Exhibit 10.1




 





 


 


$700 MILLION TERM LOAN AGREEMENT


 


made and entered into


 


as of August 28, 2007


 


by and among


 


WHOLE FOODS MARKET, INC.,


 


a Texas corporation,


 


EACH OF THE FINANCIAL
INSTITUTIONS WHICH IS


 


A SIGNATORY HERETO OR WHICH MAY FROM
TIME TO


 


TIME BECOME A PARTY HERETO,


 


ROYAL BANK OF CANADA,


 


as Administrative Agent,


 


JPMORGAN CHASE BANK, N.A.,


 


as Syndication Agent,


 


and Collateral Agent,


 


WELLS FARGO BANK, N A, WACHOVIA BANK, N.A.


 


and LASALLE BANK MIDWEST, N.A.


 


as
Co-Documentation Agents


 


and


 


RBC CAPITAL MARKETS(1) AND
J. P.  MORGAN SECURITIES INC.,


 


as Joint Lead Arrangers and Joint
Bookrunners


 




 





 










(1)           RBC Capital Markets is a brand name
for the investment banking activities of Royal Bank of Canada.


 





















 


TABLE OF
CONTENTS


 


	
   

  	
  Page

  
	
  Article I – DEFINITIONS

  	
   

  
	
  Section 1.1 Certain
  Defined Terms

  	
  1

  
	
  Section 1.2
  Accounting Terms and Determinations

  	
  18

  
	
   

  	
   

  
	
  Article II – LOANS; ETC.

  	
   

  
	
   

  	
   

  
	
  Section 2.1 Loans

  	
  19

  
	
  Section 2.2
  Commitment Fees; Termination and Reductions

  	
  20

  
	
  Section 2.3 Mandatory
  Prepayments; Commitment Reduction

  	
  21

  
	
  Section 2.4 Payments

  	
  21

  
	
  Section 2.5
  Prepayments of Loans

  	
  21

  
	
  Section 2.6
  Application of Payments and Prepayments

  	
  22

  
	
  Section 2.7 Pro Rata
  Treatment

  	
  23

  
	
  Section 2.8 Payment
  Dates on the Loans

  	
  23

  
	
  Section 2.9 Interest
  Options for Loans

  	
  23

  
	
  Section 2.10 Special
  Provisions Applicable to LIBOR Rate Borrowings

  	
  24

  
	
  Section 2.11 Payment
  Dates

  	
  26

  
	
  Section 2.12 Sharing
  of Payments, Etc.

  	
  26

  
	
  Section 2.13 Use of
  Proceeds

  	
  27

  
	
  Section 2.14 Evidence
  of Debt

  	
  27

  
	
   

  	
   

  
	
  Article III – CONDITIONS

  	
   

  
	
   

  	
   

  
	
  Section 3.1 All Loans

  	
  28

  
	
  Section 3.2 First
  Loan

  	
  28

  
	
  Section 3.3
  Determinations Under Section 3.2

  	
  30

  
	
   

  	
   

  
	
  Article IV – REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
   

  
	
  Section 4.1
  Organization

  	
  30

  
	
  Section 4.2 Financial
  Statements

  	
  30

  
	
  Section 4.3
  Enforceable Obligations; Authorization

  	
  31

  
	
  Section 4.4 Other
  Debt

  	
  31

  
	
  Section 4.5
  Litigation

  	
  31

  
	
  Section 4.6 Title

  	
  31

  
	
  Section 4.7 Taxes

  	
  31

  
	
  Section 4.8
  Subsidiaries

  	
  31

  
	
  Section 4.9
  Representations by Others

  	
  31

  
	
  Section 4.10 Permits,
  Licenses, Etc.

  	
  32

  
	
  Section 4.11 ERISA

  	
  32

  
	
  Section 4.12
  Condition of Property

  	
  32

  
	
  Section 4.13 Assumed
  Names

  	
  32

  
	
  Section 4.14
  Investment Company Act

  	
  32

  
	
  Section 4.15 Margin
  Stock

  	
  32

  
	
  Section 4.16
  Agreements

  	
  32

  
	
  Section 4.17
  Environmental Matters

  	
  33

  



 


i





















 


	
  Section 4.18 Solvency

  	
  33

  
	
  Section 4.19 Target
  Representations

  	
  33

  
	
   

  	
   

  
	
  Article V – AFFIRMATIVE COVENANTS

  	
   

  
	
   

  	
   

  
	
  Section 5.1 Taxes,
  Existence, Regulations, Property, Etc.

  	
  33

  
	
  Section 5.2 Financial
  Statements and Information

  	
  34

  
	
  Section 5.3 Financial
  Tests

  	
  34

  
	
  Section 5.4
  Inspection

  	
  34

  
	
  Section 5.5 Further
  Assurances

  	
  35

  
	
  Section 5.6 Books and
  Records

  	
  35

  
	
  Section 5.7 Insurance

  	
  35

  
	
  Section 5.8 ERISA

  	
  35

  
	
  Section 5.9 Use of
  Proceeds

  	
  35

  
	
  Section 5.10
  Additional Guaranties

  	
  35

  
	
  Section 5.11 Notice
  of Events

  	
  36

  
	
  Section 5.12 Environmental
  Matters

  	
  36

  
	
  Section 5.13 End of
  Fiscal Year

  	
  36

  
	
  Section 5.14
  Consummation of Merger

  	
  36

  
	
  Section 5.15
  Maintenance of Ratings

  	
  36

  
	
  Section 5.16 Covenant
  to Guarantee Obligations and Give Security

  	
  36

  
	
  Section 5.17 Covenant
  to Give Additional Security

  	
  37

  
	
   

  	
   

  
	
  Article VI – NEGATIVE COVENANTS

  	
   

  
	
   

  	
   

  
	
  Section 6.1
  Indebtedness

  	
  38

  
	
  Section 6.2 Liens

  	
  40

  
	
  Section 6.3
  Contingent Obligations

  	
  41

  
	
  Section 6.4 Mergers,
  Consolidations and Dispositions and Acquisitions of Assets

  	
  41

  
	
  Section 6.5 Nature of
  Business

  	
  42

  
	
  Section 6.6
  Transactions with Related Parties

  	
  42

  
	
  Section 6.7 Loans and
  Investments

  	
  42

  
	
  Section 6.8 ERISA
  Compliance

  	
  43

  
	
  Section 6.9 Credit
  Extensions

  	
  43

  
	
  Section 6.10 Change
  in Accounting Method

  	
  43

  
	
  Section 6.11
  Redemption, Dividends and Distributions

  	
  43

  
	
   

  	
   

  
	
  Article VII – EVENTS OF DEFAULT AND REMEDIES

  	
   

  
	
   

  	
   

  
	
  Section 7.1 Events of
  Default

  	
  44

  
	
  Section 7.2 Remedies
  Cumulative

  	
  46

  
	
   

  	
   

  
	
  Article VIII – THE AGENT

  	
   

  
	
   

  	
   

  
	
  Section 8.1
  Authorization and Action

  	
  46

  
	
  Section 8.2 Agents’
  Reliance, Etc.

  	
  47

  
	
  Section 8.3 Royal Bank
  and Affiliates

  	
  47

  
	
  Section 8.4 Lender
  Credit Decision

  	
  47

  
	
  Section 8.5
  Indemnification

  	
  47

  
	
  Section 8.6 Successor
  Agents

  	
  48

  
	
  Section 8.7 Other
  Agents; Arrangers and Managers

  	
  48

  



 


ii





















 


	
  Article IX – MISCELLANEOUS

  	
   

  
	
   

  	
   

  
	
  Section 9.1 No Waiver

  	
  48

  
	
  Section 9.2 Notices

  	
  49

  
	
  Section 9.3
  Jurisdiction; Governing Law; Etc.

  	
  50

  
	
  Section 9.4 Survival;
  Parties Bound

  	
  51

  
	
  Section 9.5
  Counterparts

  	
  51

  
	
  Section 9.6 Survival

  	
  51

  
	
  Section 9.7 Captions

  	
  51

  
	
  Section 9.8 Expenses,
  Etc.

  	
  51

  
	
  Section 9.9
  Indemnification

  	
  52

  
	
  Section 9.10
  Amendments, Etc.

  	
  53

  
	
  Section 9.11
  Successors and Assigns

  	
  53

  
	
  Section 9.12 Entire
  Agreement

  	
  56

  
	
  Section 9.13
  Severability

  	
  56

  
	
  Section 9.14
  Disclosures

  	
  56

  
	
  Section 9.15 Capital
  Adequacy

  	
  56

  
	
  Section 9.16
  Withholding Tax

  	
  56

  
	
  Section 9.17 Waiver
  of Claims

  	
  57

  
	
  Section 9.18 Right of
  Setoff

  	
  58

  
	
  Section 9.19 USA
  PATRIOT Act

  	
  58

  
	
  Section 9.20
  Non-Consenting Lenders; Other Lenders

  	
  58

  
	
  Section 9.21
  Confidentiality

  	
  58

  



 


iii





















 


	
  EXHIBITS

  	
   

  
	
   

  	
   

  
	
  A

  	
  -

  	
  Form of Note

  
	
  B

  	
  -

  	
  Notice of Assumption

  
	
  C

  	
  -

  	
  Officer’s Certificate

  
	
  D

  	
  -

  	
  Request for Extension of
  Credit and Certificate of No Default

  
	
  E

  	
  -

  	
  Rate Selection Notice

  
	
  F

  	
  -

  	
  Form of Assignment
  and Acceptance

  
	
  G-A

  	
   

  	
  Form of Security
  Agreement A

  
	
  G-B

  	
   

  	
  Form of Security
  Agreement B

  
	
  H

  	
   

  	
  Form of Guaranty
  Agreement

  
	
   

  	
   

  	
   

  
	
  SCHEDULES

  	
   

  
	
   

  	
   

  
	
  1.1(a)

  	
   

  	
  Disclosed Divestitures

  
	
  1.1(b)

  	
   

  	
  EBIT/EBITDA

  
	
  1.1(c)

  	
   

  	
  Guarantors

  
	
  2.1(a)

  	
   

  	
  Commitments

  
	
  4.8

  	
   

  	
  Subsidiaries

  
	
  4.13

  	
   

  	
  Assumed Names

  
	
  4.16

  	
   

  	
  Agreements

  
	
  6.2(a)

  	
   

  	
  Liens

  



 


iv





















 


TERM
LOAN AGREEMENT (this “Agreement”)
dated as of August 28, 2007 among WHOLE FOODS MARKET, INC., a Texas
corporation (the “Company”), Royal Bank of
Canada (“Royal Bank”), as
administrative agent (together with any successor administrative agent
appointed pursuant to Article VII, the “Agent”)
for the lenders from time to time parties hereto (the “Lenders”),
JPMorgan Chase Bank, N.A., as syndication agent and collateral agent together
with any successor collateral agent appointed pursuant to Security Agreement A
or Security Agreement B, as applicable (the “Collateral
Agent”), Wells Fargo Bank, N A, Wachovia Bank, N.A. and LaSalle
Bank Midwest, N.A. as co-documentation agents and RBC Capital Markets and J. P.
Morgan Securities Inc., as joint lead arrangers and joint bookrunners (in such
capacities, the “Joint Lead Arrangers”).


 


PRELIMINARY STATEMENTS:


 


(1)           Pursuant to the agreement and plan of
merger dated as of February 21, 2007 (as amended, supplemented or
otherwise modified in accordance with its terms, to the extent permitted
hereunder, the “Merger
Agreement”) among the Company, its wholly-owned subsidiary, WFMI
Merger Co., a Delaware corporation (“Merger
Sub”) and Wild Oats Markets, Inc., a Delaware corporation
(the “Target”), the
Company, through Merger Sub, has commenced an offer to purchase all the
outstanding shares of the Target (the “Tender
Offer”).  Following the
successful consummation of the Tender Offer, the Company, through Merger Sub,
will acquire 100% of the outstanding shares of the Target and will merge with
and into the Target (the “Merger”).


 


(2)           The Company has requested that the
Lenders lend to the Company up to $700,000,000 for the purposes set forth in Section 2.13.


 


(3)           The Lenders have indicated their
willingness to lend such amount on the terms and conditions of this Agreement.


 


NOW, THEREFORE, in consideration of the premises and
of the mutual covenants and agreements contained herein, the parties hereto
hereby agree as follows:


 


ARTICLE I
– DEFINITIONS


 


Section 1.1  Certain Defined Terms.  Unless a particular word or phrase is
otherwise defined or the context otherwise requires, capitalized words and
phrases used in the Loan Documents have the meanings provided below.


 


“Additional Collateral”
has the meaning specified in the Security Agreement B attached hereto as Exhibit G-B.


 


“Additional Collateral Trigger”
shall mean the date on which (a) the Borrower’s corporate credit rating
shall be (i) with respect to S&P’s corporate credit rating, equal to
or lower than BB-, and (ii) with respect to Moody’s corporate rating
system, equal to or lower than Ba3;  or (b) the
Borrower’s corporate credit rating shall be less than (i) with respect to
S&P’s corporate credit rating, BB-, or (ii) with respect to Moody’s
corporate rating system, a rating of Ba3.


 


“Additional Security Period”  shall mean the period, if any, beginning with
the occurrence of the Additional  Collateral
Trigger until the Maturity Date.


 


“Affiliate”
shall mean any Person controlling, controlled by or under common control with
any other Person; and with respect to an individual, “Affiliate” shall also
mean any other 


 


1





















 


individual related to such
individual by blood or marriage.  For
purposes of this definition, “control” (including “controlled by” and “under
common control with”) means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of securities, partnership or other
ownership interests, by contract or otherwise.


 


“Agent”
shall have the meaning ascribed to it in the recital of parties hereto.


 


“Agent’s Account”
means the Agent’s account specified by the Agent in writing to the Company and
the Lenders from time to time.


 


“Aggregate Commitment”
shall mean, on any day, the aggregate of all of the Commitments of the Lenders
on such day.


 


“Agreement”
shall have the meaning ascribed to it in the recital of parties hereto.


 


“Agreement Value”
means, for each Hedging Agreement, on any date of determination, an amount
determined by the Agent equal to the amount, if any, (a) that would be
payable by any Loan Party or any of its Subsidiaries to its counterparty to
such Hedging Agreement as if (i) such Hedging Agreement was being
terminated early on such date of determination, (ii) such Loan Party or
Subsidiary was the sole “Affected Party” and (iii) the Agent was the sole
party determining such payment amount (with the Agent making such determination
pursuant to the terms of the governing documentation); (b) in the case of
a Hedge Agreement traded on an exchange, the mark-to-market value of such Hedge
Agreement, which will be the unrealized loss on such Hedge Agreement to the
Loan Party or any of its Subsidiaries party to such Hedge Agreement based on
the settlement price of such Hedge Agreement on such date of determination; or (c) in
all other cases, the mark-to-market value of such Hedge Agreement, which will
be the unrealized loss on such Hedge Agreement to the Loan Party or Subsidiary
of a Loan Party to such Hedge Agreement as the amount, if any, by which (i) the
present value of the future cash flows to be paid by such Loan Party or
Subsidiary exceeds (ii) the present value of the future cash flows to be
received by such Loan Party or Subsidiary pursuant to such Hedge Agreement.


 


“Alternate Base Rate”
shall mean for any day (a) the greater of (i) the Prime Rate and (ii) the
Federal Funds Rate plus 0.50% per
annum, plus (b) the Applicable Margin in
effect on such day.  For purposes of this
Agreement any change in the Alternate Base Rate due to a change in the Prime
Rate or the Federal Funds Rate shall be effective on the effective date of such
change in the Prime Rate or Federal Funds Rate, respectively.  If for any reason the Agent shall have
determined (which determination shall be conclusive and binding, absent
manifest error) that it is unable to ascertain the Federal Funds Rate for any
reason, including the inability or failure of the Agent to obtain sufficient
quotations in accordance with the terms hereof, the Alternate Base Rate shall
be the Prime Rate plus the Applicable Margin.


 


“Alternate Base Rate
Borrowing” shall mean that portion of the principal balance of
the Loans at any time bearing interest at the Alternate Base Rate.


 


“Annual Audited Financial
Statements” shall mean, with respect to each fiscal year of the
Company, the Company’s 10-K Report filed with the Securities Exchange
Commission for such fiscal year, prepared in conformity with Generally Accepted
Accounting Principles and accompanied by a report and opinion of independent
certified public accountants with an accounting firm of national standing and
reputation, which shall state that such financial 


 


2





















 


statements, in the opinion
of such accountants, present fairly, in all material respects, the financial
position of the Company and its Subsidiaries, on a consolidated basis, as of
the date thereof and the results of its operations and cash flows for the
period covered thereby in conformity with Generally Accepted Accounting
Principles.


 


“Applicable Margin”
shall mean with respect to any Loan on any date of determination, the
applicable rate per annum for the corresponding rating of the Company’s
corporate family ratings, and determined in accordance with the following grid:


 


	
  Moody’s and S&P 

  	
   

  	
  LIBOR Margin 

  (Per Annum)

  	
   

  	
  ABR Margin 

  (Per Annum)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BBB+ or Baa1

  	
   

  	
  0.375

  	
  %

  	
  0.00

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BBB or Baa2

  	
   

  	
  0.500

  	
  %

  	
  0.00

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BBB- and Baa3

  	
   

  	
  0.625

  	
  %

  	
  0.00

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BBB- or Baa3

  	
   

  	
  0.875

  	
  %

  	
  0.00

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BB+ and Ba1

  	
   

  	
  1.00

  	
  %

  	
  0.00

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BB+ or Ba1

  	
   

  	
  1.25

  	
  %

  	
  0.25

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BB and Ba2

  	
   

  	
  1.375

  	
  %

  	
  0.375

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BB or Ba2

  	
   

  	
  1.50

  	
  %

  	
  0.50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Otherwise

  	
   

  	
  1.75

  	
  %

  	
  0.75

  	
  %

  



 


For purposes of determining the Applicable Margin in
the case of split ratings, where applicable, (i) in the event of a single
category split in ratings, the higher of the two ratings shall apply, (ii) in
the event of a two-category split in ratings, the rating that is in the middle
of the two ratings shall apply and (iii) in the event that there is more
than a two-category split in ratings, the rating that is one category above the
lower rating will apply.


 


“Approved Fund”
means any Person (other than a natural person) that is engaged in making,
purchasing, holding or investing in bank loans and similar extensions of credit
in the ordinary course of its business and that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate
of an entity that administers or manages a Lender.


 


“Borrowing”
shall mean an Alternate Base Rate Borrowing or a LIBOR Rate Borrowing.


 


“Business Day”
shall mean a day when the main office of the Agent is open for business and
banks in New York, New York are generally open for business.


 


3





















 


“Business Entity”
shall mean corporations, partnerships, joint ventures, joint stock
associations, business trusts and other business entities.


 


“Capital Lease Obligations”
shall mean the obligations of the Company and its Subsidiaries on a
consolidated basis 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 consolidated balance sheet of the Company and its Subsidiaries under
Generally Accepted Accounting Principles (including Statement of Financial
Accounting Standards No. 13 of the Financial Accounting Standards Board,
as amended) and, for purposes of this Agreement, the amount of such obligations
shall be the capitalized amount thereof, determined in accordance with
Generally Accepted Accounting Principles (including such Statement No. 13).


 


“Change of Control”
shall mean any change so that any Unrelated Person (or any Unrelated Persons
acting together which would constitute a Group) together with any Affiliate or
Related Persons of such Unrelated Person or Unrelated Persons (in each case
also constituting Unrelated Persons) shall at any time after the date hereof
either (i) Beneficially Own more than fifty percent (50%) of the
aggregate voting power of all classes of Voting Stock of the Company, or (ii) succeed
in having enough of its or their nominees elected by the stockholders to the
Board of Directors of the Company so as to constitute a majority of the Board
of Directors of the Company.  As used
herein, (a) “Beneficially Own” shall mean “beneficially own” as defined in
Rule 13d-3 of the Securities and Exchange Act of 1934, as amended (the “34 Act”) or any successor provision
thereto; (b) “Group” shall mean a “group” for purposes of Section 13(d) of
the 34 Act or any successor provision; (c) “Unrelated Person” shall mean
any Person other than any trust for any employee stock ownership plan of the
Company or any Subsidiary of the Company; (d) “Related Person” shall mean
as to any Person, any other Person owning (1) five percent (5%) or
more of the outstanding common stock of such Person or (2) five
percent (5%) or more of the Voting Stock of such Person, and (e) “Voting
Stock” shall mean as to any Person, the Stock of such Person which ordinarily
has voting power for the election of directors (or persons performing similar
functions) of such Person, whether at all times or only so long as no senior
class of securities has such voting power by reason of any contingency.


 


“Code” shall
mean the Internal Revenue Code of 1986, as amended, as now or hereafter in
effect, together with all regulations, rulings and interpretations thereof or
thereunder by the Internal Revenue Service.


 


“Collateral”
has the meaning specified in the Security Agreement A attached hereto as Exhibit G-A.


 


“Collateral Agent”
shall have the meaning ascribed to it in the recital of parties hereto.


 


“Commitment”
shall mean, as to any Lender, the obligation of such Lender to make Loans in an
aggregate principal amount at any one time outstanding up to, but not
exceeding, the amount set forth opposite such Lender’s name on Schedule 2.1(a) hereto
under the caption “Commitment”, or as to any Lender that becomes a Party hereto
by executing an Assignment and Acceptance, the amount set forth in such
Assignment and Acceptance (in each case, as the same may be reduced from time
to time pursuant to Section 2.2 hereof).


 


“Commitment Fee”
with respect to any Lender, shall have the meaning assigned to it in Section 2.2.


 


4




















 


“Commitment Percentage”
shall mean, with respect to any Lender, the ratio, expressed as a percentage,
of (a) such Lender’s Commitment to (b) the Aggregate Commitment.


 


“Commitment Termination
Date” means September 7, 2007.


 


“Confidential Information”
means non-public information that any Loan Party furnishes to the Agent or any
Lender, unless such information is or becomes (a) generally available to
the public (other than as a result of a breach by the Agent or any Lender of
its obligations hereunder) or that is or becomes available to the Agent or such
Lender from a source other than the Loan Parties that is not, to the best of
the Agent’s or such Lender’s knowledge, acting in violation of a
confidentiality agreement with a Loan Party or (b) designated in writing
by any Loan Party as non-confidential.


 


“Consequential Loss”
shall mean, with respect to (a) the Company’s payment of principal of a
LIBOR Rate Borrowing on a day other than the last day of the applicable LIBOR
Interest Period, (b) the Company’s failure to borrow a LIBOR Rate
Borrowing on the date specified by the Company for any reason, (c) the
Company’s failure to make any prepayment of the Loans (other than Alternate
Base Rate Borrowings) on the date specified by the Company, or (d) any
cessation of the LIBOR Rate to apply to the Loans or any part thereof pursuant
to Section 2.10 hereof, in each case whether voluntary or involuntary, any
loss, expense, penalty, premium or liability incurred by any of the Lenders or
the Agent, including any interest paid by any of the Lenders to lenders of
funds borrowed by them to make or carry the Loans; a “Consequential
Loss” shall mean, with respect to the termination or
cancellation of any LIBOR Rate Borrowing pursuant to Section 2.10 hereof,
in each case whether voluntary or involuntary, any loss, expense, penalty,
premium or liability incurred by any of the Lenders or the Agent on account of
any reduction resulting from such premature termination or cancellation of such
borrowing in such Person’s margins or spreads between its cost of funds and the
interest earned on the principal of the borrowing so terminated or canceled,
including an amount equal to the excess (if any) of (x) interest that
would have accrued on any such borrowing during the remainder of the applicable
LIBOR Interest Period had such borrowing not been terminated or canceled early,
over (y) the interest actually accrued on the principal amount of that
terminated or canceled borrowing for such remainder of such LIBOR Interest
Period.


 


“Consolidated Net Worth”
shall mean, at any time, shareholder’s equity of the Company as set forth in
the most recent consolidated Annual Audited Financial Statements of the Company
and its Subsidiaries, determined in accordance with Generally Accepted
Accounting Principles, consistently applied.


 


“Contingent Obligations”
shall mean, as to any Person, without duplication, any obligation of such
Person guaranteeing or intended to guarantee the payment or performance of any
Indebtedness, leases, dividends or other obligations (collectively “primary
obligations”) of any other Person (the “primary obligor”) in any manner,
whether directly or indirectly, including without limitation, any obligation of
the Person for whom Contingent Obligations is being determined, whether or not
contingent, (a) to purchase any such primary obligation or other property
constituting direct or indirect security therefor, (b) assume or
contingently agree to become or be secondarily liable in respect of any such
primary obligation, (c) to advance or supply funds (i) for the
purchase or payment of any such primary obligation or (ii) to maintain
working capital or equity capital for the primary obligor or otherwise to
maintain the net worth or solvency of the primary obligor, (d) to purchase
property, securities or services primarily for the purpose of assuring the
owner of any such primary obligation of the ability of the primary obligor to
make payment of such primary obligation, or (e) otherwise to assure or
hold harmless the 


 


5

















 


owner of such primary
obligation against loss in respect thereof; provided,
however, that the term “Contingent Obligations” shall not include (x) endorsements
of checks or other negotiable instruments in the ordinary course of business, (y) performance
or payment guarantees by the Company of any Indebtedness of any of its
Subsidiaries of the type permitted in Section 6.1(f) hereof, and (z) the
obligations and liabilities of each Guarantor to the Agent and the Lenders under
the Guaranties.  The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
anticipated liability in respect thereof (assuming the Person for whom
Contingent Obligations is being determined is required to perform thereunder)
as determined by the Agent in good faith.


 


“Contribution Agreement”
shall mean that certain Contribution Agreement of even effective date herewith,
by and among the Company and the Guarantors, as the same may have been or may
hereafter be amended, modified, supplemented, restated and joined in pursuant
to a Joinder Agreement, from time to time.


 


“Convertible Senior
Debentures” shall mean those certain the 3.25% Convertible
Senior Debentures due 2034 which are governed by that certain Indenture dated June 1,
2004, by and between Target and U.S. Bank National Association as trustee.


 


“Credit Facility Hedging
Agreements” shall mean any Hedging Agreement now existing or
hereafter entered into between the Company and any lender under the Revolving
Credit Facility and/or any of their respective Affiliates in connection with
all or any portion of the Loans and/or any of the loans under the Revolving
Credit Facility for purposes of hedging the risk of variable interest rate
volatility or fluctuations of interest rates, as any such Hedging Agreement may
be modified, supplemented and in effect from time to time.


 


“Current Sum”
shall mean on any day, as to a particular Lender, the sum of the then
outstanding principal balance of such Lender’s Loans on such day.


 


“Current Sum Percentage”
shall mean, with respect to any Lender, the ratio, expressed as a percentage of
(a) such Lender’s Current Sum to (b) the aggregate Current Sum of all
Lenders.


 


“Default”
means any Event of Default or any other event or circumstance that with the
passing of time or the giving of notice, or both, would constitute an Event of
Default.


 


“Disclosed Divestitures”
shall mean the proposed divestitures of the Company and its Subsidiaries set
forth in Schedule 1.1(a) hereto.


 


“Discontinued Operations”
shall mean, as of any day, operations of the Company or its Subsidiaries which
have been discontinued, as reflected on the most recent Form 10-K or 10-Q
for the Company filed with the Security and Exchange Commission, and which, as
of such day, have been fully disposed of or liquidated.


 


“EBIT” shall
mean for any period for which EBIT is calculated, Net Income of the Company and
its Subsidiaries on a consolidated basis for such period plus, without
duplication, (a) non-recurring, non-cash charges of the Company and its
Subsidiaries on a consolidated basis for such period, (b) non-cash
pre-opening rent expenses of the Company and its Subsidiaries on a consolidated
basis for such period, (c) taxes of the Company and its Subsidiaries on a
consolidated basis for such period, (d) interest expense of the Company
and its Subsidiaries on a 


 


6

















 


consolidated basis for such
period and (e) non-cash stock compensation expense of the Company and its
Subsidiaries on a consolidated basis for such period; provided that EBIT for
the three quarters immediately prior to the Effective Date shall be as set
forth in Schedule 1.1(b).  All components
of EBIT shall be determined in accordance with Generally Accepted Accounting
Principles, consistently applied.


 


“EBITDA”
shall mean for any period for which EBITDA is calculated, Net Income of the
Company and its Subsidiaries on a consolidated basis for such period plus,
without duplication, (a) taxes of the Company and its Subsidiaries on a
consolidated basis for such period (calculated after excluding any gain or loss
attributable to Discontinued Operations as of such day), (b) depreciation,
depletion, obsolescence and amortization of Property of the Company and its
Subsidiaries on a consolidated basis for such period (calculated after
excluding any depreciation, depletion, obsolescence and amortization applicable
to Discontinued Operations as of such day), (c) interest expense of the
Company and its Subsidiaries on a consolidated basis for such period
(calculated after excluding any interest expense paid in connection with
Discontinued Operations as of such day), (d) non-recurring, non-cash
charges of the Company and its Subsidiaries on a consolidated basis for such
period, (e) non-cash pre-opening rent expenses of the Company and its
Subsidiaries on a consolidated basis for such period and (f) non-cash
stock compensation expense of the Company and its Subsidiaries on a
consolidated basis for such period; provided that EBITDA for the three quarters
immediately prior to the Effective Date shall be as set forth in Schedule
1.1(b).  All components of EBITDA shall
be determined in accordance with Generally Accepted Accounting Principles,
consistently applied.


 


“Effective Date”
has the meaning ascribed thereto in Section 3.2.


 


“Eligible Assignee”
shall mean (a) a Lender, (b) an Affiliate of a Lender, (c) an
Approved Fund or (d) any other Person (other than an individual) approved
by the Agent and, except during the continuance of an Event of Default, the
Company (each such consent not to be unreasonably withheld or delayed); it
being understood that none of the Company nor any of its Affiliates shall, in
any event, be an Eligible Assignee.


 


“Environmental Claim”
shall mean any third party (including any Governmental Authority) action,
lawsuit, claim or proceeding (including claims or proceedings at common law)
which seeks to impose or alleges liability for (i) preservation,
protection, conservation, pollution, contamination of, or releases or
threatened releases of Hazardous Substances into the air, surface water, ground
water or land or the clean-up, abatement, removal, remediation or monitoring of
such pollution, contamination or Hazardous Substances; (ii) generation,
recycling, reclamation, handling, treatment, storage, disposal or
transportation of Hazardous Substances or solid waste (as defined under the
Resource Conservation and Recovery Act and its regulations, as amended from
time to time); (iii) exposure to Hazardous Substances; (iv) the
safety or health of employees or other Persons in connection with any of the
activities specified in any other subclause of this definition; or (v) the
manufacture, processing, distribution in commerce, presence or use of Hazardous
Substances.  An “Environmental Claim”
includes a common law action, as well as a proceeding to issue, modify or
terminate an Environmental Permit, or to adopt or amend a regulation to the
extent that such a proceeding attempts to redress violations of the applicable
permit, license, or regulation as alleged by any Governmental Authority.


 


“Environmental Liabilities”
shall mean all liabilities arising from any Environmental Claim, Environmental
Permit or Requirement of Environmental Law under any theory of recovery, at law
or in equity, and whether based on negligence, strict liability or otherwise,
including:  remedial, removal, response,
abatement, restoration (including natural resources) 


 


7

















 


investigative, or monitoring
liabilities, personal injury and damage to property, natural resources or
injuries to persons, and any other related costs, expenses, losses, damages,
penalties, fines, liabilities and obligations, and all costs and expenses
necessary to cause the issuance, reissuance or renewal of any Environmental
Permit including attorney’s fees and court costs.  Environmental Liability shall mean any one of
them.


 


“Environmental Permit”
shall mean any permit, license, approval or other authorization under any
applicable law, regulation and other requirement of the United States or of any
state, municipality or other subdivision thereof relating to pollution or
protection of health or the environment, including laws, regulations or other
requirements relating to emissions, discharges, releases or threatened releases
of pollutants, contaminants or Hazardous Substances or toxic materials or
wastes into ambient air, surface water, ground water or land, or otherwise
relating to the manufacture, processing, distribution, recycling, presence,
use, treatment, storage, disposal, transport, or handling of, wastes,
pollutants, contaminants or Hazardous Substances.


 


“Equipment”
shall have the meaning assigned to it in the Texas Business and Commerce Code
in force on the date the document using such term was executed.


 


“ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as amended from
time to time, and all rules, regulations, rulings and interpretations adopted
by the Internal Revenue Service or the Department of Labor thereunder.


 


“Eurocurrency Liabilities”
has the meaning specified in Regulation D.


 


“Event of Default”
shall mean any of the events specified in Section 7.1 hereof or otherwise
specified as an Event of Default in any other Loan Document, provided there has
been satisfied any requirement in connection with such event for the giving of
notice, or the lapse of time, or the happening of any further condition, event
or act, and Default shall mean any of such events, whether or not any such
requirement has been satisfied.


 


“Extraordinary Receipt”
means any cash received by or paid to or for the account of any Person not in
the ordinary course of business, including, without limitation, tax refunds (provided that, for greater clarity and without limiting the
foregoing, ordinary tax refunds on account of cash taxes actually paid would be
considered ordinary course), pension plan reversions, proceeds of insurance
(including, without limitation, any key man life insurance but excluding
proceeds of business interruption insurance to the extent such proceeds
constitute compensation for lost earnings), condemnation awards (and payments
in lieu thereof), indemnity payments and any purchase price adjustment received
in connection with any purchase agreement; provided, however, that an
Extraordinary Receipt shall not include cash receipts received from proceeds of
insurance, condemnation awards (or payments in lieu thereof) or indemnity
payments to the extent that such proceeds, awards or payments are received by
any Person in respect of any third party claim against such Person and applied
to pay (or to reimburse such Person for its prior payment of) such claim and
the costs and expenses of such Person with respect thereto.


 


“Federal Funds Rate”
means, for any period, a fluctuating interest rate per annum equal for each day
during such period to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day for such transactions
received by the Agent from three Federal funds brokers of recognized standing
selected by it.


 


8

















 


“Fee Letter”
shall mean that certain fee letter dated as of February 23, 2007 among
Royal Bank, JPMorgan Chase Bank, N.A., J. P. Morgan Securities Inc. and the
Company.


 


“Fixed Charge Coverage
Ratio” shall mean as of any day that the Fixed Charge Coverage
Ratio is being calculated, the ratio of (a) EBIT plus Operating Lease
Expense to (b) interest expense plus Operating Lease Expense.  All components of the Fixed Charge Coverage
Ratio shall be computed for the Rolling Four Quarters as of such day and
determined for the Company and its Subsidiaries on a consolidated basis in
accordance with Generally Accepted Accounting Principles, consistently applied;
provided, that for purposes of
determining interest expense and Operating Lease Expense in the Fixed Charge
Coverage Ratio for the (a) fiscal quarter ended September 30, 2007,
such interest expense and Operating Lease Expense for the measurement period
then ended shall equal such items for such fiscal quarter multiplied by 52/13, (b) fiscal
quarter ended January 20, 2008, such interest expense and Operating Lease
Expense for the measuring period then ended shall equal such items for the two
fiscal quarters then ended multiplied by 52/29, and (c) fiscal quarter
ended April 30, 2008, such interest expense and Operating Lease Expense
for the measuring period then ended shall equal such items for the three fiscal
quarters then ended multiplied by 52/41; provided  also that EBIT for the three quarters immediately prior to
the Effective Date shall be as set forth in Schedule 1.1(b).


 


“Funded Indebtedness”
shall mean (a) all Indebtedness of the Company and its Subsidiaries on a
consolidated basis which by its terms matures more than one year after the
applicable date of calculation of Funded Indebtedness (including without
limitation, current maturities or scheduled principal payments of Funded
Indebtedness for the applicable period for which Funded Indebtedness is being
calculated), and any Indebtedness of the Company and its Subsidiaries on a consolidated
basis maturing within one year from such date and (b) without duplication,
Capital Lease Obligations of the Company and its Subsidiaries on a consolidated
basis.  All components of Funded
Indebtedness shall be determined in accordance with Generally Accepted
Accounting Principles, consistently applied.


 


“Generally Accepted
Accounting Principles” shall mean, as to a particular Person,
those principles and practices (a) which are recognized as such by the
Financial Accounting Standards Board or successor organization, (b) which
are applied for all periods after the date hereof in a manner consistent with
the manner in which such principles and practices were applied to the most
recent audited financial statements of the relevant Person furnished to the
Agent and the Lenders, and (c) which are consistently applied for all
periods after the date hereof so as to reflect properly the financial
condition, and results of operations and changes in financial position, of such
Person.


 


“Governmental Authority”
shall mean any foreign governmental authority, the United States of America,
any state of the United States and any political subdivision of any of the
foregoing, and any agency, instrumentality, department, commission, board,
bureau, central bank, authority, court or other tribunal, in each case whether
executive, legislative, judicial, regulatory or administrative, having
jurisdiction over the Agent, any of the Lenders or the Company, any of the
Company’s Subsidiaries or their respective Property.


 


“Guaranties”
shall mean that certain Guaranty, substantially in the form of Exhibit H
hereto, by the Guarantors party thereto in favor of the Agent dated as of the
date hereof, as the same may be amended, supplemented, modified, joined in
pursuant to a Joinder Agreement and restated from time to time, and each and
every other guaranty executed by any or all of the Guarantors from time to
time; each a “Guaranty”.


 


9

















 


“Guarantors”
shall mean the Persons listed on Schedule 1.1(c) hereto, each Subsidiary
that shall hereafter be required to execute and deliver a Guaranty pursuant to
the terms of this Agreement and each and every other Person executing a
guaranty from time to time guaranteeing the Indebtedness of the Company owing
from time to time to the Lenders pursuant to this Agreement or the Notes.


 


“Hazardous Substance”
shall mean any hazardous or toxic waste, substance or product or material
defined or regulated from time to time by any applicable law, rule, regulation
or order described in the definition of “Requirements of Environmental Law,”
including solid waste (as defined under RCRA or its regulations, as amended
from time to time), petroleum and any fraction thereof, any radioactive
materials and waste.


 


“Hedging Agreements”
shall mean any transaction (including an agreement with respect thereto) now or
hereafter existing which is a rate swap, basis swap, forward rate transaction,
commodity swap, commodity option, equity or equity index swap, equity or equity
index option, bond option, interest rate option, foreign exchange transaction,
cap transaction, floor transaction, collar transaction, forward transaction,
currency swap transaction, cross-currency rate swap transaction, currency
option or any other similar transaction (including any option with respect to
any of these transactions) or any combination thereof, whether linked to one or
more interest rates, foreign currencies, commodity prices, equity prices or
other financial measures.


 


“Incidental Liens”
shall mean (i) Liens for taxes, assessments, levies or other governmental
charges (but not Liens for clean up expenses arising pursuant to Requirements
of Environmental Law) not yet due (subject to applicable grace periods) or
which are being contested in good faith and by appropriate proceedings if
adequate reserves with respect thereto are maintained on the books of the
Company in accordance with Generally Accepted Accounting Principles; (ii) carriers’,
warehousemen’s, mechanics’, landlords’, vendors’, materialmen’s, repairmen’s,
sureties’ or other like Liens (other than Liens for clean up expenses arising
pursuant to Requirements of Environmental Law) arising in the ordinary course
of business (or deposits to obtain the release of any such Lien) and securing
amounts not yet due or which are being contested in good faith and by
appropriate proceedings if, in the case of such contested Liens, adequate
reserves with respect thereto are maintained on the books of the Company in
accordance with Generally Accepted Accounting Principles; (iii) pledges or
deposits in connection with workers’ compensation, unemployment insurance and
other social security legislation; (iv) deposits not in excess at any time
of $25,000,000 in the aggregate to secure insurance in the ordinary course of
business, the performance of bids, tenders, contracts (other than contracts for
the payment of money), leases, licenses, franchises, statutory obligations,
surety and appeal bonds and performance bonds and other obligations of a like
nature incurred in the ordinary course of business and Liens to secure progress
or partial payments made to the Company or any Subsidiary and other Liens of
like nature made in the ordinary course of business; (v) easements,
rights-of-way, covenants, reservations, exceptions, encroachments, zoning and
similar restrictions and other similar encumbrances or title defects incurred
in the ordinary course of business which, in the aggregate, are not substantial
in amount, and which do not in any case singly or in the aggregate materially
detract from the value or usefulness of the property subject thereto or
materially interfere with the ordinary conduct of the business of the Company
and its Subsidiaries, taken as a whole; (vi) bankers’ liens arising by
operation of law; (vii) Liens arising pursuant to any order of attachment,
distraint or similar legal process arising in connection with any court
proceeding the payment of which is covered in full (subject to customary
deductibles) by insurance; (viii) inchoate Liens arising under ERISA to
secure contingent liabilities of the Company; and (ix) rights of lessees
and sublessees in assets leased by the Company or any Subsidiary not prohibited
elsewhere herein.


 


10

















 


“Indebtedness”
shall mean, as to any Person, without duplication:  (a) all indebtedness (including
principal, interest, fees and charges) of such Person for borrowed money or for
the deferred purchase price of Property or services; (b) any other
indebtedness which is evidenced by a promissory note, bond, debenture or
similar instrument; (c) any obligation under or in respect of outstanding
letters of credit, acceptances and similar obligations created for the account
of such Person; (d) all Capital Lease Obligations of such Person; (e) all
indebtedness, liabilities, and obligations secured by any Lien on any Property
owned by such Person even though such Person has not assumed or has not
otherwise become liable for the payment of any such indebtedness, liabilities or
obligations secured by such Lien; (f) net liabilities of such Person under
Hedging Agreements (determined by reference to the Agreement Value thereof) and
(g) all Contingent Obligations and Synthetic Indebtedness of such Person;
provided, that such term shall not mean or include any Indebtedness in respect
of which monies sufficient to pay and discharge the same in full (either on the
expressed date of maturity thereof or on such earlier date as such Indebtedness
may be duly called for redemption and payment) shall be deposited with a
depository, agency or trustee acceptable to the Agent in trust for the payment
thereof.


 


“Interest Option”
shall have the meaning ascribed to it in Section 2.9(a) hereof.


 


“Interest Payment Dates”
shall mean (a) for Alternate Base Rate Borrowings, (1) at all times
while the Notes are outstanding, the last Business Day of each March, June, September and
December, and (2) the Maturity Date; and (b) for LIBOR Rate
Borrowings, (1) if the LIBOR Interest Period applicable to such LIBOR Rate
Borrowing is equal to or less than three (3) months, the end of such
LIBOR Interest Period, and (2) in all other cases, on that day which is
three (3) calendar months following the first day of the applicable
LIBOR Interest Period (or, if such day is not a Business Day, on the next
succeeding day that is a Business Day) and at the end of such LIBOR Interest
Period.


 


“Investment”
shall mean the purchase or other acquisition of any securities or Indebtedness
of, or the making of any loan, advance, transfer of Property or capital
contribution to, or the incurring of any liability, contingently or otherwise,
in respect of the Indebtedness of, any Person.


 


“Investment Grade”
shall mean with respect to the Moody’s corporate credit rating system a rating
of Baa3 or higher and with respect to the S&P corporate credit rating
system a rating of BBB- or higher.


 


“Joinder Agreement”
shall mean any agreement, in Proper Form, executed by a Subsidiary of the
Company from time to time, pursuant to which such Subsidiary joins in the
execution and delivery of a Guaranty and the Contribution Agreement.


 


“Joint Lead Arrangers”
shall have the meaning ascribed to such term in the recitals hereto.


 


“Legal Requirement”
shall mean any law, statute, ordinance, decree, requirement, order, judgment,
rule, regulation (or interpretation of any of the foregoing) of, and the terms
of any license or permit issued by, any Governmental Authority.


 


“Lenders”
shall have the meaning ascribed to it in the recital of parties hereto.


 


“Leverage Ratio”
shall mean as of any day that the Leverage Ratio is calculated, the ratio of
Funded Indebtedness of the Company and its Subsidiaries on a consolidated basis
as of such 


 


11

















 


day to EBITDA of the Company
and its Subsidiaries on a consolidated basis for the Rolling Four Quarters as
of such day; provided that EBITDA for the three
quarters immediately prior to the Effective Date shall be as set forth in
Schedule 1.1(b).


 


“LIBOR Business Day”
shall mean a Business Day on which transactions in United States Dollar
deposits between banks may be carried on in the London, England interbank
market.


 


“LIBOR Interest Period”
shall mean, for each LIBOR Rate Borrowing, a period commencing:


 


(a)           on
the date of such LIBOR Rate Borrowing, or


 


(b)           on
the last day of the immediately preceding LIBOR Interest Period in the case of
a rollover to a successive LIBOR Interest Period, and ending on the numerically
corresponding day one, two, three or (as available) six months thereafter, as
the Company shall elect in accordance herewith; provided, (w) any LIBOR
Interest Period which would otherwise end on a day which is not a LIBOR
Business Day shall be extended to the next succeeding LIBOR Business Day,
unless such LIBOR Business Day falls in another calendar month, in which case
such LIBOR Interest Period shall end on the next preceding LIBOR Business Day; (x) any
LIBOR Interest Period which begins on the last LIBOR Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such LIBOR Interest Period) shall end on the last
LIBOR Business Day of the appropriate calendar month; (y) no LIBOR
Interest Period shall ever extend beyond the Maturity Date; and (z) LIBOR
Interest Periods shall be selected by the Company in such a manner that the
LIBOR Interest Period with respect to any portion of the Loans which shall
become due shall not extend beyond such due date.


 


“LIBOR Rate”
means, for any LIBOR Interest Period for all LIBOR Rate Borrowings comprising
part of the same Borrowing, (a) an interest rate per annum equal to the
rate per annum obtained by dividing (i) the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) appearing on the Reuters
Screen LIBOR 01 (or any successor page) as the London interbank offered rate
for deposits in U.S. dollars at 11:00 A.M. (London time) two Business Days
before the first day of such LIBOR Interest Period for a period equal to such
LIBOR Interest Period (provided that, if for any reason such rate is not
available, the term “LIBOR” shall mean, for any LIBOR Interest Period for all
LIBOR Rate Borrowings comprising part of the same Borrowing, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on
Reuters Screen LIBOR 01 as the London interbank offered rate for deposits in
Dollars at approximately 11:00 A.M. (London time) two Business Days prior
to the first day of such LIBOR Interest Period for a term comparable to such LIBOR
Interest Period; provided, however, if more than one rate is specified on
Reuters Screen LIBOR 01, the applicable rate shall be the arithmetic mean of
all such rates) by (ii) a percentage equal to 100% minus the LIBOR Reserve
Percentage for such LIBOR Interest Period plus (b) the Applicable Margin
from time to time in effect during such term.


 


“LIBOR  Rate  Borrowing”
shall mean each portion of the principal balance of the Loans at any time
bearing interest at the LIBOR Rate.


 


“Lien” shall
mean any mortgage, pledge, charge, encumbrance, security interest, collateral
assignment or other lien or restriction of any kind, whether based on common
law, constitutional provision, statute or contract, and shall include
reservations, exceptions, 


 


12

















 


encroachments, easements,
rights of way, covenants, conditions, restrictions, leases and other title
exceptions.


 


“Loan  Documents” shall mean this
Agreement, the Notes, the Guaranties, the Contribution Agreement, the Joinder
Agreements, the Fee Letter, Security Agreement A, Security Agreement B, the
Credit Facility Hedging Agreements, all instruments, certificates and
agreements now or hereafter executed or delivered to the Agent and/or the
Lenders pursuant to any of the foregoing, and all amendments, modifications,
renewals, extensions, increases and rearrangements of, and substitutions for,
any of the foregoing.


 


“Loan  Party” means the Company or any
Guarantor.


 


“Loans”
shall mean the advances of funds described in Section 2.1 hereof.  Loan shall mean any one of the Loans.


 


“Margin  Stock” has the meaning specified in
Regulation U.


 


“Material  Adverse  Effect”
means a material adverse effect on the validity or enforceability of any
material provision of the Loan Documents, on the ability of the Company to
consummate the Transactions, on the financial condition of the Company (either
individually or taken as a whole with its Subsidiaries), or on the property,
business, operations or liabilities of the Company (either individually or
taken as a whole with its Subsidiaries).


 


“Maturity  Date” shall mean the earlier of (a) August 28,
2012 and (b) the date specified by the Agent pursuant to Section 7.1
hereof.


 


“Merger”
shall have the meaning ascribed to it in the Preliminary Statements hereto.


 


“Merger  Agreement” shall have the meaning
ascribed to it in the Preliminary Statements hereto.


 


“Moody’s”
shall mean Moody’s Investors Service, Inc.


 


“Net  Income” shall mean gross revenues
and other proper income credits, less all proper income charges, including
taxes on income, all determined in accordance with Generally Accepted
Accounting Principles; provided, that there shall not be included in such
revenues (i) any income representing the excess of equity in any
Subsidiary at the date of acquisition over the investment in such Subsidiary, (ii) any
equity in the undistributed earnings of any Person which is not a Subsidiary, (iii) any
earnings of any Subsidiary for any period prior to the date such Subsidiary was
acquired, except as may be permitted under Generally Accepted Accounting
Principles in connection with the pooling of interest method of accounting, and
(iv) any gains resulting from the write-up of assets.  Net Income shall be determined on a
consolidated basis.


