AMENDED AND RESTATED CREDIT AGREEMENT


         Reference is hereby made to that certain Credit  Agreement  dated as of
December  27,  1994,  executed by and  between  WHOLE FOODS  MARKET,  INC.  (the
"Company"),  the  financial  institutions  which are  currently  parties to said
Credit  Agreement (each of said financial  institutions now or hereafter a party
to said Credit Agreement being  hereinafter  referred to collectively as "Banks"
and individually as a "Bank"), and TEXAS COMMERCE BANK NATIONAL  ASSOCIATION,  a
national  banking  association  now  known  as  CHASE  BANK OF  TEXAS,  NATIONAL
ASSOCIATION,  a national banking association ("Chase"), in its capacity as agent
(the "Agent") for the Banks.

         The  Company,  the Banks and the Agent  have  previously  amended  said
Credit Agreement pursuant to the terms of a First Amendment to Credit Agreement,
dated as of May 16, 1996 (the "First  Amendment"),  a Second Amendment to Credit
Agreement  dated as of  December  24,  1996 (the  "Second  Amendment"),  a Third
Amendment  to  Credit   Agreement  dated  as  of  March  24,  1997  (the  "Third
Amendment"),  a Fourth  Amendment to Credit  Agreement  dated as of September 2,
1997 (the "Fourth  Amendment"),  and a Fifth Amendment to Credit Agreement dated
as of December  19,  1997 (the "Fifth  Amendment").  Said Credit  Agreement,  as
previously  amended  by the First  Amendment,  the Second  Amendment,  the Third
Amendment,  the Fourth Amendment,  and the Fifth Amendment is referred to herein
as the "Original Agreement."

         As a result of certain discussions  between the Company,  the Agent and
the Banks,  and in connection with the increase of the Aggregate  Commitment (as
defined in the Original  Agreement),  the parties to the Original Agreement,  as
well as new Banks which are signatories  hereto, now desire to amend and restate
the Original Agreement in its entirety.  Accordingly,  the Original Agreement is
hereby amended and restated in its entirety to hereafter be and read as follows:

         THIS  AMENDED  AND  RESTATED  CREDIT   AGREEMENT   (together  with  all
amendments,  modifications and supplements hereto and restatements  hereof, this
"Agreement")  is made and entered into as of June 28,  1999,  by and among WHOLE
FOODS MARKET, INC. (the "Company"),  a Texas corporation,  EACH OF THE FINANCIAL
INSTITUTIONS WHICH IS A SIGNATORY HERETO OR WHICH MAY FROM TIME TO TIME BECOME A
PARTY HERETO  (individually,  a "Bank" and collectively,  the "Banks") and CHASE
BANK OF TEXAS, NATIONAL ASSOCIATION ("Chase"), a national banking association as
agent for the Banks (in such  capacity,  together  with its  successors  in such
capacity, the "Agent").

                              W I T N E S S E T H:

         THAT,  in  consideration  of  the  mutual  covenants,   agreements  and
undertakings herein contained, the parties hereto agree as follows:



<PAGE>




1.       Definitions.

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

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

         Adjusted  LIBOR Rate shall mean,  with  respect to each LIBOR  Interest
Period,  a rate per annum equal to the quotient  (converted to a percentage)  of
(a) the London Interbank Rate with respect to such LIBOR Interest Period divided
by (b) 1 minus the Eurocurrency  Reserve  Requirement in effect on the first day
of such LIBOR Interest Period.

         Affiliate  shall mean any Person  controlling,  controlled  by or under
common  control  with any  other  Person;  and with  respect  to an  individual,
"Affiliate"  shall also mean any other individual  related to such individual by
blood  or  marriage.  For  purposes  of this  definition,  "control"  (including
"controlled by" and "under common control with") means the possession,  directly
or  indirectly,  of the power to direct or cause the direction of the management
and  policies of such  Person,  whether  through the  ownership  of  securities,
partnership or other ownership interests, by contract or otherwise.

