Document:

EMPLOYMENT AGREEMENT

         EMPLOYMENT AGREEMENT by and between Wild Oats Markets, Inc. (the
"Company"), a Delaware corporation with its principal place of business at 3375
Mitchell Lane, Boulder, CO 80301, and Perry D. Odak of Brockie Mansion, 900
Brockie Lane, York, Pennsylvania 17403 (the "Executive"), dated March 6, 2001.

         WHEREAS, the Executive is possessed of certain experience and expertise
that qualify him to provide the direction and leadership required by the
Company; and

         WHEREAS, subject to the terms and conditions hereinafter set forth, the
Company wishes to retain the Executive as its Chief Executive Officer and
President and the Executive wishes to accept such retention;

         NOW, THEREFORE, in consideration of the foregoing premises and the
mutual promises, terms, provisions and conditions set forth in this Agreement,
the parties hereby agree:

         1.       Employment.  Subject  to the  terms  and  conditions  set
forth in this Agreement, the Company hereby offers and the Executive hereby
accepts employment as the Chief Executive Officer and President of the Company,
commencing on March 19, 2001 (the "Effective Date").

         2. Term. Subject to earlier termination as hereinafter provided, the
Executive's retention under this Agreement shall be for a term of five years
commencing on the Effective Date. The term of this Agreement, as from time to
time extended or renewed, is hereinafter referred to as "the Term of this
Agreement" or "the Term hereof." This Agreement shall continue on a year-to-year
basis beyond the end of the fifth year (or a later year if this Agreement has
renewed), unless the Company notifies the Executive in writing not less than
nine (9) months prior to the end of the fifth year (or applicable later year)
that the Company does not wish to renew the Agreement. The Company's decision
not to renew this Agreement shall not be treated as a termination of the
Executive by the Company for purposes of this Agreement.

         3.       Capacity and Performance.

         (a)      During the Term hereof, the Executive shall serve the
Company as its Chief Executive Officer and President.

         (b) During the Term hereof, the Executive shall serve the Company on a
full-time basis and shall have the leadership of and be responsible to the Board
of Directors for all operations of the Company and shall have all powers and
duties consistent with such position, in accordance with the Bylaws of the
Company. It is understood that for the Term hereof, the Executive shall also
have certain authorities and obligations designated by the Board of Directors
and set forth in Exhibit A to this Agreement (the "Statement of Authority"). The
Statement of Authority is incorporated herein by reference and shall remain in
effect unless modified or terminated by mutual written agreement during the Term
hereof.

         (c) During the Term hereof, the Executive shall devote his full
business time (other than vacations) and his best efforts, business judgment,
skill and knowledge exclusively (except as provided below) to the advancement of
the business and interests of the Company and to the discharge of his duties and
responsibilities hereunder. The Executive shall not engage in any other business
activity or serve in any industry, trade, governmental position or as a director
of any other business or organization during the Term of this Agreement, except
as may be approved by a committee of the Board consisting of three outside
directors. The Company encourages participation by the Executive in community
and charitable activities, but said committee shall have the right to approve or
disapprove the Executive's participation in such activities if, in the judgment
of said committee, such participation may conflict with the Company's interests
or with the Executive's duties or responsibilities or the time required for the
discharge of those duties and responsibilities. The Executive has previously
delivered a letter containing a true and correct list of all directorships or
other participation in committees, consulting or other business activities which
the Executive has or intends to maintain during the Term, which have been
approved by said committee of the Board.

         (d) The Executive shall be appointed to the Board of Directors by the
present Board of Directors as soon as practicable. The Company agrees to propose
and recommend to the shareholders of the Company at each appropriate Annual
Meeting of such shareholders during the Term hereof the election or re-election
of the Executive as a member of the Board. The Executive shall also lead the
effort on behalf of the Company to identify candidates to fill any vacancies on
the Board of Directors.

         4.       Payments and Benefits.  As payment for all services  performed
by the Executive under and during the Term hereof and subject to performance of
the Executive's duties and the obligations pursuant to this Agreement:

         (a) Base Amount. During the Term hereof, the Company shall pay the
Executive a base amount at the rate of Five Hundred Thousand Dollars ($500,000)
per annum, payable in accordance with the Company's regular payroll practice,
subject to increase from time to time by the Board, in its sole discretion. Such
base amount, as from time to time in effect, is hereinafter referred to as the
"Base Amount. The Base Amount shall be reviewed at least annually by the
Company's Compensation Committee.

         (b) Incentive Compensation. In addition to the Base Amount, the Company
shall pay the Executive as incentive compensation ("Incentive Compensation") in
respect of each fiscal year (or portion thereof) of the Company during the Term
hereof, an amount determined in accordance with any bonus or short term
incentive compensation program (which may be based upon achieving certain
specified performance criteria) which may be established by the Board either for
Executive or for senior management. The determination as to the amounts of any
awards available to the Executive under these programs shall be reviewed at
least annually by the Company's Compensation Committee to ensure that such
amounts are competitive with awards granted to similarly situated executives of
publicly held companies comparable to the Company. The amount of Incentive
Compensation to be paid by the Company to the Executive for the first twelve
(12) months of service during the Term hereof shall not be less than Two Hundred
Fifty Thousand Dollars ($250,000), which amount shall be paid only if the
Executive remains in the continuous employment of the Company throughout such
twelve (12) month period or is terminated by the Company other than for Cause
(or he terminates for Good Reason) during such period.

         The Company shall consider whether to pay a pro rata portion of any
Incentive Bonus otherwise payable to the Executive for a fiscal year if the
Executive's employment is terminated by reason of death or disability or by the
Company other than for Cause during such fiscal year. The Executive shall
consider in good faith waiving all or a portion of the Incentive Compensation
otherwise payable to him for the first twelve (12) months of service to the
extent that the Company incurs a loss in connection with its obligation to
arrange for the purchase of the Executive's house under Section 4(h) of this
Agreement.

         (c)      Restricted Stock.

         (1) The Executive shall be given the opportunity to purchase from the
Company on the date hereof that number of shares of the Company's Common Stock,
par value $0.001 per share ("Stock"), equal to five percent (5%) of the number
of shares of Common Stock outstanding (on a fully diluted basis) upon the date
of purchase (after taking into account the shares sold to the Executive), at a
per share price equal to the closing market price on NASDAQ on the effective
date of the purchase. The purchase by the Executive shall be financed by the
Company and evidenced by a full recourse promissory note of the Executive in
favor of the Company. The purchase of the shares, including the financing, shall
be in accordance with and subject to the terms and conditions set forth in a
Restricted Stock Purchase Agreement (the "Purchase Agreement") by and between
the Executive and the Company, substantially in the form (including the exhibits
thereto) attached to this Agreement as Exhibit B.

         (2) For purposes of this Agreement, the calculation of the number of
shares of Stock outstanding on a "fully diluted basis" shall be made by assuming
that shares of Stock subject to options having an exercise price of $12 or less
are outstanding, and that shares of Stock subject to options having an exercise
price of more than $12 are not outstanding.

         (3) The terms of the Purchase Agreement shall control in the event of
any ambiguity between the Purchase Agreement and this Agreement.

         (d) Stock Options. If, by reason of the issuance by the Company of
additional shares of Stock pursuant to a capital raising transaction at any time
or times during the two hundred seventy (270) day period following the date of
this Agreement, the number of Shares purchased by the Executive pursuant to the
Purchase Agreement represents less than five percent (5%) of the sum of (i) the
number of shares of Stock outstanding (on a fully diluted basis) upon the date
of the Executive's purchase (after taking into account the shares sold to the
Executive) plus (ii) the number of shares issued pursuant to such capital
raising transaction, the Company shall automatically grant to the Executive, on
the date of issuance of the Stock in the capital raising transaction (provided
he has become an employee and remained in the continuous employment of the
Company), options to acquire such additional number of shares of Stock
sufficient to maintain the Executive's percentage interest as of such date (if
such options were exercised) at five percent (5%) of the sum of (i) and (ii)
plus the number of shares subject to such options; provided, however, that the
Executive shall not be granted options to acquire more than 300,000 shares in
the aggregate pursuant to this provision. For purposes of this Subsection (d), a
capital raising transaction does not include issuances of Stock or options to
acquire Stock to employees or other service providers in connection with the
performance of services. Any options granted pursuant to this provision shall be
subject to the terms of the Company's Equity Incentive Plan and an incentive
stock option agreement to be entered into between the Company and the Executive
pursuant thereto, the terms of which shall control, provided they are consistent
with the following provisions of this Subsection (d). Such agreement shall
provide that the options have an exercise price equal to their fair market value
at the date of grant (as determined under the Equity Incentive Plan) and a term
of ten years, and become vested and exercisable over four years at the rate of
2.0833% per month following the date of grant provided the Executive has
remained in the continuous employment of the Company pursuant to this Agreement.
The vesting and exercisability of the options shall be subject to acceleration
under the same conditions that apply to the vesting of the Restricted Shares.
Any unexercised options shall terminate upon the Executive's termination of
employment for any reason; provided, however, that any options that are vested
and exercisable upon the Executive's termination shall remain exercisable for
ninety (90) days if termination is by the Company other than for Cause or by the
Executive for Good Reason, or for twelve (12) months if the Employee's
termination is by reason of death or disability (but not longer than the
remaining term of the option). The other terms of the options shall be no less
advantageous to the Executive than currently in place for executive employees
generally.