 


“Net  Proceeds” shall mean:


 


(a)           with
respect to any sale, lease, transfer or other disposition of any asset of the
Company or any of its Subsidiaries (except in the case of Disclosed
Divestitures listed in part A of Schedule1.1(a)), the excess, if any, of (i) the
sum of cash and Permitted Investment Securities received in connection with
such sale, lease, transfer or other disposition (including any cash or
Permitted Investment Securities received by way of deferred payment pursuant
to, or by monetization of, a note receivable or otherwise, but only as and when
so received) less (ii) the 


 


13

















 


sum of (A) the principal amount of any Indebtedness (other than
Indebtedness under the Loan Documents) that is required to be repaid in connection
with such sale, lease, transfer or other disposition thereof, (B) the
reasonable and customary out-of-pocket costs, fees, commissions, premiums and
expenses incurred by the Company or its Subsidiaries, (C) federal, state,
provincial, foreign and local taxes reasonably estimated (on a consolidated
basis) to be actually payable within the current or the immediately succeeding
tax year as a result of any gain recognized in connection therewith and (D) a
reasonable reserve for any purchase price adjustment or any indemnification
payments (fixed and contingent) attributable to the seller’s obligations to the
purchaser undertaken by the Company or any of its Subsidiaries in connection
with such sale, lease, transfer or other disposition; provided, however, that,
Net Proceeds shall not include any such amounts to the extent such amounts are
reinvested or contracted to be so reinvested in capital assets used or useful
in the business of the Company and its Subsidiaries within 270 days after the
date of receipt thereof or the date such contact is entered into; and


 


(b)           with
respect to any Extraordinary Receipt that is not otherwise included in
clause (a) above, the sum of the cash and Permitted Investment
Securities received in connection therewith (including any cash or Permitted
Investment Securities received by way of deferred payment pursuant to, or by
monetization of, a note receivable or otherwise, but only as and when so
received) less fees, costs, out of pocket expenses and commissions incurred in
connection with the receipt thereof; provided, however, that Net Proceeds shall
not include any such amounts from Extraordinary Receipts (other than in respect
of Customer Penalties) to the extent such amounts are reinvested or contracted
to be so reinvested in capital assets used or useful in the business of the
Company and its Subsidiaries within 270 days after the date of receipt thereof
or the date such contract is entered into.


 


“Non-Consenting
Lender” means, in the event that the
Required Lenders have agreed to any consent, waiver or amendment pursuant to Section 9.10
that requires the consent of one or more Lenders in addition to the Required
Lenders, any Lender who is entitled to agree to such consent, waiver or
amendment but who does not so agree.


 


“Non-Guarantor
Subsidiaries” means (a) Subsidiaries
of the Company organized under the laws of a jurisdiction located outside of
the United States, (b) prior to consummation of the Merger, the Target and
its Subsidiaries, and (c) any one or more Subsidiaries of the Company
designated by the Company in writing to the Agent from time to time that do not
represent, in the aggregate, (i) five percent (5%) or more of the
consolidated EBITDA of the Company and its Subsidiaries, or (ii)  5% or
more of the consolidated tangible assets of the Company and its Subsidiaries;
provided, that no Subsidiary of the Company shall be a Non-Guarantor Subsidiary
to the extent that such Subsidiary guaranties any other Indebtedness of the
Company.


 


“Notes”
shall mean the promissory notes, each substantially in the form of Exhibit A
attached hereto, of the Company evidencing the Loans, payable to the order of
the respective Lenders in the amount of the sum of said Lender’s Unused
Commitment and the Current Sum owing to said Lender, and all renewals,
extensions, modifications, rearrangements and replacements thereof and
substitutions therefor.  Note shall mean
any one of them.


 


“Notice  of  Assumption”
shall mean a Notice of Assumption in favor of the Agent, substantially in the
form of Exhibit B attached hereto and otherwise in Proper Form.


 


“Officer’s  Certificate” shall mean a
certificate substantially in the form of Exhibit C attached hereto.


 


14

















 


“Operating  Lease  Expense”
shall mean for any period for which Operating Lease Expense is calculated, the
aggregate amount of fixed and contingent rentals (exclusive of payments of
Capital Lease Obligations) payable by the Company and its Subsidiaries for such
period with respect to leases of Property. 
Operating Lease Expense shall be determined for the Company and its
Subsidiaries on a consolidated basis in accordance with Generally Accepted
Accounting Principles, consistently applied.


 


“Organizational
Documents” shall mean, with respect
to a corporation, the certificate of incorporation, articles of incorporation
and bylaws of such corporation; with respect to a partnership, the partnership
agreement establishing such partnership; with respect to a joint venture, the
joint venture agreement establishing such joint venture, and with respect to a
trust, the instrument establishing such trust; in each case including any and
all modifications thereof as of the date of the Loan Document referring to such
Organizational Document and any and all future modifications thereof which are
consented to by the Agent.


 


“Parties”
shall mean all Persons other than the Agent or any Lender executing any Loan
Document.


 


“Past  Due  Rate”
shall mean, on any day, the Alternate Base Rate plus two percent (2%).


 


“Permitted  Asset  Dispositions”
shall have the meaning attributed to such terms in Section 6.4(z) hereof.


 


“Permitted  Investment  Securities”
shall mean:  (1) readily marketable
securities issued or fully guaranteed by the United States of America or any
agency or wholly owned corporation thereof; (2) commercial paper rated “Prime
1” by Moody’s Investors Service, Inc. 
or A-1 by Standard and Poor’s Corporation with maturities of not more
than one hundred eighty (180) days and short term notes payable of any
Business Entity where said notes are rated at least “Prime 1” by Moody’s
Investors Service, Inc.  or “A-1” by
Standard & Poor’s Corporation with maturities of not more than
ninety (90) days; (3) certificates of deposit or repurchase
certificates issued by any Lender or any other financial institution acceptable
to the Agent, all of the foregoing not having a maturity of more than one (1) year
from the date of issuance thereof; (4) securities issued by municipalities
rated AA or better by Standard & Poor’s Corporation not having a
maturity of more than one (1) year from the date of issuance thereof;
and (5) money market mutual funds having capital surplus of at least
$1,000,000,000 and deemed acceptable by the Agent, substantially all of the
assets of which are comprised of securities, commercial paper, certificates of
deposit or repurchase certificates of the type described in subclauses (1) through
(4) above.


 


“Permitted  Stock  Dispositions”
shall have the meaning attributed to such terms in Section 6.4(z) hereof.


 


“Person” shall
mean any individual, corporation, trust, unincorporated organization,
Governmental Authority or any other form of entity.


 


“Plan” shall
mean any plan subject to Title IV of ERISA and maintained for employees of the
Company or of any member of a “controlled group of corporations”, as such term
is defined in the Code, of which the Company or any of its Subsidiaries it may
acquire from time to time is a part, or any such plan to which the Company or
any of its Subsidiaries it may acquire from time to time is required to
contribute on behalf of its employees.


 


15
















 


“Prime Rate”
shall mean, for any day, the corporate base rate of interest publicly announced
by the Agent from time to time for borrowings made in the United States in U.S.
Dollars.  The corporate base rate is not
necessarily the lowest rate charged by the Lender acting as the administrative
agent to its customers.


 


“Proper  Form” shall mean in form and
substance satisfactory to the Agent.


 


“Property”
shall mean any interest in any kind of property or asset, whether real,
personal or mixed, tangible or intangible.


 


“Quarterly  Unaudited  Financial
Statements” shall mean, with respect
to each fiscal quarter of the Company (except for the last fiscal quarter), the
Company’s 10-Q Report filed with the Securities Exchange Commission for such
fiscal quarter.  All of the Quarterly
Unaudited Financial Statements of the Company are to be prepared in accordance
with Generally Accepted Accounting Principles and certified as true and correct
by a Responsible Officer of the Company.


 


“Rate  Selection  Date”
shall mean that Business Day which is (a) in the case of Alternate Base
Rate Borrowings, the date one (1) Business Day preceding such borrowing or
(b) in the case of LIBOR Rate Borrowings, the date three (3) Business
Days preceding the first day of any proposed LIBOR Interest Period.


 


“Rate  Selection  Notice”
shall have the meaning ascribed to it in Section 2.9(b)(i) hereof.


 


“Register”
shall have the meaning assigned to such term in Section 9.11(e).


 


“Regulation D”
shall mean Regulation D of the Board of Governors of the Federal Reserve
System from time to time in effect and shall include any successor or other
regulation relating to reserve requirements applicable to member banks of the
Federal Reserve System.


 


“Regulatory  Change” shall mean, with respect to
any Lender, any change on or after the date of this Agreement in any Legal
Requirement (including Regulation D) or the adoption or making on or after
such date of any interpretation, directive or request applying to a class of
banks including such Lender under any Legal Requirement (whether or not having
the force of law) by any Governmental Authority charged with the interpretation
or administration thereof.


 


“Request  for  Extension
of  Credit
and  Certificate
of  No
Default” shall mean a written
request for extension of credit substantially in the form of Exhibit D
attached hereto.


 


“Required  Lenders” shall mean two (2) or
more Lenders having a majority or greater of the sum of the Aggregate
Commitment or if the Aggregate Commitment has been terminated the aggregate
Current Sum for all Lenders.


 


“Requirements
of  Environmental
Law” shall mean all requirements
imposed by any law (including The Resource Conservation and Recovery Act, The
Comprehensive Environmental Response, Compensation, and Liability Act, the
Clean Water Act, the Clean Air Act, and any state analogues of any of the
foregoing), rule, regulation, or order of any Governmental Authority now or
hereafter in effect which relate to (i) noise; (ii) pollution,
protection or clean-up of the air, surface water, ground water or land; (iii) solid,
gaseous or liquid waste or Hazard Substance generation, recycling, reclamation,
release, threatened release, treatment, storage, disposal or transportation; (iv) exposure
of Persons or property to Hazardous Substances; (v) the safety or health
of employees or other Persons or (vi) the manufacture, presence,
processing, distribution in 


 


16

















 


commerce, use, discharge,
releases, threatened releases, emissions or storage of Hazardous Substances
into the environment.  Requirement of
Environmental Law shall mean any one of them.


 


“Responsible
Officer” shall mean the chief
executive officer, chief financial officer, president of a Loan Party and the
general counsel of the Company.  Any document
delivered hereunder that is signed by a Responsible Officer of a Loan Party
shall be conclusively presumed to have been authorized by all necessary
corporate, partnership and/or other action on the part of such Loan Party and
such Responsible Officer shall be conclusively presumed to have acted on behalf
of such Loan Party.


 


“Revolving  Credit  Facility”
shall mean the senior revolving credit facility of the Company dated as of the
date hereof among the Company, the financial institutions from time to time
parties thereto, and JPMorgan Chase Bank, N.A., as administrative agent, as the
same may be amended from time to time in accordance with the terms of this
Agreement.


 


“Rolling  Four  Quarters”
shall mean the then most recently ended four (4) consecutive fiscal
quarters of the Company for which, as of such day, financial statements are
required to have been given to the Agent and Lenders pursuant to this
Agreement.


 


“Royal  Bank” shall have the meaning
ascribed to it in the recital of parties hereto.


 


“S&P”
shall mean Standard & Poor’s, a division of The McGraw Hill Companies, Inc.


 


“Security Agreement A”  means a security and pledge agreement
substantially in the form of Exhibit G-A hereto.


 


“Security Agreement B”  means a security and pledge agreement substantially
in the form of Exhibit G-B hereto.


 


“Solvent”
and “Solvency” shall mean, with respect
to any Person on a particular date, that on such date (a) the fair value
(taken on a going concern basis) of the property of such Person is greater than
the total amount of liabilities, including, without limitation, contingent
liabilities, of such Person, (b) the present fair salable value (taken on
a going concern basis) of the assets of such Person is not less than the amount
that will be required to pay the probable liability of such Person on its debts
as they become absolute and matured, (c) such Person does not intend to,
and does not believe that it will, incur debts or liabilities beyond such
Person’s ability to pay such debts and liabilities as they mature and (d) such
Person is not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which such Person’s property would constitute
an unreasonably small capital.  The
amount of contingent liabilities at any time shall be computed as the amount
that, in the light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.  In determining the
Solvency of any Loan Party the contribution rights that such Loan Party will
have against the other Loan Parties and the subrogation rights that each
Guarantor will have against the Company shall be taken into account.


 


“Stock”
shall mean as to a Business Entity, all capital stock or other indicia of
equity rights issued by such Business Entity from time to time.


 


“Subsidiary”
of any Person shall mean any corporation, partnership, joint venture, limited
liability company, trust or estate of which (or in which) more than fifty
percent (50%) of 


 


17

















 


(a) the issued and
outstanding capital stock having ordinary voting power to elect a majority of
the board of directors of such corporation (irrespective of whether at the time
capital stock of any other class or classes of such corporation shall or might
have voting power upon the occurrence of any contingency), (b) the
interest in the capital or profits of such partnership, joint venture or
limited liability company or (c) the beneficial interest in such trust or
estate is at the time directly or indirectly owned or controlled by such
Person, by such Person and one or more of its other Subsidiaries or by one or
more of such Person’s other Subsidiaries.


 


“Synthetic  Indebtedness” shall mean the monetary
obligation of a Person under (a) a so-called synthetic, off-balance sheet
or tax retention lease, or (b) an agreement for the use or possession of
property creating obligations that do not appear on the balance sheet of such
Person (excluding operating leases) but which upon the insolvency or bankruptcy
of such Person, to the extent functioning as debt for borrowed money, would be
characterized as the indebtedness of such Person (without regard to accounting
treatment).


 


“Target”
shall have the meaning ascribed to it in the Preliminary Statements hereto.


 


“Target  Representations” shall mean the
representations and warranties made by or on behalf of the Target and its
Subsidiaries and contained in the Merger Agreement and the representations and
warranties of the Company with respect to the Target and its Subsidiaries set
forth in Sections 4.1, 4.3, 4.14, 4.15, 4.18 and 4.19.


 


“Target  Representation  Limitations”
means that, on the date of the initial Borrowing hereunder until the earlier of
the date of consummation of the Merger and the Commitment Termination Date, the
representations and warranties of the Company set forth in Article IV in
respect of the Target and its Subsidiaries shall be limited to the Target
Representations.


 


“Taxes”
shall have the meaning ascribed to it in Section 2.10(b) hereof.


 


“Tender  Offer” shall have the meaning
ascribed to it in the Preliminary Statements hereto.


 


“Transactions”
means the consummation of the Merger and the entering into and borrowings under
this Agreement.


 


“Unsecured  Borrowed  Debt”
shall mean all Indebtedness resulting from borrowings of the Company (exclusive
of intercompany borrowings) from time to time owing to Persons which is not
secured by any Liens (other than borrowings from trade creditors in the ordinary
course of business).


 


“Unused  Commitment” shall mean, as to a
particular Lender, the outstanding Commitment of such Lender giving effect to
any Borrowing on any day.


 


Section 1.2  Accounting Terms and Determinations.


 


Except where specifically otherwise provided:


 


(a)           The symbol “$” and the word “dollars” shall mean lawful
money of the United States of America.


 


18

















 


(b)           Any accounting term not otherwise defined shall have the
meaning ascribed to it under Generally Accepted Accounting Principles.


 


(c)           Unless otherwise expressly provided, any accounting
concept and all financial covenants shall be determined on a consolidated
basis, and financial measurements shall be computed without duplication.


 


(d)           Wherever the term “including” or any of its correlatives
appears in the Loan Documents, it shall be read as if it were written “including
(by way of example and without limiting the generality of the subject or
concept referred to)”.


 


(e)           Wherever the word “herein” or “hereof” is used in any Loan
Document, it is a reference to that entire Loan Document and not just to the
subdivision of it in which the word is used.


 


(f)            References in any Loan Document to Section numbers
are references to the Sections of such Loan Document.


 


(g)           References in any Loan Document to Exhibits, Schedules,
Annexes and Appendices are to the Exhibits, Schedules, Annexes and Appendices
to such Loan Document, and they shall be deemed incorporated into such Loan
Document by reference.


 


(h)           Any term defined in the Loan Documents which refers to a
particular agreement, instrument or document shall also mean, refer to and
include all modifications, amendments, supplements, restatements, renewals,
extensions and substitutions of the same; provided that nothing in this
subsection shall be construed to authorize any such modification, amendment,
supplement, restatement, renewal, extension or substitution except as may be
permitted by other provisions of the Loan Documents.


 


(i)            All times of day used in the Loan Documents mean local
time in New York, New York.


 


(j)            Defined terms may be used in the singular or plural, as
the context requires.


 


ARTICLE II
– LOANS; ETC.


 


Section 2.1  Loans.


 


(a)           Subject to the terms and conditions hereof, each Lender
severally agrees to make up to two loans to the Company from time to time on or
prior to the Commitment Termination Date, in an aggregate principal amount at
any one time outstanding up to but not exceeding such Lender’s Unused
Commitment on such date.  Loans repaid
may not be reborrowed pursuant to the terms of this Agreement.  Each Loan shall be in an amount of at least (i) $10,000,000
or (ii) the Unused Commitment of the Lenders, whichever is less.  Each repayment of the Loans shall be in an
amount of at least $10,000,000 or, if less, the Current Sum.


 


(b)           The Company shall give the Agent notice of a request for a
Loan in accordance with Section 3.1 hereof.  Upon receipt of each such notice, the Agent
shall promptly give each of the Lenders notice of receipt thereof, which notice
may be by telephone or facsimile.  Not
later than 12:00 noon on the date specified for the making of such Loan, each
Lender shall make available to the Agent, at the Agent’s Account, such Lender’s
Commitment Percentage of such Loan in immediately available funds for the
account of the Company.  The amount so
received by the Agent shall, subject to the terms 


 


19

















 


and conditions of this Agreement, be made
available to the Company by depositing same, in immediately available funds, in
an account designated by the Company maintained with the Agent or with another
financial institution reasonably acceptable to the Agent.  If a requested Loan shall not occur on any
date specified by the Company as set forth in the applicable Request for
Extension of Credit and Certificate of No Default because all of the conditions
for such Loan set forth herein or in any of the other Loan Documents shall have
not been met, the Agent shall return the amounts so received from the Lenders
in respect of such requested Loan to the applicable Lenders as soon as
practicable; provided, however, if and to the extent that the Agent fails to
return any such amounts to any applicable Lender by the Business Day following the
date that the requested Loan was to have been made, the Agent shall pay
interest on such unreturned amounts for each date from such date that the
requested Loan was to have been made, to the date that such unreturned amounts
are returned to such Lender, such interest to accrue at the Federal Funds Rate
and to be payable upon written request from such Lender.


 


(c)           Unless the Agent shall have received notice from a Lender
prior to the date of any Borrowing that such Lender will not make available to
the Agent such Lender’s ratable portions of such Borrowing, the Agent may
assume that such Lender has made such portion available to the Agent on the
date of such Borrowing in accordance with subsection (b) of this Section 2.1
and the Agent may, in reliance upon such assumption, make available to the
Company on such date a corresponding amount. 
If and to the extent that such Lender shall not have so made such
ratable portion available to the Agent, such Lender and the Company severally
agree to repay or pay to the Agent forthwith on demand such corresponding
amount and to pay interest thereon, for each day from the date such amount is
made available to the Borrower until the date such amount is repaid or paid to
the Agent, at (i) in the case of the Company, the interest rate applicable
at such time under Section 2.9 to Loans comprising such Borrowing and (ii) in
the case of such Lender, the Federal Funds Rate.  If such Lender shall pay to the Agent such
corresponding amount, such amount so paid shall constitute such Lender’s Loan
as part of such Borrowing for all purposes.


 


(d)           The obligations of the Lenders hereunder are several and
not joint; therefore, notwithstanding anything herein to the contrary, (i) no
Lender shall be required to make Loans at any one time outstanding in excess of
such Lender’s Commitment, (ii) if a Lender fails to make a Loan as and
when required hereunder and the Company subsequently makes a repayment on the
Loans, such repayment shall be split among the non-defaulting Lenders in
accordance with their respective Current Sum Percentages until each Lender has
its Commitment Percentage of all of the outstanding Loans, then the balance of
such repayment shall be divided among all of the Lenders in accordance with
their respective Commitment Percentages (it being understood that any such
repayment to a defaulting Lender shall not be deemed to relieve such defaulting
Lender from any liability to the Company resulting from such defaulting Lender’s
failure to make a Loan as and when required hereunder) and (iii) the
failure of any Lender to make any Loan shall not in itself relieve any other
Lender of its obligation to lend hereunder (provided, that no Lender shall be
responsible for the failure of any other Lender to make a Loan such other
Lender is obligated to make hereunder).


 


(e)           Notwithstanding anything to the contrary contained in this
Section 2.1 or any other provision of this Agreement, the Company
covenants and agrees that in no event shall the aggregate amount of the Loans
outstanding on any day ever exceed the amount of the Aggregate Commitment then
in effect as of such day.


 


Section 2.2  Commitment Fees; Termination and
Reductions.  In consideration of each
Lender’s Unused Commitment, the Company agrees to pay to the Agent for the
account of each Lender a commitment fee (each a “Commitment
Fee”), starting from the
date hereof and until the Commitment Termination Date, due and payable monthly
on the last day of each month and on the Commitment Termination Date, at the
rate of 0.15% per annum on the average daily Unused Commitment of such 


 


20

















 


Lender.  All past due Commitment Fees
shall bear interest at the Past Due Rate and shall be payable upon demand by
the Agent.  The Aggregate Commitment may
be permanently terminated or reduced as follows, which such reductions shall be
applied pro rata:


 


(a)           the Company may, upon three (3) Business Days’
prior written notice to the Agent, permanently terminate or reduce the
aggregate of the Unused Commitments in an amount of at least $10,000,000 or the
amount of the aggregate of the Unused Commitments at such time, whichever is
less; and


 


(b)           any prepayment of the Loans in accordance with the
provisions of Section 2.3 hereof shall permanently and automatically
reduce the Aggregate Commitment in an amount equal to any such prepayment.


 


Section 2.3  Mandatory Prepayments; Commitment
Reduction.


 


(a)           The Company shall, not later than five Business Days
following the date of receipt of any Net Proceeds by any Loan Party or any of
its Subsidiaries, by notice to the Agent, prepay an aggregate principal amount
of the Loans in an amount equal to the amount of such Net Proceeds, such
prepayment to be applied to the Loans on a pro rata basis; provided
that this subsection shall not apply to the first $10,000,000 of Net Proceeds
received by the Company and its Subsidiaries in any fiscal year of the Company.


 


(b)           The Company shall, on the date that is 90 days following
the Effective Date, prepay an aggregate principal amount of the Loans in an
amount equal to the excess above $10,000,000 of the aggregate principal amount
of the Target’s Convertible Senior Debentures outstanding on such date.


 


(c)           Except to the extent of any Loans borrowed on or prior to
such date, the Unused Commitment of each Lender shall be canceled in full on
the Commitment Termination Date.


 


Section 2.4  Payments.  All sums payable by the Company to the Agent
hereunder or pursuant to Notes for its own account or the account of the
Lenders shall be payable in United States dollars in immediately available
funds not later than 12:00 noon on the date such payment or prepayment is due
and shall be made without set-off, counterclaim or deduction of any kind.  Any such payment received and accepted by the
Agent after such time shall be considered for all purposes (including the
payment of interest, to the extent permitted by law) as having been made on the
next succeeding Business Day.  All such
payments shall be made to the Agent at the Agent’s Account.  If any payment or prepayment becomes due and
payable on a day which is not a Business Day, then the date for the payment
thereof shall be extended to the next succeeding Business Day and interest
shall be payable thereon at the then applicable rate per annum during such
extension.


 


Section 2.5  Prepayments of Loans.


 


(a)           In addition to the mandatory prepayments required by Section 2.3
hereof, the Company shall have the right, at its option, to prepay the Loans in
whole at any time or in part from time to time, without premium or penalty,
except as provided in this Section or subsections (a), (b) or (c) of
Section 2.10 hereof.  Each partial
prepayment under this subsection shall be a principal amount of not less than
$10,000,000 or an integral multiple of $1,000,000 in excess thereof.  Each prepayment under this subsection shall
be applied to the prepayment of the aggregate unpaid principal amount of the
Notes.  Prepayments under this Agreement
shall be subject to the following additional conditions:


 


21

















 


i.              In giving notice
of prepayment as hereinafter provided, the Company shall specify, for the
purpose of paragraphs (ii) and (iii) immediately following, the
manner of application of such prepayment as between any outstanding Alternate
Base Rate Borrowings and LIBOR Rate Borrowings; provided, that in no event
shall any LIBOR Rate Borrowing be partially prepaid.


 


ii.             Prepayments
applied to any LIBOR Rate Borrowing may be made on any LIBOR Business Day,
provided, that (A) the Company shall have given the Agent at least
two (2) LIBOR Business Days’ prior irrevocable written or facsimile
notice of such prepayment, specifying the principal amount of the LIBOR Rate
Borrowing to be prepaid, the particular LIBOR Rate Borrowing to which such
prepayment is to be applied and the prepayment date; and (ii) if such
prepayment is made on any day other than the last day of the LIBOR Interest
Period corresponding to the LIBOR Rate Borrowing to be prepaid, the Company
shall pay directly to the Agent for the account of the Lenders, on the last day
of such LIBOR Interest Period, the Consequential Loss as a result of such
prepayment.


 


iii.            Prepayments
applied to any Alternate Base Rate Borrowing may be made on any Business Day,
provided that the Company shall have given the Agent at least five (5) Business
Days prior irrevocable written notice or notice by telephone or facsimile
(which is to be promptly confirmed in writing) of such prepayment, specifying
the principal amount of the Alternate Base Rate Borrowing to be prepaid and the
prepayment date.


 


(b)           Notice of any prepayment having been given, the principal
amount specified in such notice, together with (in the case of any prepayment
of a LIBOR Rate Borrowing) interest thereon to the date of prepayment, shall be
due and payable on such prepayment date.


 


(c)           Any Lender may, if it so elects, fulfill its obligation as
to any LIBOR Rate Borrowing by causing a branch, foreign or otherwise, or
Affiliate of such Lender to make such Loans and may transfer and carry such
Loans at, to or for the account of any branch office or Affiliate of such
Lender; provided, that in such event for the
purposes of this Agreement such Loans shall be deemed to have been made by such
Lender and the obligation of the Company to repay such Loans shall nevertheless
be to such Lender and shall be deemed held by it, to the extent of such
portions of the Loan, for the account of such branch or affiliate.


 


(d)           Notwithstanding any provision of this Agreement to the
contrary, each Lender shall be entitled to fund and maintain its funding of all
or any part of the Loans hereunder in any manner it sees fit, it being
understood, however, that for the purposes of this Agreement all determinations
hereunder shall be made as if such Lender had actually funded and maintained
its portion of each LIBOR Rate Borrowing during each LIBOR Interest Period for
the Loans through the purchase of deposits having a maturity corresponding to
such LIBOR Interest Period and bearing an interest rate equal to the London
Interbank Rate for such LIBOR Interest Period.


 


(e)           The Company’s obligation to pay increased costs and
Consequential Loss with regard to each LIBOR Rate Borrowing as specified in
this Section 2.5 hereof shall survive termination of this Agreement.


 


Section 2.6  Application of Payments and Prepayments.  Prepayments of the Loans shall be applied
first to the principal amount thereof, with the balance to accrued
interest.  Regularly scheduled payments
of the Loans shall be applied first to accrued interest, the balance to the
principal.  If the Agent receives funds
on a date when payments of the Loans are due and such funds are not sufficient
to pay all of the obligations of the Company hereunder then due, or if the
Agent receives any payments or other 


 


22

















 


amounts owing to Agent or
any Lender under any Loan Document, including without limitation, proceeds
obtained from the enforcement of the Guaranties, then such funds shall be
applied (a) first to fees or expenses of the Agent then due hereunder or
under any other Loan Document which are to be paid by the Company or the
applicable Guarantor, (b) second, to fees or expenses of the Lenders then
due hereunder or under any other Loan Document (other than fees or expenses
owing under the Credit Facility Hedge Agreements) which are to be paid by the
Company or the applicable Guarantor, and (c) third to the accrued interest
on and, to the extent then due, principal of the Loans then outstanding.  Each payment received by the Agent hereunder
or under any Note for the account of a Lender shall be paid promptly to such
Lender, in immediately available funds. 
If the Agent fails to send to any Lender the product of such Lender’s
Current Sum Percentage times the aggregate amount of any such payment timely
received by the Agent for the account of all the Lenders by the close of
business on the Business Day following the date such payment was received by
the Agent, the Agent shall pay to such Lender interest on such Lender’s
pro-rata portion of such payment timely received by the Agent from such date of
receipt by the Agent to the date that such Lender receives its pro-rata portion
of such payment, such interest to accrue at the Federal Funds Rate and to be
payable upon written request from such Lender.


 


Section 2.7  Pro Rata Treatment.  Except to the extent otherwise provided
herein:  (a) each borrowing from the
Lenders under Section 2.1 hereof shall be made, each payment of commitment
fees shall be made and applied for the account of the Lenders, and each
termination or reduction of the Unused Commitments of the Lenders under Section 2.2
hereof shall be applied, pro rata, according to each Lender’s Commitment
Percentage; and (b) each payment by the Company of principal of or
interest on Loans shall be made to the Agent for the account of the Lenders pro
rata in accordance with the respective Current Sum Percentage of the Lenders.


 


Section 2.8  Payment Dates on the Loans.  Accrued interest on the unpaid balance of the
Loans shall be payable on the Interest Payment Dates and at the Maturity Date,
commencing with the first of such dates to occur after the date hereof.  After the Maturity Date, accrued interest on
the Loans shall be payable on demand.  On
the Maturity Date, the outstanding principal balance of the Loans shall be
fully due and payable.


 


Section 2.9  Interest Options for Loans.


 


(a)           Options Available. 
The Loans shall bear interest at the Alternate Base Rate; provided, that
(1) all past due principal and interest shall bear interest at the Past
Due Rate which shall be payable on demand, and (2) subject to the
provisions hereof, the Company shall have the option of having all or any
portion of the outstanding principal amount of the Loans bear interest until their
respective maturities at a rate per annum equal to the LIBOR Rate (together
with the Alternate Base Rate, individually herein called an “Interest Option” and
collectively called “Interest
Options”).  The records of
the Agent with respect to Interest Options, LIBOR Interest Periods and the
amounts of Loans to which they are applicable shall be binding and conclusive,
absent manifest error.  Interest on the
Loans shall be calculated at the Alternate Base Rate except where it is
expressly provided pursuant to this Agreement that the LIBOR Rate is to apply.


 


(b)           Designation and Conversion.  The Company shall have the right to designate
or convert its Interest Options in accordance with the provisions hereof.  Provided no Event of Default has occurred and
is continuing and subject to the provisions of the last sentence of
Subsection 2.09(a) hereinabove and of Section 2.10 hereof, the
Company may elect to have the LIBOR Rate apply or continue to apply to all or
any portion of the outstanding principal balance of the Loans.  Each change in Interest Options shall be a
conversion of the rate of interest applicable to the specified portion of the
Loans, but such conversion alone shall not change the outstanding principal amount
of the Loans and 


 


23

















 


such conversion shall not be construed to
make this Agreement a revolving credit facility.  The Interest Options shall be designated or
converted in the manner provided below:


 


i.              The Company shall
give the Agent notice by telephone or facsimile promptly confirmed by written
notice (the “Rate Selection Notice”)
substantially in the form of Exhibit E hereto.  Each such telephone or facsimile and written
notice shall specify the amount and type of borrowings which are the subject of
the designation, if any; the amount and type of borrowings into which such
borrowings are to be converted or for which an Interest Option is designated;
the proposed date for the designation or conversion (which, in the case of
conversion of LIBOR Rate Borrowings, shall be the last day of the LIBOR
Interest Period applicable thereto) and the LIBOR Interest Period or Periods,
if any, selected by the Company.  Such
notice by telephone or facsimile shall be irrevocable and shall be given to the
Agent no later than the applicable Rate Selection Date.  If (a) a new Loan is to be a LIBOR Rate
Borrowing, (b) an existing LIBOR Rate Borrowing is maturing at the time
that a new Loan is being requested and the Company is electing to have such
existing portion of the outstanding principal balance of the Loans going
forward bear interest at the same Interest Option and for the same LIBOR
Interest Period as the new Loan, or (c) a portion of an Alternate Base
Rate Borrowing is to be converted so as to bear interest at the same Interest
Option and for the same LIBOR Interest Period as the new Loan, then the Rate
Selection Notice shall be included in the Request for Extension of Credit and
Certificate of No Default applicable to the new Loan, which shall be given to the
Agent no later than the applicable Rate Selection Date.


 


ii.             No more than
five (5) LIBOR Interest Periods shall be in effect at any one
time.  Each LIBOR Rate Borrowing shall be
in the amount of at least $10,000,000.


 


iii.            Principal included
in any borrowing shall not be included in any other borrowing which exists at
the same time.


 


iv.            Each designation or
conversion shall occur on a Business Day (and, for LIBOR Rate Borrowings, on a
LIBOR Business Day).


 


v.             Except as provided
in Section 2.10 hereof, no LIBOR Rate Borrowing shall be converted on any
day other than the last day of the applicable LIBOR Interest Period.


 


(c)           Computations. 
Interest based on the Alternate Base Rate, to the extent determined by
reference to the Prime Rate, will be computed on the basis of 365 (or 366)
days and actual days elapsed (including the first day but excluding the last
day) occurring in the period for which payable. 
All other interest and fees shall be computed on the basis of a year of
360 days and actual days elapsed (including the first day but excluding the
last day) occurring in the period for which payable.


 


Section 2.10  Special Provisions Applicable to LIBOR
Rate Borrowings.


 


(a)           Options Unlawful. 
If, after the date of this Agreement, the adoption of any applicable
Legal Requirement or any change in any applicable Legal Requirement or in the
interpretation or administration thereof by any Governmental Authority or
compliance by the Agent or any Lender with any request or directive (whether or
not having the force of law) of any Governmental Authority shall at any time
make it unlawful or impossible for any Lender to permit the establishment of or
to maintain any LIBOR Rate Borrowing, the commitment of the Lenders to
establish or maintain the LIBOR Rate affected by such adoption or change shall
forthwith be canceled and the Company shall forthwith, upon demand by the Agent
to the Company, (1) convert the LIBOR Rate with respect to which such
demand was made to the Alternate Base Rate; (2) pay all accrued and unpaid
interest to date on the amount so 


 


24

















 


converted; and (3) pay any amounts
required to compensate the Agent and the Lenders for any additional cost or
expense which the Agent or any Lender may incur as a result of such adoption of
or change in such Legal Requirement or in the interpretation or administration
thereof and any Consequential Loss which the Agent or any Lender may incur as a
result of such conversion to the Alternate Base Rate.  If, when the Agent so notifies the Company,
the Company has given a Rate Selection Notice specifying one or more borrowings
of the type with respect to which such demand was made but the selected LIBOR
Interest Period or LIBOR Interest Periods has not yet begun, such Rate Selection
Notice shall be deemed to be of no force and effect, as if never made, and the
balance of the Loans specified in such Rate Selection Notice shall bear
interest at the Alternate Base Rate until a different available Interest Option
shall be designated in accordance herewith.


 


(b)           Increased Cost of Borrowings.  If the adoption of any applicable Legal
Requirement or any change in any applicable Legal Requirement or in the
interpretation or administration thereof by any Governmental Authority or compliance
by the Agent or any Lender with any request or directive (whether or not having
the force of law) from any Governmental Authority shall at any time as a result
of any portion of the principal balance of the Loans being maintained on the
basis of the LIBOR Rate:


 


i.              subject any Lender
(or make it apparent that any Lender is subject) to any tax (including any
United States interest equalization tax), levy, impost, duty, charge, fee
(collectively, “Taxes”),
or any deduction or withholding for any Taxes on or from the payment due under
any LIBOR Rate Borrowing or other amounts due hereunder, other than income and
franchise taxes of the United States and its political subdivisions; or


 


ii.             change the basis
of taxation of payments due from the Company to the Agent or any Lender under
any LIBOR Rate Borrowing (otherwise than by a change in the rate of taxation of
the overall net income of the Agent or any Lender); or


 


iii.            impose, modify,
increase or deem applicable any reserve requirement (excluding that portion of
any reserve requirement included in the calculation of the Eurocurrency Reserve
Requirement, special deposit requirement or similar requirement (including
state law requirements and Regulation D) imposed, modified, increased or
deemed applicable by any Governmental Authority against assets held by the
Agent or any Lender, or against deposits or accounts in or for the account of
the Agent or any Lender, or against loans made by the Agent or any Lender, or
against any other funds, obligations or other Property owned or held by the
Agent or any Lender; or


 


iv.            impose on the Agent
or any Lender any other condition regarding any LIBOR Rate Borrowing;


 


and the result of any of the foregoing is to
increase the cost to any Lender of agreeing to make or of making, renewing or
maintaining such borrowing on the basis of the LIBOR Rate, or reduce the amount
of principal or interest received by any Lender, then, upon demand by the
Agent, the Company shall pay to the Agent, from time to time as specified by
the Agent, additional amounts which shall compensate such Lender for such
increased cost or reduced amount.  The
Agent will promptly notify the Company in writing of any event, upon becoming
actually aware of it, which will entitle any Lender to additional amounts
pursuant to this paragraph.  The Agent’s
determination of the amount of any such increased cost, increased reserve
requirement or reduced amount shall be conclusive and binding, absent manifest
error, provided that the calculation thereof is set forth in reasonable detail
in such notice.


 


25
















 


The Company shall have the right, if it receives
from the Agent any notice referred to in the preceding paragraph, upon
three (3) Business Days’ notice to the Agent, either (i) to
repay in full (but not in part) any borrowing with respect to which such notice
was given, together with any accrued interest thereon, or (ii) to convert
the LIBOR Rate in effect with respect to such borrowing to the Alternate Base
Rate; provided, that any such repayment or conversion shall be accompanied by
payment of (x) the amount required to compensate the appropriate Lender or
Lenders for the increased cost or reduced amount referred to in the preceding
paragraph; (y) all accrued and unpaid interest to date on the amount so
repaid or converted, and (z) any Consequential Loss which may be incurred
as a result of such repayment or conversion.


 


(c)           Inadequacy of Pricing and Rate Determination.  If for any reason with respect to any LIBOR
Interest Period the Agent shall have determined (which determination shall be
conclusive and binding upon the Company, and, in the case of clause (2) below,
shall be presumed to be made upon notice from such Lender) that:  (1) the Agent is unable through its
customary general practices to determine a rate at which the Agent is offered
deposits in United States dollars by prime banks in the interbank market in
London, England in the appropriate amount for the appropriate period, or by
reason of circumstances affecting the interbank market in London, England,
generally, prime banks are not being offered deposits in United States dollars
in the interbank market in London, England, for the applicable LIBOR Interest
Period and in an amount equal to the amount of the LIBOR Rate Borrowing
requested by the Company, or (2) the LIBOR Rate will not adequately and
fairly reflect the cost to any Lender of making and maintaining any LIBOR Rate
Borrowing hereunder for any proposed LIBOR Interest Period, then the Agent
shall give the Company notice thereof and thereupon, (A) any Rate
Selection Notice previously given by the Company designating a LIBOR Rate which
has not commenced as of the date of such notice from the Agent shall be deemed
for all purposes hereof to be of no force and effect, as if never given, and (B) until
the Agent shall notify the Company that the circumstances giving rise to such
notice from the Agent no longer exist, each Rate Selection Notice requesting a
LIBOR Rate Borrowing shall be deemed a request for an Alternate Base Rate
Borrowing, and each outstanding LIBOR Rate Borrowing then in effect shall be
converted, without any notice to or from the Company, upon the termination of
the LIBOR Interest Period then in effect, to an Alternate Base Rate Borrowing.


 


(d)           Indemnification. 
The Company shall indemnify the Agent and each of the Lenders against
and hold each of them harmless from any loss or expense which they may incur or
sustain as a consequence of any untimely payment (mandatory or optional) or
default by the Company in the payment of any principal amount of or interest on
the Loans, or any failure by the Company to convert or to borrow any LIBOR Rate
Borrowing on the date specified by the Company, in each case including any
interest payable by any Lender to the lenders of the funds obtained by it in
order to make or maintain any LIBOR Rate Borrowing (or any portion thereof),
and, to the extent not covered above, any Consequential Loss.  This agreement shall survive the payment of
the Loans.  A certificate as to any
additional amounts payable pursuant to this paragraph submitted by the Agent or
any Lender to the Company shall be conclusive and binding upon the Company,
absent manifest error, provided the calculation thereof is set forth in
reasonable detail in such notice.


 


Section 2.11  Payment Dates.  Whenever any payment to be made hereunder in
respect of the Loans shall be stated to be due on a day which is neither a
Business Day nor a LIBOR Business Day, such payment may be made on the next
succeeding Business Day, or, subject to the definition of LIBOR Interest Period
in the case of any payment of the Loans to which the LIBOR Rate applies, on the
next succeeding LIBOR Business Day, and such extension of time shall in each
such case be included in computing interest and commitment fees in connection
with such payment.


 


Section 2.12  Sharing of Payments, Etc.  The Company agrees that, in addition to (and
without limitation of) any right of set-off, bankers’ lien or counterclaim a
Lender may otherwise have, 


 


26

















 


upon the occurrence and during
the continuance of any Event of Default, each Lender shall be entitled, at its
option, to offset balances held by it for the account of the Company at any of
its offices against any principal of or interest on any of such Lender’s Loans
to the Company hereunder or any other obligation of the Company hereunder,
which is not paid (regardless of whether such balances are then due to the
Company), in which case it shall promptly notify the Company and the Agent
thereof, provided that such Lender’s failure to give such notice shall not
affect the validity thereof.  If a Lender
shall obtain payment of any principal of or interest on any Loan made by it
under this Agreement or other obligation then due to such Lender hereunder,
through the exercise of any right of set-off (including, without limitation,
any right of setoff or lien granted under Section 9.18 hereof), banker’s
lien, counterclaim or similar right, or otherwise, it shall promptly purchase
from the other Lenders participations in the Loans made by, or the other
obligations of the Company hereunder of, the other Lenders in such amounts, and
make such other adjustments from time to time as shall be equitable to the end
that all the Lenders shall share the benefit of such payment (net of any
expenses which may be incurred by such Lender in obtaining or preserving such
benefit) pro rata in accordance with their respective Commitment
Percentages.  To such end all the Lenders
shall make appropriate adjustments among themselves (by the resale of
participations sold or otherwise) if such payment is rescinded or must
otherwise be restored.  The Company
agrees, to the fullest extent it may effectively do so under applicable law,
that any Lender so purchasing a participation in the Loans made by, or other
obligations hereunder of, the other Lenders may exercise, upon the occurrence
and during the continuance of any Event of Default, all rights of set-off,
bankers’ lien, counterclaim or similar rights with respect to such
participation as fully as if such Lender were a direct holder of said Loans or
other obligations in the amount of such participation.  Nothing contained herein shall require any
Lender to exercise any such right or shall affect the right of any Lender to
exercise, and retain the benefits of exercising, any such right with respect to
any other indebtedness or obligation of the Company.


 


Section 2.13  Use of Proceeds.  Subject to the terms and conditions contained
herein, the proceeds of the Loans shall be used solely (a) to finance the
Tender Offer and the Merger, (b) to refinance certain existing
Indebtedness of the Target; and (c) to pay costs and expenses relating to
the Transactions.


 


Section 2.14  Evidence of Debt.


 


(a)           Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Company to
such Lender resulting from each Loan owing to such Lender from time to time,
including the amounts of principal and interest payable and paid to such Lender
from time to time hereunder.  The Company
agrees that upon notice by any Lender to the Company (with a copy of such
notice to the Agent) to the effect that a Note or other evidence of
indebtedness is required or appropriate in order for such Lender to evidence
(whether for purposes of enforcement or otherwise) the Loans owing to, or to be
made by, such Lender, the Company shall promptly execute and deliver to such
Lender Party, with a copy to the Agent, a Note, in substantially the form of Exhibit A
hereto, payable to the order of such Lender in a principal amount equal to the
Commitment of such Lender.  All
references to Notes in the Loan Documents shall mean Notes, if any, to the
extent issued hereunder.


 


(b)           The Register maintained by the Agent pursuant to Section 9.11(e) shall
include a control account, and a subsidiary account for each Lender, in which
accounts (taken together) shall be recorded (i) the date and amount of
each Borrowing made hereunder, the Type of Loans comprising such Borrowing and,
if appropriate, the LIBOR Interest Period applicable thereto, (ii) the
terms of each Assignment and Acceptance delivered to and accepted by it, (iii) the
amount of any principal or interest due and payable or to become due and
payable from the Borrower to each Lender hereunder, and (iv) the amount of
any sum received by the Agent from the Borrower hereunder and each Lender’s
share thereof.


 


27

















 


(c)           Entries made in good faith by the Agent in the Register
pursuant to subsection (b) above, and by each Lender in its account
or accounts pursuant to subsection (a) above, shall be prima facie
evidence of the amount of principal and interest due and payable or to become
due and payable from the Company to, in the case of the Register, each Lender
and, in the case of such account or accounts, such Lender, under this
Agreement, absent manifest error; provided,
however, that the failure of the Agent or such Lender to make an entry, or any
finding that an entry is incorrect, in the Register or such account or accounts
shall not limit or otherwise affect the obligations of the Borrower under this
Agreement.


 


ARTICLE III
– CONDITIONS


 


Section 3.1  All Loans.  The obligation of each Lender to make any
Loan is subject to the accuracy of all representations and warranties of the
Company on the date of such Loan, to the performance by the Company of its
obligations under the Loan Documents and to the satisfaction of the following
further conditions:


 


(a)           the Agent shall have received the following, all of which
shall be duly executed and in Proper Form:


 


i.              by no later than
11:00 a.m. (New York City time) on the applicable Rate Selection Date,
notice by telephone or facsimile from the Company of the proposed date and
amount of such Loan, and


 


ii.             no later than 1:00 p.m.
(New York City time) on the applicable Rate Selection Date, a Request for
Extension of Credit and Certificate of No Default, signed by a Responsible
Officer;


 


(b)           no Default shall have occurred and be continuing, or would
result therefrom; and


 


(c)           the representations and warranties contained in the Loan
Documents are true and correct on and as of such date (except any
representation and warranty that expressly indicates that it is being made as
of a specific date, and then as of such date).


 


Section 3.2  First Loan.  In addition to the matters described in Section 3.1
hereof, the obligation of any Lender to make the initial Loan on the date
thereof (the “Effective Date”) is subject
to the satisfaction of the following conditions precedent:


 


(a)           The Agent shall have received on or before the Effective
Date the following, each dated such day (unless otherwise specified), in Proper
Form and (except for the Notes) in sufficient copies for each Lender:


 


i.              Counterparts to
this Agreement executed by the Company and each Lender;


 


ii.             The Notes payable
to the order of the Lenders to the extent requested by the Lenders pursuant to
the terms hereof;


 


iii.            The Guaranty and
the Contribution Agreement duly executed and delivered by each Guarantor as of
the Effective Date;


 


28

















 


iv.            Certified copies of
the resolutions of the board of directors (or equivalent body) of each Loan
Party approving the Transaction and each Loan Document to which it is or is to
be a party.


 


v.             a security agreement
in substantially the form of Exhibit G-A authorized and executed by the
parties thereto.


 


vi.            copies of proper
financing statements in respect of all the Loan Parties, together with evidence
that such financing statements have been presented for filing on or before the
Effective Date in all jurisdictions that the Agent may deem necessary or
desirable in order to perfect and protect the first priority liens and security
interests created under the Security Agreement A, covering the Collateral
described therein.


 


vii.           A copy of a
certificate of the Secretary of State of the jurisdiction of incorporation of
each Loan Party, dated reasonably near the Effective Date certifying (A) as
to a true and correct copy of the charter of such Loan Party and each amendment
thereto on file in such Secretary’s office and (B) that (1) such
amendments are the only amendments to such Loan Party’s charter on file in such
Secretary’s office, (2) such Loan Party has paid all franchise taxes to
the date of such certificate and (3) such Loan Party is duly incorporated
and in good standing or presently subsisting under the laws of the State of the
jurisdiction of its incorporation.


 


viii.          A certificate of
each Loan Party signed on behalf of such Loan Party by its secretary or any assistant
secretary, dated the Effective Date (the statements made in which certificate
shall be true on and as of the Effective Date), certifying as to (A) the
absence of any amendments to the charter of such Loan Party since the date of
the Secretary of State’s certificate referred to in Section 3.2(a)(v), (B) a
true and correct copy of the bylaws of such Loan Party as in effect on the date
on which the resolutions referred to in Section 3.2(a)(iv) were
adopted and on the Effective Date, (C) the absence of any proceeding for
the dissolution or liquidation of such Loan Party, (D) the truth in all
material respects of the representations and warranties contained in the Loan
Documents as though made on and as of the Effective Date, (E) the absence
of any event occurring and continuing, or resulting from the initial Borrowing
hereunder, that constitutes a Default, and (F) certifying the names and
true signatures of the officers of such Loan Party authorized to sign each Loan
Document to which it is or is to be a party and the other documents to be
delivered hereunder and thereunder.


 


ix.            A certificate, in
form and substance reasonably satisfactory to the Lenders, attesting to the
Solvency of the Company and its Subsidiaries, on a consolidated basis, both
before and after giving effect to the Transactions, from its chief financial
officer.


