent upon the Real Property (whether pursuant to a
modification agreement as to Real Property currently subject to a mortgage in
favor of Agent under the existing credit facility or a new mortgage as to Real
Property not currently subject to a mortgage in favor of Agent under the
existing credit facility) and a valid and perfected first priority leasehold
mortgage (subject to designated permitted liens) in favor of Agent upon each
Leasehold Property (whether pursuant to a modification agreement as to Leasehold
Property currently subject to a leasehold mortgage in favor of Agent under the
existing credit facility or a new leasehold mortgage as to Leasehold Property
not currently subject to a leasehold mortgage in favor of Agent under the
existing credit facility), other than (A) seventeen (17) of the Leasehold
Property selected by Agent for which such leasehold mortgage will not be
required at closing or as a post-closing requirement, (B) those leaseholds that
have valid and enforceable prohibitions on the granting of leasehold mortgages
by the lessee, and (C) such of the Leasehold Property to which no value has been
given under the April 2006 Leasehold Report, which are to be delivered within
sixty (60) days after the closing date as set forth in the Affirmative Covenants
in Exhibit A hereto, (ii) evidence of insurance coverage, (iii) a lender’s loss
payee endorsement in favor of Agent as to casualty and business interruption
insurance, (iv) mortgagee’s

 

B-3

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   title insurance by a company and agent acceptable to Agent insuring (A) as to
Real Property, the priority, amount and sufficiency of each mortgage, deed of
trust or deed to secure debt, insuring against matters that would be disclosed
by surveys, and containing any endorsements, assurances or affirmative coverage
requested by Agent in good faith in accordance with its customary practices for
protection of its interests and (B) as to Leasehold Property, the priority,
amount and sufficiency of each mortgage, deed of trust or deed to secure debt
for such Leasehold Property having an aggregate appraised value of approximately
$100,000,000 as set forth in the April 2006 Leasehold Report, insuring against
matters that would be disclosed by surveys to the extent that such surveys exist
as of the closing date, and containing any endorsements, assurances or
affirmative coverage requested by Agent in good faith in accordance with its
customary practices for protection of its interests. (f)    Agent, for the
benefit of itself and Lenders, shall hold perfected, first priority security
interests in and liens upon the Collateral, but as to priority, subject to such
liens as are permitted under the Loan Documents (which shall be consistent with
the liens permitted under the Existing Credit Agreement) that have priority over
the security interests and liens of Agent under applicable law (g)    The Excess
Availability at closing as determined by Agent after the application of proceeds
of the initial Revolving Loans and after provision for payment of all fees and
expenses of the transactions contemplated hereby, shall be not less than the
amount equal to $200,000,000. (h)    Agent shall have received evidence, in form
and substance satisfactory to Agent in good faith, that Borrowers and Guarantors
have obtained all necessary consents and approvals to the Credit Facility. (i)
   Agent shall have received a certified copy of the final order confirming the
Plan in the Chapter 11 Case (the “Confirmation Order”), which order shall be in
form and substance satisfactory to Agent in good faith, entered by the United
States Bankruptcy Court having exclusive jurisdiction over the Chapter 11 Case
(the “Bankruptcy Court”) after due notice to all creditors and other
parties-in-interest and as entered on the docket of the Clerk of the Bankruptcy
Court. The Confirmation Order shall authorize the financing under the Credit
Facility for Borrowers and shall contain such other terms and provisions as
Agent and its counsel shall in good faith require. The Confirmation Order shall
be in full force and effect and shall not have been modified, reversed, stayed
or vacated. (j)    The Plan and any amendments thereto shall be in form and
substance satisfactory to Agent and its counsel in good faith. Agent
acknowledges that the June 27, 2006 draft of the Plan provided to Agent is
satisfactory to it, provided, however, that any amendments or supplements to the
Plan will need to be in form and substance satisfactory to Agent in good faith.
The Plan shall be consummated and effective and all agreements and undertakings
of the parties thereunder to be performed by such time shall have been satisfied
and performed. The Confirmation Order shall be final, valid, subsisting and
continuing and all conditions precedent to the

 

B-4

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   effectiveness of the Plan shall have been fulfilled (or waived in accordance
with the terms of the Plan), including, without limitation, the execution,
delivery and performance of all terms and conditions thereof. Agent shall have
received evidence, in form and substance satisfactory to Agent in good faith,
that all consents, approvals or withholding of objections, appropriate or
necessary to consummate the Plan and the Credit Facility have been obtained. (k)
   No motion, action or proceeding shall be pending against a Borrower or
Guarantor by any creditor or other party-in-interest in the Bankruptcy Court or
any other court of competent jurisdiction which adversely affects or may
reasonably be expected to adversely affect the Plan in any material respect, the
post-consummation business of Borrowers in any material respect or the Credit
Facility in any material respect. (l)    Borrowers and Guarantors shall comply
in full with the notice and other requirements of the U.S. Bankruptcy Code in a
manner acceptable to Agent and its counsel in good faith. (m)    The
Confirmation Order shall have been entered by no later than November 30, 2006
and the satisfaction of the each of the conditions to the Credit Facility, and
the closing of the Credit Facility, shall have occurred by no later than
December 31, 2006.

Any actions set forth in this Exhibit B required to be taken on the effective
date of the Plan shall take place and shall be deemed to have occurred
simultaneously, and no such action shall be deemed to have occurred prior to the
taking of any other such action.

 

B-5