         (e) Supplemental Bonus. Provided the Executive has remained in the
continuous employment of the Company pursuant to this Agreement, the Executive
shall become entitled to (and shall vest in the right to receive) a cash bonus
if (i) the fair market value of the Stock, as measured by the closing stock
price on NASDAQ for the preceding 120 consecutive trading days, shall equal at
least $30 per share during the Term hereof, or (ii) a Change in Control of the
Company occurs during the Term hereof and the fair market value of the Stock, as
measured by the closing stock price on NASDAQ immediately prior to the Change in
Control, shall equal at least $20 per share. The amount of the cash bonus shall
equal $ 9,221,955.82, plus an amount equal to the interest that would accrue
thereon from the date hereof to the date of payment, at 7.5% per annum,
compounded semi-annually. The cash bonus shall be paid by the Company as soon as
reasonably practicable following the occurrence of the event described in clause
(i) or (ii) of this Subsection (e). The Company shall make appropriate
adjustments to the per share prices referred to in this Subsection (e) and the
number and exercise price of option shares referred to in Subsection (d) above
to reflect any stock dividend, extraordinary dividend payable in a form other
than stock, spin-off, stock split, reverse stock split, recapitalization, or
similar transaction affecting the Company's outstanding securities that is
effected without receipt of consideration.

         (f) Employee Benefit Plans. During the Term hereof, Executive (and his
family) shall be entitled to participate in the Company's welfare and retirement
plans, including the Company's group health, life, disability, and 401(k) plan,
from time to time in effect for executives of the Company generally, except to
the extent such plans are profit sharing or bonus plans or stock plans or are in
a category of benefit otherwise provided to the Executive under this Agreement.
The Executive shall also be entitled to defer up to $30,000 of salary and/or
incentive compensation otherwise payable to the Executive for the calendar year
2001, in accordance with and subject to the terms of the Company's Deferred
Compensation Plan. The Company may amend, terminate or add to its employee
benefit plans at any time as it, in its sole judgment, determines to be
appropriate.

         (g) Business Expenses. The Company shall pay or reimburse the Executive
for all reasonable business expenses of the Executive incurred during the Term
hereof in the performance of his duties and responsibilities hereunder,
including reasonable expenses relating to his transportation between the
Company's headquarters in Colorado and a temporary office to be maintained by
the Executive in Pennsylvania, subject to such reasonable substantiation and
documentation as may be specified by the Company from time to time. The
Executive shall be entitled to the use of an automobile (and operating expenses)
on terms to be mutually agreed upon between the Executive and the Compensation
Committee of the Board of Directors.

         (h) Relocation. The Company shall reimburse the Executive for the
reasonable costs incurred by him in relocating to a home in Colorado (not to
exceed $25,000). The Company shall assist the Executive in arranging for the
sale of his residence in York, Pennsylvania. The Executive agrees to provide the
Company with all consents, disclosures, representations and authorizations
reasonably required to enable the Company to arrange for the sale of the
residence on the Executive's behalf, to list the residence for sale for an
amount not in excess of 110% of its appraised value (determined as provided
below), and to otherwise cooperate with the Company to facilitate the sale of
the residence. In the event that a sale of the Executive's residence to a third
party is not completed with four (4) months after the Effective Date, the
Company (or a third party retained by the Company) shall offer to purchase the
Executive's residence for an amount equal to the fair market value of the
residence as of the Effective Date, or, if less, the fair market value of the
house as of the date thirty days prior to the date upon which the Company is
obligated to purchase the house pursuant to this provision. In each case, fair
market value shall be determined on the basis of an independent appraisal
obtained by the Company. However, if the Executive obtains an independent
appraisal from a party reasonably acceptable to the Company that is within 5% of
the appraised amount obtained by the Company, the fair market value shall be
deemed to equal the average of the two amounts. If the Executive's appraised
amount exceeds the Company's appraised amount by more than 5%, the Company shall
obtain a third appraisal from a party reasonably acceptable to the Executive,
and the fair market value shall be deemed the average of the three appraised
amounts.

         (i)      Legal Fees.  The Company shall reimburse the Executive for
reasonable  legal fees incurred by the Executive in the negotiation and
execution of this Agreement.

         (j)      Signing  Bonus.  The  Company  shall  pay the  Executive  a
one-time  signing  bonus of  $20,000 following the Effective Date of the
Agreement.

         5.       Termination of Employment  and Severance  Benefits.
Notwithstanding  the provisions of Section 2 hereof, the Executive's employment
hereunder shall terminate prior to the expiration of the Term hereof under the
following circumstances:

         (a) Death. In the event of the Executive's death during the Term
hereof, the Company shall pay to the Executive's designated beneficiary or, if
no beneficiary has been designated by the Executive, to his estate, any earned
and unpaid Base Amount that is earned but unpaid, and reimbursement of business
expenses accrued prior to the date of death.

         (b)      Disability.

         (1) The Company may terminate the Executive's employment hereunder,
upon thirty (30) days written notice to the Executive, in the event that the
Executive becomes disabled during his employment hereunder through any illness,
injury, accident or condition of either a physical or psychological nature and,
as a result, is unable to perform substantially all of his duties and
responsibilities hereunder for ninety (90) consecutive days during any period of
three hundred and sixty-five (365) consecutive calendar days.

         (2) The Board may designate another employee to act in the Executive's
place during any period of the Executive's disability prior to termination as
provided in Section 5(b)(1) above. Notwithstanding any such designation, the
Executive shall continue to receive from the Company (or under the Company's
disability plan) the Base Amount in accordance with Section 4(a) and benefits in
accordance with the other provisions of Section 4, to the extent permitted by
the then-current terms of the applicable benefit plans until the termination of
his employment.

         (3) The Executive shall be entitled to participate in the Company's
long-term disability plan during the Term hereof, to the same extent as other
employees. No finding of disability under this Section 5(b) shall be made in
respect of any cause or condition which has not been approved as a full
disability under the applicable plan (or, prior to the Executive's
participation, would not be approved as a full disability thereunder).

         (4) If any question shall arise as to whether during any period the
Executive is disabled through any illness, injury, accident or condition of
either a physical or psychological nature so as to be unable to perform
substantially all of his duties and responsibilities hereunder, the Executive
may, and at the request of the Company shall, submit to a medical examination by
a physician selected by the Company, to whom the Executive or his duly appointed
guardian has no reasonable objection, to determine whether the Executive is so
disabled and such determination shall for the purposes of this Agreement be
conclusive of the issue. If such question shall arise and the Executive shall
fail to submit to such medical examination, the Company's determination of the
issue shall be binding on the Executive.

         (c)      By the Company for Cause.

         (1) The Company may terminate the Executive's employment hereunder for
Cause ("Cause") any time upon written notice to the Executive setting forth in
reasonable detail the nature of such Cause. The following, as determined by the
Board in its reasonable judgment, shall each constitute Cause for termination:

          (i) a material breach of this Agreement by Executive (not otherwise
          listed in (ii) through (ix) below, for which no cure period shall be
          provided unless otherwise specified) which is not cured within thirty
          (30) days after written notice to Executive from the Compensation
          Committee;

          (ii) Executive's willful and repeated failure to comply with the
          lawful directives of the Board or the Company's Certificate of
          Incorporation or By-laws;

          (iii) gross negligence or willful misconduct by Executive in the
          performance of his duties hereunder;

          (iv) the commission by Executive of an act (including, but not limited
          to, a felony or a crime involving moral turpitude) causing material
          harm to the standing and reputation of the Company or its
          Subsidiaries, as determined in good faith by the Board;

          (v) misappropriation, breach of trust or fraudulent conduct by
          Executive with respect to the assets or operations of the Company or
          any of its Subsidiaries;

          (vi) the use by Executive of alcohol or drugs (not including the
          medicinal use of drugs in accordance with the prescription of a
          physician to treat disease, heal or relieve pain) to an extent that,
          in the good faith determination of the Board, materially interferes
          with the performance by Executive of his responsibilities under this
          Agreement and which continues after notice from the Board;

          (vii) the repeated threat of Executive to cause, or the actual
          occurrence of, damage to the relations of the Company or any of its
          Subsidiaries with customers, suppliers, lenders, advisors or employees
          which damage is materially adverse to the business or operations of
          the Company or any of its Subsidiaries, and which threat is not
          terminated or which damage is not cured following ten (10) days
          written notice from the Board (provided, however, that the utilization
          by the Executive of the dispute resolution procedures in this
          Agreement shall not, by itself, constitute a violation of this
          provision);

          (viii) unauthorized absence from work (unless resulting from
          Executive's disability) which continues after notice from the Board
          and materially interferes with the performance by Executive of his
          responsibilities under this Agreement; or

          (ix) deliberate or intentional violation of applicable laws, rules or
          regulations relating to the Company or its business, including
          violation of employment discrimination or harassment laws, rules or
          regulations.

         (2) For purposes of Section 5(c), no act, or failure to act, shall be
"willful" unless done, or omitted to be done, without reasonable belief that the
action or omission was in the best interests of the Company.

         (3) Notwithstanding the foregoing, the Executive shall not be deemed to
have been terminated for Cause unless and until there shall have been delivered
to him a notice of termination, and such termination shall have been approved by
the vote of two-thirds of the members of the Board of Directors (not including
the Executive) at a meeting of the Board (after reasonable notice to the
Executive and an opportunity for him, together with counsel, to be heard before
the Board of Directors) finding that, in the good faith opinion of the Board of
Directors, the above standard of termination for Cause was met in such case.
Effective upon a termination for Cause, the Executive shall be deemed to have
resigned as a member of the Board of Directors.

         (4) Upon the giving of notice of termination of the Executive's
employment hereunder for Cause following the determination of the Board under
the preceding subsection (3), the Company shall have no further obligation or
liability to the Executive, other than for any Base Amount earned and unpaid at
the date of termination, and payments or reimbursement of business expenses
accrued prior to the date of termination.