 


x.             Audited annual
financial statements of the Company and the Target for the three fiscal years
most recently ended and interim financial statements for the fiscal quarters
ended thereafter and prior to the Effective Date and for the most recent
quarter for which financial statements are available, pro forma
financial statements as to the Company and its Subsidiaries giving effect to
the Transactions, and forecasts prepared by management of the Company, each in
form and substance reasonably satisfactory to the Lenders, of balance sheets,
income statements and cash flow statements on an annual basis for each year
following the Effective Date until the Termination Date.


 


xi.            A favorable opinion
of counsel for the Loan Parties, in form and substance reasonably satisfactory
to the Lenders.


 


29

















 


(b)           The Tender Offer shall have been consummated, or shall be
consummated substantially concurrently with the initial Borrowing hereunder, on
substantially the terms and conditions set forth in the Merger Agreement,
without any amendment or waiver of any material term thereof that is adverse,
in any material respect, to the interests of the Lenders, and the Company shall
have acquired not less than a majority of the capital stock of the Target.


 


(c)           The Company’s existing revolving credit facilities with
JPMorgan Chase Bank, N.A. shall have been terminated.


 


(d)           The Target’s existing credit and letter of credit
facilities with Bank of America, N.A. shall have been terminated and all loans,
if any, outstanding thereunder, as well as all accrued interest and fees
thereunder, if any, shall have been paid in full.


 


(e)           There shall exist no action, suit, investigation,
litigation or proceeding affecting any Loan Party or any of its Subsidiaries
pending or, to the knowledge of the Loan Parties or any of their Subsidiaries,
threatened before any Governmental Authority that has had or could reasonably
be expected to have a Material Adverse Effect on the legality, validity or
enforceability of any Loan Document or the consummation of the Transactions.


 


(f)            All governmental authorizations and third-party consents
and approvals required to be obtained under the Merger Agreement in connection
with the Transactions shall have been obtained (without the imposition of any
conditions that materially and adversely impair the rights and remedies of the
Lenders under the Loan Documents) and shall remain in effect.


 


(g)           The Company shall have paid all accrued fees and expenses
of the Agent that are due and payable in accordance herewith (including the
accrued fees and expenses of counsel to the Agent and fees due and payable to
the Joint Lead Arrangers pursuant to the Fee Letter).


 


Section 3.3  Determinations Under Section 3.2.  For purposes of determining compliance with
the conditions specified in Section 3.2, each Lender shall be deemed to
have consented to, approved or accepted or to be satisfied with each document
or other matter required thereunder to be consented to or approved by or
acceptable or satisfactory to the Lenders unless an officer of the Agent
responsible for the transactions contemplated by the Loan Documents shall have
received notice from such Lender prior to the initial Borrowing hereunder
specifying its objection thereto and shall not have made available to the Agent
such Lender’s ratable portion of such Borrowing.


 


ARTICLE IV
– REPRESENTATIONS AND WARRANTIES


 


To induce the Agent and the Lenders to enter into
this Agreement, subject to the Target Representation Limitations, the Company
represents and warrants to the Agent and the Lenders as follows:


 


Section 4.1  Organization.  Each of the Company and its Subsidiaries is
duly organized, validly existing and in good standing under the laws of the
state of its incorporation; has all power and authority to conduct its business
as presently conducted; and is duly qualified to do business and in good
standing in each and every state in the United States of America where its
business requires such qualification, except where failure to qualify could not
reasonably be expected to have a Material Adverse Effect.


 


Section 4.2  Financial Statements.  The financial statements of the Company and
its Subsidiaries on a consolidated basis delivered to the Agent and the Lenders
in connection with this 


 


30

















 


Agreement fairly present, in
accordance with Generally Accepted Accounting Principles, the financial
condition and the results of operations of the Company and its Subsidiaries as
of the dates and for the periods indicated. 
Since the date of the last audited financial statements of the Company,
no event, development or circumstance has occurred or exists that could reasonably
be expected to have a Material Adverse Effect.


 


Section 4.3  Enforceable Obligations; Authorization.  The Loan Documents are legal, valid and
binding obligations of the Company and the Guarantors, enforceable in
accordance with their respective terms, except as may be limited by bankruptcy,
insolvency and other similar laws affecting creditors rights generally and by
general equitable principles.  The
execution, delivery and performance of the Loan Documents have all been duly
authorized by all necessary action; are within the power and authority of the
Company and the Guarantors; do not and will not contravene or violate any Legal
Requirement or the Organizational Documents of the Company or any Guarantors;
do not and will not result in the breach of, or constitute a default under, any
agreement or instrument by which the Company or any Guarantors or any of their
respective Property may be bound or affected; and do not and will not result in
the creation of any Lien upon any Property of the Company or any Guarantors
except as expressly contemplated therein. 
All necessary permits, registrations and consents for the execution,
delivery and performance by the Company and its Subsidiaries of the Loan
Documents have been obtained.


 


Section 4.4  Other Debt.  Neither the Company nor any of its
Subsidiaries is in default in the payment of any other Indebtedness or under
any agreement, mortgage, deed of trust, security agreement or lease to which it
is a party, the result of which has, would or could reasonably be expected to
have a Material Adverse Effect.


 


Section 4.5  Litigation.  There is no litigation or administrative
proceeding pending or, to the knowledge of the Company, threatened against, nor
any outstanding judgment, order or decree affecting, the Company or any of its
Subsidiaries before or by any Governmental Authority or arbitral body which in
the aggregate have, or if adversely determined, could reasonably be expected to
have a Material Adverse Effect.  Neither the
Company nor any of its Subsidiaries is in default with respect to any material
judgment, order or decree of any Governmental Authority.


 


Section 4.6  Title. 
Each of the Company and its Subsidiaries has good and marketable title
to its Property (other than negligible assets not material to the operations of
the Company or any of its Subsidiaries), free and clear of all Liens except for
Incidental Liens.


 


Section 4.7  Taxes. 
Each of the Company and its Subsidiaries has filed all tax returns
required to have been filed and paid all taxes shown thereon to be due, except
those for which extensions have been obtained and except for those which are
being contested in good faith and by appropriate proceedings if adequate
reserves with respect thereto are maintained in accordance with Generally Accepted
Accounting Principles.


 


Section 4.8  Subsidiaries.  As of the date hereof, the Company has no
Subsidiaries other than as listed on Schedule 4.8 attached hereto.  Except as expressly indicated on Schedule 4.8
attached hereto, each of the Company’s Subsidiaries is wholly owned by the
Company.


 


Section 4.9  Representations by Others.  All representations and warranties made by or
on behalf of the Company or any of its Subsidiaries in any Loan Document shall
constitute representations and warranties of the Company hereunder.


 


31

















 


Section 4.10  Permits, Licenses, Etc.  The Company and each of its Subsidiaries
possess all permits, licenses, patents, patent rights or licenses, trademarks,
trademark rights, trade names, trade name rights and copyrights which are
required to conduct its business, and which the failure of the Company or any
of its Subsidiaries to so possess would or could reasonably be expected to have
a material adverse affect on the financial condition or operations of the
Company and its Subsidiaries on a consolidated basis.


 


Section 4.11  ERISA. 
No Reportable Event (as defined in Section 4043(b) of ERISA
but excluding those events as to which the 30-day notice period is waived by
applicable regulations) has occurred with respect to any Plan.  Each Plan complies in all material respects
with all applicable provisions of ERISA, and the Company and each of its
Subsidiaries have filed all reports required by ERISA and the Code to be filed
with respect to each Plan.  The Company
has no knowledge of any event which could result in a liability of the Company
or any of its Subsidiaries to the Pension Benefit Guaranty Corporation other
than for applicable premiums.  No
accumulated funding deficiency (as defined in Section 302 of ERISA and Section 412
of the Code), whether or not waived, exists with respect to any Plan.  No event has occurred and no condition exists
that might reasonably be expected to constitute grounds for a Plan to be
terminated under circumstances which would cause the lien provided under Section 4068
of ERISA to attach to any Property of the Company or any of its
Subsidiaries.  No event has occurred and
no condition exists that might reasonably be expected to cause the lien
provided under Section 302 of ERISA or Section 412 of the Code to
attach to any Property of the Company or any of its Subsidiaries.


 


Section 4.12  Condition of Property.  The Property used or to be used in the
continuing operations of the Company and its Subsidiaries, when taken as a
whole, is in good repair, working order and condition.


 


Section 4.13  Assumed Names.  Neither the Company nor any of its
Subsidiaries is currently conducting its business under any assumed name or
names, except as set forth on Schedule 4.13 attached hereto.


 


Section 4.14  Investment Company Act.  Neither the Company nor any of its
Subsidiaries is an investment company within the meaning of the Investment
Company Act of 1940, as amended, or, directly or indirectly, controlled by or
acting on behalf of any Person which is an investment company, within the
meaning of said Act.


 


Section 4.15  Margin Stock.  The Company is not engaged in the business of
extending credit for the purpose of purchasing or carrying Margin Stock, and no
proceeds of any Loan will be used to purchase or carry any Margin Stock or to
extend credit to others for the purpose of purchasing or carrying any Margin
Stock, other than in respect of the Transaction.


 


Section 4.16  Agreements.  Schedule 4.16 attached hereto is a complete
and correct list of (i) all credit agreements for borrowed money (other
than the indebtedness governed hereby), indentures and capitalized leases and
all Property subject to any Lien securing such Indebtedness or lease
obligation, (ii) each letter of credit and guaranty for which the
liability or potential liability of the Company and its Subsidiaries on a
consolidated basis is in excess of $250,000, (iii) all other material
instruments in effect as of the date hereof providing for, evidencing, securing
or otherwise relating to any indebtedness for borrowed money of the Company or
any of its Subsidiaries (other than the Indebtedness hereunder and Indebtedness
secured by Incidental Liens), and (iv) all obligations of the Company or
any of its Subsidiaries to issuers of appeal bonds issued for account of the
Company or any of its Subsidiaries.  The
Company shall, upon request by the Agent, deliver to the Agent and the Lenders
a complete and correct copy of all such credit agreements, indentures,
capitalized leases, letters of credit, guarantees and other 


 


32

















 


instruments or leases
described in Schedule 4.16 or arising after the date hereof, including any
modifications or supplements thereto, as in effect on the date hereof.


 


Section 4.17  Environmental Matters.  No activity of the Company or any of its
Subsidiaries requires any Environmental Permit which has not been obtained and
which is not now in full force and effect, except to the extent failure to have
any such Environmental Permit could not reasonably be expected to have a
Material Adverse Effect.  The Company and
its Subsidiaries are in compliance with all limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations, schedules and
timetables contained in any applicable Requirement of Environmental Law or
Environmental Permit, except where failure to be in such compliance could not
reasonably be expected to have a Material Adverse Effect.  The Company and its Subsidiaries (and, to the
best knowledge of the Company, each of the prior owners or operators and
predecessors in interest with respect to any of its or its Subsidiaries’
Property) (i) have obtained and maintained in effect all Environmental
Permits, the failure to obtain which could reasonably be expected to have a
Material Adverse Effect, (ii) along with their respective Property have
been and are in compliance with all applicable Requirements of Environmental
Law and Environmental Permits where such failure to comply therewith could
reasonably be expected to have a Material Adverse Effect, (iii) along with
their Property are not subject to any (A) Environmental Claims or (B) Environmental
Liabilities, in either case direct or contingent, and whether known or unknown,
arising from or based upon any act, omission, event, condition or circumstance
occurring or existing on or prior to the date hereof which could reasonably be
expected to have a Material Adverse Effect, and (iv) have not received
individually or collectively any notice of any violation or alleged violation
of any Requirements of Environmental Law or Environmental Permit or any
Environmental Claim in connection with their respective Property which could
reasonably be expected to have a Material Adverse Effect.  The present and future liability (including
any Environmental Liability and any other damage to Persons or Property), if
any, of the Company and with respect to the Property of any of the Company or
any of its Subsidiaries which is reasonably expected to arise in connection
with Requirements of Environmental Law, Environmental Permits and other
environmental matters will not have a Material Adverse Effect on the Company
and its Subsidiaries on a consolidated basis.


 


Section 4.18  Solvency.  The Company and its Subsidiaries are, on a
consolidated basis, Solvent.


 


Section 4.19  Target Representations.  As to any
date of determination prior to the consummation of the Merger, the Company
makes the Target Representations, except where the failure of any Target Representation
to be true and correct on such date would not be material and adverse to the
interests of the Lenders.


 


ARTICLE V
– AFFIRMATIVE COVENANTS


 


The Company covenants and agrees with the Agent and
the Lenders that prior to the termination of this Agreement it will do, cause
each of its Subsidiaries to do, and if necessary cause to be done, each and all
of the following:


 


Section 5.1  Taxes, Existence, Regulations, Property,
Etc.  At all times (a) pay when
due all taxes and governmental charges of every kind upon it or against its
income, profits or property, unless and only to the extent that the same shall
be contested in good faith and reserves deemed adequate by the Agent have been
established therefor; (b) do all things necessary to preserve its corporate
existence, qualifications, rights and franchises in all States where such
qualification is necessary or desirable; (c) comply in all material
respects with all applicable Legal Requirements (including all applicable
Requirements of Environmental Laws) in respect of the conduct of its business
and the ownership of its Property; and (d) cause its Property to be
protected, maintained and kept in good repair and make all 


 


33

















 


replacements and additions
to its Property as may be reasonably necessary to conduct its business properly
and efficiently.


 


Section 5.2  Financial Statements and Information.  Furnish to the Agent and each Lender copies
of each of the following:  (a) as
soon as available and in any event within ninety (90) days after the end of
each fiscal year of the Company, Annual Audited Financial Statements of the
Company and its Subsidiaries, prepared on a consolidated basis; (b) as
soon as available and in any event within forty-five (45) days after the
end of each quarter (excluding the fourth quarter) of each fiscal year of the
Company, Quarterly Unaudited Financial Statements of the Company and its
Subsidiaries, prepared on a consolidated basis; (c) concurrently with the
financial statements provided for in clauses (a) and (b) hereof,
an Officer’s Certificate which shall include such schedules, computations and
other information, in reasonable detail, as may be reasonably required by the
Agent or any Lender to demonstrate compliance with the covenants set forth
herein or reflecting any non-compliance therewith as of the applicable date,
all certified as true, correct and complete by a Responsible Officer of the
Company; (d) promptly upon their becoming available, all financial
statements (other than the Annual Audited Financial Statements and Quarterly
Unaudited Financial Statements), registration statements, reports and proxy
statements which the Company or any of its Subsidiaries may file with the
Securities and Exchange Commission, and (e) such other information
relating to the financial condition and affairs of the Company and any of its
Subsidiaries as from time to time may be reasonably requested by the Agent or
any Lender.  In addition to the financial
information and reports to be delivered in accordance with the prior sentence,
if the most recent Annual Audited Financial Statements or Quarterly Unaudited
Financial Statements of the Company, as applicable, demonstrate that the
financial condition of the Company and its Subsidiaries, on a consolidated
basis, has been negatively impacted as at the end of the immediately preceding
fiscal quarter or fiscal year represented by such Annual Audited Financial
Statements or Quarterly Unaudited Financial Statements, as applicable, for one
or more reasons (said determination of negative impact to be made by the Agent
in its reasonable discretion), upon the periodic request of the Agent (until
the conditions attributable to such negative impact have been addressed and
rectified to the reasonable satisfaction of the Agent), the Company agrees that
it shall promptly provide the Agent and the Lenders with additional information
relating to the financial condition and affairs of the Company and its
Subsidiaries as may be reasonably requested by the Agent, including, but not
limited to, reports setting out in sufficient detail the financial performance
of each retail location for any and all stores and operations maintained by the
Company and/or any of its Subsidiaries.


 


Notwithstanding the foregoing, information required
to be delivered pursuant to clauses (a), (b) and (d) of this Section 5.2
shall be deemed to have been delivered if such information shall be available
on the website of the Securities and Exchange Commission at http://www.sec.gov
and the Company shall have notified the Agent of the availability of all such
financial information; provided, that the Company shall deliver paper copies of
such information to the Agent or any Lender that reasonably requests such
delivery.  Information required to be delivered
pursuant to this Section 5.2 (other than a Notice of Default) may also be
delivered by electronic means pursuant to Section 9.2(b).


 


Section 5.3  Financial Tests.  (a) Have at all times a FIXED CHARGE
COVERAGE RATIO of not less than 1.50 to 1.00; and (b) have at all times a
LEVERAGE RATIO of not more than 3.00 to 1.00.


 


Section 5.4  Inspection.  Permit the Agent and the Lenders to inspect
its Property, to examine its files, books and records and make and take away
copies thereof, and to discuss its affairs with its officers and accountants,
all at such times and intervals and to such extent as the Agent or any Lender
may reasonably desire; provided that,
in the absence of an Event of Default, no more than one such visit shall be
permitted at the expense of the Company in any fiscal year.


 


34

















 


Section 5.5  Further Assurances.  Promptly execute and deliver any and all
other and further instruments which may be requested by the Agent or any Lender
to cure any defect in the execution and delivery of any Loan Document or more
fully to describe particular aspects of the Company’s agreements set forth in
the Loan Documents or so intended to be.


 


Section 5.6  Books and Records.  Maintain books of record and account in
accordance with Generally Accepted Accounting Principles.


 


Section 5.7  Insurance.  Maintain at all times insurance with such
insurers, on such of its Property, officers, directors and employees, in such
amounts and against such risks as is customarily maintained by other Persons of
similar size and engaged in businesses substantially similar to its businesses,
and furnish the Agent satisfactory evidence thereof promptly upon request.


 


Section 5.8  ERISA. 
At all times:  (a) make
contributions to each Plan in a timely manner and in an amount sufficient to
comply with the minimum funding standards requirements of ERISA; (b) immediately
upon acquiring knowledge of (i) any Reportable Event in connection with
any Plan for which no administrative or statutory exemption exists or (ii) any
“prohibited transaction”, as such term is defined in Section 4975 of the
Code, in connection with any Plan, that could result in the imposition of
material damages or a material excise tax on the Company, furnish the Agent a
statement executed by a Responsible Officer of the Company setting forth the
details thereof and the action which the Company or any such Subsidiary
proposes to take with respect thereto and, when known, any action taken by the
Internal Revenue Service with respect thereto; (c) notify the Agent
promptly upon receipt by the Company or any of its Subsidiaries of any notice
of the institution of any proceedings or other actions which may result in the
termination of any Plan by the Pension Benefit Guaranty Corporation and furnish
the Agent with copies of such notice; (d) pay when due all required
premium payments to the Pension Benefit Guaranty Corporation; (e) furnish
the Agent with copies of the annual report for each Plan filed with the
Internal Revenue Service not later than ten (10) days after the Agent
requests such report; (f) furnish the Agent with copies of any request for
waiver of the funding standards or extension of the amortization periods
required by Sections 303 and 304 of ERISA or Section 412 of the Code
promptly after the request is submitted to the Secretary of the Treasury, the
Department of Labor or the Internal Revenue Service, as the case may be; and (g) pay
when due all installment contributions required under Section 302 of ERISA
or Section 412 of the Code or within 10 days of a failure to make any such
required contributions furnish the Agent with written notice of such failure.


 


Section 5.9  Use of Proceeds.  Subject to the terms and conditions contained
herein, use the proceeds of the Loans (a) to finance the Tender Offer and
the Merger, (b) to refinance certain existing Indebtedness of the Target
and (c) to pay costs and expenses relating to the Transactions.  No proceeds of the Loans shall be used in
violation of Regulation U of the Board of Governors of the Federal Reserve
System or any successor regulation thereof or of any other rule, statute or
regulation governing Margin Stock from time to time.


 


Section 5.10  Additional Guaranties.  Notify the Agent promptly upon creation or acquisition
by the Company or any of its Subsidiaries of any additional Subsidiary of the
Company after the date hereof, and in connection therewith, furnish the Agent
with the Organizational Documents of such newly acquired or created Subsidiary
and sufficient information to disclose to the Agent in reasonable detail the
ownership structure and capitalization of such Subsidiary, and, except with
respect to a Non-Guarantor Subsidiary, promptly cause such newly created or
acquired Subsidiary of the Company to execute and deliver to the Agent for the
ratable benefit of the Lenders and the lenders under the Revolving Credit
Facility, a Joinder Agreement, together with such related certificates,
opinions, and documents as the Agent or any Lender may reasonably require.


 


35
















 


Section 5.11  Notice of Events. 
Notify the Agent immediately upon acquiring knowledge of the occurrence
of, or if the Company or any of its Subsidiaries causes or intends to cause, as
the case may be:  (1) the
institution of any lawsuit or administrative proceeding affecting the Company
or any of its Subsidiaries, the adverse determination under which could
reasonably be expected to have a Material Adverse Effect; (2) the
occurrence of any Material Adverse Effect; (3) any Event of Default or any
Default, together with a detailed statement by an appropriate officer or other
responsible party acceptable to the Agent on behalf of the Company of the steps
being taken to cure the effect of such Event of Default or Default; (4) the
occurrence of a default or event of default by the Company or any of its
Subsidiaries under any agreement or series of related agreements to which it is
a party, which default or event of default could reasonably be expected to have
a Material Adverse Effect; and (5) any material change in the accuracy of
the representations and warranties of the Company or any of its Subsidiaries in
this Agreement or any other Loan Document. 
The Company will notify, or cause each Guarantor to notify, the Agent in
writing within 30 days prior to the date that the Company or any Guarantor
changes its name or the location of its chief executive office or principal
place of business or the place where it keeps its books and records.  Any notice of a name change delivered to the
Agent shall be accompanied by such certificates of Governmental Authorities as
the Agent or any Lender may require substantiating such name change.


 


Section 5.12  Environmental Matters. 
Without limiting the generality of Section 5.1(c) hereof, (a) comply
in all material respects with all limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and timetables
contained in any applicable Requirement of Environmental Law or Environmental
Permit; (b) obtain and maintain in effect all Environmental Permits, the
failure to obtain which could reasonably be expected to have a Material Adverse
Effect; and (c) keep its Property free of any Environmental Claims or
Environmental Liabilities which could reasonably be expected to have a Material
Adverse Effect.


 


Section 5.13  End of Fiscal Year.  The
Company shall cause each of its fiscal years and each of its Subsidiaries’
fiscal years to end on the last Sunday of each September.


 


Section 5.14  Consummation of Merger.  The
Company shall use commercially reasonable efforts to consummate the Merger
within 90 days following the Effective Date.


 


Section 5.15  Maintenance of Ratings.  The
Company shall use commercially reasonable efforts to maintain corporate family
(or equivalent) ratings from each of Moody’s and S&P.


 


Section 5.16  Covenant to Guarantee Obligations and Give
Security.  Except in connection with the Disclosed
Divestitures listed in part A of Schedule 1.1(a), the Loan Parties will upon (x) the
request of the Agent, (y) the formation or acquisition of any new direct
or indirect Subsidiaries by any Loan Party or (z) the acquisition of any
material property by any Loan Party, in each case at the Loan Parties’ expense:


 


(a)           Grant the Collateral Agent for the ratable
benefit of the Lenders and the lenders under the Revolving Credit Facility, and
upon the terms and conditions set forth in Security Agreement A, a security
interest in, each Loan Party’s right, title and interest in and to the
Collateral pursuant to the terms of the Security Agreement A.


 


(b)           within 15 days after such request, formation
or acquisition, (i)  cause each such Subsidiary to duly execute and
deliver to the Agent such guaranties or guaranty supplements so as to cause
such Subsidiary to guarantee all of the Guaranteed Obligations, as defined in
the Guaranty, (ii) duly execute and deliver, and cause each such
Subsidiary and each direct and indirect parent of such Subsidiary (if it has
not already done so) to duly execute and deliver, to the Collateral Agent,
pledges, 


 


36

















 


assignments,
security agreement supplements and other security agreements covering the
Collateral and, as specified by and in form and substance reasonably
satisfactory to the Agent, securing payment of all the obligations of the
applicable Loan Party or such Subsidiary, as the case may be, under the Loan
Documents and the Revolving Credit Facility and constituting Liens on all such
Collateral, or (iii) take whatever action, including to file Uniform
Commercial Code financing statements, as may be necessary or advisable in the
opinion of the Agent to vest in the Collateral Agent (or its designee) valid
and subsisting Liens in the Collateral as provided in this Section 5.16(b),


 


(c)           within 60 days after such request, formation
or acquisition, deliver to the Agent, upon the request of the Agent in its sole
discretion, a signed copy of a favorable opinion, addressed to the Collateral
Agent and the Lenders, of counsel for the Loan Parties reasonably acceptable to
the Agent as to the matters contained in clause (b) above, as to such
guaranties, guaranty supplements, pledges, assignments, security agreement
supplements and security agreements being legal, valid and binding obligations
of each Loan Party party thereto enforceable in accordance with their terms, as
to the matters contained in clause (b)(ii) above, as to such recordings,
filings, notices, endorsements and other actions being sufficient to create
valid perfected Liens on such Collateral to the extent a Lien can be created by
filing under the Uniform Commercial Code, and as to such other matters as the
Agent may reasonably request, in each case to the extent that such Collateral
has a value in excess of $10,000,000.


 


(d)           The Loan Parties will, upon the incurrence of
inter-company debt not included in Part II of Schedule I  to Security Agreement A on the Effective
Date, promptly cause each Subsidiary payee under such inter-company debt to
execute and deliver to the Collateral Agent, pledges, assignments, and security
agreement supplements and other security agreements covering such Collateral
and as specified by and in form and substance reasonably satisfactory to the
Agent, securing payment of all the obligations of the applicable Loan Party or
such Subsidiary, as the case may be, under the Loan Documents and the Revolving
Credit Facility and constituting Liens on all such Collateral


 


(e)           at any time and from time to time, promptly
execute and deliver any and all further instruments and documents and take all
such other action as the Agent may reasonably deem necessary or desirable in
obtaining the full benefits of, or in perfecting and preserving the Liens of,
such guaranties, pledges, assignments, security agreement supplements and
security agreements in the Collateral.


 


Section 5.17  Covenant to Give Additional Security.At any time during the Additional Security
Period the Loan Parties will upon (x) the request of the Agent, (y) the
formation or acquisition of any new direct or indirect Subsidiaries by any Loan
Party or (z) the acquisition of any material property by any Loan Party,
then the Loan Parties shall, in each case at the Loan Parties’ expense:


 


(a)           Grant the Collateral Agent for the ratable
benefit of the Lenders and the lenders under the Revolving Credit Facility, and
upon the terms and conditions set forth in the Security Agreement B, a security
interest in, each Loan Party’s right, title and interest in and to the
Additional Collateral pursuant to the terms of the Security Agreement B.


 


(b)           within 15 days after such request, formation
or acquisition, (i)  duly execute and deliver, and cause each such
Subsidiary and each direct and indirect parent of such Subsidiary (if it has
not already done so) to duly execute and deliver, to the Collateral Agent, a
supplement to Security Agreement B, securing payment of all the obligations of
the applicable Loan Party or such Subsidiary, as the case may be, under the
Loan Documents and the Revolving Credit Facility and constituting Liens on all
such properties, provided that no real property (or interest therein) shall be
subjected to a security interest in favor of the Agent for the benefit of the
Lenders, or (ii) take whatever action contemplated by Security Agreement
B, including to file Uniform Commercial Code financing statements, as may be


 


37

















 


necessary
or advisable in the opinion of the Agent to vest in the Agent (or its designee)
valid and subsisting Liens as provided in this Section 5.17(b).


 


(c)           within 60 days after such request, formation
or acquisition, deliver to the Agent, upon the request of the Collateral Agent
in its sole discretion, a signed copy of a favorable opinion, addressed to the
Agent and the Lenders, of counsel for the Loan Parties reasonably acceptable to
the Agent as to the matters contained in clauses (a) and (b) above,
as the Agent may reasonably request, in each case to the extent that such
Additional Collateral has a value in excess of $10,000,000.


 


(d)           at any time and from time to time, promptly
execute and deliver any and all further instruments and documents and take all
such other action contemplated under Security Agreement B and as the Agent may
reasonably deem necessary or desirable in obtaining the full benefits of, or in
perfecting and preserving the Liens of, such guaranties, pledges, assignments,
security agreement supplements, intellectual property security agreement
supplements and security agreements.


 


ARTICLE VI
– NEGATIVE COVENANTS


 


The Company covenants and agrees with the Agent and the Lenders that
prior to the termination of this Agreement it will not, and will not suffer or
permit any of its Subsidiaries to, do any of the following:


 


Section 6.1  Indebtedness.  Create, incur, suffer or permit to exist, or
assume or guarantee, directly or indirectly, or become or remain liable with
respect to any Indebtedness, whether direct, indirect, absolute, contingent or
otherwise, except the following:


 


(a)           Indebtedness pursuant to this Agreement, the
Guaranties and any other Loan Document;


 


(b)           Indebtedness under the Revolving Credit
Facility including, without limitation, the letters of credit under the
Revolving Credit Facility which are permitted under Section 6.1(1) hereof,
in an aggregate principal amount (as to the loans thereunder) not to exceed
$350,000,000 at any time outstanding;


 


(c)           in addition to and cumulative of any other
Indebtedness permitted in this Section 6, in the case of the Company only,
Unsecured Borrowed Debt; provided that, immediately before and immediately
after the incurrence of such Unsecured Borrowed Debt, the Company and its
Subsidiaries shall be in pro forma compliance with the financial covenants set
forth in Section 5.3 hereof;


 


(d)           Indebtedness secured by Liens permitted by Section 6.2
hereof;


 


(e)           secured Indebtedness of the Company and
Indebtedness of any one or more of the Company’s Subsidiaries, provided, that
the aggregate amount of all such Indebtedness outstanding at any time
(exclusive of Indebtedness permitted in Section 6.1(i) hereof) may
not exceed five percent (5%) of Consolidated Net Worth;


 


(f)            other liabilities existing on the date of
this Agreement and set forth on Schedule 4.16 attached hereto, and all renewals
and extensions (but not increases) thereof, provided that there shall be no
material change in the obligors thereunder;


 


(g)           current accounts payable and unsecured
current liabilities, not the result of borrowings, to vendors, suppliers and
persons providing services, for expenditures on ordinary trade


 


38

















 


terms
for goods and services normally required by the Company or any of its
Subsidiaries in the ordinary course of its business;


 


(h)           agreements of intent to acquire a Person
issued by the Company or any of its Subsidiaries in anticipation of acquiring
such Person if such acquisition is permitted under the terms and conditions of
this Agreement;


 


(i)            the Indebtedness of any Subsidiary of the
Company to the Company or to any Guarantor, as permitted in Section 6.7(f) of
this Agreement;


 


(j)            guarantees by the Company or any of its
Subsidiaries of the Indebtedness of any of their respective Subsidiaries
permitted to be incurred, created or existing pursuant to Section 6.3,
provided, that such guarantees are not directly or indirectly secured by any
Liens;


 


(k)           current and deferred taxes;


 


(l)            any obligation under or in respect of
outstanding letters of credit (including without limitation, letters of credit
under the Revolving Credit Facility), acceptances and similar obligations
created for the account of the Company or any of its Subsidiaries, and any
Hedging Agreements (other than the Credit Facility Hedging Agreements) entered
into by the Company and its Subsidiaries in the ordinary course; provided that the sum of (i) the
aggregate amount of such Indebtedness and (ii) the aggregate amount of
Contingent Obligations outstanding at any time for the Company and its
Subsidiaries, on a consolidated basis, may not exceed five percent (5%) of
Consolidated Net Worth;


 


(m)          Indebtedness or other obligations of the
Company under Capital Lease Obligations for equipment for use in new retail
locations hereafter opened and operated by the Company or any of its
Subsidiaries, so long as the capitalized amount of such obligations hereafter
entered into does not exceed five percent (5%) of Consolidated Net Worth
in the aggregate, together with guaranties of such obligations by any or all
Subsidiaries of the Company now or hereafter existing; and


 


(n)           Indebtedness evidenced by those certain zero
coupon convertible subordinated debentures of the Company due 2018 which are
governed by that certain Indenture dated March 2, 1998, by and among the
Company and Chase Bank of Texas, National Association, Trustee, outstanding on
the date hereof.


 


(o)           Indebtedness of Target under its Convertible
Senior Debentures.


 


(p)           any obligation under or in respect of
outstanding letters of credit (excluding the letters of credit issued under the
Revolving Credit Facility) or other workers’ compensation coverage payment or
reimbursement obligations secured by cash or cash equivalents created for the
account of the Company or any of its Subsidiaries as fiscal security for, or
otherwise in connection with, workers’ compensation coverage secured for the
Company and/or any of its Subsidiaries (it being agreed that any letters of
credit or other such payment or reimbursement obligations issued in accordance
with the provisions of this Section 6.1(p) shall not be included
within letters of credit for purposes of determining compliance with Section 6.1(l) hereof
or included within Contingent Obligations for purposes of determining
compliance with Section 6.3 hereof).


 


The Company, the Agent, the Lenders and each Guarantor (by its
execution of a Guaranty or a Joinder Agreement) agree that, notwithstanding
anything contained in this Section 6.1, in Section 6.7(f) or in
any other provision contained in this Agreement which may appear to be to the
contrary, any and all


 


39

















 


Indebtedness of (i) the Company from time to time owed to any
Subsidiary of the Company or of (ii) any Subsidiary of the Company from
time to time owed to the Company or to any Guarantor (together with any and all
Liens from time to time securing the same as permitted by Section 6.2(f) hereof)
is hereby made and at all times hereafter shall be inferior and subordinate in
all respects to the Indebtedness from time to time owing to the Agent or any
Lender pursuant hereto and to any Lien, if any, from time to time hereafter
securing any of such Indebtedness pursuant to the terms hereof.


 


Section 6.2  Liens.  Create or suffer to exist any
Lien upon any of its Property now owned or hereafter acquired, or acquire any
Property upon any conditional sale or other title retention device or arrangement
or any purchase money security agreement; or in any manner directly or
indirectly sell, assign, pledge or otherwise transfer any of its accounts or
contract rights; provided,
however, that the Company and its Subsidiaries (or any of them) may create or
suffer to exist:


 


(a)           Liens in effect on the date hereof and which
are described on Schedule 6.2(a) attached hereto, provided, that the
Property covered thereby does not increase either in quantity or value;


 


(b)           Liens securing any Indebtedness otherwise permitted
pursuant to Sections 6.1(e) and (l) hereof, provided that the aggregate amount of all
such secured Indebtedness outstanding at any time may not exceed five
percent (5%) of Consolidated Net Worth;


 


(c)           Liens in favor of the Collateral Agent pursuant
to the terms of Security Agreement A and/or Security Agreement B, as
applicable;


 


(d)           Incidental Liens;


 


(e)           purchase money security interests and liens
in Equipment and/or real property of the Company or any of its Subsidiaries in
favor of the seller or sellers of such Equipment and/or real property or their
successors and assigns, or purchase money security interests and liens in favor
of any third-party lender which loaned the money to purchase any such Equipment
and/or real property to the Company or such Subsidiary, provided, that neither
the sales price of, nor the amount of any loan made to acquire any of, such
Equipment and/or real property is greater than the fair value of such Equipment
and/or real property so acquired;


 


(f)            Liens in favor of the Company or any
Guarantor securing any Indebtedness owed by a Subsidiary of the Company
permitted pursuant to Section 6.1(i) hereof;


 


(g)           informational filings of financing statements
against the Company or any of its Subsidiaries by lessors under any operating
lease or any permitted Capital Lease Obligation now or hereafter entered into
by the Company or any of its Subsidiaries with any lessor, so long as the
applicable financing statement covers only the asset or assets leased pursuant
to the applicable operating lease or Capital Lease Obligation; and


 


(h)           Liens against cash or cash equivalents of the
Company and/or any of its Subsidiaries securing the obligations of, under or in
respect of outstanding letters of credit or other workers’ compensation coverage
payment or reimbursement obligations otherwise permitted pursuant to Section 6.1(o) hereof;


 


provided, however, that, notwithstanding anything contained above in this Section 6.2
to the contrary, in no event may the Company or any Subsidiary of the Company
ever create or suffer to exist any Lien upon any of the Stock of any of its
Subsidiaries, directly or indirectly, in favor of any Person other than the
Agent for the benefit of the Lenders and, subject to subsection (d) above,
under the Revolving Credit


 


40

















 


Facility, create or suffer to exist any agreement, whether oral or in
writing, with any Person other than the Agent and the Lenders pursuant to this Section 6.2,
and, subject to subsection (d) above, under the Revolving Credit Facility,
which would or could prohibit the Company or any of its Subsidiaries from
creating or permitting to exist any Lien in favor of the Agent or the Lenders
for the benefit of all of the Lenders for Indebtedness from time to time
arising under this Agreement.


 


Section 6.3  Contingent Obligations. 
Except for guaranties by Subsidiaries of the Company which are otherwise
permitted by Sections 6.1(l) and 6.1(m) hereof, and the
Guaranties, create, incur, suffer or permit to exist, directly or indirectly,
any Contingent Obligations if such Contingent Obligations would cause the sum
of (a) the aggregate amount of Contingent Obligations outstanding for the
Company and its Subsidiaries, and (b) the aggregate amount of outstanding
Indebtedness permitted by Section 6.1(l), on a consolidated basis, to
exceed five percent (5%) of Consolidated Net Worth.


 


Section 6.4  Mergers, Consolidations and Dispositions and
Acquisitions of Assets.  In any single transaction or series of
related transactions, directly or indirectly:


 


(a)           Wind up its affairs, liquidate or dissolve;


 


(b)           Be a party to any merger or consolidation
(other than the Merger) and except as permitted under Section 6.4(e);


 


(c)           Sell, convey, lease or otherwise dispose of
all or any material part of the assets (except for the sale of inventory in the
ordinary course of business) of the Company and/or its Subsidiaries, or agree
to take any such action, if such sale, lease or conveyance of assets is not
otherwise permitted for the applicable fiscal year by Section 6.4(z) hereof;


 


(d)           Sell, assign, pledge, transfer or otherwise
dispose of, or in any way part with control of, any Stock of any of its
Subsidiaries or any Indebtedness or obligations of any character of any of its
Subsidiaries, or permit any such Subsidiary so to do with respect to any Stock
of any other Subsidiary or any Indebtedness or obligations of any character of
the Company or any of its other Subsidiaries, or permit any of its Subsidiaries
to issue any additional Stock other than (i) to the Company or any of its
Subsidiaries or (ii) to purchase or acquire for a consideration any Stock
of the Company or any of its other Subsidiaries to the extent permitted under Section 6.11(a) hereof;
or


 


(e)           Take any action with a view toward
dissolution, liquidation or termination;


 


provided, however, that:


 


(x)           Any of the Company’s Subsidiaries may merge
or consolidate with any one or more of the Company’s other Subsidiaries, or
with any other Business Entity or Business Entities; provided that each surviving Business Entity after
any such merger or consolidation shall be a wholly-owned Subsidiary of the
Company or of a wholly-owned Subsidiary of the Company, and, provided, further, that the surviving Business Entity shall
simultaneously with such merger, execute and deliver to the Agent a Notice of
Assumption, appropriately completed;


 


(y)           Any of the Company’s Subsidiaries may (i) sell,
transfer or otherwise dispose of any Stock of the Company or any of its
Subsidiaries to the Company or another Subsidiary of the Company or (ii) sell,
lease, transfer or otherwise dispose of any of its assets to another Subsidiary
of the Company; provided that if all or substantially all of the transferring
Subsidiary’s assets are being sold, leased, transferred or otherwise disposed
of, then the Subsidiary to whom the sale, lease, transfer or disposition was
made must, unless it is already a Guarantor, simultaneously


 


41

















 


execute and deliver to the Agent a Notice of Assumption.  If such transferring Subsidiary is a
wholly-owned Subsidiary of the Company, it may wind up its affairs, liquidate
or dissolve following the consummation of any such sale, lease, transfer or disposal
of all or substantially all of its assets; and


 


(z)           Subject to the limitations set forth below, (i) (A) a
proposed sale, lease or conveyance of assets of one or more of the Subsidiaries
of the Company (a “Permitted Asset Disposition”) or (B) a proposed sale of the Stock of one or more Subsidiaries
of the Company (a “Permitted Stock Disposition”), in a single transaction or series of related transactions, to a
Person or Persons which is not or are not an Affiliate or Affiliates of the
Company or any of its Subsidiaries, on an arms-length basis, may occur in any
fiscal year of the Company so long as the aggregate consideration paid by such
acquiring Person or Persons (inclusive of the fair value of any non-cash
Property received as consideration) from all Permitted Asset Dispositions and all
Permitted Stock Dispositions which occur during such fiscal year does not
exceed five percent (5%) of Consolidated Net Worth and (ii) the
Company may consummate the Disclosed Divestitures; provided, however, that no Permitted Asset Disposition (other
than a Disclosed Divestiture) or Permitted Stock Disposition may occur if a
Default shall have then occurred and is then continuing or would be caused by
such proposed Permitted Asset Disposition or Permitted Stock Disposition, in
each case if consummated; provided
further that the ability to
consummate such Disclosed Divestiture shall not constitute a waiver of any such
Default.


 


Section 6.5  Nature of Business. 
Materially change the nature of its business or enter into any business
which is substantially different from the business in which it is presently
engaged; provided, however, that vertical integration within
the natural foods industry shall not be deemed to be a violation of this Section 6.5.


 


Section 6.6  Transactions with Related Parties. 
Enter into any transaction, contract or agreement of any kind with any
officer, director or holder of any of the outstanding Stock of the Company or
any of its Subsidiaries (or any Affiliate of such Person), unless such
transaction, contract or agreement is made upon terms and conditions not less
favorable to such Person than those which could have been obtained from wholly
independent and unrelated sources.  Other
than pursuant to agreements of the Target in effect on the date hereof, the
Company will not permit the compensation of any officer, stockholder, director,
partner or proprietor of the Company or any of its Subsidiaries to be
excessive, taking into consideration the financial circumstances of the Company
or such Subsidiary and the position and qualifications of such Person.


 


Section 6.7  Loans and Investments. 
Make, directly or indirectly, any loan or advance to or have any
Investment in any Person, or make any commitment to make such loan, advance or
Investment, except:


 


(a)           Stock of any Subsidiary, subject to the terms
of Section 6.7(h) as to Investments in internet strategy lines of
business;


 


(b)           Permitted Investment Securities;


 


(c)           Stock received in the settlement of debts
(created in the ordinary course of business);


 


(d)           travel advances in the ordinary course of
business to officers and employees;


 


42

















 


(e)           customer obligations and receivables owing to
the Company and arising out of sales or leases made or the rendering of
services by the Company in the ordinary course of business;


 


(f)            so long as no Default shall have occurred and
is then continuing, and subject to the terms of Section 6.1 hereof, loans
by the Company or any Guarantor to any Subsidiary of the Company;


 


(g)           so long as no Default has occurred and is
then continuing, or would result therefrom, loans to any Person which is not a
Subsidiary of the Company or of any of the Company’s Subsidiaries, provided, that the aggregate of all of
such loans does not exceed at any time five percent (5%) of Consolidated Net
Worth; and


 


(h)           so long as no Default shall have occurred and
is then continuing, or would result therefrom, Investments by the Company
and/or any Guarantor in internet strategy lines of business.


 


Section 6.8  ERISA Compliance.  At
any time permit any Plan to engage in any “prohibited transaction” as defined
in ERISA; incur any “accumulated funding deficiency” as defined in ERISA; or be
terminated in a manner which could result in the imposition of a Lien on any
Property of the Company or any of its Subsidiaries pursuant to ERISA.


 


Section 6.9  Credit Extensions. 
Extend credit other than normal and prudent extensions of credit to
customers for goods and services in the ordinary course of business.


 


Section 6.10  Change in Accounting Method.  Make
any material change in accounting method except as may be required by Generally
Accepted Accounting Principles as they are from time to time in effect.


 


Section 6.11  Redemption, Dividends and Distributions.  At
any time (1) each of the Company’s Moody’s and S&P rating have been
downgraded below Investment Grade, or (2) either of the Company’s Moody’s
or S&P rating has been downgraded by at least two categories below
Investment Grade:


 


(a)           Redeem, retire or otherwise acquire, directly
or indirectly, any shares of its Stock if such redemption or repurchase would
cause the sum of (A) and (B) below to exceed the sum of (i) $150,000,000,
plus (ii) fifty percent
(50%) of the aggregate of Net Income, depreciation, amortization and non-cash
stock compensation expense of the Company and its Subsidiaries, on a
consolidated basis, for each fiscal quarter of the Company ending after August 28,
2007 (said amount to not be adjusted or changed for a particular fiscal quarter
if the aggregate Net Income, depreciation, amortization and non-cash stock
compensation expense of the Company and its Subsidiaries, on a consolidated
basis, for such fiscal quarter is negative): 
(A) the aggregate cost paid by the Company for such Stock so
redeemed or repurchased on or after July 1, 2007, as shown on the
consolidated financial statements of the Company and its Subsidiaries to be
delivered pursuant to Sections 5.2(a) and (b) hereof; and (B) the
aggregate cash dividends paid by the Company to owners of Stock in the Company
on or after July 1, 2007;


 


(b)           Pay any dividend except (i) dividends
paid to the Company or any Subsidiary of the Company which is a direct parent
of the Subsidiary paying a dividend, (ii) dividends payable in Stock or in
rights or warrants to purchase Stock, or (iii) cash dividends paid by the
Company to owners of Stock in the Company if the aggregate amount of such cash
dividends payable by the Company to owners of Stock in the Company on or after August 28,
2007, together with the aggregate cost paid by the Company for Stock redeemed
or repurchased on or after July 1, 2007 (as shown on the consolidated
financial statements of the Company and its Subsidiaries to be delivered
pursuant to Sections 5.2(a) and (b)


 


43

















 


hereof),
does not exceed (i) $150,000,000, plus
(ii) fifty percent (50%) of the aggregate of Net Income, depreciation,
amortization and non-cash stock compensation expense of the Company and its
Subsidiaries, on a consolidated basis, for each fiscal quarter of the Company
ending after July 1, 2007 (said amount to not be adjusted or changed for a
particular fiscal quarter if the aggregate Net Income, depreciation,
amortization and non-cash stock compensation expense of the Company and its
Subsidiaries, on a consolidated basis, for such fiscal quarter is negative); or


 


(c)           Make any other distribution of any Property
or cash to stockholders as such, except as permitted under Section 6.4(e)(y).


 


ARTICLE VII
– EVENTS OF DEFAULT AND REMEDIES


 


Section 7.1  Events of Default.  If
any of the following events shall occur, then the Agent may, unless directed to
the contrary by the Required Lenders in writing actually received by the Agent
prior to the Agent doing so (and, if directed by the Required Lenders, shall),
do any or all of the following:  (1) without
notice to the Company or any other Person, declare the Loans and the Notes then
outstanding to be, and thereupon the Loans and the Notes shall forthwith
become, immediately due and payable, together with all accrued interest
thereon, the Commitment Fees and all other amounts then payable hereunder,
without notice of any kind, notice of acceleration or of intention to
accelerate, presentment and demand or protest, or other notice of any kind all
of which are hereby expressly WAIVED by the Company; (2) without notice to
the Company, terminate the Commitments and thereupon all of the Lenders shall
be relieved of any obligation to make any additional Loans; (3) by notice
in writing to the Company, accelerate the Maturity Date to a date as early as
the date of the notice, and (4) exercise any and all other rights pursuant
to the Loan Documents:


 


(a)           The Company shall fail to pay or prepay any
principal of or interest of any Loan, the Commitment Fees or any other
obligation hereunder as and when due and, solely in respect of interest, fees
and obligations other than principal, such failure remains uncured after
three (3) Business Days, in the case of interest, and five (5) Business
Days, in the case of fees and such other obligations, in each case from such
due date; or


 


(b)           The Company or any of its Subsidiaries (i) shall
fail to pay at maturity, or within any applicable period of grace, any
principal of or interest on any other borrowed money obligation in excess of
$20,000,000 in principal amount (unless such payment is being contested in good
faith by appropriate proceedings and adequate reserves have been provided
therefor), (ii) shall otherwise be in default under the provisions of any
instrument or document evidencing, securing or guaranteeing any other borrowed
money obligation of the Company or any of its Subsidiaries, including, without
limitation, in respect of the Revolving Credit Facility, in excess of
$20,000,000 in principal amount if such default continues beyond any applicable
grace or curative period, if any, and such default would entitle the holder of
such borrowed money obligation to declare such obligation to be due prior to
its stated maturity, or (iii) is in default under or in violation of any
Legal Requirement, which failure could or does have a Material Adverse Effect;
or


 


(c)           Any representation or warranty made in
connection with any Loan Document shall prove to have been materially
incorrect, false or misleading when made or deemed to have been made; or


 


(d)           Default shall occur in the punctual and
complete performance of (i) any of the affirmative covenants contained in Section 5
(other than Section 5.3) and such default shall not be cured within
ten (10) days after the Agent has given written notice to the Company
that such default has occurred, (or immediately in the case of Sections 5.14,
5.16, or 5.17) (ii) any of the negative covenants


 


44

















 


contained
in Section 6, or (iii) any covenant contained in Section 5.3 or
any other covenant of the Company or any other Person contained in any Loan
Document; or


 


(e)           Any judgments or orders in the aggregate for
the payment of money in excess of $20,000,000 shall be rendered against the
Company or any of its Subsidiaries at any time, regardless of whether the same
is being appealed or reserves established therefor or paid in full; provided, however,
that any such judgment or order shall not give rise to an Event of Default
under this Section 7.1(e) if and for so long as the amount of such
judgment or order is covered by a valid and binding policy of insurance in
favor of the Company or any of its Subsidiaries as to which coverage in respect
of such claim has not been disputed; or


 


(f)            The Company or any Subsidiary of the Company
shall claim, or any court shall find or rule, that the Agent for the benefit of
the Lenders does not have a valid Lien on any Collateral or Additional
Collateral, as the case may be, having a value in the aggregate in excess of
$5,000,000 which may have been provided to secure the Indebtedness arising
pursuant hereto from time to time by the Company or any of its Subsidiaries; or


 


(g)           Any order shall be entered in any proceeding
against the Company or any of its Subsidiaries decreeing the dissolution,
liquidation or split-up thereof, and such order shall remain in effect for
thirty (30) days; provided, however, the provisions of this
subparagraph (g) shall not apply to any divestiture by the Company or
any of its Subsidiaries of any Subsidiary acquired after the effective date of
this Agreement as a result of anti-trust issues or concerns; or


 


(h)           The occurrence of an event of default or
default under any Loan Document other than this Agreement; or


 


(i)            The Company or any of its Subsidiaries shall
have concealed, removed, or permitted to be concealed or removed, any part of
its Property, with intent to hinder, delay or defraud its creditors or any of
them, or made or suffered a transfer of any of its Property which may be
fraudulent under any bankruptcy, fraudulent conveyance or similar law; or shall
have made any transfer of its Property to or for the benefit of a creditor at a
time when other creditors similarly situated have not been paid; or


 


(j)            A change shall occur in the assets,
liabilities, financial condition, business or affairs of the Company or any of
its Subsidiaries which, in the reasonable opinion of the Required Lenders,
would or does have a Material Adverse Effect; provided,
however, the occurrence of any
such Material Adverse Effect shall not be deemed to be an Event of Default
hereunder until the Agent shall have provided the Company with written notice
that the Required Lenders have determined that such a Material Adverse Effect
has occurred; or


 


(k)           A Change of Control shall occur.