         Aggregate  Commitment  shall mean,  on any day, the aggregate of all of
the Commitments of the Banks on such day.

         Aggregate  Unused  Commitment  shall mean, on any day, the aggregate of
all of the Unused Commitments of the Banks on such day.

         Alternate  Base Rate shall  mean for any day a rate per annum  (rounded
upwards to the nearest 1/16 of 1%) equal to the lesser of (a) the sum of (1) the
greater of (A) the Prime  Rate  (computed  on the basis of the actual  number of
days  elapsed  over a year of 365 or 366 days,  as the case may be) in effect on
such day,  and (B) the Federal  Funds Rate  (computed on the basis of the actual
number of days elapsed  over a 360-day  year) in effect for such day plus 1/2 of
1%,  plus (2) the  Applicable  Margin in  effect on such day or (b) the  Highest
Lawful Rate.  For purposes of this  Agreement any change in the  Alternate  Base
Rate due to a change in the Prime Rate or Federal  Funds Rate shall be effective
on the  effective  date of such change in the Prime Rate or Federal  Funds Rate,
respectively.  If  for  any  reason  the  Agent  shall  have  determined  (which
determination shall be conclusive and binding, absent manifest error) that it is
unable to  ascertain  the  Federal  Funds  Rate for any  reason,  including  the
inability or failure of the Agent to obtain sufficient  quotations in accordance
with the terms hereof,  the  Alternate  Base Rate shall be the lesser of (a) the
Prime Rate plus the  Applicable  Margin or (b) the Highest Lawful Rate until the
circumstances giving rise to such inability no longer exist.

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

         Annual Audited  Financial  Statements  shall mean, with respect to each
fiscal year of the Company,  the Company's 10-K Report filed with the Securities
Exchange  Commission for such fiscal year, prepared in conformity with Generally
Accepted  Accounting  Principles  and  accompanied  by a report  and  opinion of
independent  certified  public  accountants  with an accounting firm of national
standing and reputation,  which shall state that such financial  statements,  in
the opinion of such accountants,  present fairly, in all material respects,  the
financial position of the Company and its Subsidiaries, on a consolidated basis,
as of the date thereof and the results of its  operations and cash flows for the
period  covered  thereby  in  conformity  with  Generally  Accepted   Accounting
Principles.

         Applicable  Commitment  Fee  Percentage  shall mean with respect to any
Unused  Commitment,  on any day  occurring on or after (1) March 31 but prior to
June 30 of the applicable  calendar  year,  the applicable per annum  percentage
corresponding  to the Leverage Ratio determined as of the end of the immediately
preceding  first quarter of the Company's  fiscal year, (2) June 30 but prior to

<PAGE>

September  30  of  the  applicable  calendar  year,  the  applicable  per  annum
percentage  corresponding  to the Leverage Ratio determined as of the end of the
immediately preceding second quarter of the Company's fiscal year, (3) September
30 but prior to December 31 of the applicable  calendar year, the applicable per
annum percentage corresponding to the Leverage Ratio determined as of the end of
the immediately  preceding  third quarter of the Company's  fiscal year, and (4)
December  31  but  prior  to  March  31 of the  applicable  calendar  year,  the
applicable per annum  percentage  corresponding to the Leverage Ratio determined
as of the immediately preceding fiscal year of the Company, as provided below:

----------------------------------------------- -------------------------------

                                                          Per Annum
               Leverage Ratio                          Percentage Rate
----------------------------------------------- -------------------------------
----------------------------------------------- -------------------------------

              Less than 1.00x                               0.20%
----------------------------------------------- -------------------------------
----------------------------------------------- -------------------------------

   1.00x or greater, but less than 2.00x                    0.25%
----------------------------------------------- -------------------------------
----------------------------------------------- -------------------------------

              2.00x or greater                              0.30%
----------------------------------------------- -------------------------------