         (d) By the Company Other than for Cause. The Company may terminate the
Executive's employment hereunder other than for Cause at any time upon notice to
the Executive, provided that the Board of Directors determines, upon vote of
two-thirds its members (not including the Executive) after consultation with the
Executive and after setting forth the reasons for the Board's actions, that
retention of the Executive as the Chief Executive Officer would no longer be in
the best interests of the Company. In the event of such termination during the
first nine (9) months of the Term hereof, the Company shall continue to pay the
Executive the Base Amount at the rate in effect on the date of termination for
twenty-four (24) months. In the event of such termination during the last
fifty-one (51) months of the Term hereof, the Company shall continue to pay the
Executive the Base Amount at the rate in effect on the date of termination for
thirty-six (36) months. Subject to any employee contribution applicable to the
Executive on the date of termination, the Company shall continue to contribute,
for the period during which the Base Amount is continued hereunder, to the cost
of the Executive's participation (including his family) in the Company's group
medical and hospitalization insurance plans and group life insurance plan,
provided that the Executive is entitled to continue such participation under
applicable law and plan terms; and provided, further, that if the Executive is
not so entitled to continue, the Company shall reimburse the Executive (subject
to any employee contribution applicable to the Executive on the date of
termination) for the cost of obtaining such coverage. Except as otherwise
required under applicable law, continuation of such participation shall
terminate on the date the Executive becomes eligible to receive comparable
coverage under the plans of a subsequent employer.

         (e) By the Executive for Good Reason in the Absence of Cause. The
Executive may terminate his employment hereunder for Good Reason ("Good
Reason"), upon notice to the Company setting forth in reasonable detail the
nature of such Good Reason, and the Company's failure to remedy such matter
within thirty (30) days after receipt of such notice. The following shall
constitute Good Reason for termination by the Executive:

         (1)      Failure of the Company to continue the Executive in the
position of Chief Executive Officer;

         (2) Failure of the Company to propose or recommend the Executive, or
failure by the shareholders of the Company to elect the Executive, to the Board
of Directors as contemplated by Section 3(d) above;

         (3)      Material  diminution  in the  nature  or scope of the
Executive's  responsibilities,  duties  or authority (including those set forth
in the Statement of Authority);

         (4) Failure of the Company to provide the Executive the Base Amounts
and benefits in accordance with the terms of Section 4 or to observe any other
material provision of this Agreement; or

         (5)      A Change in Control of the Company.

A termination by the Executive for Good Reason, and in the absence of
circumstances that would entitle the Company to terminate the Executive for
Cause, shall be treated as a termination of the Executive by the Company other
than for Cause, and the Company shall continue to pay or provide the Base Amount
and other benefits in the same manner and to the same extent as provided under
Section 5(d) above for a termination other than for Cause.

         6.       Effect of Termination.

         (a) Except for benefits expressly continued pursuant to Section 5,
benefits shall terminate pursuant to the terms of the applicable benefit plans
based on the date of termination of the Executive's employment without regard to
any continuation of Base Amounts to the Executive following such date of
termination, and the Executive's entitlement to benefits accrued as of the date
of termination of the Executive's employment for any reason shall be determined
under the terms of the applicable benefit plan.

         (b) The provisions of this Agreement shall survive any termination if
so provided herein or if necessary or desirable fully to accomplish the purposes
of such provision, including without limitation the obligations of the Executive
under Sections 7, 8 and 9 hereof and all indemnifications provided for in this
Agreement (including Sections 12 and 15). The obligation of the Company to make
payments to or on behalf of the Executive under Sections 5(d) and 5(e) hereof is
expressly conditioned upon the Executive's continued full performance of
obligations under Sections 7, 8 and 9 hereof, and the Executive's execution and
delivery of a general release in such form as the Company shall require. The
Executive agrees that, except as expressly provided in Section 5 with respect to
continuation of the Base Amount as expressly provided, no compensation is earned
after termination of employment of the Executive for any reason, including as a
result of the non-renewal of this Agreement.

         7.       Confidential Information.

         (a) The Executive acknowledges that the Company and its Subsidiaries
continually develop Confidential Information, as defined in Section 14 hereof,
that the Executive may develop Confidential Information for the Company or its
Subsidiaries and that the Executive may learn of Confidential Information during
the course of his employment under this Agreement. The Executive will comply
with the policies and procedures of the Company and its Subsidiaries for
protecting Confidential Information and shall never disclose to any person
(except as required by applicable law or legal process or for the proper
performance of his duties and responsibilities to the Company and its
Subsidiaries, or in connection with any litigation between the Company and the
Executive (provided that the Company shall be afforded a reasonable opportunity
in each case to obtain a protective order)), or use for his own benefit or gain,
any Confidential Information obtained by the Executive incident to his
employment or other association with the Company or any of its Subsidiaries. The
Executive understands that this restriction shall continue to apply after his
employment terminates, regardless of the reason for such termination.

         (b) All documents, records, tapes and other media of every kind and
description relating to the business, present or otherwise, of the Company or
its Subsidiaries and any copies, in whole or in part, thereof (the "Documents"),
whether or not prepared by the Executive, shall be the sole and exclusive
property of the Company and its Subsidiaries. The Executive shall safeguard all
Documents and shall surrender to the Company at the time his employment
terminates, or at such earlier time or times as the Board or its designee may
specify, all Documents then in the Executive's possession or control.

         8.       Assignment of Rights to Intellectual Property.

         The Executive shall promptly and fully disclose all Intellectual
Property (as defined in Section 14 hereof) to the Company. The Executive hereby
assigns and agrees to assign to the Company (or as otherwise directed by the
Company) the Executive's full right, title and interest in and to all
Intellectual Property. The Executive agrees to execute any and all applications
for domestic and foreign patents, copyrights or other proprietary rights and to
do such other acts (including without limitation the execution and delivery of
instruments of further assurance or confirmation) requested by the Company to
assign such Intellectual Property to the Company and to permit the Company to
enforce any patents, copyrights or other proprietary rights to such Intellectual
Property. The Executive will not charge the Company for time spent in complying
with these obligations. All copyrightable works that the Executive creates shall
be considered "work made for hire".

         9.       Restricted Activities.

         The Executive agrees that restrictions on his activities during and
after his employment are necessary to protect the goodwill, Confidential
Information and other legitimate interests of the Company and its Subsidiaries,
and that the agreed restrictions set forth below will not deprive the Executive
of the ability to earn a livelihood:

         (a) While the Executive is in the employment of the Company and, after
his employment terminates, for the greater of two years or the period during
which severance payments of the Base Amount are being made (the "Non-Competition
Period"), the Executive shall not, directly or indirectly, whether as owner,
partner, investor, consultant, agent, employee, co-venturer or otherwise,
compete with the business of the Company or any of its Subsidiaries within any
state within the United States, or within any province or other geographic
division within any foreign country in which the Company operates retail stores
or wholesale distribution outlets or warehouses at the date of termination of
employment, or in which the Company has commenced negotiations for or entered
into obligations relating to the opening of a retail store or wholesale
distribution outlet or warehouse to be opened within the period of this
covenant, or undertake any planning for any business competitive with the
Company or any of its Subsidiaries. Specifically, but without limiting the
foregoing, the Executive agrees not to engage in any manner in any activity that
is directly or indirectly competitive with the business of the Company or any of
its Subsidiaries as conducted or which has been proposed by management within
six months prior to termination of the Executive's employment. Restricted
activity also includes without limitation accepting employment or a consulting
position with any person who is, or at any time within twelve (12) months prior
to termination of the Executive's employment has been, a supplier, licensee or
vendor of the Company or any of its Subsidiaries. For the purposes of this
Section 9, the business of the Company and its Subsidiaries shall mean retail or
wholesale operations for the sale of groceries and ancillary Products, such as
health and beauty aids, vitamins and supplements.

         (b) The Executive further agrees that during the Non-Competition Period
or in connection with the Executive's termination of employment, the Executive
will not, either directly or through any agent or employee, Solicit any employee
of the Company or any of its Subsidiaries to terminate his or her relationship
with the Company or any of its Subsidiaries or to apply for or accept employment
with any enterprise competitive with the business of the Company, or Solicit any
customer, supplier, licensee or vendor of the Company or any of its Subsidiaries
to terminate or materially modify its relationship with them, or, in the case of
a customer, to conduct with any person any business or activity which such
customer conducts or could conduct with the Company or any of its Subsidiaries.

         (c) The provisions of this Section 9 shall not be deemed to preclude
the Executive from employment or engagement during the Non-Competition Period
following termination of employment hereunder (i) in a business engaged in
retail sales, provided such employment or engagement does not otherwise violate
the provisions of this Section 9, or (ii) by a corporation, some of the
activities of which are competitive with the business of the Company, if the
Executive's activities do not relate to such competitive business, and nothing
contained in this Section 9 shall be deemed to prohibit the Executive, during
the Non-Competition Period following termination of employment hereunder, from
acquiring or holding, solely as an investment, publicly traded securities of any
competitor corporation so long as such securities do not, in the aggregate,
constitute more than 3% of the outstanding voting securities of such
corporation.

         (d) Without limiting the foregoing, it is understood that the Company
shall not be obligated to continue to make the payments specified in Sections
5(d) and 5(e) in the event of a material breach by the Executive of the
provisions of Sections 7, 8 or 9 of this Agreement, which breach continues
without having been cured within 15 days after written notice to the Executive
specifying the breach in reasonable detail.

         10.      Enforcement of Covenants.

         The Executive acknowledges that he has carefully read and considered
all the terms and conditions of this Agreement, including the restraints imposed
upon him pursuant to Sections 7, 8 and 9 hereof. The Executive agrees that said
restraints are necessary for the reasonable and proper protection of the Company
and its Subsidiaries and that each and every one of the restraints is reasonable
in respect to subject matter, length of time and geographic area. The Executive
further acknowledges that, were he to breach any of the covenants contained in
Sections 7, 8 or 9 hereof, the damage to the Company would be irreparable. The
Executive therefore agrees that the Company, in addition to any other remedies
available to it, shall be entitled to seek preliminary and permanent injunctive
relief against any breach or threatened breach by the Executive of any of said
covenants, without having to post bond. The parties further agree that, in the
event that any provision of Section 7, 8 or 9 hereof shall be determined by any
court of competent jurisdiction to be unenforceable by reason of its being
extended over too great a time, too large a geographic area or too great a range
of activities, such provision shall be deemed to be modified to permit its
enforcement to the maximum extent permitted by law.