 


In addition to the actions permitted to be taken by the Agent under the
terms of the initial paragraph of this Section 7.1, if any of the
following events shall occur, then the Loans and the Notes together with all
accrued interest thereon, the Commitment Fees and all other amounts then
payable hereunder shall automatically, without demand, presentment, protest,
notice of intent to accelerate, notice of acceleration or other notice to any
Person of any kind, all of which are hereby expressly WAIVED by the Company,
become immediately due and payable and all Commitments shall be immediately and
automatically terminated and the Maturity Date shall immediately and
automatically be accelerated to the date of such occurrence:


 


45
















 


(x)           The Company or any of its Subsidiaries shall
make a general assignment for the benefit of creditors or shall petition or
apply to any tribunal for the appointment of a trustee, custodian, receiver or
liquidator of all or any substantial part of its business, estate or assets or
shall commence any proceeding under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution or liquidation law
of any jurisdiction, whether now or hereafter in effect; or


 


(y)           Any such petition or application shall be
filed or any such proceeding shall be commenced against the Company or any of
its Subsidiaries and the Company or such Subsidiary by any act or omission
shall indicate approval thereof, consent thereto or acquiescence therein which
shall not have been dismissed within 60 days, or an order shall be entered
appointing a trustee, custodian, receiver or liquidator of all or any
substantial part of the assets of the Company or any of its Subsidiaries or
granting relief to the Company or any of its Subsidiaries or approving the
petition in any such proceeding, and such order shall remain in effect for more
than sixty (60) days; or


 


(z)           The Company or any of its Subsidiaries shall
admit in writing its inability to pay its debts as they become due or fail
generally to pay its debts as they become due or suffer any writ of attachment
or execution or any similar process to be issued or levied against it or any
substantial part of its Property which is not released, stayed, bonded or
vacated within thirty (30) days after its issue or levy.


 


Section 7.2  Remedies Cumulative.  No
remedy, right or power conferred upon the Agent or any Lender is intended to be
exclusive of any other remedy, right or power given hereunder or now or
hereafter existing at law, in equity, or otherwise, and all such remedies,
rights and powers shall be cumulative.


 


ARTICLE VIII – THE AGENT


 


Section 8.1  Authorization and Action.  (a)  Each Lender hereby irrevocably appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers and discretion under this Agreement and the other Loan Documents as
are delegated to the Agent by the terms hereof and thereof, together with such
powers and discretion as are reasonably incidental thereto.  As to any matters not expressly provided for
by the Loan Documents (including, without limitation, enforcement or collection
of the obligations of the Company or any Guarantor), no Agent shall be required
to exercise any discretion or take any action, but shall be required to act or
to refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding upon all Lenders, and all holders of Notes, and the
Agent agrees to request from the Company any information that is reasonably
requested by any Lender; provided,
however, that no Agent shall be
required to take any action that exposes the Agent to personal liability or
that is contrary to this Agreement or applicable law.


 


(b)           The Agent and/or the Collateral Agent may
execute any of its duties under this Agreement or any other Loan Document by or
through agents, employees or attorneys-in-fact and shall be entitled to advice
of counsel and other consultants or experts concerning all matters pertaining
to such duties.


 


(c)           Each of the Lenders hereby appoints and
authorizes the Collateral Agent to take such action as collateral agent on its
behalf and to exercise such powers under the Security Agreement A and Security
Agreement B as are specifically delegated to the Collateral Agent by the terms
of such Loan Documents, together with such other powers as are reasonably
incidental thereto.


 


46

















 


Section 8.2  Agents’ Reliance, Etc. 
Neither the Agent nor the Collateral Agent nor any of their respective
directors, officers, agents or employees shall be liable for any action taken
or omitted to be taken by it or them under or in connection with the Loan
Documents, except for its or their own gross negligence or willful
misconduct.  Without limitation of the
generality of the foregoing, the Agent:  (a) may
consult with legal counsel (including counsel for any Loan Party), independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken in good faith by it in accordance with
the advice of such counsel, accountants or experts; (b) makes no warranty
or representation to any Lender and shall not be responsible to any Lender for
any statements, warranties or representations (whether written or oral) made in
or in connection with the Loan Documents; (c) shall not have any duty to
ascertain or to inquire as to the performance, observance or satisfaction of
any of the terms, covenants or conditions of any Loan Document on the part of
any Loan Party or the existence at any time of any Default under the Loan
Documents or to inspect the property (including the books and records) of any
Loan Party; (d) shall not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness, sufficiency or
value of, or the perfection or priority of any lien or security interest
created or purported to be created under or in connection with, any Loan
Document or any other instrument or document furnished pursuant thereto; and (e) shall
incur no liability under or in respect of any Loan Document by acting upon any
notice, consent, certificate or other instrument or writing (which may be by
telegram, telecopy or electronic communication) believed by it to be genuine
and signed or sent by the proper party or parties.


 


Section 8.3  Royal Bank and Affiliates.  With
respect to its Commitments, the Loan made by it and any Note issued to it,
Royal Bank shall have the same rights and powers under the Loan Documents as
any other Lender and may exercise the same as though each were not an Agent;
and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated,
include Royal Bank in its individual capacity. 
Royal Bank and its affiliates may accept deposits from, lend money to,
act as trustee under indentures of, accept investment banking engagements from,
act as a counterparty to any Hedging Agreements and generally engage in any
kind of business with, any Loan Party, any of its Subsidiaries and any Person
that may do business with or own securities of any Loan Party or any such
Subsidiary, all as if Royal Bank were not the Agent and without any duty to
account therefor to the Lenders.  No
Agent shall have any duty to disclose any information obtained or received by
it or any of its Affiliates relating to any Loan Party or any of its
Subsidiaries to the extent such information was obtained or received in any
capacity other than as the Agent.


 


Section 8.4  Lender Credit Decision.  Each
Lender acknowledges that it has, independently and without reliance upon the
Agent or any other Lender and based on the financial statements referred to in Section 4.01
and such other documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement.  Each Lender also acknowledges that it will,
independently and without reliance upon the Agent or any other Lender 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.


 


Section 8.5  Indemnification.  Each
Lender severally agrees to indemnify the Agent (to the extent not promptly
reimbursed by the Company) from and against such Lender’s ratable share
(determined as provided below) of any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever that may be imposed on, incurred by, or
asserted against the Agent in any way relating to or arising out of the Loan
Documents or any action taken or omitted by the Agent under the Loan Documents
(collectively, the “Indemnified
Costs”); provided,
however, that no Lender shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Agent’s gross negligence or willful misconduct as found in a
final, non-appealable judgment by a court of competent jurisdiction.  Without limitation of the foregoing, each
Lender agrees to reimburse the Agent


 


47

















 


promptly upon demand for its ratable share of any costs and expenses
(including, without limitation, fees and expenses of counsel) payable by the
Company under Section 9.8, to the extent that the Agent is not promptly
reimbursed for such costs and expenses by the Company.  In the case of any investigation, litigation
or proceeding giving rise to any Indemnified Costs, this Section 8.5
applies whether any such investigation, litigation or proceeding is brought by
any Lender or any other Person.


 


For purposes of this Section 8.5, each Lender’s ratable share of
any amount shall be determined, at any time, according to the sum of (i) the
aggregate principal amount of the Loans outstanding at such time and owing to
such Lender and (ii) the aggregate Unused Commitments at such time.  The failure of any Lender to reimburse the Agent
promptly upon demand for its ratable share of any amount required to be paid by
the Lenders to the Agent as provided herein shall not relieve any other Lender
of its obligation hereunder to reimburse the Agent for its ratable share of
such amount, but no Lender shall be responsible for the failure of any other
Lender to reimburse the Agent for such other Lender’s ratable share of such
amount.  Without prejudice to the
survival of any other agreement of any Lender hereunder, the agreement and
obligations of each Lender contained in this Section 8.6 shall survive the
payment in full of principal, interest and all other amounts payable hereunder
and under the other Loan Documents.


 


Section 8.6  Successor Agents.  The
Agent may resign at any time by giving written notice thereof to the Lenders
and the Company.  Upon any such
resignation, the Lenders (in consultation with the Company) shall have the
right to appoint a successor Agent.  If
no successor Agent shall have been so appointed by the Lenders, and shall have
accepted such appointment, within 30 days after the retiring Agent’s giving of
notice of resignation, then the retiring Agent may, on behalf of the Lenders,
appoint a successor Agent, which shall be a commercial bank organized under the
laws of the United States or of any State thereof and having a combined capital
and surplus of at least $250,000,000. 
Upon the acceptance of any appointment as Agent hereunder by a successor
Agent, such successor Agent shall succeed to and become vested with all the rights,
powers, discretion, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations under the
Loan Documents.  If within 30 days after
written notice is given of the retiring Agent’s resignation under this Section 8.6
no successor Agent shall have been appointed and shall have accepted such
appointment, then on such 30th day (a) the
retiring Agent’s resignation or removal shall become effective, (b) the
retiring Agent shall thereupon be discharged from its duties and obligations
under the Loan Documents and (c) the Lenders shall thereafter perform all
duties of the retiring Agent under the Loan Documents until such time, if any,
as the Lenders appoint a successor Agent as provided above.  After any retiring Agent’s resignation or
removal hereunder as Agent as to the Facility shall have become effective, the
provisions of this Article VIII shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement.


 


Section 8.7  Other Agents; Arrangers and Managers.  None
of the Lenders or other Persons identified on the facing page or signature
pages of this Agreement as a “syndication agent,” “documentation agent,” “bookrunner,”
or “lead arranger” shall have any right, power, obligation, liability,
responsibility or duty under this Agreement other than to the extent expressly
set forth herein and, in the case of such Lenders, those applicable to all
Lenders as such.  Without limiting the
foregoing, none of the Lenders or other Persons so identified shall have or be
deemed to have any fiduciary relationship with any Lender.  Each Lender acknowledges that it has not
relied, and will not rely, on any of the Lenders or other Persons so identified
in deciding to enter into this Agreement or in taking or not taking action
hereunder.


 


ARTICLE IX – MISCELLANEOUS


 


Section 9.1  No Waiver.  No waiver of any Default shall
be deemed to be a waiver of any other Default. 
No failure to exercise and no delay on the part of the Agent or any
Lender in exercising any right or power under any Loan Document or at law or in
equity shall operate as a waiver thereof, nor


 


48

















 


shall any single or partial exercise of any such right or power, or the
abandonment or discontinuance of steps to enforce any such right or power,
preclude any further or other exercise thereof or the exercise of any other
right or power.  No course of dealing
between the Company and the Agent or any Lender shall operate as a waiver of
any right or power of the Agent or any Lender. 
No amendment, modification or waiver of any provision of this Agreement
or any other Loan Document nor any consent to any departure therefrom shall be
effective unless the same is in writing and signed by the Person against whom
it is sought to be enforced, and then it shall be effective only in the
specific instance and for the purpose for which given.  No notice to or demand on the Company or any
other Person shall entitle the Company or any other Person to any other or
further notice or demand in similar or other circumstances.


 


Section 9.2  Notices.


 


(a)           All notices and other communications provided
for hereunder shall be either (x) in writing (including facsimile or
electronic communication) and mailed, faxed or delivered or (y) as and to
the extent set forth in Section 9.2(b) and in the proviso to this Section 9.2(a),
in an electronic medium and delivered as set forth in Section 9.2(b), if
to any Loan Party, to the Company at its address at 550 Bowie Street, Austin,
Texas 78703, Attention:  Glenda
Chamberlain, Chief Financial Officer, and Faxed to: 512 482 7205, with copy to
the General Counsel’s Office at the same address and faxed to: 512 482 7217; if
to any initial Lender party to this Agreement on date hereof, at the address
specified for such Lender on Schedule 2.1(a) hereto; if to any other
Lender, at the address specified in the Assignment and Acceptance pursuant to
which it became a Lender; if to the Agent, at its address at  200 Bay Street, 12th Floor, South Tower,
Royal Bank Plaza, Toronto, Ontario M5J 2W7, Attention:  Manager, Agency, Fax: 416-842-4023; or, as to
any Party, at such other address as shall be designated by such party in a
written notice to the other parties; provided,
however, that materials and
information described in Section 9.2(b) shall be delivered to the
Agent in accordance with the provisions thereof or as otherwise specified to
the Company by the Agent.  Except as
otherwise provided herein, all notices, consents, certificates, waivers,
documents and other communications required or permitted to be delivered to any
party under the terms of any Loan Document (a) must be in writing, (b) must
be personally delivered, transmitted by a recognized courier service or
transmitted by facsimile, and (c) must be directed to such party at its
address or facsimile number set forth above or on Schedule 2.1(a) hereto.  Except as provided in subsection (b) below,
all notices will be deemed to have been duly given and received on the date of
delivery if delivered personally, three (3) days after delivery to
the courier if transmitted by courier, or the date of transmission during
normal business hours with confirmation if transmitted by facsimile, whichever
occurs first, except that notices and communications to the Agent or the
Collateral Agent pursuant to Article II, III or VII shall not be
effective until received by such Agent. 
Any party may change its address or facsimile number for purposes hereof
by notice to all other parties.  Delivery
by telecopier of an executed counterpart of a signature page to any
amendment or waiver of any provision of this Agreement or the Notes shall be
effective as delivery of an original executed counterpart thereof.


 


(b)           The Company hereby agrees that it will
provide to the Agent all information, documents and other materials that it is
obligated to furnish to the Agent pursuant to the Loan Documents, including,
without limitation, all notices, requests, financial statements, financial and
other reports, certificates and other information materials, but excluding any
such communication that (i) relates to a request for a new, or a
conversion of an existing, Borrowing (including any election of an interest
rate or LIBOR Interest Period relating thereto), (ii) relates to the
payment of any principal or other amount due under this Agreement prior to the
scheduled date therefor, (iii) provides notice of any Default or Event of
Default under this Agreement or (iv) comprises original executed counterparts,
original governmental certificates , in each case, required to be delivered to
satisfy any condition precedent to the effectiveness of this Agreement and/or
any Borrowing thereunder (all such non-excluded communications being referred
to herein collectively as “Communications”), by transmitting the Communications in an electronic/soft medium in
a format reasonably acceptable to the Agent to an electronic mail address


 


49

















 


specified
by the Agent to the Company.  In
addition, the Company agrees to continue to provide the Communications to the
Agent in the manner specified in the Loan Documents but only to the extent
requested by the Agent.  The Company
further agrees that the Agent may make the Communications available to the
Lenders by posting the Communications on IntraLinks or a substantially similar
electronic transmission system (the “Platform”); provided that, unless
otherwise indicated by the Company, all such information so made available to
the Lender Parties shall be treated by the Agent as confidential information.


 


(c)           THE PLATFORM IS PROVIDED “AS IS” AND “AS
AVAILABLE.”  THE AGENT PARTIES (AS
DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE
COMMUNICATIONS, OR THE ADEQUACY OF THE PLATFORM AND EXPRESSLY DISCLAIM
LIABILITY FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS.  NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR
STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR
FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE AGENT PARTIES IN
CONNECTION WITH THE COMMUNICATIONS OR THE PLATFORM.  IN NO EVENT SHALL THE AGENT OR ANY OF ITS
AFFILIATES OR ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS,
ADVISORS OR REPRESENTATIVES (COLLECTIVELY, “AGENT PARTIES”) HAVE ANY LIABILITY
TO THE COMPANY, ANY LENDER OR ANY OTHER PERSON OR ENTITY FOR DAMAGES OF ANY
KIND, INCLUDING, WITHOUT LIMITATION, DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR
OTHERWISE) ARISING OUT OF THE COMPANY’S OR THE AGENT’S TRANSMISSION OF
COMMUNICATIONS THROUGH THE INTERNET, EXCEPT TO THE EXTENT THE LIABILITY OF THE
AGENT OR THE COLLATERAL AGENT PARTY IS FOUND IN A FINAL NON-APPEALABLE JUDGMENT
BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED PRIMARILY FROM SUCH AGENT
PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.


 


(d)           The Agent agrees that the receipt of the
Communications by the Agent at its e-mail address set forth above shall
constitute effective delivery of the Communications to the Agent for purposes
of the Loan Documents.  Each Lender
agrees that notice to it (as provided in the next sentence) specifying that the
Communications have been posted to the Platform shall constitute effective
delivery of the Communications to such Lender for purposes of the Loan
Documents.  Each Lender agrees to notify
the Agent in writing (including by electronic communication) from time to time
of such Lender’s e-mail address to which the foregoing notice may be sent by
electronic transmission and (ii) that the foregoing notice may be sent to
such e-mail address.  Nothing herein
shall prejudice the right of the Agent or any Lender to give any notice or other
communication pursuant to any Loan Document in any other manner specified in
such Loan Document.


 


Section 9.3  Jurisdiction; Governing Law; Etc.


 


(a)           Each of the parties hereto hereby irrevocably
and unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of any New York State court or Federal court of the United States
of America sitting in New York City, and any appellate court from any thereof,
in any action or proceeding arising out of or relating to this Agreement or any
of the other Loan Documents to which it is a party, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in any such New York State court or, to
the fullest extent permitted by law, in such Federal court.  Each of the parties hereto agrees that a
final judgment in any such action or


 


50

















 


proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.  Nothing in this Agreement shall affect any
right that any party may otherwise have to bring any action or proceeding
relating to this Agreement or any of the other Loan Documents in the courts of
any jurisdiction.


 


(b)           EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND
EFFECTIVELY DO SO, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS TO WHICH IT IS A PARTY IN ANY
NEW YORK STATE OR FEDERAL COURT.  EACH OF
THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION
OR PROCEEDING IN ANY SUCH COURT.


 


(c)           THIS AGREEMENT AND THE NOTES SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.


 


(d)           EACH OF THE COMPANY, THE AGENT AND THE
LENDERS IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF
OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE LOANS OR THE ACTIONS OF THE AGENT
OR ANY LENDER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT
THEREOF.


 


Section 9.4  Survival; Parties Bound.  All
representations, warranties, covenants and agreements made by or on behalf of
the Company in connection herewith shall survive the execution and delivery of
the Loan Documents, shall not be affected by any investigation made by any
Person, and shall bind the Company and its successors, trustees, receivers and
assigns and inure to the benefit of the successors and assigns of the Agent and
the Lenders, provided that the undertaking of the Lenders hereunder to make
Loans to the Company shall not inure to the benefit of any successor or assign
of the Company.  The term of this
Agreement shall be until the final maturity of each Note and the payment of all
amounts due under the Loan Documents.


 


Section 9.5  Counterparts.  This
Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall
be deemed to be an original and all of which taken together shall constitute
one and the same agreement.  Delivery of
an executed signature page of this Agreement by facsimile transmission or
electronic transmission (i.e., a “pdf” or “tif”) shall be effective as delivery
of an original executed counterpart of this Agreement.


 


Section 9.6  Survival.  The obligations of the Company
under Sections 2.15(d), 2.6, 2.10(b), 2.10(d), 9.8, 9.9, 9.16 and 9.17
hereof shall survive the repayment of the Loans and the termination of the
Commitments.


 


Section 9.7  Captions.  The headings and captions
appearing in the Loan Documents have been included solely for convenience and
shall not be considered in construing the Loan Documents.


 


Section 9.8  Expenses, Etc. 
Whether or not any Loan is ever made, the Company shall pay or reimburse
on demand each of the Lenders and the Agent for paying:  (a) the reasonable fees and expenses of
Shearman & Sterling LLP, counsel to the Agent or any other legal
counsel engaged by the


 


51

















 


Agent, in connection with (i) the preparation, execution and
delivery of this Agreement (including the exhibits and schedules hereto) and
the Loan Documents and the making of the Loans hereunder and (ii) any
modification, supplement or waiver of any of the terms of this Agreement or any
other Loan Document made as a result of any request by the Company; (b) all
reasonable costs and expenses (including reasonable attorneys’ fees) of the
Lenders and the Agent in connection with the enforcement of this Agreement or
any other Loan Document; (c) all transfer, stamp, documentary or other
similar taxes, assessments or charges levied by any governmental or revenue
authority after the effective date hereof in respect of this Agreement or any
other Loan Document or any other document referred to herein or therein; (d) all
costs, expenses, taxes, assessments and other charges incurred after the
effective date hereof in connection with any filing, registration, recording or
perfection of any security interest contemplated by Section 5.10 of this
Agreement; and (e) expenses of mutually agreed due diligence and
syndication.


 


Section 9.9  Indemnification.  The
Company shall indemnify the Agent, the Lenders and each Affiliate thereof and
their respective directors, officers, employees, counsel and agents from, and
hold each of them harmless against, any and all losses, liabilities (including
Environmental Liabilities), claims (including Environmental Claims) or damages
to which any of them may become subject, insofar as such losses, liabilities,
claims or damages arise out of or result from any (a) actual or proposed
use by the Company of the proceeds of any extension of credit by any Lender hereunder,
(b) breach by the Company of this Agreement or any other Loan Document, (c) violation
by the Company or any of its Subsidiaries of any law, rule, regulation or order
including any Requirements of Environmental Law, (d) Liens or security
interests granted on any Property pursuant to or under the Loan Documents, to
the extent resulting from any Hazardous Substance, petroleum, petroleum product
or petroleum waste located in, on or under any such property, (e) ownership
by the Lenders or the Agent of any Property following foreclosure under the
Loan Documents, to the extent such losses, liabilities, claims or damages arise
out of or result from any Hazardous Substance, petroleum, petroleum product or
petroleum waste located in, on or under such Property, including losses,
liabilities, claims or damages which are imposed upon Persons under laws
relating to or regulating Hazardous Substances, petroleum, petroleum products
or petroleum wastes solely by virtue of ownership, (f) any Lender or the
Agent being deemed an operator of any such Property by a court or other
regulatory or administrative agency or tribunal or other third party, to the
extent such losses, liabilities, claims or damages arise out of or result from
any Hazardous Substance, petroleum, petroleum product or petroleum waste
located in on or under such Property, (g) the making of the extensions of
credit hereunder and the consummation of any of the transactions contemplated
in the Loan Documents or (h) investigation, litigation or other proceeding
(including any threatened investigation or proceeding) relating to any of the
foregoing, and the Company shall reimburse the Agent and each Lender, and each
Affiliate thereof and their respective directors, officers, employees, counsel
and agents, upon demand for any expenses (including legal fees) incurred in
connection with any such investigation or proceeding, AND WHETHER ANY SUCH LOSS, LIABILITY, CLAIM OR DAMAGE
RESULTS FROM THE NEGLIGENCE OF ANY SUCH INDEMNIFIED PERSON; but
excluding any such losses, liabilities, claims, damages or expenses incurred by
a Person or any Affiliate thereof or their respective directors, officers,
employees, counsel or agents by reason of the gross negligence or willful
misconduct of such Person, affiliate, director, officer, employee or
agent.  Promptly after receipt by an
indemnified person of notice of any claim or the commencement of any action,
such indemnified person shall, if any claim in respect thereof is to be made
against the Company under this Section 9.10, notify the Company in writing
of the claim or the commencement of that action.  The Company shall not be liable for any
settlement of any such claim or action involving the payment of monetary
damages effected without its written consent not to be unreasonably
withheld.  If any such claim or action
shall be brought against an indemnified person and it shall notify the Company
thereof, the Company shall be entitled to participate in the joint defense
thereof.


 


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Section 9.10  Amendments, Etc.  No
amendment or waiver of any provision of this Agreement, the Notes or any other
Loan Document (except for the Credit Facility Hedging Agreements), nor any
consent to any departure by the Company therefrom, shall in any event be
effective unless the same shall be agreed or consented to by the Required
Lenders and the Company, and each such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given;
provided, that no amendment, waiver or consent shall, unless in writing and
signed by each Lender, do any of the following: 
(a) increase any Commitment of any of the Lenders or subject the
Agent or any of the Lenders to any additional obligations; (b) reduce the
principal of, or interest on, any Loan, or any fee hereunder; (c) waive or
postpone any scheduled date fixed for any payment of principal of, or interest
on, any Loan, or any fee or other sum to be paid hereunder; (d) change the
percentage of any of the Commitments or of the aggregate unpaid principal
amount of any of the Loans, or the number of Lenders, which shall be required
for the Lenders or any of them to take any action under this Agreement; (e) change
any provision contained in Sections 2.4, 2.7, 9.8 or 9.9 hereof or this Section 9.10
or Sections 9.15 or 9.18 hereof; (f) release all or any substantial
part of the security for the obligations of the Company under this Agreement,
any Application or any Note; (g) release any Guarantor from any Guaranty
(except for Guarantors sold by the Company or any of its Subsidiaries pursuant
to the terms of Section 6.4(y) hereof); (h) change the
definition of “Required Lenders” contained herein; (i) modify the
requirement of unanimous written approval by the Lenders of any unilateral
reduction by the Lenders of the Aggregate Commitment as provided for in Section 2.2;
or (j) waive or postpone any prepayment required by Section 2.3
hereof.  Anything in this Section 9.10
to the contrary, no amendment, waiver or consent shall be made with respect to Section 8
without the consent of the Agent.


 


Section 9.11  Successors and Assigns.


 


(a)           This Agreement shall be binding upon and
inure to the benefit of the Company, the Agent and the Lenders and their
respective successors and assigns.  The
Company may not assign or transfer any of its rights or obligations hereunder
without the prior written consent of all of the Lenders.


 


(b)           Each Lender may sell participations to any
Person in all or part of any Loan, or all or part of its Notes or Commitments,
to another bank or other entity, in which event, without limiting the
foregoing, the provisions of Sections 2.12, 9.09, 9.15 and 9.16 shall
inure to the benefit of each purchaser of a participation and the pro rata
treatment of payments, as described in Section 2.9, shall be determined as
if such Lender had not sold such participation. 
In the event any Lender shall sell any participation, (i) the
Company, the Agent and the other Lenders shall continue to deal solely and
directly with such selling Lender in connection with such selling Lender’s
rights and obligations under the Loan Documents (including the Note held by
such selling Lender), (ii) such Lender shall retain the sole right and
responsibility to enforce the obligations of the Company relating to the Loans,
including the right to approve any amendment, modification or waiver of any
provision of this Agreement other than (and then only if expressly permitted by
the applicable participation agreement) amendments, modifications or waivers
with respect to (A) any fees payable hereunder to the Lenders and (B) the
amount of principal or the rate of interest payable on, or the dates fixed for
the scheduled repayment of principal of, the Loans and other sums to be paid to
the Lenders hereunder, and (iii) the Company agrees, to the fullest extent
it may effectively do so under applicable law, that any participant of a Lender
may exercise all rights of set-off, bankers’ lien, counterclaim or similar
rights with respect to such participation as fully as if such participant were
a direct holder of Loans if such Lender has previously given notice of such
participation to the Company and such participant agrees to be bound by Section 2.12
as if it were a Lender.


 


(c)           Each Lender may assign to one or more Lenders
or Eligible Assignees all or a portion of its interests, rights and obligations
under this Agreement (including all or a portion of its Commitment and the same
portion of the related Loan at the time owing to it) (a “Ratable
Assignment”); provided, however,
that, (i) the aggregate amount of the Commitment and Loan of the assigning
Lender


 


53

















 


subject
to each such assignment (determined as of the date the Assignment and
Acceptance (as defined below) with respect to such assignment is delivered to
the Agent) shall in no event be less than $5,000,000 (unless all of the
assigning Lender’s Commitment and Loan is being assigned); and (ii) the
parties to each such assignment shall execute and deliver to the Agent, for its
acceptance and recording in its records, an Assignment and Acceptance in the
form of Exhibit F attached hereto (each an “Assignment and
Acceptance”) with blanks
appropriately completed, together with any Note or Notes subject to such
assignment and a processing and recordation fee of $3,500 (for which the
Company shall have no liability, and provided that only one such fee shall be
required in the case of simultaneous assignments to related entities).  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 five Business Days after the
execution thereof, unless a shorter period of time may be agreed to by the
Agent in its sole and absolute discretion, (A) the assignee thereunder
shall be a party hereto and, to the extent provided in such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder and (B) the
Lender thereunder shall, to the extent provided in such assignment, 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 Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto).


 


(d)           By executing and delivering an Assignment and
Acceptance, the Lender assignor thereunder and the assignee thereunder confirm
to and agree with each other and the other parties hereto as follows:  (i) other than the representation and
warranty that it is the legal and beneficial owner of the interest being
assigned thereby free and clear of any adverse claim, such Lender assignor
makes no representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection with
any Loan Document or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of any Loan Document or any other instrument
or document furnished pursuant thereto; (ii) such assignor Lender makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Company or any of its Subsidiaries or the
performance or observance by the Company of any of its obligations hereunder; (iii) such
assignee confirms that it has received a copy of this Agreement and the other
Loan Documents, together with copies of the financial statements of the Company
previously delivered in accordance herewith 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 assignor Lender
or any other Lender 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 the Loan Documents; (v) such assignee
appoints and authorizes the Agent to take such action as agent on its behalf
and to exercise such powers under the Loan Documents as are delegated to the
Agent by the terms hereof, together with such powers as are reasonably
incidental thereto; and (vi) such assignee agrees that it will perform in
accordance with their terms all obligations that by the terms of the Loan
Documents are required to be performed by it as a Lender.


 


(e)           The Agent shall maintain at its office a copy
of each Assignment and Acceptance delivered to it and a record of the names and
addresses of the Lenders and the Commitments of, and principal amount of the
Loans owing to each Lender from time to time (the “Register”).  The entries in the register
shall be conclusive, in the absence of manifest error, and the Company, the
Agent and the Lenders may treat each person the name of which is recorded
therein as a Lender hereunder for all purposes of the Loan Documents.  Such records shall be available for
inspection by the Company or any Lender at any reasonable time and from time to
time upon reasonable prior notice.


 


(f)            Upon its receipt of an Assignment and
Acceptance executed by an assigning Lender and the assignee thereunder together
with the Note, if any, subject to such assignment, the written consent to such
assignment and the fee payable in respect thereto, the Agent shall, if such
Assignment and


 


54

















 


Acceptance
has been completed with blanks appropriately filled, (i) accept such
Assignment and Acceptance, (ii) record the information contained therein
in the Register and (iii) give prompt notice thereof to the Company and
the Lenders.  Contemporaneously with the
receipt by the Company of such Assignment and Acceptance, the Company, at its
own expense, shall execute and deliver to the Agent in exchange for the
surrendered Note a new Note payable to the order of such assignee in an amount
equal to the Commitment and Loan assumed by it pursuant to such Assignment and
Acceptance and, if the assigning Lender has retained a Commitment and Loan
hereunder, a new Note to the order of the assigning Lender in an amount equal
to the Commitment and Loan retained by it hereunder.  Such new Notes 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 the surrendered Note.  Thereafter, such surrendered Note shall be
marked canceled and returned to the Company.


 


(g)           Any Lender may, in connection with any
assignment or participation or proposed assignment or participation pursuant to
this Section 9.11, disclose to the assignee or participant or proposed
assignee or participant, any information relating to the Company furnished to
such Lender by or on behalf of the Company.


 


(h)           Each Lender agrees that, in connection with
any assignment or participation or proposed assignment or participation
pursuant to this Section 9.11, the Company will not be responsible for the
accuracy and completeness of any written materials furnished by such Lender to
any actual or prospective assignee or participant, other than copies of (i) documents
furnished to such Lender pursuant to clause (a), (b), (c) or (d) of
Section 5.2 hereof, and (ii) any other documents which are prepared
by the Company for use in such connection and which contain a statement to such
effect.


 


(i)            Notwithstanding anything herein to the
contrary, each Lender may pledge and assign all or any portion of its rights
and interests under the Loan Documents to any Federal Reserve Bank.


 


(j)            Notwithstanding anything to the contrary
contained herein, any Lender (a “Granting Lender”) may grant to a special purpose funding vehicle identified as such in
writing from time to time by the Granting Lender to the Agent and the Company
(an “SPC”) the option to provide all or any part of
any Loan that such Granting Lender would otherwise be obligated to make
pursuant to this Agreement; provided,
however, that (i) nothing
herein shall constitute a commitment by any SPC to fund any Loan, and (ii) if
an SPC elects not to exercise such option or otherwise fails to make all or any
part of such Loan, the Granting Lender shall be obligated to make such Loan
pursuant to the terms hereof.  The making
of an Loan by an SPC hereunder shall utilize the Commitment of the Granting
Lender to the same extent, and as if, such Loan were made by such Granting
Lender.  Each party hereto hereby agrees
that (i) no SPC shall be liable for any indemnity or similar payment
obligation under this Agreement for which a Lender would be liable, (ii) no
SPC shall be entitled to the benefits of Sections 2.10 and 9.15 (or any
other increased costs protection provision) and (iii) the Granting Lender
shall for all purposes, including, without limitation, the approval of any
amendment or waiver of any provision of any Loan Document, remain the Lender of
record hereunder.  In furtherance of the
foregoing, each party hereto hereby agrees (which agreement shall survive the
termination of this Agreement) that, prior to the date that is one year and one
day after the payment in full of all outstanding commercial paper or other
senior Debt of any SPC, it will not institute against, or join any other person
in instituting against, such SPC any bankruptcy, reorganization, arrangement,
insolvency, or liquidation proceeding under the laws of the United States or
any State thereof.  Notwithstanding
anything to the contrary contained in this Agreement, any SPC may (i) with
notice to, but without prior consent of, the Company and the Agent, assign all
or any portion of its interest in any Loan to the Granting Lender and (ii) disclose
on a confidential basis any non-public information relating to its funding of
Loans to any rating agency, commercial paper dealer or


 


55

















 


provider
of any surety or guarantee or credit or liquidity enhancement to such SPC.  This subsection (j) may not be
amended without the prior written consent of each Granting Lender, all or any
part of whose Loans are being funded by the SPC at the time of such amendment.


 


Section 9.12  Release of Collateral.  Upon
the sale, lease, transfer or other disposition of any item of Collateral or
Additional Collateral of any Loan Party (including, without limitation, as a
result of the sale, in accordance with the terms of the Loan Documents, of the
Loan Party that owns such Collateral or Additional Collateral) in accordance
with the terms of the Loan Documents, the Collateral Agent will, at the
Borrower’s expense, execute and deliver to such Loan Party such documents as
such Loan Party may reasonably request to evidence the release of such item of
Collateral or Additional Collateral from the assignment and security interest
granted under the Security Agreements A or B, as applicable in accordance with
the terms of the Loan Documents.


 


Section 9.13  Entire Agreement.  This
Agreement embodies the entire agreement and understanding among the Company,
the Agent and the Lenders relating to the subject matter hereof and supersedes
all prior proposals, agreements and understandings relating to the subject
matter hereof.  The Company certifies
that it is relying on no representation, warranty, covenant or agreement except
for those set forth in this Agreement and the other Loan Documents of even date
herewith.


 


Section 9.14  Severability.  If
any provision of any Loan Documents shall be invalid, illegal or unenforceable
in any respect under any applicable law, the validity, legality and
enforceability of the remaining provisions shall not be affected or impaired
thereby.


 


Section 9.15  Disclosures.  Every reference in the Loan
Documents to disclosures of the Company to the Agent and the Lenders in
writing, to the extent that such references refer to disclosures at or prior to
the execution of this Agreement, shall be deemed strictly to refer only to
written disclosures delivered to the Agent and the Lenders in an orderly manner
concurrently with the execution hereof.


 


Section 9.16  Capital Adequacy.


 


(a)           If after the date of this Agreement, any
Lender shall have determined that the adoption or effectiveness (regardless of
whether previously announced) of any applicable Legal Requirement or treaty
regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any Governmental Authority or
comparable agency charged with the interpretation or administration thereof, or
compliance by any Lender with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such Governmental
Authority, has or would have the effect of increasing the cost of, or reducing
the rate of return on the capital of such Lender (or any holding company of
which such Lender is a part) as a consequence of its obligations hereunder or
under any Note to a level below that which such Lender or holding company could
have achieved but for such adoption, change or compliance by an amount deemed
by such Lender to be material, then from time to time, upon written demand to
the Company by such Lender (with a copy to the Agent), the Company shall pay to
such Lender, but only with respect to periods arising after such demand by such
Lender and applicable periods prior to such demand by such Lender if such
adoption, change or compliance is retroactive in application, such additional
amount or amounts as will compensate such Lender or holding company for such
reduction.


 


(b)           The certificate of any Lender setting forth
such amount or amounts as shall be necessary to compensate such Lender or its
holding company as specified in Subsection 9.15(a) above (and setting
forth the calculation thereof in reasonable detail) shall be delivered as soon
as practicable to the Company and shall be conclusive and binding, absent
manifest error.  The Company shall pay
such Lender the amount shown as due on any such certificate within five days
after such Lender delivers such


 


56

















 


certificate.  In preparing such certificate, such Lender
may employ such assumptions and allocations of costs and expenses as it shall
in good faith deem reasonable and may use any reasonable averaging and
attribution method.


 


Section 9.17  Withholding Tax.


 


(a)           As used in this Section 9.17, the
following terms shall have the following meanings:


 


i.              “Indemnifiable Tax” means any Tax, but excluding, in any case, any Tax that (a) would
not be imposed in respect of a payment to a Lender under this Agreement, under
the Notes held by such Lender or under any of the other Loan Documents except
for a present or former connection between the jurisdiction of the Governmental
Authority imposing such Tax and such holder (or a shareholder or other Person
with an interest in such holder), including a connection arising from such
holder’s (or shareholder of such holder or such other Person) being or having
been a citizen or resident of such jurisdiction, or being or having been
organized, present or engaged in a trade or business in such jurisdiction, or
having or having had a permanent establishment or fixed place of business in such
jurisdiction, but excluding a connection arising solely from such holder having
executed, delivered, performed its obligations or received a payment under, or
enforced, this Agreement, the Notes or any other Loan Documents, or (b) is
imposed under United States federal income tax law.


 


ii.             “Tax”
means any present or future tax, levy, impost, duty, charge, assessment or fee
of any nature (including interest thereon and penalties and additions thereto)
that is imposed by any Governmental Authority in respect of a payment to a
Lender under this Agreement or under any of the other Loan Documents.


 


(b)           If the Company is required by any applicable
Legal Requirement to make any deduction or withholding for or on account of any
Tax from any payment to be made by it under this Agreement in respect of the
Loans or under any other Loan Documents, then the Company shall (i) promptly
notify the applicable Lender hereunder that is entitled to such payment of such
requirement to so deduct or withhold such Tax, (ii) pay to the relevant
authorities the full amount required to be so deducted or withheld, (iii) promptly
forward to such Lender an official receipt (or certified copies thereof), or
other documentation reasonably acceptable to such Lender, evidencing such
payment to such Governmental Authorities and (iv) if such Tax is an
Indemnifiable Tax, pay, to the extent permitted by law, to such holder, in
addition to whatever net amount of such payment is paid to such Lender, such
additional amount as is necessary to ensure that the total amount actually
received by such Lender (free and clear of Indemnifiable Tax) will equal the
full amount of the payment such Lender would have received had no such
deduction or withholding been required. 
If the Company pays any additional amount to a Lender pursuant to the
preceding sentence and such Lender shall receive a refund of an Indemnifiable
Tax with respect to which, in the good faith opinion of such Lender, such
payment was made, such Lender shall pay to the Company the amount of such
refund promptly upon receipt thereof.


 


(c)           In the event that any Governmental Authority
notifies the Company that it has improperly failed to withhold or deduct any
Tax from a payment received by any Lender under this Agreement, the Company
shall timely and fully pay such Tax to such Governmental Authority and such
Lender shall, upon receipt of written notice of such payment, immediately pay
to the Company, an amount necessary in order that the amount of such payment to
the Company after payment of all Taxes with respect to such payment, shall
equal the amount that the Company paid to such Governmental Authority pursuant
to this clause (c).


 


57

















 


(d)           Each Lender shall, upon request by the
Company, take requested measures to mitigate the amount of Indemnifiable Tax
required to be deducted or withheld from any payment made by the Company under
this Agreement or under any other Loan Documents if such measures can, in the
sole and absolute opinion of such Lender, be taken without such Lender
suffering any economic, legal, regulatory or other disadvantage (provided, however,
that no such Lender shall be required to designate a funding office that is not
located in the United States of America).


 


Section 9.18  Waiver of Claims.  The
Company hereby waives and releases the Agent and all Lenders from any and all
claims or causes of action which the Company may own, hold or claim in respect
of any of them as of the date hereof.


 


Section 9.19  Right of Setoff.  Upon
the occurrence and during the continuance of any Event of Default, the Lenders
each are hereby authorized at any time and from time to time, without notice to
the Company or any of the Guarantors (any such notice being expressly waived by
the Company and by the Guarantors by their execution of a Guaranty or a Joinder
Agreement), to setoff and apply any and all deposits (general or special, time
or demand, provisional or final, whether or not such setoff results in any loss
of interest or other penalty, and including without limitation all certificates
of deposit) at any time held, and any other funds or property at any time held,
and other Indebtedness at any time owing by such Lender to or for the credit or
the account of the Company or any such Guarantor against any and all of the
Indebtedness arising in connection with this Agreement irrespective of whether
or not such Lender will have made any demand under this Agreement, the Notes or
any other Loan Document.  Each of the
Company and the Guarantors (by their execution of a Guaranty or a Joinder
Agreement) also hereby grants to each of the Lenders a security interest in and
hereby transfers, assigns, sets over, and conveys to each of the Lenders, as
security for payment of all Loans, all such deposits, funds or property of the
Company or any such Guarantor or Indebtedness of any Lender to the Company or
any such Guarantor.  Should the right of
any Lender to realize funds in any manner set forth hereinabove be challenged
and any application of such funds be reversed, whether by court order or
otherwise, the Lenders shall make restitution or refund to the Company pro rata
in accordance with their respective Commitment Percentages.  Each Lender agrees to promptly notify the Company
and the Agent after any such setoff and application, provided that the failure
to give such notice will not affect the validity of such setoff and
application.  The rights of the Agent and
the Lenders under this Section are in addition to other rights and
remedies (including without limitation other rights of setoff) which the Agent
or the Lenders may have.  This Section is
subject to the terms and provisions of Section 2.12 hereof.


 


Section 9.20  USA PATRIOT Act.  Each
Lender that is subject to the requirements of the USA PATRIOT Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”) hereby notifies
the Company that pursuant to the requirements of the Act, it is required to
obtain, verify and record information that identifies the Company, which
information includes the name and address of the Company and other information
that will allow such Lender to identify the Company in accordance with the Act,
and such notice is sufficient as to each such Lender.  The Company shall, and shall cause each of
its Subsidiaries to, provide to the extent commercially reasonable, such
information and take such actions as are reasonably requested by the Agent or
any Lender in order to assist the Agent and the Lenders in maintaining
compliance with the Act.


 


Section 9.21  Non-Consenting Lenders; Other Lenders.  If
at any time, any Lender becomes a Non-Consenting Lender or makes a demand for
increased costs or a withholding tax gross-up under Section 2.10 or Section 9.17,
then the Company may, at its sole cost and expense, on five Business Days’
prior written notice to the Agent and such Lender, replace such Lender by
causing such Lender to (and such Lender shall be obligated to) assign pursuant
to Section 9.11 all of its rights and obligations under this Agreement to
one or more Eligible Assignees; provided
that neither the Agent nor any Lender shall have any obligation to the Company
to find a replacement Lender or other such Person; provided,


 


58

















 


further, that such Non-Consenting Lender or other Lender shall be entitled to
receive the full outstanding principal amount of Loans so assigned, together
with accrued interest and fees payable in respect of such Loans as of the date
of such assignment and any other costs payable to such Lender under this
Agreement.


 


Section 9.22  Confidentiality.  Neither the Agent nor any Lender shall
disclose any Confidential Information to any Person without the prior written
consent of the Company, other than (a) to such Agent’s or such Lender’s
Affiliates and their officers, directors, employees, agents and advisors and to
actual or prospective Eligible Assignees and participants, and then only on a
confidential basis, (b) as required by any law, rule or regulation or
judicial process, provided that to the extent
practicable and permitted by applicable law, the party requested to disclose
any information will provide prompt written notice of such request to the
Company, will allow the Company a reasonable opportunity to seek appropriate
protective measures prior to disclosure (at the Company’s sole cost and
expense), (c) as requested or required by any state, federal or foreign
authority or examiner (including the National Association of Insurance
Commissioners or any similar organization or quasi-regulatory authority)
regulating such Lender, (d) to any rating agency when required by it, provided that, prior to any such disclosure, such rating
agency shall undertake to preserve the confidentiality of any Confidential
Information relating to the Loan Parties received by it from such Lender, (e) to
the extent reasonably necessary after consultation with counsel, in connection
with any litigation or proceeding to which the Agent or such Lender or any of
its Affiliates may be a party, provided that,
to the extent reasonably practicable, the party requested to disclose any such
information will provide prompt written notice of such request to the Company
and will allow the Company a reasonable opportunity to seek appropriate
protective measures prior to such disclosure) or (f) in connection with
the exercise of any right or remedy under this Agreement or any other Loan
Document.


 


[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]


 


59

















 


IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth above.


 


 


	
   

  	
  WHOLE FOODS MARKET, INC., as the Company

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ROYAL BANK OF CANADA, as the Agent

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ROYAL BANK OF CANADA, as Lender

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK, N.A., as Lender

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 


60
















 


EXHIBIT A


 


FORM OF


TERM NOTE


 


	
  $                            ,

  	
                          ,
  2007

  



 


FOR VALUE RECEIVED, WHOLE FOODS MARKET, INC. (herein
called “Company”), a Texas corporation, promises to pay to the order of
                                    
(herein called “Payee”), at the account specified by the Payee or at
such other place as the Payee may hereafter designate in writing, in
immediately available funds and in lawful money of the United States of
America, the principal sum of                           
Dollars ($
                      )
(or the unpaid balance of all principal advanced against this Term Note, if
that amount is less), together with interest on the unpaid principal balance of
this Term Note from time to time outstanding until maturity at the rate or
rates provided for in the Term Loan Agreement referred to below and interest on
all past due amounts, both principal and accrued interest, at the Past Due
Rate.


 


This Term Note has been
issued pursuant to the terms of, and is entitled to the benefits of, the Term
Loan Agreement, dated as of [                      ], 2007 (as the same may be amended, restated, modified or
supplemented from time to time, the “Term Loan Agreement”), by and among
the Company, Royal Bank of Canada, as administrative agent (in such capacity,
the “Agent”), JPMorgan Chase Bank, N.A., as collateral agent and
syndication agent, Payee and certain other signatory financial institutions
named therein or which may be a party thereto from time to time, to which
reference is made for all purposes. 
Advances against this Term Note by Payee or other holders hereof,
payments and prepayments hereunder and acceleration hereof shall be governed by
the Term Loan Agreement.  Capitalized
words and phrases used herein and not defined herein and which are defined in
the Term Loan Agreement shall have the same meanings herein as are ascribed to
them in the Term Loan Agreement.


 


The unpaid principal balance
of this Term Note at any time shall be the total of all principal lent or advanced
against this Term Note less the sum of all principal payments and permitted
prepayments made on this Term Note by or for the account of Company.  All Loans and advances and all payments and
permitted prepayments made hereon may be endorsed by the holder of this Term
Note on the schedule which is attached hereto (and hereby made a part hereof
for all purposes) or otherwise recorded in the holder’s records; provided,
that any failure to make notation of (a) any advance shall not cancel,
limit or otherwise affect Company’s obligations or any holder’s rights with
respect to that advance, or (b) any payment or permitted prepayment of
principal shall not cancel, limit or otherwise affect Company’s entitlement to
credit for that payment as of the date received by the holder.