         Applicable  Margin  shall  mean with  respect  to any Loan,  on any day
occurring  on or  after  (1)  March 31 but  prior  to June 30 of the  applicable
calendar year, the applicable per annum percentage corresponding to the Leverage
Ratio determined as of the end of the immediately preceding first quarter of the
Company's  fiscal year,  (2) June 30 but prior to September 30 of the applicable
calendar year, the applicable per annum percentage corresponding to the Leverage
Ratio  determined as of the end of the immediately  preceding  second quarter of
the  Company's  fiscal  year,  (3)  September 30 but prior to December 31 of the
applicable  calendar year, the applicable per annum percentage  corresponding to
the Leverage Ratio  determined as of the end of the immediately  preceding third
quarter of the Company's  fiscal year, and (4) December 31 but prior to March 31
of  the  applicable   calendar   year,  the  applicable  per  annum   percentage
corresponding to the Leverage Ratio  determined as of the immediately  preceding
fiscal year of the Company, as provided below:







<PAGE>


------------------------ ---------------------------- --------------------------
                             Per Annum Percentage        Per Annum Percentage
                                for LIBOR Rate            for Alternate Base
       Leverage Ratio             Borrowings                Rate Borrowings
------------------------ ---------------------------- --------------------------
      Less than 1.00x                0.75%                      0.000%
------------------------ ---------------------------- --------------------------
      1.00x or greater,
    but less than 2.00x              1.00%                      0.00%
------------------------ ---------------------------- --------------------------
     2.00x or greater                1.25%                      0.000%
------------------------ ---------------------------- --------------------------

         Applications  shall mean all applications and agreements for Letters of
Credit, or similar  instruments or agreements,  in Proper Form, now or hereafter
executed by any Person in connection  with any Letter of Credit now or hereafter
issued or to be issued under the terms hereof at the request of any Person.

         Business Day shall mean a day when the main office of the Agent is open
for business and banks in Houston, Texas are generally open for business.

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

         Capital Lease Obligations shall mean the obligations of the Company and
its  Subsidiaries  on a consolidated  basis to pay rent or other amounts under a
lease of (or other  agreement  conveying the right to use) real and/or  personal
Property which  obligations are required to be classified and accounted for as a
capital  lease  on  a  consolidated   balance  sheet  of  the  Company  and  its
Subsidiaries under Generally Accepted Accounting Principles (including Statement
of Financial  Accounting  Standards No. 13 of the Financial Accounting Standards
Board,  as amended)  and,  for  purposes of this  Agreement,  the amount of such
obligations  shall be the capitalized  amount thereof,  determined in accordance
with Generally Accepted Accounting Principles (including such Statement No. 13).

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

         Chapter  1D shall  mean  Chapter 1D of the Texas  Finance  Code,  as in
effect on the date the document using such term was executed.

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

         Commitment  shall mean, as to any Bank,  the obligation of such Bank to
make Loans and incur  liability for the Letters of Credit  Exposure Amount in an

<PAGE>

aggregate principal amount at any one time outstanding up to, but not exceeding,
the amount set forth  opposite  such Bank's name on the  signature  pages hereof
under the  caption  "Commitment"  (as the same may be reduced  from time to time
pursuant to Section 2.2 hereof).

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

         Commitment  Percentage shall mean, with respect to any Bank, the ratio,
expressed  as  a  percentage,   of  such  Bank's  Commitment  to  the  Aggregate
Commitment.