         11.      Conflicting Agreements.

         The Executive hereby represents and warrants that the execution of this
Agreement and the performance of his obligations hereunder will not breach or be
in conflict with any other agreement to which the Executive is a party or is
bound and that the Executive is not now subject to any covenants against
competition or similar covenants that would affect the performance of his
obligations hereunder. The Executive will not disclose to or use on behalf of
the Company any proprietary information of a third party without such party's
consent.

         12.      Indemnification.

         The Company shall indemnify, defend and hold harmless the Executive to
the extent provided for Company executive officers in its then current
Certificate of Incorporation or By-Laws, and in any event shall indemnify the
Executive to the fullest extent permitted under the Delaware Corporation Law,
including an undertaking to advance litigation expenses. The Executive agrees
promptly to notify the Company of any actual or threatened claim arising out of
or as a result of his employment with the Company. The Company agrees to
maintain Directors and Officers Liability Insurance for the benefit of
Executive, together with all other officers and directors, covering claims made
with respect to occurrences during the Term of this Agreement and having
coverage and policy limits no less favorable to directors and officers than
those in effect at the Effective Date.

         13.      No Duty to Mitigate.

         Following a termination of employment, the Executive shall not be
obligated to seek other employment or take any other action by way of mitigation
of the amounts payable to the Executive under any of the provisions of this
Agreement and such amounts shall not be reduced whether or not the Executive
obtains other employment.

         14.      Definitions.

         Words or phrases which are initially capitalized or are within
quotation marks shall have the meanings provided in Section 14 and as provided
elsewhere herein. For purposes of this Agreement, the following definitions
apply:

         (a) A "Change in Control" shall be deemed to have occurred if during
the Term hereof (a) any "person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Act), directly or indirectly, of
securities of the Company representing 50% or more of the combined voting power
of the Company's then outstanding securities in the election of directors; (b)
the Company is a party to a merger, consolidation, sale of assets or other
reorganization, or a proxy contest, as a consequence of which members of the
Board of Directors in office immediately prior to such transaction or event
constitute less than a majority of the Board of Directors thereafter, or (c)
during any period of twelve consecutive months, individuals who at the beginning
of such period constituted the Board of Directors (including for this purpose
any new director whose election or nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of such period) cease for
any reason to constitute at least a majority of the Board of Directors.
Notwithstanding the foregoing provisions of this Section 14(a), a "Change in
Control" will not be deemed to have occurred solely because of (i) the
acquisition of securities of the Company (or any reporting requirement under the
Act relating thereto) by an employee benefit plan maintained by the Company for
the benefit of employees or an acquisition by J.P. Morgan Partners LLC (formerly
known as Chase Capital), an investor group that the Executive brings in as part
of the proposed capital raising transaction, Michael C. Gilliland, Elizabeth C.
Cook or the Executive or their affiliates" or "associates" (as such terms are
defined in Rule 12b-2 under the Act) or members of their families (or trusts for
their benefit) or charitable trusts established by any of them or other related
management group.

         (b) "Confidential Information" means any and all information of the
Company and its Subsidiaries that is not generally known by others with whom
they compete or do business, or with whom they plan to compete or do business
and any and all information not readily available to the public, which, if
disclosed by the Company or its Subsidiaries could reasonably be of benefit to
such person or business in competing with or doing business with the Company.
Confidential Information includes without limitation such information relating
to (1) the development, research, testing, manufacturing, store operational
processes, marketing and financial activities, including costs, profits and
sales, of the Company and its Subsidiaries, (2) the Products and all formulas
therefor, (3) the costs, sources of supply, financial performance and strategic
plans of the Company and its Subsidiaries, (4) the identity and special needs of
the customers and suppliers of the Company and its Subsidiaries and (5) the
people and organizations with whom the Company and its Subsidiaries have
business relationships and those relationships. Confidential Information also
includes comparable information that the Company or any of its Subsidiaries have
received belonging to others or which was received by the Company or any of its
Subsidiaries with an agreement by the Company that it would not be disclosed.
Confidential Information does not include information which (i) is or becomes
available to the public generally (other than as a result of a disclosure by the
Executive), (ii) was within the Executive's possession prior to the date hereof
or prior to its being furnished to the Executive by or on behalf of the Company,
provided that the source of such information was not bound by a confidentiality
agreement with or other contractual, legal or fiduciary obligation of
confidentiality to the Company or any other party with respect to such
information, (iii) becomes available to the Executive on a non-confidential
basis from a source other than the Company, provided that such source is not
bound by a confidentiality agreement with or other contractual, legal or
fiduciary obligation of confidentiality to the Company or any other party with
respect to such information, or (iv) was independently developed the Executive
without reference to the Confidential Information.

         (d) "Intellectual Property" means inventions, discoveries,
developments, methods, processes, formulas, compositions, works, concepts and
ideas (whether or not patentable or copyrightable or constituting trade secrets)
conceived, made, created, developed or reduced to practice by the Executive
(whether alone or with others, whether or not during normal business hours or on
or off Company premises) during the Executive's service that relate to the
Products of the Company or any of its Subsidiaries.

         (e) "Products" mean all products planned, researched, developed,
tested, manufactured, sold, licensed, leased or otherwise distributed or put
into use by the Company or any of its Subsidiaries, together with all services
provided to third parties or planned by the Company or any of its Subsidiaries,
during the Executive's service; as used herein, "planned" refers to a Product or
service which the Company has decided to introduce within six months from the
date as of which such term is applied.

         (f) "Subsidiary" of an entity means any corporation or other business
organization of which the securities having a majority of the normal voting
power in electing the board of directors or similar governing body of such
entity are, at the time of determination, owned by such entity directly or
indirectly through one or more subsidiaries.

         (g) "Solicit" means any direct or indirect communication of any kind
whatsoever, regardless of by whom initiated, inviting, advising, encouraging or
requesting any person or entity, in any manner, with respect to any action.

         15.      Withholding.

         The Executive agrees that all payments made by the Company under this
Agreement shall be reduced by any tax or other amounts required to be withheld
by the Company under applicable law.

         16.      Assignment.

         Neither the Company nor the Executive may make any assignment of this
Agreement or any interest herein, by operation of law or otherwise, without the
prior written consent of the other; provided, however, that, in the event that
the Company shall hereafter effect a reorganization, consolidate with, or merge
into, any other person or transfer all or substantially all of its properties or
assets to any other person, the Company shall require such person or the
resulting entity to assume expressly and agree to perform this Agreement in the
same manner and to the same extent that the Company would be required to perform
it. This Agreement shall inure to the benefit of and be binding upon the Company
and the Executive, their respective successors, executors, administrators, heirs
and permitted assigns.

         17.      Severability.

         If any portion or provision of this Agreement shall to any extent be
declared illegal or unenforceable by a court of competent jurisdiction, then the
remainder of this Agreement, or the application of such portion or provision in
circumstances other than those as to which it is so declared illegal or
unenforceable, shall not be affected thereby, and each portion and provision of
this Agreement shall be valid and enforceable to the fullest extent permitted by
law.

         18.      Waiver.

         No waiver of any provision hereof shall be effective unless made in
writing and signed by the waiving party. The failure of either party to require
the performance of any term or obligation of this Agreement, or the waiver by
either party of any breach of this Agreement, shall not prevent any subsequent
enforcement of such term or obligation or be deemed a waiver of any subsequent
breach.

         19.      Notices.

         Any and all notices, requests, demands and other communications
provided for by this Agreement shall be in writing and shall be effective when
delivered in person or deposited in the United States mail, postage prepaid,
registered or certified; provided that, if the receiving party consents in
advance, a notice may be given by telecopy or by such other electronic
transmission mechanism as may be available to the parties. Notice shall be
addressed to the Executive at his last known address on the books of the Company
or, in the case of the Company, at its principal executive office, attention,
Board of Directors, with a copy to General Counsel, or to such other address as
either party may specify by notice to the other.

         20.      Entire Agreement.

         This Agreement (including any letters or agreements referred to herein
or attached as exhibits hereto) constitutes the entire agreement between the
parties and supersedes all prior communications, representations and
understandings, whether written or oral and whether express or implied, with
respect to the terms and conditions of the Executive's employment.

         21.      Amendment.

         This Agreement may be amended or rescinded only by a written instrument
signed by the Executive and by a expressly authorized officer of the Company
making specific reference to this Agreement.

         22.      Governing Law, Arbitration and Consent to Jurisdiction.

         (a) This Agreement shall be construed and enforced under and be
governed in all respects by the laws of the State of Colorado, without regard to
the conflict of laws principles thereof.

         (b) The parties hereby agree that, in order to obtain prompt and
expeditious resolution of any disputes under this Agreement, each claim, dispute
or controversy of whatever nature, arising out of, in connection with, or in
relation to the interpretation, performance or breach of this Agreement (or any
other agreement contemplated by or related to this Agreement or any other
agreement between the Company and Executive), including without limitation, any
claim based on contract, tort or statute, or the arbitrability of any claim
hereunder (a "Claim"), shall be settled, at the request of any party to this
Agreement, by final and binding arbitration conducted in Denver, Colorado. All
such Claims shall be settled by one arbitrator in accordance with the Commercial
Arbitration Rules then in effect of the American Arbitration Association. Such
arbitrator shall be provided through the CFR Institute for Dispute Resolution
("CFR") by mutual agreement of the parties, provided that, absent such
agreement, the arbitrator shall be appointed by CFR. In either event, such
arbitrator may not have any pre-existing, direct or indirect relationship with
any party to the dispute. Each party hereto expressly consents to, and waives
any future objection to, such forum and arbitration rules. Judgment upon any
award may be entered by any state or federal court having jurisdiction thereof.
Except as required by law (including, without limitation, the rules and
regulations of the Securities and Exchange Commission and the NASDAQ Stock
Market, if applicable), neither party nor the arbitrator shall disclose the
existence, content, or results of any arbitration hereunder without the prior
written consent of all parties. Except as provided herein, the Federal
Arbitration Act shall govern the interpretation, enforcement and all proceedings
pursuant to this Section.