 


Company and any and all
co-makers, endorsers, guarantors and sureties severally waive notice
(including, but not limited to, notice of intent to accelerate and notice of
acceleration, notice of protest and notice of dishonor), demand, presentment
for payment, protest, diligence in collecting and the filing of suit for the
purpose of fixing liability and consent that the time of payment hereof may be
extended and re-extended from time to time without notice to any of them.  Each such person agrees that his, her or its
liability on or with respect to this Term Note shall not be affected by any
release of or change in any guaranty or security at any time existing or by any
failure to perfect or maintain perfection of any lien against or security
interest in any such security or the partial or complete unenforceability of
any guaranty or other surety obligation, in each case in whole or in part, with
or without notice and before or after maturity.


 

















 


This
Term Note shall be governed by, and construed in accordance with, the laws of
the State of New York.


 


 


	
   

  	
  WHOLE
  FOODS MARKET, INC.

  
	
   

  	
  a
  Texas corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 

















 


LOANS AND PAYMENTS OF PRINCIPAL


 


	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Amount of

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Principal Paid or

  	
   

  	
  Unpaid Principal

  	
   

  	
   

  	
   

  
	
  Date

  	
   

  	
  Amount of Loan

  	
   

  	
  Prepaid

  	
   

  	
  Balance

  	
   

  	
  Notation Made By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 

















 


EXHIBIT B


 


NOTICE OF ASSUMPTION


 


Reference is made to that certain Term Loan
Agreement dated as of
                      ,
2007 (as the same may have heretofore been amended, restated, modified and
supplemented from time to time, the “Term Loan Agreement”), by and among
Whole Foods Market, Inc., certain financial institutions from time to time
a party thereto, Royal Bank of Canada, in its capacity as administrative gent
on behalf of said financial institutions (in such capacity, the “Agent”),
and JPMorgan Chase Bank, N.A., as collateral agent and syndication agent.  Terms used herein and not defined herein
shall have the same meanings herein as are ascribed to them in the Term Loan
Agreement.


 


[Pursuant to Section 6.4(x) of
the Term Loan Agreement, the undersigned Subsidiary hereby gives notice to the
Agent that [the entities listed on Exhibit A attached hereto and
incorporated herein by reference (the “Merged Guarantors”) have] [
                      
(the “Merged Guarantor”), a
                    
corporation, has] been merged into the undersigned Subsidiary effective as of
                    
, 20       and the undersigned Subsidiary is the
surviving Business Entity.  The
undersigned Person is liable for, and does hereby assume all of, the
obligations of the Merged Guarantor[s] under the Guaranties and the
Contribution Agreement and shall be a “Guarantor” thereunder for all purposes.]


 


[Pursuant to Section 6.4(y) of
the Term Loan Agreement, the undersigned Subsidiary (the  “Transferor
Subsidiary Guarantor”) hereby gives notice to the Agent that the
undersigned has acquired, purchased, leased or received all of the Stock and/or
assets of [                                    ] (the “Transferee Subsidiary Guarantor”) effective
as of
                    
, 20      . 
The undersigned does hereby assume and is hereby liable for, all of the
obligations of the Transferor Subsidiary Guarantor under the Guaranties and the
Contribution Agreement and shall be a “Guarantor” thereunder for all purposes.]


 


EXECUTED the      day of
                    ,
20      .


 


	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  



 


[Attachment: Exhibit A - List of Merged
Guarantors]


 

















 


EXHIBIT C


 


OFFICER’S CERTIFICATE


 


Date:           


 


Royal Bank of Canada- Agency Services


12th Floor, Royal Bank Plaza, 200 Bay Street


Toronto, Ontario, Canada M5J2W7


Tel: (416) 842-3910


Fax: (416) 842-4023


Attention: 
Manager


 


	
  Re:

  	
   

  	
  Financial Statements
  Required under Term Loan Agreement (as the same may have been amended,
  modified and restated from time to time, the “Term Loan Agreement”)
  dated as of
                                  ,
  2007, by and among Whole Foods Market, Inc., the financial institutions
  or party thereto from time to time, Royal Bank of Canada, as Administrative
  Agent, and JPMorgan Chase Bank, N.A., as Collateral Agent and Syndication
  Agent.

  



 


Ladies and Gentlemen:


 


Reference is made to the above referenced Term Loan
Agreement.  Capitalized words and phrases
used herein and not defined herein and defined in the Term Loan Agreement are
used herein with the same meanings as are assigned to them in the Term Loan
Agreement.


 


The undersigned hereby certifies, warrants and
represents to the addressee named above that:


 


(1)  He or she is the duly appointed and acting(1)                     
of the Company;


 


[Use
following paragraph 1 for fiscal year-end financial statements]


 


(2)  This Certificate is delivered in conjunction
with the Annual Audited Financial Statements of the Company and its
Subsidiaries for the fiscal year of the Company ended as of
                                ,
20      , together with the annual audit report
and opinion of an independent certified public accountant for such fiscal year
that are required to be delivered by Section 5.2(a) of the
Term Loan Agreement.  Each such document
referred to herein is currently available on the website of the Securities and
Exchange Commission at http://www.sec.gov.


 


[Use following paragraph 1 for
fiscal quarter-end financial statements]


 


(2)  This Certificate is delivered in
conjunction with the consolidated Quarterly Unaudited Financial Statements of
the Company and its Subsidiaries required by Section 5.2(b) of
the Term Loan Agreement for the fiscal quarter of the Company ended as of the
above date.  Each such document referred
to herein is currently available on the website of the Securities and Exchange
Commission at http://www.sec.gov.


 


(3)  Based on my knowledge, the financial
statements do not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with
respect to the period covered by the financial statements.


 






(1) Must be the chief executive officer, president, chief operating
officer or chief financial officer of the Company.


 

















 


(4)  As of the end of the period covered by the
attached financial statements:


 


(a)  LEVERAGE RATIO:


 


	
  (i)

  	
  Funded
  Indebtedness: 

  	
   

  	
  $                 

  
	
   

  	
   

  	
   

  	
   

  
	
  (ii)

  	
  EBIT
  of the Company and its Subsidiaries for the Rolling Four Quarters:

  	
   

  	
  $               

  
	
   

  	
   

  	
   

  	
   

  
	
  (iii)

  	
  Depreciation, depletion, obsolescence and amortization of the Company
  and its Subsidiaries for the Rolling Four Quarters:

  	
   

  	
  $              

  
	
   

  	
   

  	
   

  	
   

  
	
  (iv)

  	
  EBITDA for the Rolling, Four Quarters (the sum of (ii) plus
  (iii)):

  	
   

  	
  $              

  
	
   

  	
   

  	
   

  	
   

  
	
  (v)

  	
  Required Leverage Ratio (not more than):

  	
   

  	
  3.00 to 1.00

  
	
   

  	
   

  	
   

  	
   

  
	
  (vi)

  	
  Actual Leverage Ratio:

  	
   

  	
   

  
	
   

  	
  ((i) to
  (iv))

  	
   

  	
         to 1.00

  



 


(b)  FIXED CHARGE COVERAGE RATIO:


 


	
  (i)

  	
  EBIT for the Rolling Four Quarters (see a(ii) above)  

  	
   

  	
  $              

  
	
   

  	
   

  	
   

  	
   

  
	
  (ii)

  	
  Operating Lease Expense for the Rolling Four Quarters:(2)

  	
   

  	
  $              

  
	
   

  	
   

  	
   

  	
   

  
	
  (iii)

  	
  (i) plus
  (ii) =

  	
   

  	
  $              

  



 






(2)          For the fiscal quarter ended (i) September,
30, 2007, such amount shall equal such item for such fiscal quarter multiplied
by 52/13,  (ii) January, 20, 2008,
such amount to equal such item for such fiscal quarter multiplied by 52/29
and  (iii) April, 30, 2008, such
amount to equal such item for such fiscal quarter multiplied by 52/41.


 

















 


	
  (iv)

  	
  Interest
  expense for the Rolling Four Quarters:(3)

  	
   

  	
  $              

  
	
   

  	
   

  	
   

  	
   

  
	
  (v)

  	
  Operating
  Lease Expense for the Rolling Four Quarters (see b(ii)):

  	
   

  	
  $              

  
	
   

  	
   

  	
   

  	
   

  
	
  (vi)

  	
  Fixed
  Charge Coverage Ratio for the applicable period (iii) to the sum of (iv) and
  (v):

  	
   

  	
       to 1.00

  
	
   

  	
   

  	
   

  	
   

  
	
  (vii)

  	
  Required Fixed Charge Coverage Ratio for the Applicable period (not
  less than):

  	
   

  	
  1.50 to 1.00

  



 


(c)  RESTRICTED PAYMENTS:


 


	
  (i)

  	
  Aggregate
  cost paid by Company for Stock redeemed or repurchased on or after
  [                ,
  2007]:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (ii)

  	
  Aggregate
  cash dividends paid by Company to owners of Stock on or after
  [                ,
  2007]:

  	
   

  	
  $                   

  
	
   

  	
   

  	
   

  	
   

  
	
  (iii)

  	
  Amount
  of permitted “restricted payments” described in (i) & (ii) (See Section 6.11):

  	
   

  	
  $                   

  



 


	
  (A)

  	
   

  	
  Initial
  threshold — $[150,000,000]

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (B)

  	
   

  	
  [50]% of the
  aggregate of Net Income, depreciation, amortization and non-cash stock
  compensation expense of the Company and its Subsidiaries, on a consolidated
  basis, for each fiscal quarter of the Company ending after
  [                        ,
  2007] — $              

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (C)

  	
   

  	
  Sum
  of (A) & (B):

  	
   

  	
  $                  .

  



 


(4)  (Check either (a) or (b) )


 






(3)   For the fiscal quarter ended (i) [              ],
2007, such amount shall equal such item for such fiscal quarter multiplied by
52/13,  (ii) [              ],
2008, such amount to equal such item for such fiscal quarter multiplied by
52/29 and  (iii) [              ],
2008, such amount to equal such item for such fiscal quarter multiplied by
52/41..


 

















 


(a)                        The Company has kept, observed, performed and
fulfilled each and every one of its covenants and obligations under the Term
Loan Agreement during the period covered by the attached financial statements
and no Default or Event of Default has occurred and is continuing.


 


(b)                       The Company has kept, observed, performed and
fulfilled each and every one of the covenants and obligations under the Term
Loan Agreement during the period covered by the attached financial statements
except for the following matters: [Describe all
such defaults, specifying the nature, duration and status thereof and what
action the Company has taken or proposes to take with respect thereto].


 


(5)  The representations and warranties of the
Company contained in Article IV of the Agreement, or which are contained
in any document furnished at any time under or in connection with the Loan
Documents, are true and correct in all material respects on and as of the date
hereof, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they are true and correct
as of such earlier date, and except that for purposes of this Officer’s
Certificate, the representations and warranties contained in Section 4.2
of the Term Loan Agreement shall be deemed to refer to the most recent
statements furnished pursuant to clause (a) and (b), respectively, of Section 5.2
of the Term Loan Agreement, including the statements in connection with which
this Officer’s Certificate is delivered.


 


 


	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 
















 


EXHIBIT D


 


[Company Letterhead]


 


REQUEST FOR EXTENSION OF
CREDIT


 


Date:             


 


Royal Bank of Canada- Agency Services


12th Floor, Royal Bank Plaza, 200 Bay Street


Toronto, Ontario, Canada M5J2W7


Tel: (416) 842-3910


Fax: (416) 842-4023


Attention: 
Manager


 


	
  Re:

  	
   

  	
  Loan under Term Loan
  Agreement dated as of
                ,
  2007, by and among Whole Foods Market, Inc., a Texas corporation, the
  financial institutions a party thereto from time to time, Royal Bank of
  Canada, as Administrative Agent (in such capacity, the “Agent”), and
  JPMorgan Chase Bank, N.A., as Collateral Agent and Syndication Agent (as the
  same may have been amended, modified and/or restated from time to time, the “Term
  Loan Agreement”).

  



 


Ladies and Gentlemen:


 


Reference is made to the above referenced Term Loan
Agreement.  Capitalized words and phrases
used herein but not defined herein which are defined in the Term Loan Agreement
are used herein with the same meanings as are ascribed to them in the Term Loan
Agreement.


 


The Company requests that a Loan be made under the
Term Loan Agreement in the amount of $[700],000,000  and that
such Loan be made on
                ,
2007, which is a Business Day, or in the case of a LIBOR Rate Borrowing, a LIBOR
Business Day (unless this request for a Loan is received by the Agent after
12:00 noon in which case, then on the next to occur Business Day, or in the
case of a LIBOR Rate Borrowing, the next to occur LIBOR Business Day,
hereafter).


 


The Loan is to be an (check one)
[  ] Alternate Base Rate Borrowing [  ] LIBOR Rate Borrowing.  If the Loan is to be a LIBOR Rate Borrowing,
the LIBOR Interest Period is to be (check one)
[  ] one [  ] two [ 
] three [  ] six months.


 

















 


The proceeds of the
advances should be disbursed to the following account:


 


[Bank]


[Bank
Address]


[Account
Name]


[Account
Number]


[ABA#]


 


	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
  WHOLE
  FOODS MARKET, INC., a Texas corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 

















 


EXHIBIT E


 


RATE SELECTION NOTICE


 


Whole Foods Market, Inc., a Texas corporation,
certain financial institutions signatory thereto (collectively, the “Lenders”),
Royal Bank of Canada, as Administrative Agent for and on behalf of the Lenders
and JPMorgan Chase Bank, N.A., as Collateral Agent and Syndication Agent
executed and delivered that certain Term Loan Agreement (as amended,
supplemented and restated, the “Term Loan Agreement”) dated as of
                    ,
2007.  Any term used herein and not
otherwise defined herein shall have the meaning herein ascribed to it in the
Term Loan Agreement.


 


In accordance with the Term Loan Agreement, the
Company hereby notifies the Agent of the exercise of an Interest Option.


 


A.            Current
borrowing


 


	
  1.

  	
   

  	
  Interest
  Option now in effect:

  	
               

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Amount:

  	
   

  	
   

  	
  $              

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Expiration
  of current Interest Period, if applicable:

  	
   

  	
   

  	
           ,
  200     

  



 


B.            Proposed
borrowing


 


	
  1.

  	
   

  	
  Amount:

  	
   

  	
   

  	
  $              

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Date
  Interest Option is to be effective: 

  	
           ,
  200   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Interest
  Option to be applicable (check one):

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
    o          Alternate
  Base Rate

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
    o          LIBOR
  Rate

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Interest
  period (check one if applicable):

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
    o          1
  month

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
    o          2
  months

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
    o          3
  months

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
    o          6
  months

  	
   

  	
   

  	
   

  



 

















 


The Company represents and warrants that the
Interest Option and the interest period (if applicable) selected above comply
with all provisions of the Term Loan Agreement and that there exists no Event
of Default or any event which, with the passage of time, the giving of notice
or both, would be an Event of Default.


 


	
   

  	
  WHOLE
  FOODS MARKET, INC., a Texas corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
  Date:            200    

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
  *

  



 






* Must be the
chief executive officer, president, chief operating officer or chief financial
officer of the Company.


 

















 


EXHIBIT F


 


FORM OF


ASSIGNMENT AND ACCEPTANCE


 


Dated:                  ,
200    


 


Reference is made to the Term Loan Agreement dated
as of                ,
2007 (as restated, amended, modified, supplemented and in effect from time to
time, the “Term Loan Agreement”), among Whole Foods Market, Inc., a
Texas corporation (the “Company”), the financial institutions from time
to time a party thereto, Royal Bank of Canada, as Administrative Agent (the “Agent”),
and JPMorgan Chase Bank, N.A., as Collateral Agent and Syndication Agent.  Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Term Loan Agreement.  This Assignment and
Acceptance, between the Assignor (as set forth on Schedule I attached
hereto and made a part hereof by reference for all purposes) and the Assignee
(as set forth on Schedule I hereto and made a part hereof), is dated as of the
Effective Date (as set forth on Schedule I hereto attached).


 


1.  Each
Assignor hereby irrevocably sells and assigns to each Assignee without recourse
to the Assignor, and each Assignee hereby irrevocably purchases and assumes
from such Assignor without recourse to the Assignor, as of the Effective Date,
an undivided interest (the “Assigned Interest”) in and to all such
Assignor’s rights and obligations under the Term Loan Agreement respecting the
credit facility and only the credit facility provided for in the Term Loan
Agreement (the “Facility”), in a principal amount as set forth on Schedule
I.


 


2.  Each
Assignor (i) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Term Loan Agreement or any other Loan
Document or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Term Loan Agreement, any other Loan Document or any
other instrument or document furnished pursuant thereto, other than that it is
the legal and beneficial owner of the interest being assigned by it hereunder
and that such interest is free and clear of any adverse claim; (ii) makes
no representation or warranty and assumes no responsibility with respect to the
financial condition of the Company or its Subsidiaries or the performance or observance
by the Company or its Subsidiaries of any of its respective obligations under
the Term Loan Agreement, any other Loan Document or any other instrument or
document furnished pursuant thereto; and (iii) attaches the Term Note (if
any) held by it and requests that the Agent exchange such Term Note for a new
Term Note payable to such Assignor (if such Assignor has retained any interest
in the Facility) and a new Term Note payable to such Assignee in the respective
amounts which reflect the assignment being made hereby (and after giving effect
to any other assignments which have become effective on the Effective Date).


 


3.  Each
Assignee (i) represents and warrants that it is legally authorized to
enter into this Assignment and Acceptance and that it is an Eligible Assignee
(as that term is defined in the Term Loan Agreement); (ii) confirms that
it has received a copy of the Term Loan Agreement, together with copies of the
financial statements referred to in Section 4.2 thereof, or if later the
most recent financial statements delivered pursuant to Section 5.2
thereof, and such other documents and information as it has deemed appropriate
to make its own credit analysis; (iii) agrees that it will, independently
and without reliance upon the Agent, the Assignor or any other Lender 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
the Term Loan Agreement; (iv) appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers under the Term
Loan Agreement as are delegated to the Agent by the terms thereof, together
with such powers as are reasonably incidental thereto; (v) agrees that it
will be bound by the provisions of the Term Loan Agreement and will perform in
accordance with its terms all the obligations which by the terms of the Term
Loan Agreement are required to be performed by it as a Lender; (vi) if
such Assignee is organized under the laws of a jurisdiction outside the United
States,


 

















 


attaches the forms
prescribed by the Internal Revenue Service of the United States certifying as
to the Assignee’s exemption from United States withholding taxes with respect
to all payments to be made to the Assignee under the Term Loan Agreement or
such other documents as are necessary to indicate that all such payments are
subject to such tax at a rate reduced by an applicable tax treaty, and (vii) has
supplied the information requested on the administrative questionnaire attached
hereto as Exhibit A.


 


4.  Following
the execution of this Assignment and Acceptance, it will be delivered to the
Agent, together with a processing and recordation fee of $3,500, for acceptance
by it and the Company and recording by the Agent pursuant to Section 9.11
of the Term Loan Agreement, effective as of the Effective Date (which Effective
Date shall, unless otherwise agreed to by the Agent in it sole and absolute
discretion, be at least five Business Days after the execution of this Assignment
and Acceptance).


 


5.  Upon such
acceptance and recording, from and after the Effective Date, the Agent shall
make all payments in respect of the Assigned Interest (including payments of
principal, interest, fees and other amounts) to such Assignee, whether such
amounts have accrued prior to the Effective Date or accrue subsequent to the
Effective Date.  Each Assignor and each
Assignee shall make all appropriate adjustments in payments for periods prior
to the Assignment Effective Date by the Agent or with respect to the making of
this assignment directly between themselves.


 


6.  From and
after the Effective Date, (i) each Assignee shall be a party to the Term
Loan Agreement and, to the extent provided in this Assignment and Acceptance,
have the rights and obligations of a Lender thereunder, and (ii) each
Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Term Loan
Agreement provided that such Assignor hereby represents and warrants that
restrictions set forth in Section 9.11 of the Term Loan Agreement
pertaining to the minimum amount of assignments has been satisfied.


 


7.  This
Assignment and Acceptance shall be governed by, and construed in accordance
with, the laws of the State of New York.


 


8.  This Assignment and Acceptance may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.  Delivery of an executed
counterpart of Schedule I to this Assignment and Acceptance by
telecopier or electronic format shall be effective as delivery of an original
executed counterpart of this Assignment and Acceptance.


 


IN
WITNESS WHEREOF, the parties hereto have caused this Assignment and Acceptance
to be executed by their respective duly authorized officers on Schedule I
attached hereto.


 


[The remainder of this page is intentionally left blank.]


 

















 


SCHEDULE 1

TO

ASSIGNMENT AND ACCEPTANCE


 


Effective Date:


 


 


                                            ,
2007(4)


 


 


Assignor


 


	
   

  	
                      ,
  as Assignor

  
	
   

  	
  [Type or print legal name
  of Assignor]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Dated:                     ,
  200  

  



 






(4) This date
should be no earlier than five Business Days after the delivery of this
Assignment and Acceptance to the Agent.


 

















 


Assignee


 


	
   

  	
                        ,
  as Assignee

  
	
   

  	
  [Type or print legal name
  of Assignee]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Dated: 
                      ,
  200  

  
	
   

  	
  Lending Office:

  



 

















 


	
  Accepted:

  	
   

  
	
   

  	
   

  
	
  ROYAL
  BANK OF CANADA, as Agent

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   WHOLE FOODS MARKET, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
  *

  	
   

  



 






* Must be the chief executive officer, president, chief operating
officer or chief financial officer of the Company


 

















 


SCHEDULE 1

TO

ASSIGNMENT AND ACCEPTANCE


 


	
  ASSIGNORS:

  	
   

  	
   

  
	
  Percentage interest assigned

  	
   

  	
  %

  
	
  Aggregate outstanding principal amount of Term
  Loans assigned

  	
   

  	
  $

  
	
  Principal amount of Term Note payable to Assignor

  	
   

  	
  $

  



 
















 


EXHIBIT G-A


 


SECURITY
AGREEMENT A


 


 


Dated August 28, 2007


 


From


 


WHOLE FOODS MARKET, INC.,


 


as Grantor


 


- and -


 


the other Grantors referred to herein


 


as Grantors


 


to


 


JPMORGAN CHASE BANK, N.A.


 


as Collateral Agent


 

















 


T  A  B  L  E  O  F  C  O  N  T  E  N
T  S


 


	
  Section

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Section 1. Grant of Security

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section 2. Security for Obligations;
  Interpretation

  	
   

  	
  3

  
	
   

  	
   

  	
   

  
	
  Section 3. Grantors Remain Liable

  	
   

  	
  3

  
	
   

  	
   

  	
   

  
	
  Section 4. Representations and
  Warranties

  	
   

  	
  3

  
	
   

  	
   

  	
   

  
	
  Section 5. Further Assurances

  	
   

  	
  4

  
	
   

  	
   

  	
   

  
	
  Section 6. Post-Closing Changes

  	
   

  	
  4

  
	
   

  	
   

  	
   

  
	
  Section 7. Voting Rights; Dividends;
  Etc.

  	
   

  	
  4

  
	
   

  	
   

  	
   

  
	
  Section 8. Transfers and Other Liens;
  Additional Shares

  	
   

  	
  5

  
	
   

  	
   

  	
   

  
	
  Section 9. Collateral Agent Appointed
  Attorney-in-Fact

  	
   

  	
  5

  
	
   

  	
   

  	
   

  
	
  Section 10. Collateral Agent
  May Perform

  	
   

  	
  6

  
	
   

  	
   

  	
   

  
	
  Section 11. The Collateral Agent’s
  Duties

  	
   

  	
  6

  
	
   

  	
   

  	
   

  
	
  Section 12. Remedies

  	
   

  	
  8

  
	
   

  	
   

  	
   

  
	
  Section 13. Indemnity and Expenses

  	
   

  	
  9

  
	
   

  	
   

  	
   

  
	
  Section 14. Amendments; Waivers;
  Additional Grantors; Etc.

  	
   

  	
  9

  
	
   

  	
   

  	
   

  
	
  Section 15. Notices, Etc.

  	
   

  	
  9

  
	
   

  	
   

  	
   

  
	
  Section 16. Continuing Security Interest;
  Assignments under the Loan Agreements

  	
   

  	
  10

  
	
   

  	
   

  	
   

  
	
  Section 17. Release; Termination

  	
   

  	
  10

  
	
   

  	
   

  	
   

  
	
  Section 18. Execution in Counterparts

  	
   

  	
  10

  
	
   

  	
   

  	
   

  
	
  Section 19. Jurisdiction; Governing
  Law; Etc

  	
   

  	
  10

  



 

















 


SCHEDULES


 


	
  Schedule I

  	
   

  	
  –

  	
   

  	
  Initial Pledged Equity and Initial Pledged Debt

  
	
  Schedule II

  	
   

  	
  –

  	
   

  	
  Location, Chief Executive Office, Place Where
  Agreements Are Maintained, Type Of Organization, Jurisdiction Of Organization
  And Organizational Identification Number

  
	
  Schedule III

  	
   

  	
  –

  	
   

  	
  Changes in Name, Location, Etc.

  



 


EXHIBIT


 


	
  Exhibit A

  	
   

  	
  –

  	
   

  	
  Form of Security Agreement A Supplement

  



 


ii

















 


SECURITY
AGREEMENT A


 


SECURITY AGREEMENT dated August 28, 2007 made by
WHOLE FOODS MARKET, INC., a Texas corporation (the “Borrower”), and the other Persons
listed on the signature pages hereof (the Borrower and the Persons so
listed being, collectively, the “Grantors”), to JPMORGAN CHASE BANK, N.A.
(“JPMorgan”),
as collateral agent (in such capacity, and together with any successor
collateral agent appointed pursuant to this Agreement, the “Collateral Agent”)
for the Secured Parties (as defined below).


 


PRELIMINARY STATEMENTS.


 


1.             The Borrower has entered into a
Term Loan Agreement dated as of August 28, 2007 among the Borrower, Royal
Bank of Canada, as administrative agent for the lenders from time to time
parties thereto (together with its successors and assigns in such capacity, the
“Term Loan Administrative Agent”), JPMorgan Chase Bank, N.A., as
Collateral Agent and as syndication agent, and RBC Capital Markets and J. P.
Morgan Securities Inc., as joint lead arrangers and joint bookrunners (said
agreement, as it may hereafter be amended, restated, supplemented or otherwise
modified from time to time, being the “Term Loan Agreement”).


 


2.             The Borrower has entered into a
Revolving Credit Agreement dated as of August 28, 2007 among the Borrower,
JPMorgan Chase Bank, N.A., as Collateral Agent and as administrative agent for
the lenders from time to time parties thereto (together with its successors and
assigns in such capacity, the “Revolving Loan Administrative Agent”),
Royal Bank of Canada,, as syndication agent, and J. P. Morgan Securities Inc.
and RBC Capital Markets, as joint lead arrangers and joint bookrunners (said
agreement, as it may hereafter be amended, restated, supplemented or otherwise
modified from time to time, being the “Revolving Loan Agreement”).  The Term Loan Agreement and the Revolving
Loan Agreement shall sometimes hereinafter be collectively referred to as the “Loan
Agreements.”


 


3.             In connection with the Term Loan
Agreement, certain of the Grantors (other than the Borrower) and other
affiliated entities have executed and delivered a Master Guaranty Agreement to
the Term Loan Administrative Agent dated as of August 28, 2007, and in
connection with the Revolving Loan Agreement, the Grantors (other than the
Borrower) and other affiliated entities have executed and delivered a Master
Guaranty Agreement to the Revolving Loan Administrative Agent dated as of August 28,
2007 (both of said Master Guaranty Agreements, as each of the same may
hereafter be amended, restated, supplemented or otherwise modified from time to
time, being the “Master Guaranty Agreements”).


 


4.             It is a condition precedent to the
making of Loans by the Lenders under the Loan Agreements that the Grantors
shall have granted the security interest contemplated by this Agreement.  Each Grantor will derive substantial direct
and indirect benefit from the transactions contemplated by the Loan Agreements.


 


5.             Terms defined in the Loan
Agreements and not otherwise defined in this Agreement are used in this
Agreement as defined in the Loan Agreements. 
Further, unless otherwise defined in this Agreement or in the Loan
Agreements, terms defined in Article 8 or 9 of the UCC (as defined below)
are used in this Agreement as such terms are defined in such Article 8 or
9.  “UCC” means the Uniform Commercial
Code as in effect from time to time in the State of New York; provided that, if perfection or the effect
of perfection or non-perfection or the priority of the security interest in any
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, “UCC” means the Uniform Commercial
Code as in effect from time to time in such other jurisdiction for purposes of
the provisions hereof relating to such perfection, effect of perfection or
non-perfection or priority.


 


NOW, THEREFORE, in consideration of the premises and
in order to induce the Lenders to make Loans under the Loan Agreements, each
Grantor hereby agrees with the Collateral Agent for the ratable benefit of the
Secured Parties under each of the Loan Agreements as follows:


 


Section 1. 
Grant of Security.  Each
Grantor hereby grants to the Collateral Agent, for the ratable benefit of the
lenders from time to time party to either or both of the Loan Agreements
(together with the Collateral Agent, the Term Loan Administrative Agent and the
Revolving Loan Administrative Agent, the “Secured Parties”) ,


 

















 


a security interest in such
Grantor’s right, title and interest in and to the following, in each case, as
to each type of property described below, whether now owned or hereafter
acquired by such Grantor, wherever located, and whether now or hereafter
existing or arising (collectively, the “Collateral”):


 


(a)  (i) 
all of such shares of capital stock, partnership interests, membership
interests in a limited liability company, beneficial interests in a trust or
other equity interests in any Person, or any obligations convertible into or
exchangeable for, or giving any Person a right, option or warrant to acquire,
such equity interests or such convertible or exchangeable obligations (any and
all such interests being the “Equity Interests”) owned by each Grantor,
including without limitation, the initial pledged equity listed in Part I
of Schedule I hereof, (the “Initial Pledged Equity”), and the
certificates, if any, representing any of the foregoing, and all dividends,
distributions, return of capital, cash, instruments and other property from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the foregoing and all subscription warrants, rights
or options issued thereon or with respect thereto; provided that, notwithstanding anything contained herein to
the contrary, such Grantor shall not be required to pledge, and the terms “Pledged Equity” and “Collateral” used in this
Agreement shall not include, any Equity Interests in any foreign subsidiary
acquired, owned, or otherwise held by such Grantor, in each case, that, when
aggregated with all of the other shares of stock in such foreign Subsidiary
pledged by such Grantor, would result in more than 66% of the shares of stock
in such foreign Subsidiary being pledged to the Collateral Agent for the
benefit of the Secured Parties under this Agreement;


 


(ii)           all Equity Interests from time to
time acquired by each Grantor in any manner (such Equity Interests, together
with the Initial Pledged Equity, being the “Pledged Equity”), and the
certificates, if any, representing such additional Equity Interests, and all
dividends, distributions, return of capital, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such Equity Interests and all
subscription warrants, rights or options issued thereon or with respect
thereto;


 


(iii)          all investment property (including,
without limitation, all (A) securities, whether certificated or
uncertificated, (B) security entitlements, (C) securities accounts, (D) commodity
contracts and (E) commodity accounts) in which such Grantor has now, or
acquires from time to time hereafter, any right, title or interest in any
manner, and the certificates or instruments, if any, representing or evidencing
such investment property, and all dividends, distributions, return of capital,
interest, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such investment property and all warrants, rights or options issued thereon
or with respect thereto.


 


(b)           all indebtedness from time to time
owed to such Grantor (such indebtedness being the “Pledged Debt”)
including without limitation, the initial pledged debt listed in Part II
of Schedule I hereof, (the “Initial Pledged Debt”) and all
interest, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any of all
such indebtedness.


 


(c)           all proceeds of, collateral for and
supporting obligations relating to, any and all of the foregoing (including,
without limitation, proceeds, collateral and supporting obligations that
constitute property of the types described in clause (a) and (b) of
this Section 1 and this clause (c)) and, to the extent not otherwise
included, all cash.


 


Notwithstanding the
foregoing, “Collateral”
shall not include and the Grantors shall not be deemed to have granted a
security interest in any property or agreement of such Grantor to the extent
(but only so long as) (x) the granting of a security interest thereunder
is prohibited by any applicable law or (y) is prohibited by, or
constitutes a breach or default under or results in the termination of or
requires any consent not obtained under, any contract, lease, license,
agreement, instrument or other document giving rise to such property, in each
case solely to the extent that such breach or default is not rendered
ineffective by the UCC or other applicable law or, in the case of any consent,
such consent is actually required to grant such security interest under
applicable law.


 


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Section 2. 
Security for Obligations; Interpretation.  This Agreement secures, in the case of each
Grantor, the payment of all Indebtedness and other obligations of such Grantor
now or hereafter existing under any of the Loan Documents (as defined in each
of the Loan Agreements), whether direct or indirect, absolute or contingent, and
whether for principal, reimbursement obligations, interest, fees, premiums,
penalties, indemnifications, contract causes of action, costs, expenses or
otherwise (all such obligations being the “Secured Obligations”).  Without limiting the generality of the
foregoing, this Agreement secures, as to each Grantor, the payment of all
amounts that constitute part of the Secured Obligations and would be owed by
such Grantor to any Secured Party under any of the Loan Documents but for the
fact that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving a Loan Party.


 


Section 3. 
Grantors Remain Liable. 
Anything herein to the contrary notwithstanding, (a) each Grantor
shall remain liable under the contracts and agreements included in or related
to such Grantor’s Collateral to the extent set forth therein to perform all of
its duties and obligations thereunder to the same extent as if this Agreement
had not been executed, (b) the exercise by the Collateral Agent of any of
the rights hereunder shall not release any Grantor from any of its duties or
obligations under the contracts and agreements included in or related to the
Collateral and (c) no Secured Party shall have any obligation or liability
under the contracts and agreements included in or related to the Collateral by
reason of this Agreement or any other Loan Document, nor shall any Secured
Party be obligated to perform any of the obligations or duties of any Grantor
thereunder or to take any action to collect or enforce any claim for payment.


 


Section 4. 
Representations and Warranties. 
Each Grantor represents and warrants as follows:


 


(a)           As of the date hereof, such Grantor’s
exact legal name, location, chief executive office, type of organization,
jurisdiction of organization and organizational identification number is set
forth in Schedule II hereto. 
Within the five years preceding the date hereof, such Grantor has not
changed its name, location, chief executive office, type of organization,
jurisdiction of organization or organizational identification number from those
set forth in Schedule II hereto except as set forth in Schedule III
hereto.


 


(b)           Such Grantor is the legal and
beneficial owner of the Collateral granted or purported to be granted by it
pursuant to Schedule I hereof, free and clear of any Lien, claim, option
or right of others, except for the security interest created under this
Agreement or permitted under the Loan Agreements.  Except as permitted under the Loan Agreements,
no effective financing statement or other instrument similar in effect covering
all or any part of such Collateral or listing such Grantor or any trade name of
such Grantor as debtor is on file in any recording office, except such as may
have been filed in favor of the Collateral Agent relating to the Loan
Documents, filings which have not been authorized by the applicable Grantor or
as otherwise permitted under the Loan Agreements.


 


(c)           If such Grantor is an issuer of
Collateral, such Grantor confirms that it has received notice of the security
interest granted hereunder.


 


(d)           The Pledged Equity pledged by such
Grantor hereunder has been duly authorized and validly issued and is fully paid
and non-assessable.  The Pledged Debt
pledged by such Grantor hereunder has been duly authorized, authenticated or
issued and delivered, is the legal, valid and binding obligation of the issuers
thereof.


 


(e)           This Agreement creates in favor of
the Collateral Agent for the benefit of the Secured Parties under the Loan Agreements
a valid security interest in the Collateral granted by such Grantor (to the
extent such matter is governed by the laws of the United States, or a
jurisdiction located therein), securing the payment of the Secured Obligations;
all filings and other actions necessary to perfect the security interest in the
Collateral granted by such Grantor, to the extent required hereunder, have been
or will be timely made or taken and are, or will be, in full force and effect
(to the extent perfection can be accomplished by such filing or action); such
security interest is first priority except for the Liens permitted by the Loan
Agreements.


 


(f)            To such Grantor’s knowledge, no
material Governmental Authorization by, and no notice to or filing with, any
Governmental Authority or other third party is required for the grant by such
Grantor of the security interest granted hereunder or for the execution,
delivery or performance of this Agreement by such Grantor.


 


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Section 5. 
Further Assurances.  (a) 
Each Grantor agrees that from time to time, at the expense of such Grantor,
such Grantor will promptly execute and deliver, or otherwise authenticate, all
further instruments and documents, and take all further action that may be
necessary or reasonably desirable, or that the Collateral Agent may reasonably
request, in order to perfect and maintain perfection of any pledge or security
interest granted or purported to be granted by such Grantor hereunder or to
enable the Collateral Agent to exercise and enforce its rights and remedies
hereunder with respect to any Collateral of such Grantor.  Without limiting the generality of the
foregoing, each Grantor will promptly with respect to Collateral of such
Grantor:  (i) execute or authenticate
and file, or authorize the Collateral Agent to file, such financing or
continuation statements, or amendments thereto, and as permitted by the terms
of this Agreement or otherwise with the Grantor’s consent, such other
instruments or notices, as may be necessary or desirable, or as the Collateral
Agent may reasonably request, in order to perfect and preserve the security
interest granted or purported to be granted by such Grantor hereunder; (ii) upon
the occurrence and during the continuance of an Event of Default, take all
action necessary to ensure that the Collateral Agent has control of Collateral
consisting of investment property as provided in Section 9-106 of the UCC;
and (iii) deliver to the Collateral Agent evidence that all other actions
that the Collateral Agent may deem reasonably necessary or desirable in order
to perfect and protect the security interest granted or purported to be granted
by such Grantor under this Agreement has been taken. Notwithstanding anything
to the contrary set forth in this Section 5 or in this Agreement, unless
an Event of Default shall have occurred and be continuing, the Grantors shall
not be required to take any action to perfect the security interests granted
under this Agreement in any Collateral other than (A) executing,
authenticating and filing, or authorizing the Collateral Agent to file,
financing or continuation statements, or amendments thereto, and (B) delivering
any certificated stock certificates (and blank stock powers) representing the
Pledged Equity.


 


(b)           Each Grantor hereby authorizes the
Collateral Agent to file one or more financing or continuation statements, and
amendments thereto, including, without limitation, one or more financing
statements indicating that such financing statements cover the Collateral
listed in Section 1 of this Agreement of such Grantor, in each case
without the signature of such Grantor, and regardless of whether any particular
asset described in such financing statements falls within the scope of the UCC
or the granting clause of this Agreement. 
A photocopy or other reproduction of this Agreement shall be sufficient
as a financing statement where permitted by law.  Each Grantor ratifies its authorization for
the Collateral Agent to have filed such financing statements, continuation
statements or amendments filed prior to the date hereof.


 


(c)           Upon the occurrence and continuance
of an Event of Default, upon the written request of the Collateral Agent, each
Grantor will furnish to the Collateral Agent from time to time statements and
schedules further identifying and describing the Collateral of such Grantor and
such other reports in connection with such Collateral as the Collateral Agent
may reasonably request, all in reasonable detail.


 


Section 6. 
  Post-Closing Changes.  (a)  No Grantor will change its name,
type of organization, jurisdiction of organization, organizational
identification number or location from those set forth in Section 4(a) of
this Agreement without first giving at least 15 days’ prior written notice to
the Collateral Agent and taking all action reasonably required by the
Collateral Agent for the purpose of perfecting or protecting the security
interest granted by this Agreement.  Each
Grantor will hold and preserve its records relating to the Collateral and will
permit representatives of the Collateral Agent at any reasonable time during
normal business hours upon reasonable advance notice to inspect and make
abstracts from such records and other documents.  If any Grantor does not have an organizational
identification number and later obtains one, it will forthwith notify the
Collateral Agent of such organizational identification number.


 


Section 7. 
Voting Rights; Dividends; Etc. 
(a)  So long as no Event of Default shall have occurred and be continuing:


 


(i)            Each Grantor shall be entitled to
exercise any and all voting and other consensual rights pertaining to the
Collateral of such Grantor or any part thereof for any purpose.


 


(ii)           Each Grantor shall be entitled to
receive and retain any and all dividends, interest and other distributions paid
in respect of the Collateral of such Grantor if and to the extent that the
payment thereof is not otherwise prohibited by the terms of the Loan Documents,
provided, however, that any and all dividends and other
distributions paid or payable in cash in 


 


4

















 


respect of any Collateral in
connection with a partial or total liquidation or dissolution or in connection
with a reduction of capital, capital surplus or paid-in-surplus shall be
received in trust for the benefit of the Collateral Agent, be segregated from
the other property or funds of such Grantor and be forthwith delivered to the
Collateral Agent as Collateral in the same form as so received (with any necessary
indorsement), together with any instruments or certificates evidencing all
related Collateral (with any necessary indorsement).


 


(iii)          The Collateral Agent will execute and
deliver (or cause to be executed and delivered) to each Grantor all such proxies
and other instruments as such Grantor may reasonably request for the purpose of
enabling such Grantor to exercise the voting and other rights that it is
entitled to exercise pursuant to paragraph (i) above and to receive
the dividends or interest payments that it is authorized to receive and retain
pursuant to paragraph (ii) above.


 


(b)           Upon the occurrence and during the
continuance of an Event of Default:


 


(i)            All rights of each Grantor (x) to
exercise or refrain from exercising the voting and other consensual rights that
it would otherwise be entitled to exercise pursuant to Section 7(a)(i) shall,
upon five Business Days’ notice to such Grantor by the Collateral Agent, cease
and (y) to receive the dividends, interest and other distributions that it
would otherwise be authorized to receive and retain pursuant to Section 7(a)(ii) shall
automatically cease, and all such rights shall thereupon become vested in the
Collateral Agent, which shall thereupon have the sole right to exercise or
refrain from exercising such voting and other consensual rights and to receive
and hold as Collateral such dividends, interest and other distributions.


 


(ii)           All dividends, interest and other
distributions that are received by any Grantor contrary to the provisions of
paragraph (i) of this Section 7(b) shall be received in
trust for the benefit of the Collateral Agent, shall be segregated from other
funds of such Grantor and shall be forthwith paid over to the Collateral Agent
as Collateral in the same form as so received (with any necessary indorsement),
together with any instruments or certificates evidencing all related Collateral
(with any necessary indorsement).


 


Section 8. 
Transfers and Other Liens; Additional Shares.  Each Grantor agrees that:


 


(a)           It will not (i) sell, assign or
otherwise dispose of, or grant any option with respect to, any of the
Collateral, other than sales, assignments and other dispositions of Collateral,
and options relating to Collateral, permitted under the terms of this Agreement
or the Loan Agreements, or (ii) create or suffer to exist any Lien upon or
with respect to any of the Collateral of such Grantor except for the pledge,
assignment and security interest created under this Agreement and Liens
permitted under the Loan Agreements.


 


(b)           It will (i) cause each issuer of
the Pledged Equity pledged by such Grantor not to issue any Equity Interests or
other securities in addition to or in substitution for the Pledged Equity
issued by such issuer, except to such Grantor or except as permitted by the
Loan Agreements, and (ii) pledge hereunder, immediately upon its
acquisition (directly or indirectly) thereof, any and all additional Equity
Interests or other securities.


 


Section 9. 
Collateral Agent Appointed Attorney-in-Fact.  Each Grantor hereby irrevocably appoints the
Collateral Agent such Grantor’s attorney-in-fact (such appointment to cease
upon the payment in full of all the Secured Obligations other than contingent
indemnification claims as to which no demand has been made), with full authority
in the place and stead of such Grantor and in the name of such Grantor or
otherwise, from time to time, upon the occurrence and during the continuance of
an Event of Default, in the Collateral Agent’s reasonable discretion, to take
any action and to execute any instrument that the Collateral Agent may deem
reasonably necessary or advisable to accomplish the purposes of this Agreement,
including, without limitation:


 


5

















 


(a)           to ask for, demand, collect, sue for,
recover, compromise, receive and give acquittance and receipts for moneys due
and to become due under or in respect of any of the Collateral,


 


(b)           to receive, indorse and collect any
drafts or other instruments, documents and chattel paper, in connection with
clause (a) or (b) above, and


 


(c)           to file any claims or take any action
or institute any proceedings that the Collateral Agent may deem necessary or
desirable for the collection of any of the Collateral or otherwise to enforce
the rights of the Collateral Agent with respect to any of the Collateral.


 


Section 10. 
Collateral Agent May Perform.  If any Grantor fails to perform any agreement
contained herein, the Collateral Agent may, as the Collateral Agent deems
necessary to protect the security interest granted hereunder in the Collateral
or to protect the value thereof, but without any obligation to do so and
without notice, itself perform, or cause performance of, such agreement, and
the expenses of the Collateral Agent incurred in connection therewith shall be
payable by such Grantor under Section 13.


 


Section 11. 
The Collateral Agent’s Duties. 
(a)  The powers conferred on the Collateral Agent hereunder are
solely to protect the Secured Parties’ interest in the Collateral and shall not
impose any fiduciary relationship or any duty upon it to exercise any such
powers.  Except for the exercise of
reasonable care in the safe custody of any Collateral in its possession or in
the possession of an Affiliate of the Collateral Agent or any designee (including
without limitation, a Subagent (as defined in clause (b) below)) of the
Collateral Agent acting on its behalf and the accounting for moneys actually
received by it or its Affiliates hereunder in accordance with the express terms
hereof, the Collateral Agent shall have no fiduciary relationship or other duty
as to any Collateral, as to ascertaining or taking action with respect to
calls, conversions, exchanges, maturities, tenders or other matters relative to
any Collateral, whether or not any Secured Party has or is deemed to have
knowledge of such matters, or as to the taking of any necessary steps to
preserve rights against any parties or any other rights pertaining to any
Collateral.  The Collateral Agent and any
of its Affiliates or any designee (including without limitation, a Subagent) on
its behalf shall be deemed to have exercised reasonable care in the custody and
preservation of any Collateral in its possession or in the possession of an
Affiliate or any designee (including without limitation, a Subagent) on its
behalf if such Collateral is accorded treatment substantially equal to that
which it accords its own property.


 


(b)           Anything contained herein to the
contrary notwithstanding, the Collateral Agent may from time to time, when the
Collateral Agent deems it to be necessary, appoint one or more subagents (each
a “Subagent”)
for the Collateral Agent hereunder with respect to all or any part of the
Collateral.  In the event that the
Collateral Agent so appoints any Subagent with respect to any Collateral, (i) the
assignment and pledge of such Collateral and the security interest granted in
such Collateral by each Grantor hereunder shall be deemed for purposes of this
Security Agreement A to have been made to such Subagent, in addition to the Collateral
Agent, for the ratable benefit of the Secured Parties, as security for the
Secured Obligations of such Grantor, (ii) such Subagent shall
automatically be vested, in addition to the Collateral Agent, with all rights,
powers, privileges, interests and remedies of the Collateral Agent hereunder
and pursuant to the terms hereof, with respect to such Collateral, and (iii) the
term “Collateral Agent,” when used herein in relation to any rights, powers,
privileges, interests and remedies of the Collateral Agent with respect to such
Collateral, shall include such Subagent; provided, however, that no such Subagent shall be
authorized to take any action with respect to any such Collateral unless and
except to the extent expressly authorized in writing by the Collateral Agent.


 


(c)           Each Secured Party by its acceptance
thereof hereby appoints and authorizes the Collateral Agent to take such action
as agent on its behalf and to exercise such powers hereunder and under the
other Loan Documents as are specifically delegated to the Collateral Agent by
the terms of this Agreement and the Loan Documents, together with such other
powers as are reasonably incidental thereto. 
The Collateral Agent shall not have any duties or responsibilities
except those expressly set forth in this Agreement and the Loan Documents.


 


(d)           As to any matters not expressly
provided for by the Loan Documents, the Collateral Agent shall not be required
to exercise any discretion or take any action, but shall be required to act or
to refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the written instructions signed by the Term Loan
Administrative Agent and the Revolving Loan Administrative Agent provided,
however, that the Collateral Agent shall not be required to take any action
that exposes the Collateral Agent to personal liability or that 


 


6

















 


is contrary to
this Agreement or applicable law. The Collateral Agent shall in all cases be
fully protected in acting or refraining from acting under this Agreement or any
of the Loan Documents upon written directions signed by the Term Loan
Administrative Agent and the Revolving Loan Administrative Agent, except for
any such actions (or restraint of actions) which constitute gross negligence or
willful misconduct on the part of the Collateral Agent. Any such directions by
the Collateral Agent and any action taken by the Collateral Agent and any
failure by the Collateral Agent to act, in each case pursuant to such directions,
shall be binding on all the Secured Parties and their respective successors and
assigns.  The Collateral Agent shall not
be responsible to any Secured Party for any recitals, statements,
representations, or warranties (other than any thereof made by the Collateral
Agent or any officer thereof) contained in this Agreement or in any of the Loan
Documents, for the value, validity, effectiveness, genuineness, enforceability,
or sufficiency of this Agreement, of any of the Loan Documents, or of the Collateral,
or for the creation, maintenance, priority or perfection of any Lien created by
the Loan Documents.