         Consequential  Loss  shall  mean,  with  respect  to (a) the  Company's
payment of principal of a LIBOR Rate  Borrowing on a day other than the last day
of the applicable LIBOR Interest Period,  (b) the Company's  failure to borrow a
LIBOR Rate  Borrowing on the date  specified by the Company for any reason,  (c)
the Company's  failure to make any prepayment of the Loans (other than Alternate
Base Rate Borrowings) on the date specified by the Company, or (d) any cessation
of the LIBOR Rate to apply to the Loans or any part thereof  pursuant to Section
2.11 hereof, in each case whether voluntary or involuntary,  any loss,  expense,
penalty,  premium  or  liability  incurred  by any of the  Banks  or the  Agent,
including any interest paid by any of the Banks to lenders of funds  borrowed by
it to make or carry the Loans. And "Consequential Loss" shall mean, with respect
to the  termination  or  cancellation  of any LIBOR Rate  Borrowing  pursuant to
Section 2.11 hereof,  in each case whether  voluntary or involuntary,  any loss,
expense, penalty, premium or liability incurred by any of the Banks or the Agent
on  account  of any  reduction  resulting  from such  premature  termination  or
cancellation  of such borrowing in such Person's  margins or spreads between its
cost of funds and the  interest  earned on the  principal  of the  borrowing  so
terminated or canceled,  including an amount equal to the excess (if any) of (x)
interest that would have accrued on any such  borrowing  during the remainder of
the applicable  LIBOR Interest  Period had such borrowing not been terminated or
canceled early,  over (y) the interest  actually accrued on the principal amount
of that  terminated  or  canceled  borrowing  for such  remainder  of such LIBOR
Interest Period.

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

         Contingent   Obligations   shall  mean,  as  to  any  Person,   without
duplication, any obligation of such Person guaranteeing or intended to guarantee
the payment or  performance  of any  Indebtedness,  leases,  dividends  or other
obligations  (collectively  "primary  obligations")  of any  other  Person  (the
"primary  obligor") in any manner,  whether  directly or  indirectly,  including
without limitation, any obligation of the Person for whom Contingent Obligations
is being determined, whether or not contingent, (a) to purchase any such primary
obligation or other property  constituting direct or indirect security therefor,
(b) assume or contingently  agree to become or be secondarily  liable in respect
of any such  primary  obligation,  (c) to  advance  or supply  funds (i) for the
purchase or payment of any such primary  obligation or (ii) to maintain  working
capital or equity  capital for the primary  obligor or otherwise to maintain the
net  worth  or  solvency  of the  primary  obligor,  (d) to  purchase  property,
securities  or services  primarily  for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary  obligation,  or (e) otherwise to assure or hold harmless the owner
of such primary obligation against loss in respect thereof;  provided,  however,
that the term  "Contingent  Obligations"  shall not include (x)  endorsements of
checks or other negotiable  instruments in the ordinary course of business,  (y)
performance or payment  guarantees by the Company of any  Indebtedness of any of
its  Subsidiaries  of the type permitted in Section  6.1(f) hereof,  and (z) the
obligations  and  liabilities of each Guarantor to the Agent and the Banks under
the Guaranties. The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determinable  amount of the primary  obligation in
respect  of which  such  Contingent  Obligation  is made or,  if not  stated  or
determinable, the maximum anticipated liability in respect thereof (assuming the
Person for whom  Contingent  Obligations  is being  determined  is  required  to
perform thereunder) as determined by the Agent in good faith.

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

         Current  Guarantors  shall mean each of the Subsidiaries of the Company
listed on Schedule II attached  hereto  (other than Natrix  International,  LLC,
Amrion New Zealand Limited and Australian Naturalcare Products PTY LTD), and any
and all of their respective successors and assigns.


<PAGE>

         Current Sum shall mean on any day, as to a particular  Bank, the sum of
(a) the outstanding  principal  balance of such Bank's Note on such day plus (b)
the product of (i) such Bank's  Commitment  Percentage  times (ii) the Letter of
Credit Exposure Amount on such day.

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

         EBIT shall mean for any period for which EBIT is calculated, Net Income
of the Company and its Subsidiaries on a consolidated basis for such period plus
(a)  non-recurring,  non-cash  charges of the Company and its  Subsidiaries on a
consolidated   basis  for  such  period,  (b)  taxes  of  the  Company  and  its
Subsidiaries on a consolidated basis for such period and (c) interest expense of
the Company and its  Subsidiaries on a consolidated  basis for such period.  All
components of EBIT shall be determined in  accordance  with  Generally  Accepted
Accounting Principles, consistently applied.