         (c) Adherence to this dispute resolution process shall not limit the
right of the Company or Executive to obtain any provisional remedy, including
without limitation, injunctive or similar relief set forth in Section 10 from
any court of competent jurisdiction as may be necessary to protect their
respective rights and interests pending arbitration. Notwithstanding the
foregoing sentence, this dispute resolution procedure is intended to be the
exclusive method of resolving any Claims arising out of or relating to this
Agreement.

         (d) The arbitration procedures shall follow the substantive law of the
State of Colorado, including the provisions of statutory law dealing with
arbitration, as it may exist at the time of the demand for arbitration, insofar
as said provisions are not in conflict with this Agreement and specifically
excepting therefrom sections of any such statute dealing with discovery and
sections requiring notice of the hearing date by registered or certified mail.

         (e) To the extent a dispute is not to be arbitrated in accordance with
the foregoing, each of the Company and the Executive (1) irrevocably submits to
the jurisdiction of the United States District Court for the District of
Colorado and to the jurisdiction of the state courts of the State of Colorado
for the purpose of any suit or other proceeding arising out of or based upon
this Agreement or the subject matter hereof and agrees that any such proceeding
shall be brought or maintained only in such court, and (2) waives, to the extent
not prohibited by applicable law and agrees not to assert in any such
proceedings, any claim that it is not subject personally to the jurisdiction of
the above-named courts, that he or it is immune from extraterritorial injunctive
relief or other injunctive relief, that any such proceeding brought or
maintained in a court provided for above may not be properly brought or
maintained in such court, should be transferred to some other court or should be
stayed or dismissed by reason of the pendency of some other proceeding in some
other court, or that this Agreement or the subject matter hereof may not be
enforced in or by such court.

         IN WITNESS WHEREOF, this Agreement has been executed by the Company, by
its duly authorized officer, and by the Executive, as of the date first above
written.

THE EXECUTIVE:                                  WILD OATS MARKETS, INC.

----------------------                          By:
Perry D. Odak                                       ---------------------------
                                                    Name:
                                                    Title:

<PAGE>

                                                                       Exhibit A

                             Statement of Authority

         The Board of Directors of the Company acknowledges that, in connection
with the Company's engagement of the Chief Executive Officer to accomplish
certain objectives on behalf of the Company and its shareholders, the Chief
Executive Officer will require certain authorities to conduct business on behalf
of the Company. The purpose of this Statement of Authority is to specify the
authorities of the Chief Executive Officer, subject to the Board's reservation
of authority to limit or revoke such authority to the extent necessary to comply
with the Board's responsibilities under applicable law, including the Company's
Certificate of Incorporation and By-Laws ("Applicable Law").

A.   The Chief Executive Officer shall have authority with respect to the
     following matters with the required written concurrence of the Chief
     Financial Officer:

         1.    Capital expenditures within the capital budget up to $1,000,000
               per project (or up to $3,000,000 per new store if approved by the
               Real Estate Committee); provided, that the total value of capital
               expenditures does not exceed the amount authorized in the budget.

         2.    Capital expenditures not in the capital budget up to $350,000 per
               project, but not over $750,000 in the aggregate. In no event will
               total capital expenditures exceed the total value of capital
               expenditures authorized in the capital budget.

         3.    Disposal or encumbrance of assets with a book or fair market
               value of no more than $150,000 per transaction.

         4.    Operating leases (within any operating lease budget, if
               applicable) up to a total commitment of $500,000 per transaction.

         5.    Operating leases not in operating lease budget, with a total
               commitment of $150,000 per year in total commitment per lease
               with a term not to exceed five years, but not over $450,000
               annually in the aggregate.

         6.    Administration of the details of the Company's compensation
               program (applying its general compensation philosophy as
               previously developed) for all employees (other than those at or
               above the level of officer or any other employees with annual
               compensation in excess of $200,000).

         7.    Administration of the employee benefits program, including
               approval of changes with an aggregate annual cost up to $300,000.

         8.      a. Execution of contracts within the ordinary course with an
                    individual value of up to $500,000 that do not require
                    special approval under Section B.1 below.

                 b. Other non-ordinary payments in an amount up to $150,000 that
                    also do not require special approval under Section B.1
                    below.

         9.    Primary responsibility for negotiation of financing transaction
               involving investment of approximately $35-$50 million of new
               equity in the Company.

               Notwithstanding the foregoing, the authorities described in this
               Section A will be subject to Board approval (i) to the extent
               specifically covered in Section B below, (ii) to the extent that
               the exercise of the authority directly affects the Chief
               Executive Officer personally (other than where the Chief
               Executive Officer is affected only incidentally by a decision
               affecting all employees generally), or (iii) to the extent that
               Board approval is required under Applicable Law.

B.   The Board of Directors of the Company retains authority with regard to the
     following matters:

         1.    Any transaction involving:

                  a. The sale or encumbrance of assets with a book value over
                     $150,000.

                  b. The sale of stock or assets of a subsidiary.

                  c. The acquisition of stock or assets of another company.

                  d. Loans in excess of $30,000 made outside the ordinary course
                     of business not to exceed $150,000 outstanding at any time.

                  e. A single purchase of inventory in excess of $5 million or
                     any opening of letters of credit in excess of $2 million
                     (individually or in the aggregate).

                  f. Transactions with any parties related to any officer of the
                     Company.

                  g. The sale or purchase of the Company's capital stock.

                  h. The declaration and payment of dividends.

                  i. The approval of any other contract (including all real
                     property leases, joint venture, partnership or similar
                     contracts with vendors) with a value in excess of $250,000
                     per year or any other non-ordinary course payment or
                     purchase orders (including the settlement of litigation
                     claims involving payments by the Company) in excess of
                     $150,000.

         2.    All matters not specified in Section A above which require
               approval of the Board of Directors under Applicable Law,
               including the approval of the above specification of authorities.

C.   The Chief Executive Officer will cause to be provided to the Board a
     comprehensive review of the following matters on a regular basis, or more
     often if issues create the need:

         1.    As soon as practical:

                  a. Status of material tax matters as they arise.

                  b. Status of material legal matters as they arise.

                  c. Any material change in vendor relations.

                  d. Any material change in the operating or financial
                     performance of the Company.

                  e. Any contact made by potential  buyers who may be interested
                     in  purchasing  the Company and/or its assets.

                  f. Notices of default or acceleration under loan agreements,
                     notes or significant contract.

         2.       Monthly:

                  a. Financial and operating results, including management's
                     analysis in writing.

                  b. Update/reconciliation of actual vs. budgeted capital
                     expenditures.

         3.       Quarterly:

                  a. Status of legal matters.

                  b. Competition update.

                  c. Information systems

                  d. Report on all banking relationships.

         4.       Annually:

                  a. Independent accountant management letters.

                  b. Other tax matters.

                  c. Officers salary, bonus and wages adjustment and/or
                     recommendations.

                  d. Property/casualty and employee benefit insurance programs.

                  e. Advertising and public relations programs.

                  f. Officer performance appraisals.

                  g. Union relationships.RESTRICTED STOCK PURCHASE AGREEMENT

     THIS RESTRICTED STOCK PURCHASE AGREEMENT ("Agreement") is entered into as
of March 6, 2000, by Wild Oats Markets, Inc., a Delaware corporation (the
"Company"), and Perry D. Odak (the "Purchaser").

SECTION A -- Acquisition Of Shares

1.   Transfer. Pursuant to the employment agreement between the parties dated as
     of March 6, 2001 ("Employment Agreement"), and subject to the terms and
     conditions set forth in this Agreement, the Company agrees to transfer
     1,332,649 shares ("Purchased Shares") of Common Stock, $0.001 par value per
     share, of the Company ("Stock") to the Purchaser. The transfer shall occur
     at the offices of the Company on the date set forth above or at such other
     place and time as the parties may agree.

2.   Consideration. The Purchaser agrees to pay $6.969 for each Purchased Share
     ("Purchase Price"), or an aggregate of $9,287,230.15. The Purchase Price is
     agreed to be at 100% of the per share closing price of the Stock on NASDAQ
     as of the date of purchase. Payment of $0.01 per share shall be made on the
     purchase date in cash or cash equivalents and the balance shall be paid by
     delivery of a full recourse, five-year promissory note in an original
     principal amount equal to the amount of the Purchase Price for the
     Purchased Shares not otherwise paid in cash or cash equivalents (the
     "Note") (the form of which is attached hereto as Exhibit A and made a part
     hereof), with interest on the Note at the rate set forth in the Note.
     Payments of principal and interest due under the Note shall be subject to
     acceleration under the terms set forth therein and in the Pledge Agreement.
     The Note shall provide for a balloon payment of principal and accrued,
     unpaid interest on the fifth anniversary of the date the Note is made.

3.   Tax Election and Withholding. Purchaser hereby acknowledges that he has
     been advised by the Company to seek independent tax advice regarding the
     availability and advisability of making an election under Section 83(b) of
     the Internal Revenue Code of 1986, as amended (the "Code"), and that any
     such election (an "83(b) Election"), if made, must be made within 30 days
     of the date the Purchased Shares are transferred to the Purchaser. At the
     time of making a timely 83(b) Election, or, in the event the Purchaser
     fails to make a timely 83(b) Election, on each date on which a Right of
     Repurchase (defined below) lapses, the Company shall have the right to
     deduct from any compensation or any other payment of any kind (including
     withholding the release of Purchased Shares) due the Purchaser the amount
     of any federal, state or local taxes required by law to be withheld as a
     result of the purchase of the Purchased Shares or the lapse of the Right of
     Repurchase in whole or in part; provided, however, that the value of
     Purchased Shares withheld may not exceed the statutory minimum withholding
     amount required by law. In lieu of such deduction, the Company may require
     the Purchaser to make a cash payment to the Company equal to the amount
     required to be withheld. If the Purchaser does not make such payment when
     requested, the Company may refuse to release any certificate representing
     Purchased Shares under this Agreement until arrangements satisfactory to
     the Board of Directors of the Company for such payment have been made.