 


(e)           Subject to the provisions of Section 11(d),
the Collateral Agent may consult with independent legal counsel and the advice
of such counsel shall be full and complete authorization and protection in
respect of any action to be taken, suffered, or omitted by it hereunder in good
faith and in reliance thereon.  The
Collateral Agent may execute any of the rights or powers hereunder or perform
any duties hereunder either directly or through other agents or attorneys
reasonably acceptable to the Required Lenders under each of the Loan
Agreements.  The Collateral Agent shall
not be liable for the misconduct or negligence of any such agent or attorney
appointed by it with due care.  The
foregoing shall not exculpate any such agent or attorney from liability for its
own misconduct or negligence.


 


(f)            The Collateral Agent, in its
individual capacity and its affiliates may accept deposits from, lend to, and generally
engage in any kind of lending, banking, or trust business with, any Grantor or
their respective affiliates as if it were not acting as the Collateral
Agent.  With respect to its commitment
and in its capacity as a Lender under each of the Loan Agreements, the
Collateral Agent shall have and may exercise the same rights and powers under
this Agreement and is subject to the same obligations and liabilities as
applicable to any other Lender.


 


(g)           To the extent that Grantors fail to
do so under the terms of the Loan Documents, and without limiting the primary
obligation of Grantors to do so, the Secured Parties will reimburse the
Collateral Agent upon demand and hold the Collateral Agent, its directors,
officers, employees, and agents harmless against any and all losses,
liabilities, or expenses incurred by the Collateral Agent arising out of or in
connection with any action taken pursuant to and consistently with the express
written direction of the applicable Secured Parties given under Section 11(d),
including any costs and expenses incurred in connection with any investigation,
suit (whether or not the Collateral Agent or any other such indemnified person
is named as a party thereto), or claim arising out of or related to such
action, in proportion to the respective principal amounts of the Indebtedness
under the Loan Agreements at the time held by them, provided, that no Secured
Party shall be liable under this Section 11(g) for any such losses,
liabilities, or expenses incurred by the Collateral Agent as a result of its
own breach of this Agreement, gross negligence or willful misconduct.


 


(h)           The Collateral Agent may resign at
any time by giving at least forty-five (45) days’ prior written notice of
resignation to Grantors and each Secured Party, such resignation to be
effective upon the appointment of a successor Collateral Agent as provided in
this Section 11.  The Collateral
Agent may be removed at any time, for or without cause, by an instrument or
instruments in writing delivered to the Collateral Agent and Grantors and
signed by the Required Lenders under both of the Loan Agreements.  In case the office of Collateral Agent shall
become vacant for any reason, a successor Collateral Agent may be appointed to fill
such vacancy by an instrument or instruments in writing delivered to such
successor Collateral Agent, the departing Collateral Agent, each Lender under
any Loan Agreement and Grantors.  After
any such resignation or removal, the provisions of this Section 11 shall
continue in effect for the benefit of the departing Collateral Agent with
respect to any actions taken or omitted by it while acting as Collateral Agent.


 


(i)            Any corporation or national banking
association into which the Collateral Agent may be merged or with which it may
be consolidated, or any corporation or national banking association resulting
from any merger or consolidation to which the Collateral Agent is a party, or
any state or national bank or trust company in any manner succeeding to all or
substantially all of the business of the Collateral Agent and shall
automatically succeed to all of the rights and obligations of the Collateral
Agent hereunder and under the Loan Documents without 


 


7

















 


further action
on the part of any of the parties hereto. 
Such surviving or succeeding corporation or national banking association
(if other than the Collateral Agent) shall forthwith deliver to each Secured
Party and Grantors written notice of such succession to the rights and
obligations of the Collateral Agent hereunder and under the Loan Documents.


 


Section 12. 
Remedies.  If any Event of
Default shall have occurred and be continuing:


 


(a)           The Collateral Agent may exercise in
respect of the Collateral, in addition to other rights and remedies provided
for herein or otherwise available to it, all the rights and remedies of a
secured party upon default under the UCC and also may:  (i) without notice except as specified
below, sell the Collateral or any part thereof in one or more parcels at public
or private sale, at any of the Collateral Agent’s offices or elsewhere, for
cash, on credit or for future delivery, and upon such other terms as the
Collateral Agent may in its reasonable discretion deem commercially reasonable
and (ii) exercise any and all rights and remedies of any of the Grantors
under or in connection with the Collateral, or otherwise in respect of the
Collateral, including, without limitation, (A) any and all rights of such
Grantor to demand or otherwise require payment of any amount under, or
performance of any provision of or related to the Collateral and (B) exercise
all other rights and remedies with respect to the Collateral, including,
without limitation, those set forth in Section 9-607 of the UCC.  Each Grantor agrees that, to the extent
notice of sale shall be required by law, at least ten days’ notice to such
Grantor of the time and place of any public sale or three days’ notice of the
time and place of any private sale shall constitute reasonable
notification.  The Collateral Agent shall
not be obligated to make any sale of Collateral regardless of notice of sale
having been given.  The Collateral Agent
may adjourn any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned.


 


(b)           Any cash held by or on behalf of the
Collateral Agent and all cash proceeds received by or on behalf of the
Collateral Agent in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral shall be held by the
Collateral Agent as collateral for, and/or then or at any time thereafter
applied (after payment of any amounts payable to the Collateral Agent pursuant
to Section 13) in whole or in part by the Collateral Agent for the benefit
of the Secured Parties against, all or any part of the Secured Obligations in
the following order, (i) first, on a pari
passu basis, to all Secured Obligations (excluding Secured Obligations
arising under the terms of any Credit Facility Hedging Agreements), comparing (1) the
aggregate principal amount of the then outstanding term loans under the Term
Loan Agreement to (2) the amount of the then effective Aggregate
Commitment (as defined in the Revolving Loan Agreement), if the Aggregate
Commitment has not been terminated, or the sum of the aggregate principal
amount of the then outstanding revolving loans under the Revolving Loan
Agreement and the Letter of Credit Exposure Amount (as defined in the Revolving
Loan Agreement) then outstanding under the Revolving Loan Agreement, if the
Aggregate Commitment has been terminated; provided that the amounts set forth in
this clause (i) that will be given pari
passu treatment as set forth above shall be limited to amounts (of
Aggregate Commitments and Loans under the Term Loan Agreement and Aggregate
Commitments or Loans and Letter of Credit Exposure Amount under the Revolving
Credit Agreement, or as applicable) which would not give rise to an Event of
Default arising under section 7.1(d) of the Term Loan Agreement or the
Revolving Credit Agreement as a result of a breach of section 6.1(b) of
the Term Loan Agreement or the Revolving Credit Agreement, respectively
and (ii) second, on a pari passu
basis, to all Secured Obligations arising under the terms of any Credit
Facility Hedging Agreements).  Any surplus of such cash or cash proceeds held by
or on the behalf of the Collateral Agent and remaining after
payment in full of all the Secured Obligations (other than contingent
indemnification claims as to which no demand has been made) shall be paid over
to the applicable Grantor or to whomsoever may be lawfully entitled to receive
such surplus.


 


(c)           All payments received by any Grantor
under or in respect of the Collateral shall be received in trust for the
benefit of the Collateral Agent, shall be segregated from other funds of such
Grantor and shall be forthwith paid over to the Collateral Agent in the same
form as so received (with any necessary indorsement).


 


8
















 


(d)           The Collateral Agent is authorized,
in connection with any sale of the Collateral pursuant to this Section 12,
to deliver or otherwise disclose to any prospective purchaser of the Collateral
any information in its possession relating to such Collateral.


 


Section 13.  Indemnity and Expenses.  (a)  Each Grantor agrees to indemnify,
defend and save and hold harmless each Secured Party and each of their
Affiliates and their respective officers, directors, employees, agents and
advisors (each, an “Indemnified
Party”) from and against, and shall pay on demand, any and all
actual claims, damages, losses, liabilities and out-of-pocket expenses
(including, without limitation, reasonable fees and expenses of counsel but
excluding special, indirect, punitive or consequential damages, whether arising
in tort, contract or otherwise) that may be incurred by or asserted or awarded
against any Indemnified Party, in each case arising out of or in connection
with or by reason of (including, without limitation, in connection with any
investigation, litigation or proceeding or preparation of a defense in
connection therewith) this Agreement, except to the extent such claim, damage,
loss, liability or expense is found in a final nonappealable judgment by a
court of competent jurisdiction to have resulted from such Indemnified Party’s
gross negligence or willful misconduct. 
In the case of an investigation, litigation or other proceeding to which
the indemnity in this Section 13(a) applies, such indemnity shall be
effective whether or not such investigation, litigation or proceeding is
brought by any Grantor, its directors, shareholders or creditors or any
Indemnified Party or any other Person, whether or not any Indemnified Party is
otherwise a party thereto and whether or not the Merger is consummated.  The Grantors also agree not to assert any
claim against the Collateral Agent, any Secured Party or any of their
Affiliates, or any of their respective officers, directors, employees, agents
and advisors, on any theory of liability, for special, indirect, consequential
or punitive damages arising out of or otherwise relating to the this Agreement.


 


(b)           Each Grantor agrees to pay on demand (i) all
reasonable out-of-pocket costs and expenses of the Collateral Agent in
connection with the preparation, execution, delivery, administration,
modification and amendment of, or any consent or waiver under, this Agreement
(including, without limitation, the reasonable out-of-pocket fees and expenses
of counsel for the Collateral Agent with respect thereto, with respect to
advising the Collateral Agent as to its rights and responsibilities, or the
perfection, protection or preservation of rights or interests, under this
Agreement, with respect to negotiations with any Grantor or with other creditors
of any Grantor or any of its Subsidiaries arising out of any Default or any
events or circumstances that may give rise to a Default and with respect to
presenting claims in or otherwise participating in or monitoring any
bankruptcy, insolvency or other similar proceeding involving creditors’ rights
generally and any proceeding ancillary thereto) and (ii) all costs and
expenses of the Collateral Agent and each Secured Party in connection with the
enforcement of this Agreement, whether in any action, suit or litigation, or
any bankruptcy, insolvency or other similar proceeding affecting creditors’
rights generally (including, without limitation, the reasonable fees and
expenses of counsel for the Collateral Agent and each Secured Party with
respect thereto).


 


Section 14. 
Amendments; Waivers; Additional Grantors; Etc.  (a)  No amendment or waiver of any
provision of this Agreement, and no consent to any departure by any Grantor
herefrom, shall in any event be effective unless the same shall be in writing and
signed by the Collateral Agent, the Term Loan Administrative Agent and the
Revolving Loan Administrative Agent and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.  No failure on the part of the
Collateral Agent or any other Secured Party to exercise, and no delay in
exercising any right hereunder, shall operate as a waiver thereof; nor shall
any single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right.


 


(b)           Upon the execution and delivery by
any Person of a security agreement supplement in substantially the form of Exhibit A
hereto (each a “Security Agreement A Supplement”), such Person
shall be referred to as an “Additional Grantor”
and shall be and become a Grantor hereunder, and each reference in this
Agreement and the other Loan Documents to “Grantor” shall also mean and be a
reference to such Additional Grantor, each reference in this Agreement and the
other Loan Documents to the “Collateral” shall also mean and be a reference to
the Collateral granted by such Additional Grantor and each reference in this
Agreement to a Schedule shall also mean and be a reference to the schedules
attached to such Security Agreement A Supplement.


 


Section 15. 
Notices, Etc.  All notices
and other communications provided for hereunder shall be in writing (including
telecopier) and mailed, telecopied or otherwise delivered, in the case of the
Borrower or the Collateral Agent, addressed to it at its address specified in
the Loan Agreements and, in the case of each Grantor 


 


9

















 


other than the Borrower,
addressed to it at its address set forth opposite such Grantor’s name on the
signature pages hereto or on the signature page to the Security
Agreement A Supplement pursuant to which it became a party hereto; or, as to
any party, at such other address as shall be designated by such party in a
written notice to the other parties.  All
such notices and other communications shall, when mailed, telegraphed or
telecopied, be effective when deposited in the mails, delivered to the
telegraph company or transmitted by telecopier, respectively.  Delivery by telecopier of an executed
counterpart of a signature page to any amendment or waiver of any
provision of this Agreement of any Exhibit hereto to be executed and
delivered hereunder shall be effective as delivery of an original executed
counterpart thereof.  As agreed to among
the Borrower, the Collateral Agent and the applicable Secured Parties from time
to time, notices and other communications may also be delivered by e-mail to
the e-mail address of a representative of the applicable Person provided from
time to time by such Person.


 


Section 16. 
Continuing Security Interest; Assignments under the Loan Agreements.  This Agreement shall create a continuing
security interest in the Collateral and shall (a) remain in full force and
effect until the payment in full in cash of the Secured Obligations (other than
contingent indemnification obligations as to which no demand has been made), (b) be
binding upon each Grantor, its successors and assigns and (c) inure,
together with the rights and remedies of the Collateral Agent hereunder, to the
benefit of the Secured Parties and their respective successors, transferees and
assigns.  Without limiting the generality
of the foregoing clause (c), any Lender may assign or otherwise transfer
all or any portion of its rights and obligations under the applicable Loan
Agreement(s) (including, without limitation, all or any portion of the
Loans owing to it and the Note or Notes, if any, held by it) to any other
Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such Lender herein or otherwise.


 


Section 17. 
Release; Termination.  (a) 
Upon any sale, lease, transfer or other disposition of any item of Collateral
of any Grantor in accordance with the terms of the Loan Documents, the
Collateral Agent will, at such Grantor’s expense, execute and deliver to such
Grantor such documents as such Grantor shall reasonably request to evidence the
release of such item of Collateral from the assignment and security interest
granted hereby; provided, however, that (i) at the time of such
request and such release no Event of Default shall have occurred and be
continuing, (ii) such Grantor shall have delivered to the Collateral
Agent, prior to the date of the proposed release, a written request for release
describing the item of Collateral, together with a form of release for
execution by the Collateral Agent and a certificate of such Grantor to the
effect that the transaction is in compliance with the Loan Documents and as to
such other matters as the Collateral Agent may reasonably request and (iii) the
proceeds of any such sale, lease, transfer or other disposition required to be
applied, or any payment to be made in connection therewith, in accordance with
the terms of this Agreement.


 


(b)           Upon the payment in full in cash of
the Secured Obligations (other than contingent indemnification obligations as
to which no demand has been made), and the termination of the Aggregate
Commitment (as defined in each of the Loan Agreements), the pledge and security
interest granted hereby shall terminate and all rights to the Collateral shall
revert to the applicable Grantor.  Upon
any such termination, the Collateral Agent will, at the applicable Grantor’s
expense, execute and deliver to such Grantor such documents as such Grantor
shall reasonably request to evidence such termination.


 


Section 18. 
Execution in Counterparts. 
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement. 
Delivery of an executed signature page of this Agreement by
facsimile transmission or electronic transmission (i.e., a “pdf” or “tif”)
shall be effective as delivery of an original executed counterpart of this
Agreement.


 


Section 19. 
Jurisdiction; Governing Law; Etc. 
(a) Each of the parties hereto hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of any New York State court or Federal court of the United States
of America sitting in New York City, and any appellate court from any thereof,
in any action or proceeding arising out of or relating to this Agreement or any
of the other Loan Documents to which it is a party, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in any such New York State court or, to
the fullest extent permitted by law, in such Federal court.  Each of the parties hereto agrees that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.  Nothing in this
Agreement 


 


10

















 


shall affect any right
that any party may otherwise have to bring any action or proceeding relating to
this Agreement or any of the other Loan Documents in the courts of any
jurisdiction.


 


(b)           EACH OF THE PARTIES HERETO
IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY
AND EFFECTIVELY DO SO, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS TO WHICH IT IS A
PARTY IN ANY NEW YORK STATE OR FEDERAL COURT. 
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.


 


(c)           THIS AGREEMENT AND THE NOTES SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.


 


(d)           EACH
OF THE GRANTORS AND THE COLLATERAL AGENT IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT,
TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE
LOANS OR THE ACTIONS OF THE AGENT OR ANY LENDER IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.


 


[Rest of this page intentionally left blank.]


 


11

















 


IN WITNESS WHEREOF, each of the undersigned have
caused this Agreement to be duly executed and delivered by its officer
thereunto duly authorized as of the date first above written.


 


	
   

  	
   

  	
  JPMORGAN CHASE BANK, N.A., AS COLLATERAL AGENT

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WHOLE FOODS MARKET, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address for Notices:

  	
   

  	
  [OTHER GRANTORS]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  



 

















 


Schedule I to the

Security Agreement A


 


PLEDGED
INTERESTS AND PLEDGED DEBT


 


Part I


 


 Initial
Pledged Interests


 


	
  Grantor

  	
   

  	
  Issuer

  	
   

  	
  Class of Equity

  Interest

  	
   

  	
  Par Value

  	
   

  	
  Certificate

  No(s)

  	
   

  	
  Number

  of Shares

  	
   

  	
  Percentage

  of

  Outstanding

  Shares of the

  Same Class of

  Equity Interest

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


Part II


 


Initial
Pledged Debt


 


	
  Grantor

  	
   

  	
  Debt

  Issuer

  	
   

  	
  Description of

  Debt

  	
   

  	
  Debt Certificate No(s).

  	
   

  	
  Final

  Scheduled

  Maturity

  	
   

  	
  Outstanding

  Principal

  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 

















 


Schedule II
to the

Security Agreement A


 


LOCATION, CHIEF EXECUTIVE OFFICE, TYPE OF
ORGANIZATION, JURISDICTION OF ORGANIZATION AND ORGANIZATIONAL IDENTIFICATION
NUMBER


 


	
  Grantor

  	
   

  	
  Location

  	
   

  	
  Chief

  Executive

  Office

  	
   

  	
  Type of

  Organization

  	
   

  	
  Jurisdiction

  of

  Organization

  	
   

  	
  Organizational

  I.D. No.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 

















 


Schedule III
to the

Security Agreement A


 


CHANGES IN NAME, LOCATION, ETC.


 

















 


Exhibit A to the

Security Agreement A


 


FORM OF SECURITY AGREEMENT SUPPLEMENT


 


[Date of Security Agreement A Supplement]


 


JPMORGAN CHASE BANK,
N.A.,

as the Collateral Agent for the

Secured Parties referred to in the

Loan Agreements  referred to below

                                        

                                        


	
  Attn:

  	
                              

  	
   

  



 


WHOLE FOODS MARKET, INC.


 


Ladies and Gentlemen:


 


Reference is made to (i) the Term Loan Agreement
dated as of August [  ], 2007 (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the “Term Loan Agreement”), among the Borrower, Royal Bank of
Canada, as administrative agent for the lenders from time to time parties
thereto, JPMorgan Chase Bank, N.A., and
              
as [joint] syndication agent[s],
                    
as documentation
agent,                      
as managing agent and RBC Capital Markets and J. P. Morgan Securities Inc., as
joint lead arrangers and joint bookrunners (ii)  the Revolving Credit Loan
Agreement dated as of August [  ],
2007 (as amended, amended and restated, supplemented or otherwise modified from
time to time, the “Revolving Loan Agreement”), among the Borrower,
JPMorgan Chase Bank, N.A., as administrative agent for the lenders from time to
time parties thereto, Royal Bank of Canada, as syndication agents, and J. P.
Morgan Securities Inc. and RBC Capital Markets, as joint lead arrangers and
joint bookrunners, and (iii) the Security Agreement A dated
[                      
    ], 2007 (as amended, amended and restated, supplemented
or otherwise modified from time to time, the “Security Agreement A”) made by the
Grantors from time to time party thereto in favor of JPMorgan Chase Bank, N.A.
as collateral agent (together with any successor collateral agent, the “Collateral Agent”)
for the Secured Parties under the Term Loan Agreement and the Revolving Loan
Agreement (the Term Loan Agreement and the Revolving Loan Agreement being
sometimes hereinafter collectively referred to as the “Loan Agreements”).  Terms defined in the Loan Agreements or the
Security Agreement A and not otherwise defined herein are used herein as
defined in the Loan Agreements or the Security Agreement A.


 


SECTION 1. 
Grant of Security.  The
undersigned hereby grants to the Collateral Agent, for the ratable benefit of
the Secured Parties under the Loan Documents, a security interest in, all of
its right, title and interest in and to all of the Collateral of the
undersigned, whether now owned or hereafter acquired by the undersigned,
wherever located and whether now or hereafter existing or arising, including,
without limitation, the property and assets of the undersigned set forth on the
attached supplemental schedules to the Schedules to the Security Agreement A.


 


SECTION 2. 
Security for Obligations. 
The grant of a security interest in the Collateral by the undersigned
under this Security Agreement A Supplement and the Security Agreement A secures
the payment of all Indebtedness and other obligations of the undersigned now or
hereafter existing under or in respect of the Loan Documents, whether direct or
indirect, absolute or contingent, and whether for principal, reimbursement
obligations, interest, premiums, penalties, fees, indemnifications, contract
causes of action, costs, expenses or otherwise. 
Without limiting the generality of the foregoing, this Security
Agreement A Supplement and the Security Agreement A secure the payment of all
amounts that constitute part of the Secured Obligations and that would be owed
by the undersigned to any Secured Party under the Loan Documents but for the
fact that such Secured Obligations are


 

















 


unenforceable
or not allowable due to the existence of a bankruptcy, reorganization or
similar proceeding involving a Loan Party.


 


SECTION 3. 
Supplements to Security Agreement A Schedules.  The undersigned has attached hereto
supplemental Schedules I through III to Schedules I through III,
respectively, to the Security Agreement A, and the undersigned hereby certifies,
as of the date first above written, that such supplemental schedules have been
prepared by the undersigned in substantially the form of the equivalent
Schedules to the Security Agreement A and are complete and correct.


 


SECTION 4. 
Representations and Warranties. 
The undersigned hereby makes each representation and warranty set forth
in Section 4 of the Security Agreement A (as supplemented by the attached
supplemental schedules) to the same extent as each other Grantor.


 


SECTION 5. 
Obligations Under the Security Agreement A.  The undersigned hereby agrees, as of the date
first above written, to be bound as a Grantor by all of the terms and
provisions of the Security Agreement A to the same extent as each of the other
Grantors.  The undersigned further
agrees, as of the date first above written, that each reference in the Security
Agreement A to an “Additional Grantor” or a “Grantor” shall also mean and be a
reference to the undersigned.


 


SECTION 6. 
Governing Law.  This
Security Agreement A Supplement shall be governed by, and construed in
accordance with, the laws of the State of New York.


 


	
   

  	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [NAME OF ADDITIONAL GRANTOR]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Address for notices:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
						



 


A-2
















 


EXHIBIT G-B


 


SECURITY
AGREEMENT B


 


Dated
[                      
    ], 2007


 


From


 


WHOLE FOODS MARKET, INC.,


 


as Grantor


 


- and -


 


the other Grantors referred to herein


 


as Grantors


 


to


 


JPMORGAN CHASE BANK, N.A.


 


as Collateral Agent


 





















 


T A B L E  O F  C O N T E N T S


 


	
  Section

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Section 1. Grant of
  Security

  	
   

  	
  2

  
	
   

  	
   

  	
   

  
	
  Section 2. Security
  for Obligations; Interpretation

  	
   

  	
  4

  
	
   

  	
   

  	
   

  
	
  Section 3. Grantors
  Remain Liable

  	
   

  	
  4

  
	
   

  	
   

  	
   

  
	
  Section 4.
  Representations and Warranties

  	
   

  	
  4

  
	
   

  	
   

  	
   

  
	
  Section 5. Further
  Assurances

  	
   

  	
  5

  
	
   

  	
   

  	
   

  
	
  Section 6. As to
  Equipment and Inventory

  	
   

  	
  5

  
	
   

  	
   

  	
   

  
	
  Section 7. Insurance

  	
   

  	
  6

  
	
   

  	
   

  	
   

  
	
  Section 8.
  Post-Closing Changes; Collections on Receivables and Related Contracts

  	
   

  	
  6

  
	
   

  	
   

  	
   

  
	
  Section 9. As to
  Intellectual Property Collateral

  	
   

  	
  6

  
	
   

  	
   

  	
   

  
	
  Section 10. As to
  Letter-of-Credit Rights

  	
   

  	
  6

  
	
   

  	
   

  	
   

  
	
  Section 11.
  Commercial Tort Claims

  	
   

  	
  7

  
	
   

  	
   

  	
   

  
	
  Section 12. Transfers
  and Other Liens; Additional Shares

  	
   

  	
  7

  
	
   

  	
   

  	
   

  
	
  Section 13.
  Collateral Agent Appointed Attorney-in-Fact

  	
   

  	
  7

  
	
   

  	
   

  	
   

  
	
  Section 14.
  Collateral Agent May Perform

  	
   

  	
  7

  
	
   

  	
   

  	
   

  
	
  Section 15. The
  Collateral Agent’s Duties

  	
   

  	
  7

  
	
   

  	
   

  	
   

  
	
  Section 16. Remedies

  	
   

  	
  9

  
	
   

  	
   

  	
   

  
	
  Section 17. Indemnity
  and Expenses

  	
   

  	
  10

  
	
   

  	
   

  	
   

  
	
  Section 18.
  Amendments; Waivers; Additional Grantors; Etc.

  	
   

  	
  11

  
	
   

  	
   

  	
   

  
	
  Section 19. Notices,
  Etc.

  	
   

  	
  11

  
	
   

  	
   

  	
   

  
	
  Section 20.
  Continuing Security Interest; Assignments under the Loan Agreements

  	
   

  	
  12

  
	
   

  	
   

  	
   

  
	
  Section 21. Release;
  Termination

  	
   

  	
  12

  
	
   

  	
   

  	
   

  
	
  Section 22. Execution
  in Counterparts

  	
   

  	
  12

  
	
   

  	
   

  	
   

  
	
  Section 23.
  Jurisdiction; Governing Law, Etc

  	
   

  	
  12

  



 





















 


SCHEDULES


 


	
  Schedule I

  	
  -

  	
  Location, Chief Executive Office, Place Where
  Agreements Are Maintained, Type Of Organization, Jurisdiction Of Organization
  And Organizational Identification Number

  
	
  Schedule II

  	
  -

  	
  Changes in Name, Location, Etc.

  
	
   

  	
   

  	
   

  
	
  EXHIBIT

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  -

  	
  Form of Security Agreement B Supplement

  



 


ii





















 


SECURITY
AGREEMENT B


 


SECURITY AGREEMENT dated
[                    
    ], 20     made by WHOLE FOODS
MARKET, INC., a Texas corporation (the “Borrower”), and the other Persons
listed on the signature pages hereof (the Borrower and the Persons so
listed being, collectively, the “Grantors”), to JPMORGAN CHASE BANK, N.A.
(“JPMorgan”),
as collateral agent (in such capacity, and together with any successor
collateral agent appointed pursuant to this Agreement, the “Collateral Agent”)
for the Secured Parties (as defined below).


 


PRELIMINARY STATEMENTS.


 


1.                                       The Borrower has entered into a Term Loan
Agreement dated as of August 28, 2007 among the Borrower, Royal Bank of
Canada, as administrative agent for the lenders from time to time parties
thereto (together with its successors and assigns in such capacity, the “Term
Loan Administrative Agent”), JPMorgan Chase Bank, N.A., as Collateral Agent
and as syndication agent, and RBC Capital Markets and J. P. Morgan Securities Inc.,
as joint lead arrangers and joint bookrunners (said agreement, as it may
hereafter be amended, restated, supplemented or otherwise modified from time to
time, being the “Term Loan Agreement”).


 


2.                                       The Borrower has entered into a Revolving
Credit Agreement dated as of August 28, 2007 among the Borrower, JPMorgan
Chase Bank, N.A., as Collateral Agent and as administrative agent for the
lenders from time to time parties thereto (together with its successors and
assigns in such capacity, the “Revolving Loan Administrative Agent”),
Royal Bank of Canada,, as syndication agent, and J. P. Morgan Securities Inc.
and RBC Capital Markets, as joint lead arrangers and joint bookrunners (said
agreement, as it may hereafter be amended, restated, supplemented or otherwise
modified from time to time, being the “Revolving Loan Agreement”).  The Term Loan Agreement and the Revolving
Loan Agreement shall sometimes hereinafter be collectively referred to as the “Loan
Agreements.”


 


3.                                       In connection with the Term Loan Agreement,
certain of the Grantors (other than the Borrower) and other affiliated entities
have executed and delivered a Master Guaranty Agreement to the Term Loan
Administrative Agent dated as of August 28, 2007, and in connection with
the Revolving Loan Agreement, the Grantors (other than the Borrower) and other
affiliated entities have executed and delivered a Master Guaranty Agreement to
the Revolving Loan Administrative Agent dated as of August 28, 2007 (both
of said Master Guaranty Agreements, as each of the same may hereafter be
amended, restated, supplemented or otherwise modified from time to time, being
the “Master
Guaranty Agreements”).


 


4.                                       In connection with the Loan Agreements,
the Grantors have executed and delivered a Security Agreement A to the Collateral
Agent dated as of August 28, 2007 (said agreement, as it may hereafter be
amended, restated, supplemented or otherwise modified from time to time, being
the “Security
Agreement A”), with the understanding that this Agreement and the
security interest granted hereunder is in addition to, and not in lieu of,
Security Agreement A.


 


5.                                       Pursuant to Section 5.17 of the Term
Loan Agreement and/or Section 5.17 of the Revolving Loan Agreement, either
or both of the Term Loan Administrative Agent and/or the Revolving Loan
Administrative Agent have requested that the Grantors grant the security
interest contemplated by this Agreement. 
Each Grantor will derive substantial direct and indirect benefit from
the transactions contemplated by the Loan Agreements.


 


6.                                       Upon the request of the Collateral Agent
in connection with the exercise of its remedies hereunder, the Borrower will
open a collateral deposit account (the “Collateral Account”) pursuant to,
and subject to the terms of, this Agreement.


 


7.                                       Terms defined in the Loan Agreements and
not otherwise defined in this Agreement are used in this Agreement as defined
in the Loan Agreements.  Further, unless
otherwise defined in this Agreement or in the Loan Agreements, terms defined in
Article 8 or 9 of the UCC (as defined below) are used in this Agreement as
such terms are defined in such Article 8 or 9.  “UCC” means the Uniform Commercial Code
as in effect from time to time in the State of New York; provided that, if perfection or the effect
of perfection or non-perfection or the


 





















 


priority of the security
interest in any Collateral is governed by the Uniform Commercial Code as in
effect in a jurisdiction other than the State of New York, “UCC”
means the Uniform Commercial Code as in effect from time to time in such other
jurisdiction for purposes of the provisions hereof relating to such perfection,
effect of perfection or non-perfection or priority.


 


NOW, THEREFORE, in consideration of the premises, each
Grantor hereby agrees with the Collateral Agent for the ratable benefit of the
Secured Parties under each of the Loan Agreements as follows:


 


Section 1. 
Grant of Security.  Each
Grantor hereby grants to the Collateral Agent, for the ratable benefit of the
lenders from time to time party to either or both of the Loan Agreements
(together with the Collateral Agent, the Term Loan Administrative Agent and the
Revolving Loan Administrative Agent, the “Secured Parties”) , a security
interest in such Grantor’s right, title and interest in and to the following,
in each case, as to each type of property described below, whether now owned or
hereafter acquired by such Grantor, wherever located, and whether now or
hereafter existing or arising (collectively, the “Additional Collateral”):


 


(a)                                  all
equipment in all of its forms, including, without limitation, all machinery,
tools, furniture and fixtures, and all parts thereof and all accessions
thereto, including, without limitation, computer programs and supporting
information that constitute equipment within the meaning of the UCC (any and
all such property being the “Equipment”);


 


(b)                                 all
inventory in all of its forms, including, without limitation, (i) all raw
materials, work in process, finished goods and materials used or consumed in
the manufacture, production, preparation or shipping thereof, (ii) goods
in which such Grantor has an interest in mass or a joint or other interest or
right of any kind (including, without limitation, goods in which such Grantor
has an interest or right as consignee) and (iii) goods that are returned
to or repossessed or stopped in transit by such Grantor, and all accessions
thereto and products thereof and documents therefor, including, without
limitation, computer programs and supporting information that constitute
inventory within the meaning of the UCC (any and all such property being the “Inventory”);


 


(c)                                  all
accounts, chattel paper (including, without limitation, tangible chattel paper
and electronic chattel paper), instruments (including, without limitation,
promissory notes), deposit accounts, letter-of-credit rights, general
intangibles (including, without limitation, payment intangibles) and other
obligations of any kind, whether or not arising out of or in connection with
the sale or lease of goods or the rendering of services and whether or not
earned by performance, and all rights now or hereafter existing in and to all
supporting obligations and in and to all security agreements, mortgages, Liens,
leases, letters of credit and other contracts securing or otherwise relating to
the foregoing property (any and all of such accounts, chattel paper,
instruments, deposit accounts, letter-of-credit rights, general intangibles and
other obligations, to the extent not referred to in clause (d), (e) or
(f) below, being the “Receivables,” and any and all such supporting
obligations, security agreements, mortgages, Liens, leases, letters of credit
and other contracts being the “Related Contracts”);


 


(d)                                 the
following (collectively, the “Account Collateral”):


 


(i)                                     the
Collateral Account and each other deposit account and all funds and financial
assets from time to time credited thereto (including, without limitation, all
Cash Equivalents), and all certificates and instruments, if any, from time to
time representing or evidencing the Collateral Account or such other deposit
account;


 


(ii)                                  all
promissory notes, certificates of deposit, checks and other instruments from
time to time delivered to or otherwise possessed by the Collateral Agent or an
Affiliate of the Collateral Agent on its behalf, for or on behalf of such
Grantor in substitution for or in addition to any or all of the then existing
Account Collateral; and


 


(iii)                               all
interest, dividends, distributions, cash, instruments and other property from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the then existing Account Collateral;


 


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(e)                                  the
following (collectively, the “Intellectual Property Collateral”):


 


(i)                                     all
patents, patent applications, utility models and statutory invention
registrations, all inventions claimed or disclosed therein and all improvements
thereto;


 


(ii)                                  all
trademarks, service marks, domain names, trade dress, logos, designs, slogans,
trade names, business names, corporate names and other source identifiers,
whether registered or unregistered (provided
that no security interest shall be granted in United States intent-to-use
trademark applications to the extent that, and solely during the period in
which, the grant of a security interest therein would impair the validity or
enforceability, or result in the cancellation, of such intent-to-use trademark
applications under applicable federal law), together, in each case, with the
goodwill symbolized thereby (“Trademarks”);


 


(iii)                               all
copyrights, including, without limitation, copyrights in Computer Software (as
hereinafter defined), internet web sites and the content thereof, whether
registered or unregistered;


 


(iv)                              all
computer software, programs and databases (including, without limitation,
source code, object code and all related applications and data files), firmware
and documentation and materials relating thereto, together with any and all
maintenance rights, service rights, programming rights, hosting rights, test rights,
improvement rights, renewal rights and indemnification rights and any
substitutions, replacements, improvements, error corrections, updates and new
versions of any of the foregoing (“Computer
Software”);


 


(v)                                 all
confidential and proprietary information, including, without limitation,
know-how, trade secrets, manufacturing and production processes and techniques,
inventions, research and development information, databases and data,
including, without limitation, technical data, financial, marketing and
business data, pricing and cost information, business and marketing plans and
customer and supplier lists and information, and all other intellectual,
industrial and intangible property of any type, including, without limitation,
industrial designs and mask works;


 


(vi)                              all
registrations and applications for registration for any of the foregoing,
together with all reissues, divisions, continuations, continuations-in-part,
extensions, renewals and reexaminations thereof;


 


(vii)                           all
tangible embodiments of the foregoing, all rights in the foregoing provided by
international treaties or conventions, all rights corresponding thereto
throughout the world and all other rights of any kind whatsoever of such
Grantor accruing thereunder or pertaining thereto;


 


(viii)                        all
agreements, permits, consents, orders and franchises relating to the license,
development, use or disclosure of any of the foregoing to which such Grantor,
now or hereafter, is a party or a beneficiary (“IP Agreements”);


 


(ix)                                any
and all claims for damages and injunctive relief for past, present and future
infringement, dilution, misappropriation, violation, misuse or breach with
respect to any of the foregoing, with the right, but not the obligation, to sue
for and collect, or otherwise recover proceeds arising from such damages;


 


(f)                                    all
commercial tort claims;


 


(g)                                 all
books and records (including, without limitation, customer lists, credit files,
printouts and other computer output materials and records) of such Grantor
pertaining to any of the Additional Collateral; and


 


(h)                                 all
proceeds of, collateral for, income, royalties and other payments now or
hereafter due and payable with respect to, and supporting obligations relating
to, any and all of the Additional Collateral 


 


3





















 


(including,
without limitation, proceeds, collateral and supporting obligations that
constitute property of the types described in clauses (a) through (g) and
this clause (h) of this Section 1) and, to the extent not otherwise included,
all (A) payments under insurance (whether or not the Collateral Agent is
the loss payee thereof), or any indemnity, warranty or guaranty, in each case,
payable by reason of loss or damage to or otherwise with respect to any of the
foregoing Additional Collateral, and (B) cash.


 


Notwithstanding the foregoing, “Additional
Collateral” shall not include and the Grantors shall not be deemed
to have granted a security interest in any property or agreement of such
Grantor to the extent (but only so long as) (x) the granting of a security
interest thereunder is prohibited by any applicable law or (y) is
prohibited by, or constitutes a breach or default under or results in the
termination of or requires any consent not obtained under, any contract, lease,
license, agreement, instrument or other document giving rise to such property,
in each case solely to the extent that such breach or default is not rendered
ineffective by the UCC or other applicable law or, in the case of any consent,
such consent is actually required to grant such security interest under
applicable law.


 


Section 2. 
Security for Obligations; Interpretation.  This Agreement secures, in the case of each
Grantor, the payment of all Indebtedness and other obligations of such Grantor
now or hereafter existing under any of the Loan Documents (as defined in each
of the Loan Agreements), whether direct or indirect, absolute or contingent,
and whether for principal, reimbursement obligations, interest, fees, premiums,
penalties, indemnifications, contract causes of action, costs, expenses or
otherwise (all such obligations being the “Secured Obligations”).  Without limiting the generality of the
foregoing, this Agreement secures, as to each Grantor, the payment of all
amounts that constitute part of the Secured Obligations and would be owed by
such Grantor to any Secured Party under any of the Loan Documents but for the
fact that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving a Loan Party.


 


Section 3. 
Grantors Remain Liable. 
Anything herein to the contrary notwithstanding, (a) each Grantor
shall remain liable under the contracts and agreements included in such Grantor’s
Additional Collateral to the extent set forth therein to perform all of its
duties and obligations thereunder to the same extent as if this Agreement had
not been executed, (b) the exercise by the Collateral Agent of any of the
rights hereunder shall not release any Grantor from any of its duties or
obligations under the contracts and agreements included in the Additional
Collateral and (c) no Secured Party shall have any obligation or liability
under the contracts and agreements included in the Additional Collateral by
reason of this Agreement or any other Loan Document, nor shall any Secured
Party be obligated to perform any of the obligations or duties of any Grantor
thereunder or to take any action to collect or enforce any claim for payment.


 


Section 4. 
Representations and Warranties. 
Each Grantor represents and warrants as follows:


 


(a)                                  As
of the date hereof, such Grantor’s exact legal name, location, chief executive
office, type of organization, jurisdiction of organization and organizational
identification number is set forth in Schedule I hereto.  Within the five years preceding the date
hereof, such Grantor has not changed its name, location, chief executive
office, type of organization, jurisdiction of organization or organizational
identification number from those set forth in Schedule I hereto except
as set forth in Schedule II hereto.


 


(b)                                 Such
Grantor is the legal and beneficial owner of the Additional Collateral granted
or purported to be granted by it free and clear of any Lien, claim, option or
right of others, except for the security interest created under this Agreement
or permitted under the Loan Agreements. 
Except as permitted under the Loan Agreements, no effective financing
statement or other instrument similar in effect covering all or any part of such
Additional Collateral or listing such Grantor or any trade name of such Grantor
as debtor is on file in any recording office, except such as may have been
filed in favor of the Collateral Agent relating to the Loan Documents, filings
which have not been authorized by the applicable Grantor or as otherwise
permitted under the Loan Agreements.


 


(c)                                  This
Agreement creates in favor of the Collateral Agent for the benefit of the
Secured Parties under the Loan Agreements a valid security interest in the
Additional Collateral granted by such Grantor (to the extent such matter is
governed by the laws of the United States, or a jurisdiction located therein),
securing the payment of the Secured Obligations; all filings and other actions
necessary to perfect the security interest in the Additional Collateral granted
by such Grantor, to the extent required hereunder, have been or will be timely
made or taken and are, or will be, in full force and effect (but only to the
extent perfection can be accomplished by filing a 


 


4





















 


financial
statement in the proper jurisdiction); such security interest is first priority
except for the Liens permitted by the Loan Agreements.


 


(d)                                 To
such Grantor’s knowledge, no material Governmental Authorization by, and no
notice to or filing with, any Governmental Authority or other third party is
required for the grant by such Grantor of the security interest granted
hereunder or for the execution, delivery or performance of this Agreement by
such Grantor.


 


(e)                                  As
to itself and its material Intellectual Property Collateral (i) to such
Grantor’s knowledge, the operation of such Grantor’s business as currently
conducted or as contemplated to be conducted and the use of the Intellectual
Property Collateral in connection therewith do not conflict with, infringe,
misappropriate, dilute, misuse or otherwise violate the intellectual property
rights of any third party, (ii) such Grantor is the exclusive owner of all
right, title and interest in and to, or has a valid right to use, all Intellectual
Property Collateral subject only to the terms of the IP Agreements and (iii) there
is no judgment or decree in respect of any Intellectual Property Collateral
that would reasonably be expected to have a Material Adverse Effect.


 


Section 5. 
Further Assurances.  (a) 
Each Grantor agrees that from time to time, at the expense of such Grantor,
such Grantor will promptly execute and deliver, or otherwise authenticate, all
further instruments and documents, and take all further action that may be
necessary or reasonably desirable, or that the Collateral Agent may reasonably
request, in order to perfect and maintain perfection of any pledge or security
interest granted or purported to be granted by such Grantor hereunder or to
enable the Collateral Agent to exercise and enforce its rights and remedies
hereunder with respect to any Additional Collateral of such Grantor.  Without limiting the generality of the
foregoing, each Grantor will promptly with respect to Additional Collateral of
such Grantor:  (i) execute or
authenticate and file, or authorize the Collateral Agent to file, such
financing or continuation statements, or amendments thereto, and as permitted
by the terms of this Agreement or otherwise with the Grantor’s consent, such
other instruments or notices, as may be necessary or desirable, or as the
Collateral Agent may reasonably request, in order to perfect and preserve the
security interest granted or purported to be granted by such Grantor hereunder;
(ii) upon the occurrence and during the continuance of an Event of
Default, take all action necessary to ensure that the Collateral Agent has
control of Additional Collateral consisting of deposit accounts, electronic
chattel paper and letter of credit rights as provided in Sections 9-104, 9-105
and 9-107 of the UCC; and (iii) deliver to the Collateral Agent evidence that
all other actions that the Collateral Agent may deem reasonably necessary or
desirable in order to perfect and protect the security interest granted or
purported to be granted by such Grantor under this Agreement has been taken.
Notwithstanding anything to the contrary set forth in this Section 5 or in
this Agreement, unless an Event of Default shall have occurred and be
continuing, (A) the Grantors shall not be required to take any action to
perfect the security interests granted under this Agreement in any Additional
Collateral other than executing, authenticating and filing, or authorizing the
Collateral Agent to file, financing or continuation statements, or amendments
thereto and (B) landlords and warehousemen shall be not be required to
provide access or subordination agreements.


 


(b)                                 Each
Grantor hereby authorizes the Collateral Agent to file one or more financing or
continuation statements, and amendments thereto, including, without limitation,
one or more financing statements indicating that such financing statements
cover all assets or all personal property (or words of similar effect) of such
Grantor, in each case without the signature of such Grantor, and regardless of
whether any particular asset described in such financing statements falls
within the scope of the UCC or the granting clause of this Agreement.  A photocopy or other reproduction of this
Agreement shall be sufficient as a financing statement where permitted by law.  Each Grantor ratifies its authorization for
the Collateral Agent to have filed such financing statements, continuation
statements or amendments filed prior to the date hereof.


 


(c)                                  Upon
the occurrence and continuance of an Event of Default, upon the written request
of the Collateral Agent, each Grantor will furnish to the Collateral Agent from
time to time statements and schedules further identifying and describing the
Additional Collateral of such Grantor and such other reports in connection with
such Additional Collateral as the Collateral Agent may reasonably request, all
in reasonable detail.


 


Section 6.  As to Equipment and Inventory             Each
Grantor will cause its Equipment to be maintained and preserved in the same
condition, repair and working order as when new, ordinary wear and tear and
casualty and condemnation losses excepted, and will forthwith, or in the case
of any loss or damage to any of such Equipment as soon as practicable after the
occurrence thereof, make or cause to be made all repairs, replacements


 


5





















 


and other
improvements in connection therewith that such Grantor determines are necessary
or desirable to such end.


 


Section 7. 
Insurance.  Each Grantor
will, at its own expense, maintain insurance with respect to its Equipment and
Inventory in the manner required by the Loan Agreements.


 


Section 8. 
  Post-Closing Changes;
Collections on Receivables and Related Contracts.  (a)  No Grantor will change its name,
type of organization, jurisdiction of organization, organizational
identification number or location from those set forth in Section 4(a) of
this Agreement without first giving at least 15 days’ prior written notice to
the Collateral Agent and taking all action reasonably required by the Collateral
Agent for the purpose of perfecting or protecting the security interest granted
by this Agreement.  Each Grantor will
hold and preserve its records relating to the Additional Collateral and will
permit representatives of the Collateral Agent at any reasonable time during
normal business hours upon reasonable advance notice to inspect and make
abstracts from such records and other documents.  If any Grantor does not have an
organizational identification number and later obtains one, it will forthwith
notify the Collateral Agent of such organizational identification number.


 


(b)                                 Except
as otherwise provided in this subsection (b), each Grantor will continue to
collect, at its own expense, all amounts due or to become due such Grantor
under the Receivables and Related Contracts. 
In connection with such collections, such Grantor may take (and, at the
Collateral Agent’s direction, upon the occurrence and during the continuance of
an Event of Default, will take) such action as such Grantor or the Collateral
Agent may deem necessary or advisable to enforce collection of the Receivables
and Related Contracts; provided, however, that the Collateral Agent shall have
the right at any time, upon the occurrence and during the continuance of an
Event of Default and upon written notice to such Grantor of its intention to do
so, to notify the Obligors under any Receivables and Related Contracts of the
assignment of such Receivables and Related Contracts to the Collateral Agent
and to direct such Obligors to make payment of all amounts due or to become due
to such Grantor thereunder directly to the Collateral Agent and, upon such
notification and at the expense of such Grantor, to enforce collection of any
such Receivables and Related Contracts, to adjust, settle or compromise the
amount or payment thereof, in the same manner and to the same extent as such
Grantor might have done, and to otherwise exercise all rights with respect to
such Receivables and Related Contracts, including, without limitation, those
set forth set forth in Section 9-607 of the UCC.  After receipt by any Grantor of the notice
from the Collateral Agent referred to in the proviso to the preceding sentence,
upon the occurrence and during the continuance of an Event of Default (i) all
amounts and proceeds (including, without limitation, instruments) received by
such Grantor in respect of the Receivables and Related Contracts of such
Grantor shall be deemed to be received in trust for the benefit of the
Collateral Agent hereunder, shall be segregated from other funds of such
Grantor and shall be forthwith paid over to the Collateral Agent in the same
form as so received (with any necessary indorsement) to be deposited in the
Collateral Account and either (A) released to such Grantor so long as no
Event of Default shall have occurred and be continuing or (B) if any Event
of Default shall have occurred and be continuing, applied as provided in Section 16(b) and
(ii) such Grantor will not adjust, settle or compromise the amount or
payment of any Receivable or amount due on any Related Contract, release wholly
or partly any Obligor thereof or allow any credit or discount thereon.  No Grantor will permit or consent to the
subordination of its right to payment under any of the Receivables and Related
Contracts to any other indebtedness or obligations of the Obligor thereof.


 


Section 9. 
As to Intellectual Property Collateral.  Each Grantor shall take such commercially
reasonable actions to take all steps as are reasonable and appropriate under
the circumstances (all as determined by the Board of Directors of the Grantor)
to preserve and protect each material item of its Intellectual Property
Collateral.


 


Section 10. 
As to Letter-of-Credit Rights. 
Each Grantor, by granting a security interest in its Receivables
consisting of letter-of-credit rights to the Collateral Agent, intends to (and
hereby does) assign to the Collateral Agent its rights (including its
contingent rights) to the proceeds of all Related Contracts consisting of
letters of credit of which it is or hereafter becomes a beneficiary or
assignee.  Upon the occurrence and during
the continuance of an Event of Default, each Grantor will promptly use
commercially reasonable efforts to cause the issuer of each letter of credit
and each nominated person (if any) with respect thereto to consent to such
assignment of the proceeds thereof pursuant to a consent in form and substance
reasonably satisfactory to the Collateral Agent and deliver written evidence of
such consent to the Collateral Agent.