         EBITDA  shall mean for any period for which EBITDA is  calculated,  Net
Income of the  Company and its  Subsidiaries  on a  consolidated  basis for such
period  plus (a) taxes of the  Company and its  Subsidiaries  on a  consolidated
basis for such period  (calculated after excluding any gain or loss attributable
to  Discontinued  Operations  as of  such  day),  (b)  depreciation,  depletion,
obsolescence and amortization of Property of the Company and its Subsidiaries on
a  consolidated   basis  for  such  period   (calculated   after  excluding  any
depreciation,   depletion,   obsolescence   and   amortization   applicable   to
Discontinued Operations as of such day), (c) interest expense of the Company and
its  Subsidiaries  on a  consolidated  basis for such period  (calculated  after
excluding any interest expense paid in connection with  Discontinued  Operations
as of such day), and (d) non-recurring,  non-cash charges of the Company and its
Subsidiaries on a consolidated  basis for such period.  All components of EBITDA
shall be determined in accordance with Generally Accepted Accounting Principles,
consistently applied.

         Eligible  Assignee shall mean (a) a commercial bank having total assets
in excess of $10,000,000,000 or (b) a finance company,  insurance company, other
financial institution or fund, acceptable to the Agent and the Company, which is
regularly  engaged in making,  purchasing or investing in loans and having total
assets in excess of $10,000,000,000.

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

         Environmental  Liabilities shall mean all liabilities  arising from any
Environmental  Claim,  Environmental  Permit or Requirement of Environmental Law
under  any  theory  of  recovery,  at law or in  equity,  and  whether  based on
negligence,  strict  liability  or  otherwise,   including:  remedial,  removal,
response, abatement, restoration (including natural resources) investigative, or
monitoring  liabilities,   personal  injury  and  damage  to  property,  natural
resources or injuries to persons, and any other related costs, expenses, losses,
damages,  penalties,  fines,  liabilities  and  obligations,  and all  costs and
expenses  necessary  to  cause  the  issuance,  reissuance  or  renewal  of  any
Environmental  Permit including  attorney's fees and court costs.  Environmental
Liability shall mean any one of them.

         Environmental Permit shall mean any permit, license,  approval or other
authorization  under any applicable law, regulation and other requirement of the

<PAGE>

United  States  or of any  state,  municipality  or  other  subdivision  thereof
relating to  pollution or  protection  of health or the  environment,  including
laws,  regulations  or other  requirements  relating to  emissions,  discharges,
releases  or  threatened  releases  of  pollutants,  contaminants  or  Hazardous
Substances or toxic materials or wastes into ambient air, surface water,  ground
water  or  land,  or  otherwise   relating  to  the   manufacture,   processing,
distribution, recycling, presence, use, treatment, storage, disposal, transport,
or handling of, wastes, pollutants, contaminants or Hazardous Substances.

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

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

         Eurocurrency  Reserve Requirement shall mean, on any day, for any LIBOR
Interest  Period,  the stated  maximum  rate  (expressed  as a decimal)  for all
reserves  (including  basic,  supplemental,  marginal  and  emergency  reserves)
required to be maintained  during such LIBOR Interest Period under  Regulation D
by  any  member  bank  of  the  Federal  Reserve  System  against  "Eurocurrency
liabilities,"  as  currently  defined in  Regulation  D, all as specified by any
Governmental  Authority.  Without  limiting  the  effect of the  foregoing,  the
Eurocurrency Reserve Requirement shall reflect any other reserves required to be
maintained by such member banks by reason of any  Regulatory  Change against (a)
any category of liabilities  which  includes  deposits by reference to which the
Adjusted LIBOR Rate is to be determined as provided in the definition of "London
Interbank  Rate" or (b) any  category of  extensions  of credit or other  assets
which include Eurocurrency Loans. Each determination of the Eurocurrency Reserve
Requirement by the Agent shall be conclusive and binding, absent manifest error,
and may be computed using any reasonable averaging and attribution method.

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

         Excess Interest  Amount shall have the meaning  attributed to such term
in Section 2.12 hereof.