SECTION B -- Right Of Repurchase

1.   Scope of Repurchase Right. All Purchased Shares initially shall be
     "Restricted Shares" and shall be subject to a right, but not an obligation,
     of repurchase by the Company ("Right of Repurchase"). The Purchaser shall
     not transfer, assign, encumber, sell, hypothecate, exchange or otherwise
     dispose of any Restricted Shares, except by will or the laws of descent and
     distribution, subject to the terms of this Agreement.

2.   Condition Precedent to Exercise of Repurchase Right. Subject to Paragraph 3
     below, the Right of Repurchase shall be exercisable with respect to any or
     all of the Restricted Shares at any time (i) following the date when the
     Purchaser's employment pursuant to the Employment Agreement terminates for
     any reason, with or without cause, including death or disability, or (ii)
     if the Purchaser does not commence employment on the effective date of the
     Employment Agreement.

3.   Lapse of Repurchase Right. Provided that the Purchaser has remained in the
     continuous employment of the Company pursuant to the Employment Agreement
     from the effective date of that agreement, the Right of Repurchase shall
     lapse and the Purchased Shares shall no longer be Restricted Shares (i.e.,
     they shall become "vested") as follows:

     (i) Unless vesting is accelerated pursuant to clauses (ii) or (iii) below,
     on each of the dates specified in the following table with respect to the
     aggregate percentage of Purchased Shares indicated:

<TABLE>
<CAPTION>
                   AGGREGATE                           AGGREGATE                            AGGREGATE
                 PERCENTAGE OF                       PERCENTAGE OF                        PERCENTAGE OF
 VESTING DATE   TOTAL PURCHASED         VESTING     TOTAL PURCHASED         VESTING      TOTAL PURCHASED
                 SHARES VESTED           DATE        SHARES VESTED            DATE        SHARES VESTED
-------------- ------------------    -------------- -----------------     ------------- ------------------
<S>                  <C>             <C>                 <C>              <C>                <C>
4/19/01              2.08%           8/19/02             35.42%           12/19/03           68.75%
-------------- ------------------    -------------- -----------------     ------------- ------------------
5/19/01              4.17%           9/19/02             37.50%           1/19/04            70.83%
-------------- ------------------    -------------- -----------------     ------------- ------------------
6/19/01              6.25%           10/19/02            39.58%           2/19/04            72.92%
-------------- ------------------    -------------- -----------------     ------------- ------------------
7/19/01              8.33%           11/19/02            41.67%           3/19/04            75.00%
-------------- ------------------    -------------- -----------------     ------------- ------------------
8/19/01             10.42%           12/19/02            43.75%           4/19/04            77.08%
-------------- ------------------    -------------- -----------------     ------------- ------------------
9/19/01             12.50%           1/19/03             45.83%           5/19/04            79.17%
-------------- ------------------    -------------- -----------------     ------------- ------------------
10/19/01            14.58%           2/19/03             47.92%           6/19/04            81.25%
-------------- ------------------    -------------- -----------------     ------------- ------------------
11/19/01            16.67%           3/19/03             50.00%           7/19/04            83.33%
-------------- ------------------    -------------- -----------------     ------------- ------------------
12/19/01            18.75%           4/19/03             52.08%           8/19/04            85.42%
-------------- ------------------    -------------- -----------------     ------------- ------------------
1/19/02             20.83%           5/19/03             54.17%           9/19/04            87.50%
-------------- ------------------    -------------- -----------------     ------------- ------------------
2/19/02             22.92%           6/19/03             56.25%           10/19/04           89.58%
-------------- ------------------    -------------- -----------------     ------------- ------------------
3/19/02             25.00%           7/19/03             58.33%           11/19/04           91.67%
-------------- ------------------    -------------- -----------------     ------------- ------------------
4/19/02             27.08%           8/19/03             60.42%           12/19/04           93.75%
-------------- ------------------    -------------- -----------------     ------------- ------------------
5/19/02             29.17%           9/19/03             62.50%           1/19/05            95.83%
-------------- ------------------    -------------- -----------------     ------------- ------------------
6/19/02             31.25%           10/19/03            64.58%           2/19/05            97.92%
-------------- ------------------    -------------- -----------------     ------------- ------------------
7/19/02             33.33%           11/19/03            66.67%           3/19/05             100%
-------------- ------------------    -------------- -----------------     ------------- ------------------
</TABLE>

     The extent to which the Purchased Shares are vested as of a particular
     vesting date specified above, determined based on the total number of
     Purchased Shares, is rounded down to the nearest whole share. However,
     vesting is rounded up to the nearest whole share with respect to the last
     vesting date reflected on this vesting schedule.

     (ii) The aggregate percentage of Purchased Shares specified below shall
     become vested when the fair market value of the Stock, as measured by the
     average of the daily closing stock prices on NASDAQ for the preceding 90
     consecutive trading days, shall equal at least the corresponding Per Share
     Fair Market Value Threshold indicated (such shares being the Restricted
     Shares that would regularly vest the latest under clause (i) above
     following the date when such acceleration under this clause (ii) has become
     effective):

     ------------------------------------- -------------------------------------
         Per Share Fair Market Value           AGGREGATE PERCENTAGE OF TOTAL
                  Threshold                       PURCHASED shares vested
     ------------------------------------- -------------------------------------
                     $12                                    50%
     ------------------------------------- -------------------------------------
                     $18                                    75%
     ------------------------------------- -------------------------------------
                     $24                                   100%
     ------------------------------------- -------------------------------------

     For example, if 25% of the Purchased Shares are already vested pursuant to
     clause (i) above, and 50% of the Purchased Shares become vested pursuant to
     this clause (ii), then the Purchaser shall be vested in 75% of the
     Purchased Shares.

     (iii) One hundred percent (100%) of the Restricted Shares shall become
     vested upon a Change in Control of the Company (as defined in the
     Employment Agreement), within the first twelve months after the effective
     date of the Employment Agreement, or upon a Change of Control of the
     Company thereafter if the fair market value of the Stock, as measured by
     the closing stock price on NASDAQ immediately prior to the Change in
     Control, shall equal at least Twenty Dollars ($20).

4.   Repurchase Cost. If the Company exercises the Right of Repurchase, it shall
     pay the Purchaser an amount equal to the Purchase Price for each of the
     Restricted Shares being repurchased.

5.   Exercise of Repurchase Right. The Right of Repurchase shall be exercisable
     only by written notice delivered to the Purchaser. The notice shall set
     forth the date on which the repurchase is to be effected. Such date shall
     not be more than 30 days after the date of the notice. To the extent not
     held in escrow by the Company, the certificate(s) representing the
     Restricted Shares to be repurchased shall, prior to the close of business
     on the date specified for the repurchase, be delivered to the Company
     properly endorsed for transfer, together with any other documents needed to
     effectuate the transfer. The Company shall, concurrently with the receipt
     of such certificate(s), pay to the Purchaser the purchase price determined
     according to Paragraph B.4 above. Payment shall be made (a) in cash or cash
     equivalents, (b) by canceling indebtedness to the Company, including
     indebtedness incurred by the Purchaser in the purchase of the Restricted
     Shares (whether or not then due), or (c) by a combination of the foregoing.

6.   Additional Shares or Substituted Securities. In the event of a stock
     dividend, extraordinary dividend payable in a form other than stock,
     spin-off, stock split, reverse stock split, recapitalization, or similar
     transaction affecting the Company's outstanding securities that is effected
     without receipt of consideration, any new, substituted or additional
     securities or other property (including money paid other than as an
     ordinary cash dividend) that are by reason of such transaction distributed
     with respect to any Restricted Shares shall immediately be subject to this
     Agreement (including the Right of Repurchase). Appropriate adjustments to
     reflect the distribution of such securities or property shall be made to
     the number and/or class of the Restricted Shares. Appropriate adjustments
     shall also be made, after each such transaction, to the per share fair
     market value prices referred to in Paragraph B.3(ii) above, and the price
     per share to be paid upon the exercise of the Right of Repurchase, in order
     to reflect any change in the Company's outstanding securities effected
     without receipt of consideration therefor; provided, however, that the
     aggregate purchase price payable for the Restricted Shares shall remain the
     same.

7.   Termination of Rights as Stockholder. If the Company makes available, at
     the time and place and in the amount and form provided in this Agreement,
     the consideration for the Restricted Shares to be repurchased in accordance
     with this Section B, then after such time the person from whom such
     Restricted Shares are to be repurchased shall no longer have any rights as
     a holder of such Restricted Shares (other than the right to receive payment
     of such consideration in accordance with this Agreement). Such Restricted
     Shares shall be deemed to have been repurchased in accordance with the
     applicable provisions hereof, whether or not the certificate(s) therefor
     have been delivered as required by this Agreement.