 


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Section 11. 
Commercial Tort Claims. 
Each Grantor will promptly give notice to the Collateral Agent of any
commercial tort claim that may arise after the date hereof with an anticipated
recovery of at least $5,000,000 and, upon the request of the Collateral Agent,
will promptly execute or otherwise authenticate a supplement to this Agreement,
and otherwise take all action reasonably necessary to subject such commercial
tort claim to the security interest created under this Agreement.


 


Section 12. 
Transfers and Other Liens; Additional Shares.  Each Grantor agrees that:


 


(a)                                  It
will not (i) sell, assign or otherwise dispose of, or grant any option
with respect to, any of the Additional Collateral, other than sales, assignments
and other dispositions of Additional Collateral, and options relating to
Additional Collateral, permitted under the terms of this Agreement or the Loan
Agreements, or (ii) create or suffer to exist any Lien upon or with
respect to any of the Additional Collateral of such Grantor except for the
pledge, assignment and security interest created under this Agreement and Liens
permitted under the Loan Agreements.


 


Section 13. 
Collateral Agent Appointed Attorney-in-Fact.  Each Grantor hereby irrevocably appoints the
Collateral Agent such Grantor’s attorney-in-fact (such appointment to cease
upon the payment in full of all the Secured Obligations other than contingent
indemnification claims as to which no demand has been made), with full
authority in the place and stead of such Grantor and in the name of such
Grantor or otherwise, from time to time, upon the occurrence and during the
continuance of an Event of Default, in the Collateral Agent’s reasonable
discretion, to take any action and to execute any instrument that the
Collateral Agent may deem reasonably necessary or advisable to accomplish the
purposes of this Agreement, including, without limitation:


 


(a)                                  to
ask for, demand, collect, sue for, recover, compromise, receive and give
acquittance and receipts for moneys due and to become due under or in respect
of any of the Additional Collateral,


 


(b)                                 to
receive, indorse and collect any drafts or other instruments, documents and
chattel paper, in connection with clause (a) or (b) above, and


 


(c)                                  to
file any claims or take any action or institute any proceedings that the
Collateral Agent may deem necessary or desirable for the collection of any of
the Additional Collateral or otherwise to enforce the rights of the Collateral
Agent with respect to any of the Additional Collateral.


 


Section 14. 
Collateral Agent May Perform.  If any Grantor fails to perform any agreement
contained herein, the Collateral Agent may, as the Collateral Agent deems
necessary to protect the security interest granted hereunder in the Additional
Collateral or to protect the value thereof, but without any obligation to do so
and without notice, itself perform, or cause performance of, such agreement,
and the expenses of the Collateral Agent incurred in connection therewith shall
be payable by such Grantor under Section 17.


 


Section 15. 
The Collateral Agent’s Duties. 
(a)  The powers conferred on the Collateral Agent hereunder are
solely to protect the Secured Parties’ interest in the Additional Collateral
and shall not impose any fiduciary relationship or any duty upon it to exercise
any such powers.  Except for the exercise
of reasonable care in the safe custody of any Additional Collateral in its
possession or in the possession of an Affiliate of the Collateral Agent or any
designee (including without limitation, a Subagent (as defined in clause (b) below))
of the Collateral Agent acting on its behalf and the accounting for moneys
actually received by it or its Affiliates hereunder in accordance with the
express terms hereof, the Collateral Agent shall have no fiduciary relationship
or other duty as to any Additional Collateral, as to ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relative to any Additional Collateral, whether or not any Secured
Party has or is deemed to have knowledge of such matters, or as to the taking
of any necessary steps to preserve rights against any parties or any other
rights pertaining to any Additional Collateral. 
The Collateral Agent and any of its Affiliates or any designee
(including without limitation, a Subagent) on its behalf shall be deemed to
have exercised reasonable care in the custody and preservation of any
Additional Collateral in its possession or in the possession of an Affiliate or
any designee (including without limitation, a Subagent) on its behalf if such
Additional Collateral is accorded treatment substantially equal to that which
it accords its own property.


 


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(b)           Anything contained herein to the
contrary notwithstanding, the Collateral Agent may from time to time, when the
Collateral Agent deems it to be necessary, appoint one or more subagents (each
a “Subagent”)
for the Collateral Agent hereunder with respect to all or any part of the
Additional Collateral.  In the event that
the Collateral Agent so appoints any Subagent with respect to any Additional
Collateral, (i) the assignment and pledge of such Additional Collateral
and the security interest granted in such Additional Collateral by each Grantor
hereunder shall be deemed for purposes of this Security Agreement B to have
been made to such Subagent, in addition to the Collateral Agent, for the
ratable benefit of the Secured Parties, as security for the Secured Obligations
of such Grantor, (ii) such Subagent shall automatically be vested, in
addition to the Collateral Agent, with all rights, powers, privileges,
interests and remedies of the Collateral Agent hereunder and pursuant to the
terms hereof, with respect to such Additional Collateral, and (iii) the
term “Collateral Agent,” when used herein in relation to any rights, powers,
privileges, interests and remedies of the Collateral Agent with respect to such
Additional Collateral, shall include such Subagent; provided, however,
that no such Subagent shall be authorized to take any action with respect to
any such Additional Collateral unless and except to the extent expressly
authorized in writing by the Collateral Agent.


 


(c)           Each Secured Party by its acceptance
thereof hereby appoints and authorizes the Collateral Agent to take such action
as agent on its behalf and to exercise such powers hereunder and under the
other Loan Documents as are specifically delegated to the Collateral Agent by
the terms of this Agreement and the Loan Documents, together with such other
powers as are reasonably incidental thereto. 
The Collateral Agent shall not have any duties or responsibilities
except those expressly set forth in this Agreement and the Loan Documents.


 


(d)           As to any matters not expressly
provided for by the Loan Documents, the Collateral Agent shall not be required
to exercise any discretion or take any action, but shall be required to act or
to refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the written instructions signed by the Term Loan
Administrative Agent and the Revolving Loan Administrative Agent provided,
however, that the Collateral Agent shall not be required to take any action
that exposes the Collateral Agent to personal liability or that is contrary to
this Agreement or applicable law. The Collateral Agent shall in all cases be
fully protected in acting or refraining from acting under this Agreement or any
of the Loan Documents upon written directions signed by the Term Loan
Administrative Agent and the Revolving Loan Administrative Agent, except for
any such actions (or restraint of actions) which constitute gross negligence or
willful misconduct on the part of the Collateral Agent. Any such directions by
the Collateral Agent and any action taken by the Collateral Agent and any
failure by the Collateral Agent to act, in each case pursuant to such
directions, shall be binding on all the Secured Parties and their respective
successors and assigns.  The Collateral
Agent shall not be responsible to any Secured Party for any recitals,
statements, representations, or warranties (other than any thereof made by the
Collateral Agent or any officer thereof) contained in this Agreement or in any
of the Loan Documents, for the value, validity, effectiveness, genuineness,
enforceability, or sufficiency of this Agreement, of any of the Loan Documents,
or of the Additional Collateral, or for the creation, maintenance, priority or
perfection of any Lien created by the Loan Documents.


 


(e)           Subject to the provisions of Section 15(d),
the Collateral Agent may consult with independent legal counsel and the advice
of such counsel shall be full and complete authorization and protection in
respect of any action to be taken, suffered, or omitted by it hereunder in good
faith and in reliance thereon.  The
Collateral Agent may execute any of the rights or powers hereunder or perform
any duties hereunder either directly or through other agents or attorneys
reasonably acceptable to the Required Lenders under each of the Loan
Agreements.  The Collateral Agent shall
not be liable for the misconduct or negligence of any such agent or attorney
appointed by it with due care.  The
foregoing shall not exculpate any such agent or attorney from liability for its
own misconduct or negligence.


 


(f)            The Collateral Agent, in its
individual capacity and its affiliates may accept deposits from, lend to, and
generally engage in any kind of lending, banking, or trust business with, any
Grantor or their respective affiliates as if it were not acting as the
Collateral Agent.  With respect to its
commitment and in its capacity as a Lender under each of the Loan Agreements,
the Collateral Agent shall have and may exercise the same rights and powers
under this Agreement and is subject to the same obligations and liabilities as
applicable to any other Lender.


 


(g)           To the extent that Grantors fail to
do so under the terms of the Loan Documents, and without limiting the primary
obligation of Grantors to do so, the Secured Parties will reimburse the
Collateral Agent 


 


8

















 


upon demand and
hold the Collateral Agent, its directors, officers, employees, and agents
harmless against any and all losses, liabilities, or expenses incurred by the
Collateral Agent arising out of or in connection with any action taken pursuant
to and consistently with the express written direction of the applicable
Secured Parties given under Section 15(d), including any costs and
expenses incurred in connection with any investigation, suit (whether or not
the Collateral Agent or any other such indemnified person is named as a party
thereto), or claim arising out of or related to such action, in proportion to
the respective principal amounts of the Indebtedness under the Loan Agreements
at the time held by them, provided, that no Secured Party shall be liable under
this Section 15(g) for any such losses, liabilities, or expenses
incurred by the Collateral Agent as a result of its own breach of this Agreement,
gross negligence or willful misconduct.


 


(h)           The Collateral Agent may resign at
any time by giving at least forty-five (45) days’ prior written notice of
resignation to Grantors and each Secured Party, such resignation to be
effective upon the appointment of a successor Collateral Agent as provided in
this Section 15.  The Collateral
Agent may be removed at any time, for or without cause, by an instrument or
instruments in writing delivered to the Collateral Agent and Grantors and
signed by the Required Lenders under both of the Loan Agreements.  In case the office of Collateral Agent shall
become vacant for any reason, a successor Collateral Agent may be appointed to
fill such vacancy by an instrument or instruments in writing delivered to such
successor Collateral Agent, the departing Collateral Agent, each Lender under
any Loan Agreement and Grantors.  After
any such resignation or removal, the provisions of this Section 15 shall
continue in effect for the benefit of the departing Collateral Agent with
respect to any actions taken or omitted by it while acting as Collateral Agent.


 


(i)            Any corporation or national banking
association into which the Collateral Agent may be merged or with which it may
be consolidated, or any corporation or national banking association resulting
from any merger or consolidation to which the Collateral Agent is a party, or
any state or national bank or trust company in any manner succeeding to all or
substantially all of the business of the Collateral Agent and shall automatically
succeed to all of the rights and obligations of the Collateral Agent hereunder
and under the Loan Documents without further action on the part of any of the
parties hereto.  Such surviving or
succeeding corporation or national banking association (if other than the
Collateral Agent) shall forthwith deliver to each Secured Party and Grantors
written notice of such succession to the rights and obligations of the
Collateral Agent hereunder and under the Loan Documents.


 


Section 16. 
Remedies.  If any Event of
Default shall have occurred and be continuing:


 


(a)           The Collateral Agent may exercise in
respect of the Additional Collateral, in addition to other rights and remedies
provided for herein or otherwise available to it, all the rights and remedies
of a secured party upon default under the UCC and also may:  (i) require each Grantor to, and each
Grantor hereby agrees that it will at its expense and upon request of the
Collateral Agent forthwith, assemble all or part of the Additional Collateral
as directed by the Collateral Agent and make it available to the Collateral
Agent at a place and time to be designated by the Collateral Agent that is
reasonably convenient to both parties; (ii) without notice except as
specified below, sell the Additional Collateral or any part thereof in one or
more parcels at public or private sale, at any of the Collateral Agent’s
offices or elsewhere, for cash, on credit or for future delivery, and upon such
other terms as the Collateral Agent may in its reasonable discretion deem
commercially reasonable; (iii) occupy any premises owned by any of the Grantors
where the Additional Collateral or any part thereof is assembled or located for
a reasonable period in order to effectuate its rights and remedies hereunder or
under law, without obligation to such Grantor in respect of such occupation;
and (iv) exercise any and all rights and remedies of any of the Grantors
under or in connection with the Additional Collateral, or otherwise in respect
of the Additional Collateral, including, without limitation, (A) any and all
rights of such Grantor to demand or otherwise require payment of any amount
under, or performance of any provision of, the Receivables, the Related
Contracts and the other Additional Collateral, (B) withdraw, or cause or
direct the withdrawal, of all funds with respect to the Account Collateral and (C) exercise
all other rights and remedies with respect to the Receivables, the Related
Contracts and the other Additional Collateral, including, without limitation, those
set forth in Section 9-607 of the UCC. 
Each Grantor agrees that, to the extent notice of sale shall be required
by law, at least ten days’ notice to such Grantor of the time and place of any
public sale or three days’ notice of the time and place of any private sale
shall constitute reasonable notification. 
The Collateral Agent shall not be obligated to make any sale of
Additional Collateral regardless of notice of sale having been given.  The 


 


9

















 


Collateral Agent may adjourn any
public or private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned.


 


(b)           Any cash held by or on behalf of the
Collateral Agent and all cash proceeds received by or on behalf of the
Collateral Agent in respect of any sale of, collection from, or other
realization upon all or any part of the Additional Collateral shall be held by
the Collateral Agent as collateral for, and/or then or at any time thereafter
applied (after payment of any amounts payable to the Collateral Agent pursuant
to Section 17) in whole or in part by the Collateral Agent for the  benefit of the Secured Parties against, all
or any part of the Secured Obligations in the following order: (i) first,
on a pari passu basis, to all
Secured Obligations (excluding Secured Obligations arising under the terms of
any Credit Facility Hedging Agreements) comparing (1) the aggregate
principal amount of the then outstanding term loans under the Term Loan
Agreement to (2) the amount of the then effective Aggregate Commitment (as
defined in the Revolving Loan Agreement), if the Aggregate Commitment has not
been terminated, or the sum of the aggregate principal amount of the then
outstanding revolving loans under the Revolving Loan Agreement and the Letter
of Credit Exposure Amount (as defined in the Revolving Loan Agreement) then
outstanding under the Revolving Loan Agreement, if the Aggregate Commitment has
been terminated; provided that
the amounts set forth in this clause (i) that will be given pari passu treatment as set forth above
shall be limited to amounts (of Aggregate Commitments and Loans under the Term
Loan Agreement and Aggregate Commitments or Loans and Letter of Credit Exposure
Amount under the Revolving Credit Agreement, or as applicable) which would not
give rise to an Event of Default arising under section 7.1(d) of the Term
Loan Agreement or the Revolving Credit Agreement as a result of a breach of
section 6.1(b) of the Term Loan Agreement or the Revolving Credit
Agreement, respectively and, (ii) second, on a pari passu basis, to all Secured
Obligations arising under the terms of any Credit Facility Hedging
Agreements).  Any surplus of such cash or cash proceeds held by or on the behalf of
the Collateral Agent and remaining after payment in full of all
the Secured Obligations (other than contingent indemnification claims as to
which no demand has been made) shall be paid over to the applicable Grantor or
to whomsoever may be lawfully entitled to receive such surplus.


 


(c)           All payments received by any Grantor
under or in respect of the Additional Collateral shall be received in trust for
the benefit of the Collateral Agent, shall be segregated from other funds of
such Grantor and shall be forthwith paid over to the Collateral Agent in the
same form as so received (with any necessary indorsement).


 


(d)           The Collateral Agent may, without
notice to any Grantor except as required by law and at any time or from time to
time, charge, set-off and otherwise apply all or any part of the Secured
Obligations then due and owing against any funds held with respect to the
Account Collateral or in any other deposit account.


 


(e)           In the event of any sale or other
disposition of any of the Intellectual Property Collateral of any Grantor, the
goodwill symbolized by any Trademarks subject to such sale or other disposition
shall be included therein, and such Grantor shall supply to the Collateral
Agent or its designee such Grantor’s know-how and expertise, and documents and
things relating to any Intellectual Property Collateral subject to such sale or
other disposition, and such Grantor’s customer lists and other records and
documents relating to such Intellectual Property Collateral and to the
manufacture, distribution, advertising and sale of products and services of
such Grantor.


 


Section 17. 
Indemnity and Expenses.  (a) 
Each Grantor agrees to indemnify, defend and save and hold harmless each
Secured Party and each of their Affiliates and their respective officers,
directors, employees, agents and advisors (each, an “Indemnified Party”) from and against, and shall pay on
demand, any and all actual claims, damages, losses, liabilities and
out-of-pocket expenses (including, without limitation, reasonable fees and
expenses of counsel but excluding special, indirect, punitive or consequential
damages, whether arising in tort, contract or otherwise) that may be incurred
by or asserted or awarded against any Indemnified Party, in each case arising
out of or in connection with or by reason of (including, without limitation, in
connection with any investigation, litigation or proceeding or preparation of a
defense in connection therewith) this Agreement, except to the extent such
claim, damage, loss, liability or expense is found in a final nonappealable
judgment by a court of 


 


10

















 


competent jurisdiction to
have resulted from such Indemnified Party’s gross negligence or willful
misconduct.  In the case of an
investigation, litigation or other proceeding to which the indemnity in this Section 17(a) applies,
such indemnity shall be effective whether or not such investigation, litigation
or proceeding is brought by any Grantor, its directors, shareholders or
creditors or any Indemnified Party or any other Person, whether or not any
Indemnified Party is otherwise a party thereto and whether or not the Merger is
consummated.  The Grantors also agree not
to assert any claim against the Collateral Agent, any Secured Party or any of
their Affiliates, or any of their respective officers, directors, employees,
agents and advisors, on any theory of liability, for special, indirect,
consequential or punitive damages arising out of or otherwise relating to the
this Agreement.


 


(b)           Each Grantor agrees to pay on demand (i) all
reasonable out-of-pocket costs and expenses of the Collateral Agent in
connection with the preparation, execution, delivery, administration,
modification and amendment of, or any consent or waiver under, this Agreement
(including, without limitation, the reasonable out-of-pocket fees and expenses
of counsel for the Collateral Agent with respect thereto, with respect to
advising the Collateral Agent as to its rights and responsibilities, or the
perfection, protection or preservation of rights or interests, under this
Agreement, with respect to negotiations with any Grantor or with other
creditors of any Grantor or any of its Subsidiaries arising out of any Default
or any events or circumstances that may give rise to a Default and with respect
to presenting claims in or otherwise participating in or monitoring any
bankruptcy, insolvency or other similar proceeding involving creditors’ rights
generally and any proceeding ancillary thereto) and (ii) all costs and
expenses of the Collateral Agent and each Secured Party in connection with the
enforcement of this Agreement, whether in any action, suit or litigation, or
any bankruptcy, insolvency or other similar proceeding affecting creditors’
rights generally (including, without limitation, the reasonable fees and
expenses of counsel for the Collateral Agent and each Secured Party with
respect thereto).


 


Section 18. 
Amendments; Waivers; Additional Grantors; Etc.  (a)  No amendment or waiver of any
provision of this Agreement, and no consent to any departure by any Grantor
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Collateral Agent, the Term Loan Administrative Agent and the
Revolving Loan Administrative Agent, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.  No failure on the part of the
Collateral Agent or any other Secured Party to exercise, and no delay in
exercising any right hereunder, shall operate as a waiver thereof; nor shall
any single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right.


 


(b)           Upon the execution and delivery by any
Person of a security agreement supplement in substantially the form of Exhibit A
hereto (each a “Security Agreement B Supplement”), such Person
shall be referred to as an “Additional Grantor”
and shall be and become a Grantor hereunder, and each reference in this
Agreement and the other Loan Documents to “Grantor” shall also mean and be a
reference to such Additional Grantor, each reference in this Agreement and the
other Loan Documents to the “Additional Collateral” shall also mean and be a
reference to the Additional Collateral granted by such Additional Grantor and
each reference in this Agreement to a Schedule shall also mean and be a
reference to the schedules attached to such Security Agreement B Supplement.


 


Section 19. 
Notices, Etc.  All notices
and other communications provided for hereunder shall be in writing (including
telecopier) and mailed, telecopied or otherwise delivered, in the case of the
Borrower or the Collateral Agent, addressed to it at its address specified in
the Revolving Agreements and, in the case of each Grantor other than the
Borrower, addressed to it at its address set forth opposite such Grantor’s name
on the signature pages hereto or on the signature page to the
Security Agreement B Supplement pursuant to which it became a party hereto; or,
as to any party, at such other address as shall be designated by such party in
a written notice to the other parties. 
All such notices and other communications shall, when mailed,
telegraphed or telecopied, be effective when deposited in the mails, delivered
to the telegraph company or transmitted by telecopier, respectively.  Delivery by telecopier of an executed
counterpart of a signature page to any amendment or waiver of any
provision of this Agreement of any Exhibit hereto to be executed and
delivered hereunder shall be effective as delivery of an original executed
counterpart thereof.  As agreed to among
the Borrower, the Collateral Agent and the applicable Secured Parties from time
to time, notices and other communications may also be delivered by e-mail to
the e-mail address of a representative of the applicable Person provided from
time to time by such Person.


 


11

















 


Section 20. 
Continuing Security Interest; Assignments under the Loan Agreements.  This Agreement shall create a continuing
security interest in the Additional Collateral and shall (a) remain in
full force and effect until the payment in full in cash of the Secured
Obligations (other than contingent indemnification obligations as to which no
demand has been made), (b) be binding upon each Grantor, its successors
and assigns and (c) inure, together with the rights and remedies of the
Collateral Agent hereunder, to the benefit of the Secured Parties and their
respective successors, transferees and assigns. 
Without limiting the generality of the foregoing clause (c), any
Lender may assign or otherwise transfer all or any portion of its rights and
obligations under the applicable Loan Agreement(s) (including, without
limitation, all or any portion of the Loans owing to it and the Note or Notes,
if any, held by it) to any other Person, and such other Person shall thereupon
become vested with all the benefits in respect thereof granted to such Lender
herein or otherwise.


 


Section 21. 
Release; Termination.  (a) 
Upon any sale, lease, transfer or other disposition of any item of Additional
Collateral of any Grantor in accordance with the terms of the Loan Documents,
the Collateral Agent will, at such Grantor’s expense, execute and deliver to
such Grantor such documents as such Grantor shall reasonably request to
evidence the release of such item of Additional Collateral from the assignment
and security interest granted hereby; provided,
however, that (i) at the
time of such request and such release no Event of Default shall have occurred
and be continuing, (ii) such Grantor shall have delivered to the
Collateral Agent, prior to the date of the proposed release, a written request
for release describing the item of Additional Collateral, together with a form
of release for execution by the Collateral Agent and a certificate of such
Grantor to the effect that the transaction is in compliance with the Loan
Documents and as to such other matters as the Collateral Agent may reasonably
request, (iii) the proceeds of any such sale, lease, transfer or other
disposition required to be applied, or any payment to be made in connection
therewith, in accordance with the terms of this Agreement and (iv) with
respect to sales of Equipment and Inventory in the ordinary course of business
and other sales and dispositions that are explicitly permitted by the Loan
Agreements, the Liens granted herein shall be deemed to be released with no
further action on the part of any Person.


 


(b)           Upon the payment in full in cash of
the Secured Obligations (other than contingent indemnification obligations as
to which no demand has been made) and the termination of the Aggregate
Commitment (as defined in each of the Loan Agreements), the pledge and security
interest granted hereby shall terminate and all rights to the Additional
Collateral shall revert to the applicable Grantor.  Upon any such termination, the Collateral
Agent will, at the applicable Grantor’s expense, execute and deliver to such
Grantor such documents as such Grantor shall reasonably request to evidence
such termination.


 


Section 22. 
Execution in Counterparts. 
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. 
Delivery of an executed signature page of this Agreement by
facsimile transmission or electronic transmission (i.e., a “pdf” or “tif”)
shall be effective as delivery of an original executed counterpart of this
Agreement.


 


Section 23. 
Jurisdiction; Governing Law, Etc. (a) Each of the parties
hereto hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or any of the other Loan Documents to which it is a
party, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in any
such New York State court or, to the fullest extent permitted by law, in such
Federal court.  Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law. 
Nothing in this Agreement shall affect any right that any party may
otherwise have to bring any action or proceeding relating to this Agreement or
any of the other Loan Documents in the courts of any jurisdiction.


 


(b)           EACH OF THE PARTIES HERETO
IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY
AND EFFECTIVELY DO SO, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS TO WHICH IT IS A
PARTY IN ANY NEW YORK STATE OR FEDERAL COURT. 
EACH OF 


 


12

















 


THE PARTIES
HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT.


 


(c)           THIS AGREEMENT AND THE NOTES SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.


 


(d)           EACH
OF THE GRANTORS AND THE COLLATERAL AGENT IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT,
TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE
LOANS OR THE ACTIONS OF THE AGENT OR ANY LENDER IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.


 


[Rest of this page intentionally left blank.]


 


13

















 


IN WITNESS WHEREOF, each of the undersigned have
caused this Agreement to be duly executed and delivered by its officer
thereunto duly authorized as of the date first above written.


 


	
   

  	
  JPMORGAN CHASE BANK, N.A., AS

  
	
   

  	
  COLLATERAL AGENT

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WHOLE FOODS MARKET, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  Address for Notices:

  	
  [OTHER GRANTORS]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 

















 


Schedule I
to the

Security Agreement B


 


LOCATION, CHIEF EXECUTIVE OFFICE, TYPE OF
ORGANIZATION, JURISDICTION OF ORGANIZATION AND ORGANIZATIONAL IDENTIFICATION
NUMBER


 


	
  Grantor

  	
   

  	
  Location

  	
   

  	
  Chief

  Executive

  Office

  	
   

  	
  Type of

  Organization

  	
   

  	
  Jurisdiction

  of

  Organization

  	
   

  	
  Organizational

  I.D. No.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 

















 


Schedule II
to the

Security Agreement B


 


CHANGES IN NAME, LOCATION, ETC.


 

















 


Exhibit A to the

Security Agreement B


 


FORM OF SECURITY AGREEMENT B SUPPLEMENT


 


[Date of Security Agreement B Supplement]


 


JPMORGAN CHASE BANK,
N.A.,

as the Collateral Agent for the

Secured Parties referred to in the

Loan Agreements  referred to below

                                        

                                        

Attn:


 


WHOLE FOODS MARKET, INC.


 


Ladies and Gentlemen:


 


Reference is made to (i) the Term Loan Agreement
dated as of August 24, 2007 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the “Term Loan
Agreement”), among the Borrower, Royal Bank of Canada, as administrative
agent for the lenders from time to time parties thereto, JPMorgan Chase Bank,
N.A., and
              
as [joint] syndication agent[s],
                    
as documentation
agent,                      
as managing agent and RBC Capital Markets and J. P. Morgan Securities Inc., as
joint lead arrangers and joint bookrunners, (ii)  the Revolving Credit
Loan Agreement dated as of August 28, 2007 (as amended, amended and
restated, supplemented or otherwise modified from time to time, the “Revolving
Loan Agreement”), among the Borrower, JPMorgan Chase Bank, N.A., as
administrative agent for the lenders from time to time parties thereto, Royal
Bank of Canada, as syndication agents, and J. P. Morgan Securities Inc. and RBC
Capital Markets, as joint lead arrangers and joint bookrunners, and (iii) the
Security Agreement B dated
[                      
    ], 2007 (as amended, amended and restated, supplemented
or otherwise modified from time to time, the “Security Agreement B”) made by the
Grantors from time to time party thereto in favor of JPMorgan Chase Bank, N.A.
as collateral agent (together with any successor collateral agent, the “Collateral Agent”)
for the Secured Parties under the Term Loan Agreement and the Revolving Loan
Agreement (the Term Loan Agreement and the Revolving Loan Agreement being
sometimes hereinafter collectively referred to as the “Loan Agreements”).  Terms defined in the Loan Agreements or the
Security Agreement B and not otherwise defined herein are used herein as
defined in the Loan Agreements or the Security Agreement B.


 


SECTION 1. 
Grant of Security.  The
undersigned hereby grants to the Collateral Agent, for the ratable benefit of
the Secured Parties under the Loan Documents, a security interest in, all of
its right, title and interest in and to all of the Additional Collateral of the
undersigned, whether now owned or hereafter acquired by the undersigned,
wherever located and whether now or hereafter existing or arising, including,
without limitation, the property and assets of the undersigned set forth on the
attached supplemental schedules to the Schedules to the Security Agreement B.


 


SECTION 2. 
Security for Obligations. 
The grant of a security interest in the Additional Collateral by the
undersigned under this Security Agreement B Supplement and the Security
Agreement B secures the payment of all Indebtedness and other obligations of
the undersigned now or hereafter existing under or in respect of the Loan
Documents, whether direct or indirect, absolute or contingent, and whether for
principal, reimbursement obligations, interest, premiums, penalties, fees,
indemnifications, contract causes of action, costs, expenses or otherwise.  Without limiting the generality of the
foregoing, this Security Agreement B Supplement and the Security Agreement B
secure the payment of all amounts that constitute part of the Secured
Obligations and that would be owed by the undersigned to any Secured Party
under the Loan Documents but for the fact that such


 

















 


Secured
Obligations are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving a Loan Party.


 


SECTION 3. 
Supplements to Security Agreement B Schedules.  The undersigned has attached hereto
supplemental Schedules I and II to Schedules I and II, respectively, to
the Security Agreement B, and the undersigned hereby certifies, as of the date
first above written, that such supplemental schedules have been prepared by the
undersigned in substantially the form of the equivalent Schedules to the
Security Agreement B and are complete and correct.


 


SECTION 4. 
Representations and Warranties. 
The undersigned hereby makes each representation and warranty set forth
in Section 4 of the Security Agreement B (as supplemented by the attached
supplemental schedules) to the same extent as each other Grantor.


 


SECTION 5. 
Obligations Under the Security Agreement B.  The undersigned hereby agrees, as of the date
first above written, to be bound as a Grantor by all of the terms and
provisions of the Security Agreement B to the same extent as each of the other
Grantors.  The undersigned further
agrees, as of the date first above written, that each reference in the Security
Agreement B to an “Additional Grantor” or a “Grantor” shall also mean and be a
reference to the undersigned.


 


SECTION 6. 
Governing Law.  This
Security Agreement B Supplement shall be governed by, and construed in
accordance with, the laws of the State of New York.


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  [NAME OF ADDITIONAL GRANTOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  	
  Address for notices:

  
	
   

  	
   

  



 


A-2
















 


EXHIBIT
H


 


MASTER GUARANTY


 


THIS MASTER GUARANTY (“Guaranty”) dated
effective as of August 28, 2007, executed and delivered by various
Subsidiaries of WHOLE FOODS MARKET, INC., a Texas corporation (“Company”)
and EACH OF THE PERSONS WHICH IS OR WHICH MAY BECOME A PARTY HERETO
(individually, a “Guarantor” and, collectively, the “Guarantors”),
to ROYAL BANK OF CANADA, in its capacity as administrative agent (“Agent”)
for each of the financial institutions (collectively the “Lenders”) now
or hereafter a party to that certain Term Loan Agreement, dated as of August 28,
2007, by and between the Company, the Agent, JPMorgan Chase Bank, N.A. as
collateral agent and syndication agent and the Lenders, (as may have heretofore
been amended, restated, modified and supplemented from time to time, the “Term
Loan Agreement”).


 


ARTICLE
1


 


Section 1.1                                      Definitions.  As used in
this Guaranty, these terms shall have these respective meanings:


 


Bankruptcy Law means any proceeding of the type referred to in Section 7.01(x) and
(y) of the Term Loan Agreement or Title 11, U.S. Code, or any similar
foreign, federal or state law for the relief of debtors.


 


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


 


Guaranteed Obligations means the sum of all indebtedness and obligations of
the Company or any Subsidiary at any time evidenced by or arising pursuant to
any and all of the advances, the Notes and all other obligations and
indebtedness of the Company or any Subsidiary at any time incurred under or
arising pursuant to or in connection with the Term Loan Agreement or any of the
other Loan Documents (including, without limitation, any extensions,
modifications, substitutions, amendment or renewals of any or all of the
foregoing Indebtedness), whether direct or indirect, absolute or contingent,
and whether for principal, interest, premiums, fees, indemnities, contract
causes of action, costs, expenses or otherwise. 
The Guaranteed Obligations include interest and other obligations accruing
or arising in connection with the foregoing after (a) commencement of any
case under any bankruptcy or similar laws by or against any Obligor or (b) the
obligations of any Obligor shall cease to exist by operation of law or for any
other reason.  The Guaranteed Obligations
also include all reasonable attorneys’ fees and any other expenses incurred by
Agent or any Lender in negotiating, monitoring or enforcing the Loans, the
Notes or any of the Loan Documents or defending against any claims made by
Persons other than the Lenders or the Agent, arising directly or indirectly in
respect of or on account of any of the Guaranteed Obligations.


 


Joinder Agreement means each Joinder Agreement, substantially in the
form of Exhibit A attached hereto, from time to time executed and
delivered to Agent by a Subsidiary of Company pursuant to the terms of the Term
Loan Agreement, for the purpose, among others, of becoming an additional
Guarantor hereunder and an additional party to the Contribution Agreement.


 


1

















 


Obligor means any person or entity now or hereafter primarily
or secondarily obligated to pay all or any part of the Guaranteed Obligations,
including Company and each Guarantor.


 


Unless redefined in this Guaranty, capitalized terms
used in this Guaranty have the respective meanings ascribed to them in the Term
Loan Agreement.  The provisions of Section 1.2
of the Term Loan Agreement are incorporated herein by reference for all
purposes.


 


ARTICLE
2


 


Section 2.1                                      Execution of Loan Documents. 
Company has executed and delivered the Term Loan Agreement and the Notes
to the Lenders.


 


Section 2.2                                      Consideration.  In
consideration of the credit and financial accommodations contemplated to be
extended to Company by the Lenders pursuant to the Loan Documents or otherwise,
which each Guarantor has determined will substantially benefit it directly or
indirectly, and for other good and valuable consideration, the receipt and
sufficiency of which each Guarantor hereby acknowledges, each Guarantor
executes and delivers this Guaranty to Agent with the intention of being
presently and legally bound by its terms.


 


ARTICLE
3


 


Section 3.1                                      Payment Guaranty; Limitation of Liability.  (a) 
Guarantors, as primary obligors and not as sureties, unconditionally guarantee,
jointly and severally, to the Agent for the benefit of the Lenders, the full,
prompt and punctual payment of the Guaranteed Obligations when due (whether at
its stated maturity, by acceleration or otherwise) in accordance with the Loan
Documents, to the extent set forth herein. 
This Guaranty is irrevocable, unconditional and absolute, and if for any
reason all or any portion of the Guaranteed Obligations shall not be paid when
due, Guarantors, jointly and severally will immediately pay the Guaranteed
Obligations to Agent or other Person entitled to it, in Dollars, regardless of (a) any
defense, right of set-off or counterclaim which any Obligor may have or assert,
(b) whether Agent or any other Person shall have taken any steps to
enforce any rights against any Obligor or any other Person to collect any of
the Guaranteed Obligations and (c) any other circumstance, condition or
contingency.  Without limiting the
generality of the foregoing, each Guarantor’s liability shall extend to all
amounts that constitute part of the Guaranteed Obligations and would be owed by
the Company or any Subsidiary to the Agent, for the benefit of the Lenders,
under or in respect of the Loan Documents but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving such Guarantor.


 


(b)                                 Each Guarantor, and by its acceptance of
this Guaranty, the Agent and each other Lender, hereby confirms that it is the
intention of all such Persons that this Guaranty and the obligations of each
Guarantor hereunder not constitute a fraudulent transfer or conveyance for
purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar foreign, federal or state law to the
extent applicable to this Guaranty and the obligations of each Guarantor
hereunder.  To effectuate the foregoing
intention, the Agent, the Lenders and the Guarantors hereby irrevocably agree
that the obligations of each Guarantor under this Guaranty at any time shall be
limited to the maximum


 


2

















 


amount as will result in the obligations of such
Guarantor under this Guaranty not constituting a fraudulent transfer or
conveyance.


 


Section 3.2                                      Obligations Not Affected. 
Guarantors’ covenants, agreements and obligations under this Guaranty
shall in no way be released, diminished, reduced, impaired or otherwise
affected by reason of the happening from time to time of any of the following
things, for any reason, whether by voluntary act, operation of law or order of
any competent governmental authority and whether or not Guarantors are given
any notice or are asked for or give any further consent (all requirements for
which, however arising, each Guarantor hereby WAIVES to the fullest extent
permitted by applicable law):


 


(a)                                  release or waiver of any obligation or
duty to perform or observe any express or implied agreement, covenant, term or
condition imposed in any of the Loan Documents or by applicable law on any
Obligor or any party to the Loan Documents, including, without limitation, any
increase in the Guaranteed Obligations resulting from the extension of
additional credit to the Company or any Subsidiary or otherwise.


 


(b)                                 extension of the time for payment of any
part of the Guaranteed Obligations or any other sums payable under the Loan
Documents, extension of the time for performance of any other obligation under
or arising out of or in connection with the Loan Documents or change in the
manner, place or other terms of such payment or performance.


 


(c)                                  settlement or compromise of any or all of
the Guaranteed Obligations.


 


(d)                                 renewal, supplementing, modification,
rearrangement, amendment, restatement, replacement, cancellation, rescission,
revocation or reinstatement (whether or not material) of any part of any of the
Loan Documents or any obligations under the Loan Documents of any Obligor or
any other party to the Loan Documents (without limitation on the number of
times any of the foregoing may occur).


 


(e)                                  acceleration of the time for payment or
performance of any Guaranteed Obligations or other obligation under any of the
Loan Documents or exercise of any other right, privilege or remedy under or in
regard to any of the Loan Documents.


 


(f)                                    failure, omission, delay, neglect,
refusal or lack of diligence by any Lender or Agent or any other Person to
assert, enforce, give notice of intent to exercise—or any other notice with
respect to—or exercise any right, privilege, power or remedy conferred on any
Lender or Agent or any other Person in any of the Loan Documents or by law or
action on the part of any Lender or Agent or any other Person granting
indulgence, grace, adjustment, forbearance or extension of any kind to any
Obligor or any other Person.


 


(g)                                 release, surrender, exchange,
subordination or loss of any security or lien priority under any of the Loan
Documents or in connection with the Guaranteed Obligations.


 


(h)                                 release, modification or waiver of, or
failure, omission, delay, neglect, refusal or lack of diligence to enforce, any
guaranty, pledge, mortgage, deed of trust, security agreement, lien, charge,
insurance agreement, bond, letter of credit or other security device, guaranty,
surety or indemnity agreement whatsoever.


 


3

















 


(i)                                     taking or acceptance of any other
security or guaranty for the payment or performance of any or all of the
Guaranteed Obligations or the obligations of any Obligor.


 


(j)                                     release, modification or waiver of, or
failure, omission, delay, neglect, refusal or lack of diligence to enforce, any
right, benefit, privilege or interest under any contract or agreement, under
which the rights of any Obligor have been collaterally or absolutely assigned,
or in which a security interest has been granted, to any Lender or Agent as
direct or indirect security for payment of the Guaranteed Obligations or
performance of any other obligations to—or at any time held by any Lender or
Agent.


 


(k)                                  voluntary or involuntary liquidation,
dissolution, sale of any collateral, marshaling of assets and liabilities,
change in corporate or organizational status, receivership, insolvency,
bankruptcy, assignment for the benefit of creditors, reorganization,
arrangement, composition or readjustment of debt or other similar proceedings
of or affecting any Obligor or any of the assets of any Obligor, even if any of
the Guaranteed Obligations is thereby rendered void, unenforceable or
uncollectible against any other Person.


 


(l)                                     occurrence or discovery of any
irregularity, invalidity or unenforceability of any of the Guaranteed
Obligations or Loan Documents or any defect or deficiency in any of the
Guaranteed Obligations or Loan Documents, including the unenforceability of any
provisions of any of the Loan Documents because entering into any such Loan
Document was ultra  vires or because anyone who executed them
exceeded their authority.


 


(m)                               failure to acquire, protect or perfect
any lien or security interest in any collateral intended to secure any part of
the Guaranteed Obligations or any other obligations under the Loan Documents or
failure to maintain perfection.


 


(n)                                 failure by any Lender, Agent or any other
Person to notify or timely notify any Guarantor of any default, event of
default or similar event (however denominated) under any of the Loan Documents,
any renewal, extension, supplementing, modification, rearrangement, amendment,
restatement, replacement, cancellation, rescission, revocation or reinstatement
(whether or not material) or assignment of any part of the Guaranteed
Obligations, release or exchange of any security, any other action taken or not
taken by any Lender or Agent against any Obligor or any other Person or any
direct or indirect security for any part of the Guaranteed Obligations or other
obligation of Company, any new agreement between any Lender or Agent and any
Obligor or any other Person or any other event or circumstance.  Except as required by applicable law, neither
Agent nor any Lender has any duty or obligation to give any Guarantor any
notice of any kind under any circumstances whatsoever with respect to or in
connection with the Guaranteed Obligations or the Loan Documents.


 


(o)                                 occurrence of any event or circumstances
which might otherwise constitute a defense available to, or a discharge of, any
Obligor, including failure of consideration, fraud by or affecting any Person,
usury, forgery, breach of warranty, failure to satisfy any requirement of the
statute of frauds, running of any statute of limitation, accord and
satisfaction and any defense based on election of remedies of any type.


 


4

















 


(p)                                 receipt and/or application of any
proceeds, credits or recoveries from any source, including any proceeds,
credits, or amounts realized from exercise of any rights, remedies, powers or
privileges of any Lender or Agent under the Loan Documents, by law or otherwise
available to any Lender or Agent except only as and to the extent the same
reduces the Guaranteed Obligations pursuant to and in accordance with other
express provisions of this Guaranty.


 


Section 3.3                                      Waiver of Certain Rights and Notices.  (a) 
To the fullest extent permitted by applicable law, each Guarantor hereby WAIVES
and RELEASES all right to require marshalling of assets and liabilities, sale
in inverse order of alienation, notice of acceptance of this Guaranty and of
any liability to which it applies or may apply, notice of the creation,
accrual, renewal, increase, extension, modification, amendment or rearrangement
of any part of the Guaranteed Obligations, presentment, demand for payment,
protest, notice of nonpayment, notice of dishonor, notice of intent to
accelerate, notice of acceleration and all other notices and demands,
collection, suit and the taking of any other action by any Lender or Agent.


 


(b)                                 Each Guarantor hereby unconditionally and
irrevocably waives (i) any defense arising by reason of any claim or
defense based upon an election of remedies by Agent or any Lender that in any
manner impairs, reduces, releases or otherwise adversely affects the
subrogation, reimbursement, exoneration, contribution or indemnification rights
of such Guarantor or other rights of such Guarantor to proceed against any of
the other Loan Parties, any other guarantor or any other Person and (ii) any
defense based on any right of set-off or counterclaim against or in respect of
the obligations of such Guarantor hereunder.


 


(c)                                  Each Guarantor hereby unconditionally and
irrevocably waives any duty on the part of the Agent or any Lender to disclose
to such Guarantor any matter, fact or thing relating to the business, condition
(financial or otherwise), operations, performance, properties or prospects of
any other Loan Party or any of its Subsidiaries now or hereafter know by such
Agent or Lender.


 


Section 3.4                                      Not a Collection Guaranty. 
This is an absolute guaranty of payment, and an absolute guaranty of
performance of all of the obligations of the Obligors under the Loan Documents,
and not of collection, and to the fullest extent not prohibited by applicable
law, each Guarantor WAIVES any right to require that any action be brought
against any Obligor or any other Person, or that any Lender or Agent be
required to enforce, attempt to enforce or exhaust any rights, benefits or
privileges of any Lender or Agent under any of the Loan Documents, by law or
otherwise; provided that nothing herein shall be construed to prevent
any Lender or Agent from exercising and enforcing at any time any right,
benefit or privilege which any Lender or Agent may have under any Loan Document
or by law from time to time, and at any time, and Guarantors agree that
Guarantors’ obligations hereunder are—and shall be—absolute, independent,
unconditional, joint and several under any and all circumstances.  Should any Lender or Agent seek to enforce
Guarantors’ obligations by action in any court, to the fullest extent not
prohibited by applicable law, each Guarantor WAIVES any requirement,
substantive or procedural, that (a) Agent pursue any foreclosure action,
realize or attempt to realize on any security or preserve or enforce any
deficiency claim against any Obligor or any other Person after any such
realization, (b) a judgment first be sought or rendered against any
Obligor or any other Person, (c) any Obligor or any other Person be joined
in such action or (d) a separate action


 


5

















 


be brought against any Obligor or any other
Person.  Guarantors’ obligations under
this Guaranty are several from those of any other Obligor or any other Person,
and are primary obligations concerning which Guarantors are the principal
obligors.  All waivers in this Guaranty
or any of the Loan Documents shall be without prejudice to any Lender or Agent
at its option to proceed against any Obligor or any other Person, whether by
separate action or by joinder. 
Guarantors agree that this Guaranty shall not be discharged except by
payment of the Guaranteed Obligations in full, complete performance of all
obligations of the Obligors under the Loan Documents and termination of each
Lender’s obligation if any—to make any further advances under the Loan
Documents or extend other financial accommodations to any Obligor.


 


Section 3.5                                      Subrogation.  Each
Guarantor hereby unconditionally and irrevocably agrees not to exercise any rights
that it may now have or hereafter acquire against the Company, any other
Obligor or any other insider guarantor that arise from the existence, payment,
performance or enforcement of such Guarantor’s obligations under or in respect
of this Guaranty or any other Loan Document, including, without limitation, any
right of subrogation, reimbursement, exoneration, contribution or
indemnification and any right to participate in any claim or remedy of the
Agent or any Lender against the Company, any other Obligor or any other insider
guarantor or any Collateral, whether or not such claim, remedy or right arises
in equity or under contract, statute or common law, including, without
limitation, the right to take or receive from the Company, any other Obligor or
any other insider guarantor, directly or indirectly, in cash or other property
or by set-off or in any other manner, payment or security on account of such
claim, remedy or right, unless and until all of the Guaranteed Obligations and
all other amounts payable under this Guaranty shall have been paid in full in
cash and the Commitments shall have expired or been terminated.  If any amount shall be paid to any Guarantor
in violation of the immediately preceding sentence at any time prior to the
latest of the payment in full in cash of the Guaranteed Obligations and all
other amounts payable under this Guaranty, such amount shall be received and
held in trust for the benefit of the Agent and the Lenders, shall be segregated
from other property and funds of such Guarantor and shall forthwith be paid or
delivered to the Agent in the same form as so received (with any necessary
endorsement or assignment) to be credited and applied to the Guaranteed
Obligations and all other amounts payable under this Guaranty, whether matured
or unmatured, in accordance with the terms of the Loan Documents, or to be held
as Collateral for any Guaranteed Obligations or other amounts payable under
this Guaranty thereafter arising.  If (i) any
Guarantor shall make payment to the Agent, for the benefit of the Lenders, of
all or any part of the Guaranteed Obligations, (ii) all of the Guaranteed
Obligations and all other amounts payable under this Guaranty shall have been
paid in full in cash and (iii) the Maturity Date shall have occurred, the
Agent will, at such Guarantor’s request and expense, execute and deliver to
such Guarantor appropriate documents, without recourse and without
representation or warranty, necessary to evidence the transfer by subrogation
to such Guarantor of an interest in the Guaranteed Obligations resulting from
such payment made by such Guarantor pursuant to this Guaranty.


 


Section 3.6                                      Taxes.  (a)  If
any Guarantor is required by any applicable Legal Requirement to make any
deduction or withholding for or on account of any Tax from any payment to be
made by it under this Guaranty in respect of the Loans or under any other Loan
Documents, then such Guarantor shall (i) promptly notify the applicable
Lender hereunder that is entitled to such payment of such requirement to so
deduct or withhold such Tax, (ii) pay to the relevant authorities the full
amount required to be so deducted or withheld, (iii) promptly


 


6

















 


forward to such Lender an official receipt (or
certified copies thereof), or other documentation reasonably acceptable to such
Lender, evidencing such payment to such Governmental Authorities and (iv) if
such Tax is an Indemnifiable Tax, pay, to the extent permitted by law, to such
holder, in addition to whatever net amount of such payment is paid to such
Lender, such additional amount as is necessary to ensure that the total amount
actually received by such Lender (free and clear of Indemnifiable Tax) will
equal the full amount of the payment such Lender would have received had no
such deduction or withholding been required. 
If any Guarantor pays any additional amount to a Lender pursuant to the
preceding sentence and such Lender shall receive a refund of an Indemnifiable
Tax with respect to which, in the good faith opinion of such Lender, such
payment was made, such Lender shall pay to such Guarantor the amount of such
refund promptly upon receipt thereof.


 


(b)                                 In the event that any Governmental
Authority notifies any Guarantor that it has improperly failed to withhold or
deduct any Tax from a payment received by any Lender under this Guaranty, such
Guarantor shall timely and fully pay such Tax to such Governmental Authority
and such Lender shall, upon receipt of written notice of such payment,
immediately pay to such Guarantor, an amount necessary in order that the amount
of such payment to such Guarantor after payment of all Taxes with respect to
such payment, shall equal the amount that such Guarantor paid to such
Governmental Authority pursuant to this clause (b).


 


(c)                                  Each Lender shall, upon request by any
Guarantor, take requested measures to mitigate the amount of Indemnifiable Tax
required to be deducted or withheld from any payment made by the Company under
this Guaranty or under any other Loan Documents if such measures can, in the
sole and absolute opinion of such Lender, be taken without such Lender
suffering any economic, legal, regulatory or other disadvantage (provided,
however, that no such Lender shall be required to designate a funding
office that is not located in the United States of America).