         FDIC  Percentage  shall  mean,  on any day,  the annual  rate  (rounded
upwards,  if not already a whole  multiple of 1/100% to the next higher  1/100%)
most recently  estimated by the Agent as the then current annual assessment that
will be employed in  determining  amounts  payable by Chase to any  Governmental
Authority  (including the Federal Deposit  Insurance  Corporation)  for insuring
time deposits  made in United  States  dollars at Chase's main banking house and
maturing at the end of the relevant LIBOR Interest Period.  Each estimate of the
FDIC  Percentage by the Agent shall be binding and  conclusive,  absent manifest
error,  and may be computed by using any  reasonable  averaging and  attribution
method.

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

         Fixed  Charge  Coverage  Ratio  shall mean as of any day that the Fixed
Charge Coverage Ratio is being calculated,  the ratio of (a) EBIT plus Operating
Lease  Expense  to (b)  interest  expense  plus  Operating  Lease  Expense.  All
components of the Fixed Charge  Coverage Ratio shall be computed for the Rolling
Four Quarters as of such day and determined for the Company and its Subsidiaries
on a  consolidated  basis  in  accordance  with  Generally  Accepted  Accounting
Principles, consistently applied.

         Funded  Indebtedness shall mean (a) all Indebtedness of the Company and
its  Subsidiaries  on a consolidated  basis which by its terms matures more than
one year  after  the  applicable  date of  calculation  of  Funded  Indebtedness
(including  without  limitation,   current  maturities  or  scheduled  principal


<PAGE>

payments  of Funded  Indebtedness  for the  applicable  period for which  Funded
Indebtedness is being  calculated),  and any Indebtedness of the Company and its
Subsidiaries  on a consolidated  basis  maturing  within one year from such date
which is renewable or  extendable  at the option of the obligor to a date beyond
one year from such date and (b) without  duplication,  Capital Lease Obligations
of the Company and its  Subsidiaries on a consolidated  basis. All components of
Funded  Indebtedness  shall be determined in accordance with Generally  Accepted
Accounting Principles, consistently applied.

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

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

         Guaranties  shall  mean  that  certain  Master  Guaranty  of even  date
herewith  by  and  among  the  Current  Guarantors,  as  amended,  supplemented,
modified,  joined in pursuant to a Joinder  Agreement  and restated from time to
time, and each and every other guaranty executed by any or all of the Guarantors
from time to time.

         Guarantors  shall mean each and every Person  executing a guaranty from
time to time  guaranteeing  the  Indebtedness  of the Company owing from time to
time to the Banks pursuant to this Agreement or the Notes, including the Current
Guarantors.

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

         Highest Lawful Rate shall mean the maximum nonusurious rate of interest
permitted  by  whichever  of  applicable  federal or Texas law from time to time
permits the higher maximum nonusurious interest rate stated as a rate per annum.
On each day, if any, that  applicable  Texas law  establishes the Highest Lawful
Rate,  the  Highest  Lawful Rate shall be the  "weekly  ceiling"  (as defined in
Chapter 1D and ss. 303 of the Texas Finance Code, as amended,  respectively) for
that  day.  The  Agent  may from time to time,  as to  then-current  and  future
balances,  implement  any other  ceiling  under Chapter 1D and the Texas Finance
Code and/or  revise the index,  formula or  provision of law used to compute the
rate on such  obligation,  if and to the extent  permitted by, and in the manner
provided in, Chapter 1D and the Texas Finance Code.