8.   Escrow Upon issuance, the certificates for Restricted Shares shall be
     deposited in escrow with the Company, together with a stock power, endorsed
     in blank by the Purchaser, with respect to the Restricted Shares, to be
     held in accordance with the provisions of this Agreement. Any new,
     substituted or additional securities or other property described in
     Paragraph B.6 above shall immediately be delivered to the Company to be
     held in escrow, but only to the extent the Purchased Shares with respect to
     which such securities or other property are issued are, at the time,
     Restricted Shares. All regular cash dividends on Restricted Shares (or
     other securities at the time held in escrow) shall be paid directly to the
     Purchaser and shall not be held in escrow. The Purchaser shall have no
     right to vote the Restricted Shares while held in escrow. Restricted
     Shares, together with any other assets or securities held in escrow
     hereunder, shall be (i) surrendered to the Company for repurchase and
     cancellation upon the Company's exercise of its Right of Repurchase
     (provided that the Purchaser hereby appoints the Company as
     attorney-in-fact to execute any repurchase agreement and related
     certificates and documents for the repurchase of the Restricted Shares by
     the Company and to endorse and transfer such shares to the Company) or (ii)
     released to the Purchaser upon the Purchaser's request to the extent the
     Purchased Shares are no longer Restricted Shares. In any event, all
     Purchased Shares which have vested (and any other vested assets and
     securities attributable thereto) shall be released within 60 days after the
     Purchaser's cessation of employment pursuant to the Employment Agreement.

SECTION C -- Restrictions On Transfer

1.   Purchaser Representations. In connection with the issuance and acquisition
     of Purchased Shares under this Agreement, the Purchaser hereby represents
     and warrants to the Company as follows:

     The Purchaser understands and is familiar with the requirements of
     Regulation D (17 C.F.R. ss.230.501-08), and is an accredited investor
     within the meaning of the Securities Act of 1933 (the "Securities Act").

     The Purchaser is acquiring and will hold the Purchased Shares for
     investment for his account only and not with a view to, or for resale in
     connection with, any "distribution" thereof within the meaning of the
     Securities Act.

     The Purchaser understands that the Purchased Shares have not been
     registered under the Securities Act by reason of a specific exemption
     therefrom and that the Purchased Shares must be held indefinitely, unless
     they are subsequently registered under the Securities Act or the Purchaser
     obtains an opinion of counsel, in form and substance satisfactory to the
     Company and its counsel, that such registration is not required. The
     Purchaser further acknowledges and understands that the Company is under no
     obligation to register the Purchased Shares.

     The Purchaser is aware of the adoption of Rule 144 by the Securities and
     Exchange Commission under the Securities Act, which permits limited public
     resales of securities acquired in a non-public offering, subject to the
     satisfaction of certain conditions, including without limitation the
     availability of certain current public information about the issuer, the
     resale occurring only after the holding period required by Rule 144 has
     been satisfied, the sale occurring through an unsolicited "broker's
     transaction," and the amount of securities being sold during any
     three-month period not exceeding specified limitations.

     The Purchaser will not sell, transfer or otherwise dispose of the Purchased
     Shares in violation of the Securities Act, the Securities Exchange Act of
     1934, or the rules promulgated thereunder, including Rule 144 under the
     Securities Act. The Purchaser agrees that he will not dispose of the
     Purchased Shares unless and until he has complied with all requirements of
     this Agreement applicable to the disposition of Purchased Shares and he has
     provided the Company with written assurances, in substance and form
     satisfactory to the Company, that (a) the proposed disposition does not
     require registration of the Purchased Shares under the Securities Act or
     all appropriate action necessary for compliance with the registration
     requirements of the Securities Act or with any exemption from registration
     available under the Securities Act (including Rule 144) has been taken and
     (b) the proposed disposition will not result in the contravention of any
     transfer restrictions applicable to the Purchased Shares under state
     securities law.

     The Purchaser has been furnished with, and has had access to, such
     information as he considers necessary or appropriate for deciding whether
     to invest in the Purchased Shares, and the Purchaser has had an opportunity
     to ask questions and receive answers from the Company regarding the terms
     and conditions of the issuance of the Purchased Shares.

     The Purchaser is aware that his investment in the Company is a speculative
     investment which has limited liquidity and is subject to the risk of
     complete loss. The Purchaser is able, without impairing his financial
     condition, to hold the Purchased Shares for an indefinite period and to
     suffer a complete loss of his investment in the Purchased Shares.

2.   Securities Law Restrictions. Regardless of whether the offering and sale of
     Shares under this Agreement have been registered under the Securities Act
     or have been registered or qualified under the securities laws of any
     state, the Company at its discretion may impose restrictions upon the sale,
     pledge or other transfer of the Purchased Shares (including the placement
     of appropriate legends on stock certificates or the imposition of
     stop-transfer instructions) if, in the judgment of the Company, such
     restrictions are necessary or desirable in order to achieve compliance with
     the Securities Act, the securities laws of any state or any other law.

3.   Rights of the Company. The Company shall not be required to (i) transfer on
     its books any Purchased Shares that have been sold or transferred in
     contravention of this Agreement or (ii) treat as the owner of Purchased
     Shares, or otherwise to accord voting, dividend or liquidation rights to,
     any transferee to whom Purchased Shares have been transferred in
     contravention of this Agreement.

4.   Piggyback Registration Rights. If the Company proposes to register any of
     its equity securities under the Securities Act (other than a registration
     effected solely to implement an employee benefit plan or transaction to
     which Rule 145 of the Securities Act is applicable, or a registration using
     any form that does not permit secondary sales of securities), on a form and
     in a manner that would permit registration of the Purchased Shares for sale
     to the public under the Securities Act, it will give written notice to the
     Purchaser of its intention to do so, describing such securities and
     specifying the form and manner and other relevant facts involved in such
     proposed registration, if such disclosure is acceptable to the managing
     underwriter. Upon the written request of the Purchaser delivered to the
     Company within ten (10) days after the receipt of any such notice (which
     request shall specify the Purchased Shares intended to be disposed of by
     the Purchaser and the intended method of disposition thereof), the Company
     will use reasonable commercial efforts (at the Company's expense, other
     than underwriting commissions, stock transfer taxes and opinions of counsel
     accruing to or required by the Purchased Shares being registered) to effect
     the registration under the Securities Act of all the Purchased Shares that
     the Company has been so requested to register; provided, however, that:

     (i) The Company shall only be obligated to register those Purchased Shares
     which are fully paid and nonassessable, which have fully vested under any
     vesting schedule applicable to Purchased Shares, and with respect to which
     any indebtedness incurred by the Purchaser in the purchase of the Purchased
     Shares has been paid.

     (ii) If, at any time after giving such written notice of its intention to
     register its securities and prior to the effective date of the registration
     statement filed in connection with such registration, the Company shall
     determine for any reason not to register such securities, the Company may,
     at its election, give notice of such determination to the Purchaser and
     thereupon the Company shall be relieved of its obligation to register any
     Purchased Shares in connection with such registration.

     (iii) If such registration involves an underwritten offering, the Purchaser
     must sell the Purchased Shares requested to be registered to the
     underwriter selected by the Company on the same terms and conditions as
     apply to the Company or the other selling stockholders participating
     therein, and Purchaser shall bear all costs of such sale.

     The Company shall not be obligated to effect any registration of Purchased
     Shares incidental to the registration of any of its securities in
     connection with mergers, acquisitions, exchange offers, dividend
     reinvestment plans or stock option or other employee benefit plans. If a
     registration pursuant to this Agreement involves an underwritten offering
     and the sole or managing underwriter advises the Company that, in its
     opinion, the number of securities proposed to be included in such
     registration should be limited due to market conditions or the necessity of
     including shares being sold by the Company, or being sold by third parties
     pursuant to the Registration Rights Agreement dated July 12, 1996, then the
     Company will notify the Purchaser, if he has requested registration, and
     the Purchased Shares shall be excluded until such limitation has been met.
     The Company shall have the right to select the managing underwriter with
     respect to any offering. The Company shall have no obligation to pro rate
     the amount of Purchased Shares that the Purchaser may register in any such
     offering, in the event the number of shares includable is limited.

     Notwithstanding the foregoing, the Company shall not be required to
     included any Purchased Shares in any registration in the event that the
     Company shall obtain an opinion of its counsel that the Purchased Shares
     requested to be registered may then be sold without registration under Rule
     144 or other provisions of the Securities Act.

     The Purchaser agrees that in the event Purchased Shares are registered as
     provided for above, the Purchaser shall cooperate with the Company to
     provide any information required for the registration.

SECTION D -- Successors And Assigns

     Except as otherwise expressly provided to the contrary, the provisions of
this Agreement shall inure to the benefit of, and be binding upon, the Company
and its successors and assigns and be binding upon the Purchaser and the
Purchaser's legal representatives, heirs, legatees, distributees, assigns and
transferees by operation of law, whether or not any such person has become a
party to this Agreement or has agreed in writing to join herein and to be bound
by the terms, conditions and restrictions hereof.

SECTION E -- No Retention Rights

     Nothing in this Agreement shall confer upon the Purchaser any right to
continue in the employment of the Company for any period of specific duration or
interfere with or otherwise restrict in any way the rights of the Company (or
any parent or subsidiary employing or retaining the Purchaser) or of the
Purchaser, which rights are hereby expressly reserved by each, to terminate his
employment at any time and for any reason, with or without cause or notice.

SECTION F -- Legends

     All certificates evidencing Purchased Shares shall bear legends
referencing, to the extent applicable, this Agreement, and restricting
transferability of such Shares. If required by the authorities of any state in
connection with the issuance of the Purchased Shares, the legend or legends
required by such state authorities shall also be endorsed on all such
certificates. Legends will be removed by the Company when such Shares are
registered or an exemption from registration is available under applicable
federal and state law and the Purchased Shares are no longer subject to such
agreements.

SECTION G -- NOTICE

     Any notice required by the terms of this Agreement shall be given in
writing and shall be deemed effective upon personal delivery or upon deposit
with the United States Postal Service, by registered or certified mail, with
postage and fees prepaid; provided that, if the receiving party consents in
advance, a notice may be given by telecopy or by such other electronic
transmission mechanism as may be available to the parties. Notice shall be
addressed to the Company at its principal executive office, attention Board of
Directors, with a copy to General Counsel, and to the Purchaser at the address
that he most recently provided to the Company, or to such other address as
either party may specify by notice to the other.