 


Section 3.7                                      Reliance on Guaranty.  All
extensions of credit and financial accommodations heretofore or hereafter made
by any Lender or Agent under or in respect of the Term Loan Agreement, the
Notes or any of the other Loan Documents shall be conclusively presumed to have
been made in acceptance of this Guaranty.


 


Section 3.8                                      Demands are Conclusive.  Any demand by
Agent under this Guaranty shall be conclusive, absent manifest error, as to the
matters therein stated, including the amount due.


 


Section 3.9                                      Joint and Several.  If any Person
makes any guaranty of any of the obligations guaranteed hereby or gives any
security for them, Guarantors’ obligations hereunder shall be joint and several
with the obligations of such other Person pursuant to such agreement or other
papers making the guaranty or giving the security.


 


Section 3.10                                Payments Returned.  Guarantors
agree that, if at any time all or any part of any payment previously applied by
Agent to the Guaranteed Obligations is or must be returned by any Lender or
Agent—or recovered from any Lender or Agent—for any legally binding reason
(including the order of any bankruptcy court), to the extent not prohibited by
applicable law, this Guaranty shall automatically be reinstated to the same
effect as if the prior application


 


7

















 


had not been made, and, in addition, each Guarantor
hereby agrees, to the extent not prohibited by applicable law, to indemnify
each Lender and Agent against, and to save and hold each Lender and Agent
harmless from any required return by any Lender or Agent—or recovery from any
Lender or Agent—of any such payment because of its being deemed preferential
under applicable bankruptcy, receivership or insolvency laws, or for any other
reason.


 


ARTICLE
4


 


Each Guarantor hereby makes each representation and
warranty made in the Loan Documents by the Company with respect to such
Guarantor and each Guarantor hereby further represents and warrants as follows:


 


Section 4.1                                      Relationship to Company.  It has
determined that its liability and obligation under this Guaranty may reasonably
be expected to substantially benefit it directly or indirectly, and its board
of directors has made that determination. 
Company and it are mutually dependent on each other in the conduct of
their respective businesses and are, and do business together with the other
Subsidiaries of Company as, an integrated business enterprise involved in
same-day local delivery and distribution management services.  The maintenance and improvement of Company’s
financial condition is vital to sustaining its business and the transactions
contemplated in the Term Loan Agreement produce distinct and identifiable
financial and economic direct or indirect benefits to it.  Such identifiable benefits include:  (i) the availability to it of the
proceeds of the Loans on an as needed basis by way of intercompany loans and/or
capital contributions for general corporate or other purposes and (ii) the
general improvement of its financial and economic condition.  It has had full and complete access to the
Loan Documents and all other papers executed by any Obligor or any other Person
in connection with the Guaranteed Obligations, has reviewed them and is fully
aware of the meaning and effect of their contents.  It is fully informed of all circumstances
which bear upon the risks of executing this Guaranty and which a diligent
inquiry would reveal.  It has adequate
means to obtain from Company on a continuing basis information concerning
Company’s financial condition, and is not depending on Agent or any Lender to
provide such information, now or in the future. 
It agrees that neither Agent nor any Lender shall have an obligation to
advise or notify it or to provide it with any such data or information.  The execution and delivery of this Guaranty
is not a condition precedent (and neither Agent nor any Lender has in any way
implied that the execution of this Guaranty is a condition precedent) to Agent’s
or any Lender’s making, extending or modifying any loan or any other financial
accommodation to or for it.


 


Section 4.2                                      Proceedings.  No bankruptcy
or insolvency proceedings are pending or contemplated by or—to the best of its
knowledge—against it.


 


ARTICLE
5

Covenants for the Benefit of Agent


 


Each Guarantor covenants and agrees that, so long as
any part of the Guaranteed Obligations shall remain unpaid or any Lender shall
have any Commitment outstanding, such Guarantor will perform and observe, and
cause each of its Subsidiaries to perform and observe, all of the terms,
covenants and agreements set forth in the Loan Documents on its or their part
to be performed or observed or that the Company has agreed to cause such
Guarantor or such


 


8

















 


Subsidiaries to perform or observe.  Each Guarantor, jointly and severally,
covenants and agrees that, until termination of the Term Loan Agreement in
accordance with its terms, each Guarantor will promptly after learning of any
Default or Event of Default, notify Agent of it in writing, specifying its
nature, the period of its existence and what action Guarantors are taking or
propose to take with respect thereto.


 


ARTICLE
6

Term


 


Subject to the automatic reinstatement provisions of Article 3
above, this Guaranty shall terminate and be of no further force or effect upon
payment in full of the Guaranteed Obligations.


 


ARTICLE
7

Default


 


If any Event of Default occurs under the Term Loan
Agreement, then that shall automatically constitute default under this
Guaranty.


 


ARTICLE
8


 


Section 8.1                                      Binding on Successors; No Assignment by Guarantors. 
All guaranties, warranties, representations, covenants and agreements in
this Guaranty shall bind the trustees, receivers, successors and assigns of
each Guarantor and shall benefit the Lenders and Agent, their respective
successors and assigns, and any holder of any part of the Guaranteed
Obligations.  No Guarantor shall assign
or delegate any of its obligations under this Guaranty or any of the other Loan
Documents without the express prior written consent of Agent.


 


Section 8.2                                      Subordination of Company’s Obligations to Guarantors. 
Each Guarantor agrees that if, for any reason whatsoever, Company now or
hereafter owes any Indebtedness, directly or indirectly, to any Guarantor, or
any Guarantor now or hereafter owes any Indebtedness, directly or indirectly,
to any other Guarantor, all such Indebtedness, together with all interest
thereon and fees and other charges in connection therewith, and all Liens
securing any such Indebtedness shall at all times be second, subordinate and
inferior in right of payment, in lien priority and in all other respects to the
Guaranteed Obligations and the fulfillment of any such indebted Guarantor’s
obligations hereunder or under any of the other Loan Documents and all Liens
from time to time securing the Guaranteed Obligations.  The provisions of this Section are in
addition to, and cumulative of, any other provisions contained in any other
Loan Document or other document, instrument or writing.


 


Section 8.3                                      Waiver of Suretyship Rights. 
By signing this Guaranty or executing a Joinder Agreement, each
Guarantor to the fullest extent not prohibited by applicable law, WAIVES each
and every right to which it may be entitled by virtue of any suretyship law.


 


Section 8.4                                      Indemnification.  To the fullest extent not prohibited by
applicable law, Guarantors, jointly and severally, agree to indemnify, defend
and hold each Lender and Agent and their respective shareholders, directors,
officers, agents, attorneys, advisors and employees (collectively, the “Indemnified
Parties”) harmless from and against any and


 


9

















 


all loss, liability, obligation,
damage, penalty, judgment, claim, deficiency, expense, action, suit, cost and
disbursement of any kind or nature whatsoever (including interest, penalties,
attorneys’ fees and amounts paid in settlement) (the “Losses”),
REGARDLESS OF WHETHER CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE OF ANY
OF THE INDEMNIFIED PARTIES, imposed on, incurred by or asserted against the
Indemnified Parties growing out of or resulting from any Loan Document or any
transaction or event contemplated therein (except that such indemnity shall not
be paid to any Indemnified Party to the extent that the Losses directly result
from the gross negligence or willful misconduct of that Indemnified Party), to
the extent that such Losses arise out of or by reason of claims made by Persons
other than the Indemnified Parties, Company or any Guarantor.  Each Indemnified Party will give prompt
written notice to the Guarantors of any claim for indemnification by such
Person and shall consult with the Guarantors in the conduct of any defense; provided,
that failure to give any such notice shall not diminish the Guarantors’
obligations hereunder.  Any amount to be
paid under this Section by Guarantors to any Lender or Agent shall be a
joint and several demand obligation owing by Guarantors and shall bear interest
from the date of expenditure until paid at the Past Due Rate.


 


Section 8.5                                      Amendments in Writing.  This Guaranty
shall not be changed orally but shall be changed only by agreement in writing
signed by each Guarantor, the Agent and the Required Lenders; provided, however,
that that no amendment, waiver or consent shall, unless in writing and signed
by all of the Lenders (a) reduce or limit the obligations of any Guarantor
hereunder, release any Guarantor hereunder or otherwise limit any Guarantor’s
liability with respect to the Obligations owing to the Lenders under or in
respect of the Loan Documents (except as provided in the next succeeding
sentence, (b) postpone any date fixed for payment hereunder or (c) change
the number of Lenders or the percentage of the aggregate unpaid principal
amount of the Loans that, in each case, shall be required for the Lenders or
any of them to take any action hereunder. 
Upon the sale or disposition of a Guarantor to the extent permitted in
accordance with the terms of the Loan Documents, such Guarantor shall be
automatically released from this Guaranty. 
Any waiver or consent with respect to this Guaranty shall be effective
only in the specific instance and for the specific purpose for which given.  No course of dealing between the parties, no
usage of trade and no parole or extrinsic evidence of any nature shall be used
to supplement or modify any of the terms or provisions of this Guaranty.


 


Section 8.6                                      Notices.  Any notices
or other communications required or permitted to be given hereunder shall be
given, made and received in the manner provided in Section 9.2 of the Term
Loan Agreement; provided, that with respect to the Guarantors, any such notices
or other communications shall be sent to them at the “Address for Notices”
specified below their respective names on the signature pages hereof or on
the signature pages of any Joinder Agreement or at such other address as
shall be designated by such recipient in a notice to the other parties hereto
given in accordance with Section 9.2 of the Term Loan Agreement.


 


Section 8.7                                      Gender; “Including” is Not Limiting; Section Headings. 
The masculine and neuter genders used in this Guaranty each includes the
masculine, feminine and neuter genders, and the singular number includes the
plural where appropriate, and vice  versa.  Wherever the term “including” or a similar
term is used in this Guaranty, it shall be read as if it were written “including
by way of example only and without in any way limiting the generality


 


10

















 


of the clause or concept referred to.”  The headings used in this Guaranty are
included for reference only and shall not be considered in interpreting,
applying or enforcing this Guaranty.


 


Section 8.8                                      Offset Rights.  (a) 
Each Guarantor agrees that, in addition to (and without limitation of) any
right of set-off, bankers’ lien or counterclaim a Lender may otherwise have, to
the fullest extent not prohibited by applicable law, each Lender shall be
entitled, at its option, upon the occurrence and during the continuance of an
Event of Default to offset balances held by it for the account of any Guarantor
at any of its offices, in Dollars or in any other currency, against any
obligations of Guarantors hereunder or under any other Loan Document, which is not
paid when due, in which case it shall promptly notify the affected Guarantor
and Agent thereof, provided that such Lender’s failure to give such
notice shall not affect the validity thereof.


 


(b)                                 If a Lender shall obtain payment of any
obligation then due hereunder or under any other Loan Document to such Lender,
through the exercise of any right of set-off, banker’s lien, counterclaim or
similar right, or otherwise, it shall promptly purchase from the other Lenders
participations in the Loans made by, or other obligations under the Loan
Documents of, the other Lenders in such amounts, and make such other
adjustments from time to time as shall be equitable to the end that all the
Lenders shall share the benefit of such payment (net of any expenses which may
be incurred by such Lender in obtaining or preserving such benefit) pro rata
in accordance with their respective Commitment Percentages.  To such end all the Lenders shall make
appropriate adjustments among themselves (by the resale of participations sold
or otherwise) if such payment is rescinded or must otherwise be restored.


 


(c)                                  Guarantors agree, that any Lender so
purchasing a participation in the Loans made by, or other obligations under the
Loan Documents of, other Lenders may to the fullest extent it may effectively
do so under applicable law, exercise all rights of set-off, bankers’ lien,
counterclaim or similar rights with respect to such participation as fully as
if such Lender were a direct holder of such Loans or other obligations in the
amount of such participation.  Nothing
contained herein shall require any Lender to exercise any such right or shall
affect the right of any Lender to exercise, and retain the benefits of
exercising, any such right with respect to any other Indebtedness of Guarantors.


 


Section 8.9                                      Jurisdiction; Governing Law; Etc.  (a) 
Each of the parties hereto hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any New York State
court or Federal court of the United States of America sitting in New York
City, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Guaranty or any of the other Loan Documents
to which it is a party, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in any such New York State court or, to the fullest extent permitted
by law, in such Federal court.  Each of
the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.  Nothing in this Guaranty shall affect any
right that any party may otherwise have to bring any action or proceeding
relating to this Guaranty or any of the other Loan Documents in the courts of
any jurisdiction.


 


11
















 


(b)           EACH OF THE PARTIES HERETO
IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY
AND EFFECTIVELY DO SO, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS GUARANTY OR ANY OF THE OTHER LOAN DOCUMENTS TO WHICH IT IS A PARTY IN
ANY NEW YORK STATE OR FEDERAL COURT. 
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.


 


(c)           THIS GUARANTY SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.


 


(d)           EACH GUARANTOR, THE AGENT AND THE
LENDERS IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF
OR RELATING TO THE GUARANTY, ANY OF THE LOAN DOCUMENTS OR THE ACTIONS OF THE
AGENT OR ANY LENDER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR
ENFORCEMENT THEREOF.


 


Section 8.10           Survival.  All representations, warranties, covenants
and agreements made by or on behalf of each Guarantor in connection herewith
shall survive the execution and delivery of this Guaranty and the Loan
Documents, shall not be affected by any investigation made by any Person, and
shall bind each Guarantor and its successors, trustees, receivers and assigns
and inure to the benefit of the successors and assigns of the Agent and the
Lenders.


 


Section 8.11           Counterparts.  This Guaranty may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.  Delivery of an executed signature page of
this Guaranty by facsimile transmission or electronic transmission (i.e., a “pdf”
or “tif”) shall be effective as delivery of an original executed counterpart of
this Guaranty.


 


Section 8.12           Rights Cumulative; Delay Not
Waiver.  Any Lender’s or Agent’s
exercise of any right, benefit or privilege under any of the Loan Documents or
any other papers or at law or in equity shall not preclude the concurrent or
subsequent exercise of any other present or future rights, benefits or
privileges or any Lender or Agent.  The
remedies provided in this Guaranty are cumulative and not exclusive of any
remedies provided by law, the Loan Documents or any other papers or in equity.  No failure by any Lender or Agent to exercise,
and no delay in exercising, any right under any Loan Document or any other
papers shall operate as a waiver thereof.


 


Section 8.13           Severability.  If any provision of this Guaranty is held to
be illegal, invalid or unenforceable under present or future laws, the
legality, validity and enforceability of the remaining provisions of this
Guaranty shall not be affected thereby, and this Guaranty shall be liberally
construed so as to carry out the intent of the parties to it.  Each waiver in this Guaranty is subject to
the overriding and controlling rule that it shall be effective only if and
to the extent


 


12

















 


that (a) it is not prohibited by applicable law and (b) applicable
law neither provides for nor allows any material sanctions to be imposed
against any Lender or Agent for having bargained for and obtained it.


 


Section 8.14           Entire Agreement.  This Guaranty embodies the entire agreement
and understanding between Guarantors and the Lenders and Agent with respect to
its subject matter and supersedes all prior conflicting or inconsistent
agreements, consents and understandings relating to such subject matter.  Guarantors acknowledge and agree that there
is no oral agreement between any Guarantor and any Lender or Agent which has
not been incorporated in this Guaranty.


 


ARTICLE
9


Joinder


 


It is contemplated by each Guarantor that additional Subsidiaries of
Company may from time to time become a Guarantor hereunder (as required by the
terms of the Term Loan Agreement) and a party to the Contribution Agreement, by
their execution and delivery to Agent on behalf of the Lenders of a Joinder
Agreement.  Each Guarantor agrees,
consents and acknowledges that upon the execution and delivery to Agent by any
such Subsidiary of a Joinder Agreement, such Subsidiary shall become a
Guarantor hereunder for all purposes, jointly and severally liable hereunder as
if such Subsidiary had originally been a party hereto, without notice to any
Guarantor or any other Party.  Delivery
of a Joinder Agreement to any Guarantor or any other Party is not required for
the Subsidiary of the Company executing and delivering such Joinder Agreement
to become a Guarantor hereunder and a party to the Contribution Agreement.


 


13

















 


THIS GUARANTY is executed as of the date first above written.


 


	
   

  	
  WHOLE FOODS MARKET, INC.,

  
	
   

  	
  a Texas corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Glenda Chamberlain, Exec. Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [SIGNATURES OF GUARANTOR SUBSIDIARIES]

  



 


14

















 


Exhibit A


 


Form of Joinder
Agreement


 

















 


FORM OF JOINDER
AGREEMENT


 


This JOINDER AGREEMENT (this “Joinder Agreement”) is dated
effective as of
[                        ],
, 200[  ], and is executed and delivered
by the undersigned to ROYAL BANK OF CANADA, AS ADMINISTRATIVE AGENT FOR AND ON
BEHALF OF THE LENDERS (in such capacity, together with its successors in such
capacity, the “Agent”).  The
undersigned shall each sometimes hereinafter be individually referred to as a “Joining
Guarantor” and collectively referred to as the “Joining Guarantors.”


 


W I T N E S S E T H:


 


RECITALS:


 


1.             Whole
Foods Market, Inc., a Texas corporation (“Company”), of which
Joining Guarantors are Subsidiaries, has entered into that certain Term Loan
Agreement with Agent and certain financial institutions which are signatories
thereto or which may become a party thereto from time to time, dated as of
[                        ],
2007 (said Term Loan Agreement, as hereafter amended, modified, restated, and
supplemented from time to time, shall hereinafter be collectively referred to
as the “Term Loan Agreement”).


 


2.             Certain
of the Subsidiaries of the Company executed and delivered to the Agent a Master
Guaranty dated effective
[                        ],
2007, pursuant to which, among other things, each of such Subsidiaries jointly
and severally unconditionally guaranteed the payment and performance of all of
the Guaranteed Obligations.  Said Master
Guaranty, as heretofore or hereafter amended, modified, supplemented, joined in
and restated from time to time, is herein called the “Guaranty.”  All Persons from time to time a party to the
Guaranty (whether originally or by joinder) are herein collectively called the “Guarantors”
and are each a “Guarantor” herein.


 


3.             In
addition, in connection with the execution and delivery of the Guaranty,
Company and Guarantors have executed and delivered a Contribution Agreement
dated effective
[                              ],
2007, pursuant to which, among other things, each Guarantor grants to the other
Guarantors a right of contribution from such Guarantor for any payments made
under the Guaranty, all as is more fully described therein.  The Contribution Agreement as heretofore or
hereafter amended, modified, supplemented, joined in and restated from time to
time, is herein called the “Contribution Agreement.”


 


4.             In
accordance with the terms of Section 5.10 of the Term Loan
Agreement, Joining Guarantors are now required to join in the execution and
delivery to Agent on behalf of Lenders of (a) the Guaranty and (b) the
Contribution Agreement, in each case, by their execution and delivery of this
Joinder Agreement and otherwise by such action as Agent or any Lender may
reasonably require.


 


5.             In
order to comply with such requirement, Joining Guarantors execute and deliver
this Joinder Agreement.


 

















 


AGREEMENTS:


 


Now, in consideration of the credit and financial accommodations
extended and to be extended to Company pursuant to the Term Loan Agreement and
the other Loan Documents or otherwise, which Joining Guarantors hereby agree
have and shall continue to benefit Joining Guarantors and their respective
shareholders, directly or indirectly, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Joining Guarantors hereby agree, assume, ratify, join and acknowledge as
follows:


 


1.             ASSUMPTION.  Joining Guarantors hereby unconditionally,
jointly and severally, assume liability for all covenants, warranties, representations,
indemnifications, obligations and other Indebtedness of Guarantors now existing
or which may hereafter arise under the Guaranty and shall be liable therefor as
though Joining Guarantors had originally been parties to the Guaranty.  Without limitation of the foregoing, Joining
Guarantors, as primary obligors and not as sureties, unconditionally, jointly
and severally, guarantee unto Agent on behalf of the Lenders (i) the
payment of the Guaranteed Obligations when due (whether at the stated maturity,
by acceleration or otherwise) in accordance with the terms of the Loan
Documents, and (ii) that Company will perform and observe each agreement,
covenant, term and condition in the Loan Documents to be performed or observed
by Company and, upon Company’s failure to do so, will promptly perform and
observe, or will cause to be promptly performed and observed, each such
agreement, covenant, term or condition.


 


Each Joining Guarantor, and by its assumption of this Joinder
Agreement, the Agent and each other Lender, hereby confirms that it is the
intention of all such Persons that this Joinder Agreement and the obligations
of each Joining Guarantor hereunder not constitute a fraudulent transfer or
conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance
Act, the Uniform Fraudulent Transfer Act or any similar foreign, federal or
state law to the extent applicable to the Guaranty and the obligations of each
Joining Guarantor hereunder.  To
effectuate the foregoing intention, the Agent, the Lenders and the Joining
Guarantors hereby irrevocably agree that the obligations of each Joining
Guarantor under this Joinder Agreement at any time shall be limited to the
maximum amount as will result in the obligations of such Joining Guarantor
under this Joinder Agreement not constituting a fraudulent transfer or
conveyance.


 


2.             CONTRIBUTION.  Joining Guarantors hereby unconditionally,
jointly and severally, assume liability for all covenants, warranties,
representations, indemnifications, obligations and other Indebtedness of
Guarantors now existing or which may hereafter arise under the Contribution
Agreement and shall be liable therefor as though Joining Guarantors had
originally been parties to the Contribution Agreement.  Without limitation of the foregoing, Joining
Guarantors unconditionally agree that in the event any other Guarantor shall
suffer any loss or liability under the Guaranty beyond such Guarantor’s
Proportionate Share (as defined in the Contribution Agreement), then Joining
Guarantors will upon demand by such other Guarantor pay thereto a sum equal to
the amount of such excess loss or liability, not to exceed each Joining
Guarantor’s Proportionate Share of the total loss or liability.


 


3.             TERMS
RATIFIED.  Joining Guarantors hereby
expressly ratify all guarantees, terms, covenants, representations,
indemnifications, warranties, agreements, provisions, WAIVERS, RELEASES,
restrictions, duties and responsibilities of the Guarantors under the 


 

















 


Guaranty, the Contribution Agreement and all other Loan Documents and
agree that they shall apply to Joining Guarantors as if Joining Guarantors had
executed the Guaranty and the Contribution Agreement, and that any reference to
“Guarantors” or a “Guarantor” contained in the Guaranty, the Contribution Agreement,
the Term Loan Agreement or any other Loan Documents shall mean, without
limitation, Joining Guarantors.


 


4.             REPRESENTATIONS.  Joining Guarantors hereby make each
representation and warranty set forth in Article 4 of the Guaranty to the
same extent as each other Guarantor. 
Joining Guarantors (a) confirm that they each have received a copy
of the Loan Documents, together with such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter
into this Joinder Agreement; (b) agree that they will, independently and
without reliance upon Agent or any Lender and based on such documents and
information as they shall deem appropriate at the time, continue to make their
own credit decisions in taking or not taking action under the Loan Documents,
and (c) represent that the value of the consideration received and to be
received by each Joining Guarantor is reasonably worth at least as much as the
liability and obligation of such Joining Guarantor hereunder, and that such
liability and obligation may reasonably be expected to benefit Joining
Guarantors directly or indirectly.  The
Board of Directors of each of Joining Guarantors has duly adopted resolutions
certifying that the execution, delivery and performance of this Joinder
Agreement (and the effect thereof) will benefit the applicable Joining
Guarantor, directly or indirectly.


 


5.             NO
IMPAIRMENT.  Nothing herein shall in any
manner impair or extinguish the Guaranty, the Contribution Agreement or any of
the other Loan Documents or any lien or security interest now or hereafter
securing the payment of any of the Indebtedness arising pursuant to the Loan
Documents.


 


6.             GOVERNING
LAW; JURISDICTION, ETC.  (a)  Unless
otherwise specified therein, this Joinder Agreement shall be governed by and
construed in accordance with the laws of the State of New York and the United
States of America.  Each Joining
Guarantor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Joinder Agreement or any of the other Loan Documents to which
it is a party, or for recognition or enforcement of any judgment, and each of
the parties hereto hereby irrevocably and unconditionally agrees that all
claims in respect of any such action or proceeding may be heard and determined in
any such New York State court or, to the fullest extent permitted by law, in
such Federal court.  Each Joining
Guarantor agrees that a final judgment in any such action or proceeding shall
be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.  Nothing in this Joinder Agreement shall
affect any right that any party may otherwise have to bring any action or
proceeding relating to this Joinder Agreement or any of the other Loan
Documents in the courts of any jurisdiction.


 


(b)           EACH JOINING
GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT
IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION THAT IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS GUARANTY OR ANY OF THE OTHER LOAN DOCUMENTS 


 

















 


TO WHICH IT IS A PARTY IN ANY NEW YORK STATE OR
FEDERAL COURT.  EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT.


 


(c)           EACH JOINING
GUARANTOR, THE AGENT AND THE LENDERS IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT
OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS JOINDER AGREEMENT, ANY OF THE
LOAN DOCUMENTS OR THE ACTIONS OF THE AGENT OR ANY LENDER IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.


 


7.             SURVIVAL;
PARTIES BOUND.  All representations,
warranties, covenants and agreements made by or on behalf of each Joining
Guarantor in connection herewith shall survive the execution and delivery of
this Joinder Agreement and the other Loan Documents, shall not be affected by any
investigation made by any Person, and shall bind Joining Guarantors and their
successors, trustees, receivers and assigns and inure to the benefit of the
successors and assigns of Agent and Lenders. 
The term of this Joinder Agreement shall be until the termination of the
Guaranty and the Contribution Agreement as to all Parties.


 


8.             CAPTIONS.  The headings and captions appearing in this
Joinder Agreement have been included solely for convenience and shall not be
considered in construing this Joinder Agreement.


 


9.             DEFINITIONS.     Terms used herein and not defined herein,
but which are defined in the Term Loan Agreement or the Guaranty, shall have
the meanings herein assigned to them in the Term Loan Agreement or the
Guaranty, respectively.


 


10.           PARTIES
BOUND.  This Joinder Agreement shall bind
and benefit the parties hereto and their respective successors and assigns,
except that Joining Guarantors may not assign their rights or obligations
hereunder without the prior written consent of Agent and Lenders.


 


11.           COUNTERPARTS.  This Joinder Agreement may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same
agreement.  Delivery of an executed
signature page of this Joinder Agreement by facsimile transmission or
electronic transmission (i.e., a “pdf” or “tif”) shall be effective as delivery
of an original executed counterpart of this Joinder Agreement.


 


[Remainder
of page left intentionally blank.]


 

















 


IN WITNESS WHEREOF, Joining Guarantors have executed this Joinder
Agreement as of the date set forth above.


 


 


	
   

  	
  [Joining Guarantors]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 
















 


NOTE: A request for confidential treatment has been made with respect
to the portions of the following document that are marked with
[*CONFIDENTIAL*].  The redacted portions
have been filed separately with the SEC.


 


Schedule 1.1(a)


Disclosed Divestitures


 


Part A


 


1.                                       Sale of Henry’s
and Sun Harvest stores, and related Southern California distribution center.


 


Part B


 


2.                                       Divestiture of
such of the Wild Oats stores as may be mandated by the FTC/DOJ in connection
with their legal challenge to consummation of the Transactions.


 

















 


NOTE: A request for confidential treatment has been made with respect
to the portions of the following document that are marked with
[*CONFIDENTIAL*].  The redacted portions
have been filed separately with the SEC.


 


Schedule 1.1(b)


 


EBIT/EBITDA


(in millions)


 


For
the Fiscal Quarter ending on 1/14/07


 


·                  EBIT shall be:  $95.2


·                  EBITDA shall be:  $154.4


 


For
the Fiscal Quarter ending on 4/08/07


 


·                  EBIT shall be:  $86.1


·                  EBITDA shall be:  $135.2


 


For the Fiscal Quarter
ending on 6/01/07


 


·                  EBIT shall be:  $89.5


·                  EBITDA shall be:  $138.2


 


2

















 


NOTE: A request for confidential treatment has been made with respect
to the portions of the following document that are marked with
[*CONFIDENTIAL*].  The redacted portions
have been filed separately with the SEC.


 


Schedule 1.1(c)


Guarantors


 


[*CONFIDENTIAL*]


 


Allegro
Coffee Company, a Colorado corporation


 


Mrs. Gooch’s
Natural Food Markets, Inc., a California corporation


 


Nature’s
Heartland, Inc., a Massachusetts corporation


 


The
Sourdough, A European Bakery, Inc., a Texas corporation


 


WFM
Beverage Corp., a Texas corporation


 


WFM
Beverage Holding Company, a Texas corporation


 


WFM
Gift Card, LLC, a Virginia limited liability company


 


WFM
Hawaii, LLC, a Hawaii limited liability company


 


WFM
IP Investments, Inc., a Delaware corporation


 


WFM
IP Management, Inc., a Delaware corporation


 


WFM
Northern Nevada, Inc., a Delaware corporation


 


WFM
Private Label Management, Inc., a Delaware corporation


 


WFM
Private Label, L.P., a Delaware limited partnership


 


WFM
Procurement Investments, Inc., a Delaware corporation


 


WFM
Properties Scottsdale, LLC, a Delaware limited liability company


 


WFM
Properties, L.P., a Texas limited partnership


 


WFM
Purchasing Management, Inc., a Delaware corporation


 


WFM
Purchasing, L.P., a Delaware limited partnership


 


WFM
Select Fish, Inc., a Delaware corporation


 


WFM
Southern Nevada, Inc., a Delaware corporation


 


WFMI
Merger Co., a Delaware corporation


 


3





















 


NOTE: A request for confidential treatment has been made with respect
to the portions of the following document that are marked with
[*CONFIDENTIAL*].  The redacted portions
have been filed separately with the SEC.


 


Whole
Food Company, Inc., a Louisiana corporation


 


Whole
Foods Market Brand 365, LLC, a California limited liability company


 


Whole
Foods Market California, Inc., a California corporation


 


Whole
Foods Market Distribution, Inc., a Delaware corporation


 


Whole
Foods Market Finance, Inc., a Delaware corporation


 


Whole
Foods Market Group, Inc., a Delaware corporation


 


Whole
Foods Market IP, L.P., a Delaware limited partnership


 


Whole
Foods Market Pacific Northwest, Inc., a Delaware corporation


 


Whole
Foods Market Procurement, Inc., a Delaware corporation


 


Whole
Foods Market Rocky Mountain/Southwest I, Inc., a Delaware corporation


 


Whole
Foods Market Rocky Mountain/Southwest, L.P., a Texas limited partnership


 


Whole
Foods Market Services, Inc., a Delaware corporation


 


Whole
Foods Market Southwest Investments, Inc., a Delaware corporation


 


4





















 


NOTE: A request for confidential treatment has been made with respect
to the portions of the following document that are marked with
[*CONFIDENTIAL*].  The redacted portions
have been filed separately with the SEC.


 


SCHEDULE 1.1 (d)


EXISTING LETTERS OF CREDIT


 


I.                                         WHOLE
FOODS MARKET, INC.


 


	
  LOC #

  	
   

  	
  ISSUER

  	
   

  	
  BENEFICIARY

  	
   

  	
  AMOUNT

  	
   

  	
  EXPIRATION

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  a.

  	
   

  	
  i-463934

  	
   

  	
  JPMorgan Chase Bank, N.A.

  	
   

  	
  *CONFIDENTIAL*

  	
   

  	
  *CONFIDENTIAL*

  	
   

  	
  *CONFIDENTIAL*

  
	
  b.

  	
   

  	
  SBD-231337

  	
   

  	
  JPMorgan Chase Bank, N.A.

  	
   

  	
  *CONFIDENTIAL*

  	
   

  	
  *CONFIDENTIAL*

  	
   

  	
  *CONFIDENTIAL*

  
	
  c.

  	
   

  	
  TDTS-636991

  	
   

  	
  JPMorgan Chase Bank, N.A.

  	
   

  	
  *CONFIDENTIAL*

  	
   

  	
  *CONFIDENTIAL*

  	
   

  	
  *CONFIDENTIAL*

  
	
  d.

  	
   

  	
  TDTS-230794

  	
   

  	
  JPMorgan Chase Bank, N.A.

  	
   

  	
  *CONFIDENTIAL*

  	
   

  	
  *CONFIDENTIAL*

  	
   

  	
  *CONFIDENTIAL*

  



 


II.                                     WILD
OATS MARKETS, INC.


 


	
  LOC #

  	
   

  	
  ISSUER

  	
   

  	
  BENEFICIARY

  	
   

  	
  AMOUNT

  	
   

  	
  EXPIRATION

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  a.

  	
   

  	
  3085815

  	
   

  	
  Bank of America

  	
   

  	
  Capitol Indemnity Corporation and/or Platte River Ins. Co.

  	
   

  	
  $

  	
  1,075,000.00

  	
   

  	
  11/30/2007

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  b.

  	
   

  	
  3078322

  	
   

  	
  Bank of America

  	
   

  	
  Liberty Mutual Insurance Company

  	
   

  	
  $

  	
  7,448,000.00

  	
   

  	
  9/30/2007

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  c.

  	
   

  	
  3076234

  	
   

  	
  Bank of America

  	
   

  	
  Park Blvd Holdings, a California Limited Partnership

  	
   

  	
  $

  	
  100,000.00

  	
   

  	
  11/30/2007

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  d.

  	
   

  	
  3076235

  	
   

  	
  Bank of America

  	
   

  	
  Pinecrest Plaza LLC, a Florida Ltd Liability Company

  	
   

  	
  $

  	
  549,514.00

  	
   

  	
  11/30/2007

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  e.

  	
   

  	
  3076236

  	
   

  	
  Bank of America

  	
   

  	
  Travelers Indemnity Company

  	
   

  	
  $

  	
  6,035,000.00

  	
   

  	
  9/30/2007

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  f.

  	
   

  	
  3076237

  	
   

  	
  Bank of America

  	
   

  	
  Travelers Indemnity Company

  	
   

  	
  $

  	
  422,000.00

  	
   

  	
  9/30/2007

  



 


5

















 


NOTE: A request for confidential treatment has been made with respect
to the portions of the following document that are marked with
[*CONFIDENTIAL*].  The redacted portions
have been filed separately with the SEC.


 


Schedule 2.1(a)


Commitments


 


	
  Name of Lender

  	
   

  	
  Commitment

  	
   

  	
  Commitment

  Percentage

  	
   

  
	
  JPMorgan
  Chase Bank, N.A.

  	
   

  	
  $

  	
  50,000,000.00

  	
   

  	
  20.0

  	
  %

  
	
  Royal
  Bank of Canada

  	
   

  	
  $

  	
  50,000,000.00

  	
   

  	
  20.0

  	
  %

  
	
  Wells
  Fargo Bank, N A

  	
   

  	
  $

  	
  42,500,000.00

  	
   

  	
  17.0

  	
  %

  
	
  LaSalle
  Bank Midwest, N.A.

  	
   

  	
  $

  	
  30,000,000.00

  	
   

  	
  12.0

  	
  %

  
	
  Wachovia
  Bank, N.A.

  	
   

  	
  $

  	
  30,000,000.00

  	
   

  	
  12.0

  	
  %

  
	
  Fortis
  Capital

  	
   

  	
  $

  	
  20,000,000.00

  	
   

  	
  8.0

  	
  %

  
	
  U.S.
  Bank, National Association

  	
   

  	
  $

  	
  17,500,000.00

  	
   

  	
  7.0

  	
  %

  
	
  Bank
  of America, N.A.

  	
   

  	
  $

  	
  10,000,000.00

  	
   

  	
  4.0

  	
  %

  
	
  Total

  	
   

  	
  $

  	
  250,000,000.00

  	
   

  	
  100

  	
  %

  



 


6

















 


NOTE: A request for confidential treatment has been made with respect
to the portions of the following document that are marked with
[*CONFIDENTIAL*].  The redacted portions
have been filed separately with the SEC.


 


Schedule 3.2(e)


Litigation


 


None


 


7




















 


NOTE: A request for confidential treatment has been made with respect
to the portions of the following document that are marked with
[*CONFIDENTIAL*].  The redacted portions
have been filed separately with the SEC.


 


Schedule 4.8


Subsidiaries


 


[*CONFIDENTIAL*]


 


5.             Allegro Coffee Company, a
Colorado corporation


 


[*CONFIDENTIAL*]


 


9.             Fresh & Wild
Holding Limited, a company incorporated in England and Wales


 


10.           Fresh & Wild
Limited, a company incorporated in England and Wales (Parent:  Fresh &
Wild Holding Limited)


 


11.           Freshlands Holdings Limited,
a company incorporated in England and Wales (Parent: Fresh & Wild
Limited)


 


12.           Freshlands Limited, a
company incorporated in England and Wales (Parent: Freshlands Holdings Limited)


 


[*CONFIDENTIAL*]


 


19.           Mrs. Gooch’s Natural
Food Markets, Inc., a California corporation


 


20.           Nature’s Heartland, Inc.,
a Massachusetts corporation (Parent: Whole Foods Market Group, Inc.)


 


[*CONFIDENTIAL*]


 


26.           The Sourdough, A European
Bakery, Inc., a Texas corporation (Parent: Whole Foods Market Southwest
Investments, Inc.)


 


[*CONFIDENTIAL*]


 


28.           WFM Beverage Corp., a Texas
corporation (Parent: WFM Beverage Holding Company)


 


29.           WFM Beverage Holding
Company, a Texas corporation


 


[*CONFIDENTIAL*]


 


31.           WFM Gift Card, LLC, a
Virginia limited liability company (Parent: Whole Foods Market Group, Inc.


 


8

















 


NOTE: A request for confidential treatment has been made with respect
to the portions of the following document that are marked with [*CONFIDENTIAL*].  The redacted portions have been filed
separately with the SEC.


 


32.           WFM Hawaii, LLC, a Hawaii
limited liability company (Parent: Mrs. Gooch’s Natural Food Markets, Inc.)


 


[*CONFIDENTIAL*]


 


34.           WFM IP Investments, Inc.,
a Delaware corporation


 


35.           WFM IP Management, Inc.,
a Delaware corporation


 


36.           WFM Northern Nevada, Inc.,
a Delaware corporation (Parent: Whole Foods Market California, Inc.)


 


37.           WFM Private Label Management, Inc.,
a Delaware corporation (Parent: Whole Foods Market Procurement, Inc.)


 


38.           WFM Private
Label, L.P., a Delaware limited partnership (General Partner (0.01%): WFM
Private Label Management, Inc.; Limited Partner (99.99%):  WFM Procurement Investments, Inc.)


 


39.           WFM Procurement Investments, Inc.,
a Delaware corporation (Parent: Whole Foods Market Procurement, Inc.)


 


[*CONFIDENTIAL*]


 


42.           WFM Properties Holdings, Inc.,
a Delaware corporation


 


43.           WFM Properties Investments, Inc.,
a Delaware corporation (Parent: WFM Properties Holdings, Inc.)


 


44.           WFM Properties Management, Inc.,
a Delaware corporation (WFM Properties Holdings, Inc.)


 


[*CONFIDENTIAL*]


 


46.           WFM Properties Scottsdale,
LLC, a Delaware limited liability company (Parent: GBD Properties, Inc.)


 


47.           WFM Properties, L.P., a Texas limited partnership
(General Partner (0.01%): WFM Properties Management, Inc.; Limited Partner
(99.99%): WFM Properties Investments, Inc.)


 


48.           WFM Purchasing Management, Inc.,
a Delaware corporation (Parent: Whole Foods Market Procurement, Inc.)


 


9

















 


NOTE: A request for confidential treatment has been made with respect
to the portions of the following document that are marked with
[*CONFIDENTIAL*].  The redacted portions
have been filed separately with the SEC.


 


49.           WFM Purchasing, L.P., a Delaware limited partnership
(General Partner (0.01%): WFM Purchasing Management, Inc.; Limited Partner
(99.99%): WFM Procurement Investments, Inc.)


 


50.           WFM Select Fish, Inc.,
a Delaware corporation


 


51.           WFM Southern Nevada, Inc.,
a Delaware corporation (Parent: Mrs. Gooch’s Natural Food Markets, Inc.)


 


52.           WFMI Merger Co., a Delaware
corporation


 


53.           Whole Food Company, Inc.,
a Louisiana corporation (Parent: Whole Foods Market Southwest Investments, Inc.


 


54.           Whole Foods Market Brand
365, LLC, a California limited liability company (Parent: Whole Foods Market
Services, Inc.)


 


55.           Whole Foods Market
California, Inc., a California corporation


 


56.           Whole Foods Canada, Inc.,
a Canada corporation


 


57.           Whole Foods Market
Distribution, Inc., a Delaware corporation


 


58.           Whole Foods Market Finance, Inc.,
a Delaware corporation


 


59.           Whole Foods Market Group, Inc.,
a Delaware corporation


 


60.           Whole Foods Market IP, L.P., a Delaware limited
partnership (General Partner (0.01%): WFM IP Management, Inc.; Limited
Partner (99.99%): WFM IP Investments, Inc.)


 


61.           Whole Foods Market Pacific
Northwest, Inc., a Delaware corporation


 


62.           Whole Foods Market
Procurement, Inc., a Delaware corporation


 


63.           Whole Foods Market Rocky
Mountain/Southwest I, Inc., a Delaware corporation


 


64.           Whole Foods Market Rocky
Mountain/Southwest, L.P., a Texas limited partnership (General Partner (1%):
Whole Foods Market Rocky Mountain/Southwest I, Inc.; Limited Partner
(99%): Whole Foods Market Southwest Investments, Inc.)


 


65.           Whole Foods Market Services, Inc.,
a Delaware corporation


 


66.           Whole Foods Market Southwest
Investments, Inc., a Delaware corporation


 


10





















 


NOTE: A request for confidential treatment has been made with respect
to the portions of the following document that are marked with
[*CONFIDENTIAL*].  The redacted portions
have been filed separately with the SEC.


 


67.           YellowFrames Limited, a
company incorporated in England and Wales (Parent: Fresh & Wild
Limited)


 


11





















 


NOTE: A request for confidential treatment has been made with respect
to the portions of the following document that are marked with
[*CONFIDENTIAL*].  The redacted portions
have been filed separately with the SEC.


 


Schedule 4.13


Assumed Names


 


Whole
Foods Market


 


Fresh
Fields


 


Fresh
Fields Whole Foods Market


 


Merchant
of Vino


 


Whole
Foods Market Southwest, L.P.


 


Whole
Foods Market Southwest


 


Whole
Foods Market Southwest Distribution Center


 


Whole
Foods Market Rocky Mountain, L.P.


 


Whole
Foods Market Rocky Mountain


 


Whole
Hearth


 


12





















 


NOTE: A request for confidential treatment has been made with respect
to the portions of the following document that are marked with
[*CONFIDENTIAL*].  The redacted portions
have been filed separately with the SEC.


 


Schedule 4.16


Agreements


 


1.             All credit agreements for
borrowed money (other than the indebtedness governed hereby), indentures and
capitalized leases and all Property subject to any Lien securing such Indebtedness
or lease obligation


 


None other than as
summarized in Company’s SEC filings or with respect to liens described in Section 6.2(b) through
6.2(i)


 


2.             Letter of credit and
guaranty for which the liability or potential liability of the Company and its
Subsidiaries on a consolidated basis is in excess of $250,000


 


None other than as
summarized in Company’s SEC filings


 


3.             Other material instruments
in effect as of the date hereof providing for, evidencing, securing or
otherwise relating to any indebtedness for borrowed money of the Company or any
of its Subsidiaries (other than the Indebtedness hereunder and Indebtedness
secured by Incidental Liens)


 


None other than as
summarized in Company’s SEC filings or with respect to liens described in Section 6.2(b) through
6.2(i)


 


4.             Obligations of the Company
or any of its Subsidiaries to issuers of appeal bonds issued for account of the
Company or any of its Subsidiaries.


 


None


 


13

















 


NOTE: A request for confidential treatment has been made with respect
to the portions of the following document that are marked with
[*CONFIDENTIAL*].  The redacted portions
have been filed separately with the SEC.


 


Schedule 6.2(a)


Liens


 


Mrs. Gooch
Natural Food Markets, Inc.


 


11/26/02;
Citicorp Vendor Finance (Equipment Lease); #0233660421


 


Whole
Foods Market California, Inc.


 


11/24/02;
US Bancorp (Equipment Lease); #0226860364


3/21/05;
Robert Reiser & Co. (Equipment Lease); #05-7019828060


6/29/06;
United Rentals, Inc. (Equipment Lease); #06-7075949885


5/24/07;
Bank of America Leasing & Capital (Equipment Lease); #07-7115128719


5/25/07;
Bank of America Leasing & Capital (Equipment Lease) (2 filings);
#07-7115332170


7/23/07;
Bank of America Leasing & Capital (Equipment Lease); # 07-7122379816


7/24/07;
Bank of America Leasing & Capital (Equipment Lease); #07-7122591034


 


Whole
Foods Market Distribution, Inc.


 


12/05/03;
Recycle America Alliance, LLC (Equipment Lease); #33194050


 


Whole
Foods Market Group, Inc.


 


9/3/02;
American Bank Note Company, as agent for USPS (Consignment); #22214041


9/25/02;
IBM Credit Corporation (Equipment Lease); #22469553


10/23/02;
IBM Credit Corporation (Equipment Lease); #22769119


7/17/03;
Patriot Commercial Leasing Co. (Equipment Lease); #30309347


2/28/03;
American Bank Note Company, as agent for USPS (Consignment); #30498843


2/5/03;
Crown Credit Company (Equipment Lease); #30571797


3/10/03;
Crown Credit Company (Equipment Lease); #30576762


2/28/03;
Crown Credit Company (Equipment Lease) (2 filings); #30687692, #30687734


11/13/03;
Crown Credit Company (Equipment Lease); #32987553


4/29/04;
Crown Credit Company (Equipment Lease); #41198490


9/7/04;
Crown Credit Company (Equipment Lease); #42507442


1/20/05;
Crown Credit Company (Equipment Lease); #50223173


2/14/05;
Crown Credit Company (Equipment Lease); #50494329


2/25/05;
Crown Credit Company (Equipment Lease); #50613555


4/12/05;
Crown Credit Company (Equipment Lease); #51116608


8/8/05;
Crown Credit Company (Equipment Lease) (3 filings); #52438548; 52442847


8/25/05;
Crown Credit Company (Equipment Lease); #52647692


3/10/03;
US Bancorp (Equipment Lease); #30576762


3/31/03;
US Bancorp (Equipment Lease); #30879927


4/28/03;
US Bancorp (Equipment Lease); #31260093


 


14

















 


NOTE: A request for confidential treatment has been made with respect
to the portions of the following document that are marked with
[*CONFIDENTIAL*].  The redacted portions
have been filed separately with the SEC.


 


11/26/03;
US Bancorp (Equipment Lease); #33125294


3/10/04;
US Bancorp (Equipment Lease); #30576762


3/16/04;
US Bancorp (Equipment Lease); #40729923


9/7/06;
US Bancorp (Equipment Lease); #42507442


4/15/03;
IOS Capital LLC (Equipment Lease); #30972052


7/27/04;
IOS Capital LLC (Equipment Lease); #42162065


3/12/04;
Robert Reiser & Co. (Equipment Lease); #4078888


2/11/04;
IOS Capital LLC (Equipment Lease); #40511099


3/8/07;
IOS Capital LLC (Equipment Lease); #0867464


1/8/04;
Konica Minolta Business Solutions (Equipment Lease); #40044737


4/1/05;
Greater Bay Bank (Equipment Lease); #50993692


10/6/04;
First Access (Equipment Lease); #42808394


8/30/05;
Robert Reiser & Co. (Equipment Lease); #52688258


7/28/06;
Robert Reiser & Co. (Equipment Lease); #62611614


12/14/06;
Robert Reiser & Co. (Equipment Lease); #64372520


3/20/07;
Robert Reiser & Co. (Equipment Lease); #1028397


9/7/05;
Citicapital Technology Finance (Equipment Lease); #52762764


9/23/05;
Citicapital Technology Finance (Equipment Lease); #52996289


5/30/06;
NMHG Financial Services (Equipment Lease); #61817121


 


Whole
Foods Market, Inc.


 


6/10/04;
Crown Credit Company (Equipment Lease); #04-0070989027


6/15/04;
Crown Credit Company (Equipment Lease) (2 filings); #04-0071408034,
#04-0071408145


6/21/04;
Crown Credit Company (Equipment Lease) (2 filings); #04-0072049804,
#04-0072062556


6/24/04;
Crown Credit Company (Equipment Lease); #04-0072582240


6/29/04;
Crown Credit Company (Equipment Lease); #04-0072992124


10/14/04;
Crown Credit Company (Equipment Lease); #04-0085079881


10/25/04;
Crown Credit Company (Equipment Lease); #04-0086111233


5/23/05;
Crown Credit Company (Equipment Lease); #05-0016055860


5/24/05;
Crown Credit Company (Equipment Lease) (2 filings); #05-0016243415,
#05-001623526


12/19/05;
Crown Credit Company (Equipment Lease); #05-0038612843


3/18/02;
NCR Corporation (Equipment Lease); #02-0022852708


4/29/02;
NMHG Financial Services (Equipment Lease); #02-0027956536


9/11/03;
American Bank Note, as agent for USPS (Consignment); #04-0041483498


9/30/05;
IBM Credit (Equipment Lease); #05-0030547216


6/26/07;
US Express Leasing (Equipment Lease); #07-0021504998


 


Allegro
Coffee Company, Inc.


 


2/11/05;
Air Liquide Industrial US, LP (Equipment Lease); #20052016259


 


15