SECTION H -- Entire Agreement

     This Agreement, together with the Employment Agreement and Note, constitute
the entire agreement between the parties hereto with regard to the subject
matter hereof. It supersedes all prior communications, representations and
understandings, whether oral or written and whether express or implied, which
relate to the subject matter hereof.

SECTION I - AMENDMENT AND RESCISSION

     This Agreement may be amended or rescinded only by a writing signed by the
parties making specific reference to this Agreement.

SECTION J-- Choice Of Law, ARBITRATION AND CONSENT TO JURISDICTION

     This Agreement shall be governed by, and construed in accordance with, the
laws of the State of Colorado, as such laws are applied to contracts entered
into and performed in such State, without regard to the conflicts of law
principles thereof. This Agreement and the Note shall also be subject to the
arbitration and consent to jurisdiction provisions in Section 22 of the
Employment Agreement, which are incorporated herein by reference as though fully
set forth herein.

     IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the
case of the Company by its duly authorized officer, as of the day and year first
above written.

PURCHASER:                                        WILD OATS MARKETS, INC.

                                                  By:
-----------------------------------------            ---------------------------
                                                  Title:
                                                        ------------------------

<PAGE>

                                                                       EXHIBIT A

                                 PROMISSORY NOTE

$ 9,273,978.31                                                     March 6, 2001
                                                               Boulder, Colorado

                FOR VALUE RECEIVED, Perry D. Odak ("Borrower") promises to pay
to the order of Wild Oats Markets, Inc., a Delaware corporation ("Holder"), the
principal sum of Nine Million Two Hundred Seventy Three Thousand Nine Hundred
Seventy Eight and 31/100 Dollars ($9,273,978.31) ("Principal Sum"), together
with interest computed on the unpaid balance of the Principal Sum calculated
from the date hereof until paid in full in accordance with the provisions of
this Note (the "Loan").

         Borrower has delivered to Holder on the date hereof an executed
Restricted Stock Purchase Agreement (the "Stock Purchase Agreement"), pursuant
to which Borrower purchased 1,332,649 shares of Common Stock, par value of
$0.001 per share, of Wild Oats Markets, Inc. (the "Shares"). Borrower has paid
$13,251.84 in cash and has requested that Holder make the Loan to Borrower to
pay the balance of the purchase price of the Shares, and Holder is willing to
make the Loan to Borrower upon the terms and subject to the conditions contained
in this Note.

         1. Interest. Interest shall accrue on the outstanding principal amount
of this Note at a rate equal to 5.5% per annum, and shall be compounded
semi-annually. All interest shall accrue based on a 360-day year for the actual
number of days outstanding. In the event Borrower shall fail to make any payment
under this Note within 10 days after its due date, Borrower shall pay a late
charge, without written notice or additional demand therefor, that is equal to
the lesser of (i) 5% of the amount not paid in a timely manner or (ii) the
maximum amount permitted by applicable law. Any such late charge shall be
payable with the interest payment on which it is imposed. All payments made
pursuant to this Note shall be applied, first, to any late fees and penalties
hereunder, next, to all accrued and outstanding interest on the Loan, and lastly
to the principal amount outstanding.

         2.       Payment.

                (a) Method of Payment. All payments hereunder shall be made in
lawful currency of the United States and in immediately available funds at the
principal office of Holder at 3375 Mitchell Lane, Boulder, CO 80301, or at such
other place as Holder may from time to time designate. Any payments by check
shall be accepted subject to collection in immediately available funds.

                  (b) Scheduled Payment. The entire outstanding Principal Sum of
this Note, together with all accrued and unpaid interest, late charges,
expenses, and fees, shall be due and payable in full on the last business day
preceding the fifth anniversary of the date this Note is made.

                  (c) Mandatory Prepayment. Accrued and unpaid interest,
together with the Principal Sum, if not sooner paid, shall be immediately due
and payable on the earliest of: (i) the date Borrower is no longer the
beneficial owner of the Shares; (ii) the date of termination of Borrower's
employment with Holder pursuant to the Employment Agreement between Borrower and
Holder dated March 6, 2001 (the "Employment Agreement"); (iii) thirty days after
the achievement of the "Performance Targets" (defined below); and (iv) the
acceleration of the maturity of the Loan as provided in Section 3. For purposes
of this Note, the Performance Targets are achieved (i) when the fair market
value of the Shares, as measured by the closing stock price on NASDAQ for the
preceding 120 consecutive trading days shall equal at least $30 per share, or
(ii) upon a Change in Control of the Company (as defined in the Employment
Agreement) if the fair market value of the Shares as measured by the closing
stock price on NASDAQ immediately prior to the Change in Control shall equal at
least $20 per share (as such per share prices may be adjusted by Holder to
reflect any stock dividend, extraordinary dividend payable in a form other than
stock, spin-off, stock split, reverse stock split, recapitalization, or similar
transaction affecting the Holder's outstanding securities that is effected
without receipt of consideration).

                  (d)      Optional  Prepayment.  Borrower may, at any time and
from time to time,  without premium or penalty, prepay the outstanding Principal
Sum in whole or in part.

                  (e)      Event  of  Default.  Any of  the  following  shall
constitute an "Event of Default" hereunder: (i) failure to pay the Loan when due
and payable; (ii) any breach by Borrower of the terms of the Stock Purchase
Agreement or this Note; or (iii) death of Borrower.

         3. Acceleration. In the event that Borrower commences an action under
any law relating to bankruptcy, insolvency or relief of debtors, there is
commenced against Borrower an action under any such law which results in the
entry of an order for relief or such action remains undismissed for a period of
60 days or Borrower otherwise becomes insolvent, or upon the occurrence of an
Event of Default, Holder may accelerate this Loan and may, by written notice to
Borrower, declare the entire outstanding Principal Sum and all accrued and
unpaid interest thereon to be immediately due and payable and, thereupon, the
outstanding Principal Sum and all such accrued and unpaid interest shall become
and be forthwith due and payable, without presentment, demand, protest or
further notice of any kind, all of which are expressly waived by Borrower. If an
Event of Default shall occur, Borrower shall pay Holder all costs and expenses
which Holder may incur in connection with the collection of any monies due under
this Note or in connection with the enforcement of any rights under this Note or
under any other agreement related to the loan evidenced hereby, including
reasonable attorneys' fees and costs not to exceed Fifteen Percent (15%) of the
then outstanding principal balance hereunder. The failure of Holder to
accelerate this Loan shall not constitute a waiver of any of Holder's rights
under this Loan as long as any of the events described in this Section continue.

         4.       Recourse.

                  The Loan shall be a full recourse obligation of Borrower, and
Holder may enforce this Note by any suit, claim, action or proceeding wherein a
money judgment, deficiency judgment or other judgment for personal liability
shall be sought against Borrower. Without limiting Holder's right to exercise
any or all of its rights, powers and remedies upon an Event of Default, Holder
agrees to accept Shares if offered in payment of Borrower's obligation under the
Note, which Shares shall be valued based on their then fair market value as
determined by the closing price on NASDAQ; provided, however, that any Shares
that are "unvested" and subject to the Company's "right of repurchase" under the
Stock Purchase Agreement will not be valued at more than the purchase price paid
by the Borrower for such Shares.

         5.       Miscellaneous.

                  (a) Each right, power and remedy of Holder under this Note or
under applicable laws shall be cumulative and concurrent, and the exercise of
any one or more of them shall not preclude the simultaneous or later exercise by
Holder of any or all such other rights, powers or remedies. No failure or delay
by Holder to insist upon the strict performance of any one or more provisions of
this Note or to exercise any right, power or remedy consequent upon a breach
thereof or default hereunder shall constitute a waiver thereof, or preclude
Holder from exercising any such right, power or remedy. By accepting full or
partial payment after the due date of any amount of principal of this Note,
Holder shall not be deemed to have waived the right either to require payment
when due and payable of all other amounts of principal of this Note or to
exercise any rights and remedies available to it in order to collect all such
other amounts due and payable under this Note.

                  (b) No modification, change, waiver or amendment of this Note
shall be deemed to be made by Holder unless in writing signed by Holder, and
each such waiver, if any, shall apply only with respect to the specific instance
involved.

                  (c) To the extent permitted by law, Borrower waives diligence,
presentment, demand, demand for payment, notice of nonpayment, notice of
dishonor, protest and notice of protest and all other notices or demands in
connection with the delivery, acceptance, performance, default or enforcement of
this Note.

                  (d) Borrower hereby agrees that at any time and from time to
time and with or without consideration, Holder may, without notice to or further
consent of Borrower and without in any manner releasing, lessening or affecting
the obligations of Borrower hereunder: (a) release, surrender, waive, add,
substitute, settle, exchange, compromise, modify, extend or grant indulgences
with respect to, (i) this Note, (ii) all or any part of the collateral or
security for this Note, if any, and (iii) Borrower; and (b) grant any extension
or other postponements of time of payment hereof.

                  (e)      The terms of any documents referred to herein are
incorporated  herein by reference as though fully set forth herein.

                  (f) Borrower hereby acknowledges, consents and agrees that the
provisions of this Note and the rights of all parties mentioned herein shall be
governed by and construed and enforced in accordance with the internal laws of
the State of Colorado, without regard to the conflict of laws and principles
thereof.

                  (g) This Note shall not be assignable by Borrower and shall be
binding upon Borrower's personal representative, heirs and legatees.

                  (h) All notices, demands, requests for modification, consents
or approvals under this Note must be in writing and shall be deemed to have been
properly given when received by Holder at its address as above stated, and when
hand-delivered or mailed by first class mail, postage prepaid, to Borrower at
the address as it appears below, or at such other place as either party may
designate in writing.

                  (i)      Time is of the essence with respect to all matters
hereunder.

         IN WITNESS WHEREOF, Borrower has executed this Note, under seal, on the
day and year first above written.

WITNESS:      BORROWER

------------------------------                 -------------------------------
                                                        Perry D. Odak

                                               -------------------------------
                                               -------------------------------
                                                        (address)

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