         Incidental Liens shall mean (i) Liens for taxes, assessments, levies or
other governmental charges (but not Liens for clean up expenses arising pursuant
to Requirements of  Environmental  Law) not yet due (subject to applicable grace
periods)  or  which  are  being  contested  in  good  faith  and by  appropriate
proceedings  if adequate  reserves  with respect  thereto are  maintained on the
books  of  the  Company  in  accordance  with  Generally   Accepted   Accounting
Principles; (ii) carriers',  warehousemen's,  mechanics',  landlords', vendors',
materialmen's,  repairmen's, sureties' or other like Liens (other than Liens for
clean up expenses arising pursuant to Requirements of Environmental Law) arising
in the  ordinary  course of business  (or  deposits to obtain the release of any
such Lien) and securing amounts not yet due or which are being contested in good
faith and by appropriate  proceedings  if, in the case of such contested  Liens,
adequate  reserves  with  respect  thereto  are  maintained  on the books of the
Company in accordance  with  Generally  Accepted  Accounting  Principles;  (iii)
pledges or deposits  in  connection  with  worker's  compensation,  unemployment
insurance and other social security legislation;  (iv) deposits not in excess at
any time of $1,000,000 to secure  insurance in the ordinary  course of business,
the  performance  of bids,  tenders,  contracts  (other than  contracts  for the
payment of money), leases, licenses, franchises,  statutory obligations,  surety
and appeal bonds and  performance  bonds and other  obligations of a like nature
incurred  in the  ordinary  course of business  and Liens to secure  progress or
partial  payments made to the Company or any  Subsidiary and other Liens of like
nature made in the ordinary  course of business;  (v) easements,  rights-of-way,
covenants,   reservations,   exceptions,   encroachments,   zoning  and  similar
restrictions  and other similar  encumbrances  or title defects  incurred in the
ordinary  course of business  which,  in the aggregate,  are not  substantial in
amount,  and  which do not in any case  singly  or in the  aggregate  materially
detract  from  the  value or  usefulness  of the  property  subject  thereto  or
materially  interfere  with the ordinary  conduct of the business of the Company
and its Subsidiaries, taken as a whole; (vi) bankers' liens arising by operation
of law; (vii) Liens arising  pursuant to any order of  attachment,  distraint or
similar  legal  process  arising in  connection  with any court  proceeding  the
payment  of which is covered  in full  (subject  to  customary  deductibles)  by
insurance;  (viii)  inchoate  Liens  arising  under  ERISA to secure  contingent
liabilities of the Company;  and (ix) rights of lessees and sublessees in assets
leased by the Company or any Subsidiary not prohibited elsewhere herein.

         Indebtedness shall mean, as to any Person, without duplication: (a) all
indebtedness  (including principal,  interest,  fees and charges) of such Person
for borrowed  money or for the deferred  purchase price of Property or services;
(b) any other  indebtedness  which is  evidenced  by a  promissory  note,  bond,
debenture  or  similar  instrument;  (c) any  obligation  under or in respect of
outstanding  letters of credit  (including  without  limitation,  the Letters of
Credit),  acceptances  and similar  obligations  created for the account of such
Person;  (d) all Capital Lease Obligations of such Person; (e) all indebtedness,
liabilities,  and obligations  secured by any Lien on any Property owned by such
Person  even though  such  Person has not  assumed or has not  otherwise  become
liable for the  payment of any such  indebtedness,  liabilities  or  obligations
secured by such Lien; and (f) net liabilities of such Person under interest rate
cap  agreements,  interest  rate  swap  agreements,  foreign  currency  exchange
agreements and other hedging  agreements or arrangements  (calculated on a basis
satisfactory to the Agent and in accordance with accepted  practice);  provided,
that such term shall not mean or include  any  Indebtedness  in respect of which
monies sufficient to pay and discharge the same in full (either on the expressed
date of maturity  thereof or on such  earlier date as such  Indebtedness  may be
duly called for  redemption  and payment)  shall be deposited with a depository,
agency or trustee acceptable to the Agent in trust for the payment thereof.

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

         Interest   Payment  Dates  shall  mean  (a)  for  Alternate  Base  Rate
Borrowings, (1) at all times while the Notes are outstanding,  the last Business
Day of each March, June, September and December,  and (2) the Maturity Date; and
(b) for LIBOR Rate  Borrowings,  (1) if the LIBOR Interest Period  applicable to
such LIBOR Rate Borrowing is equal to or less than three (3) months,  the end of
such LIBOR  Interest  Period,  and (2) in all other cases,  on that day which is
three (3)  calendar  months  following  the first  day of the  applicable  LIBOR
Interest  Period (or, if there be no  corresponding  day, on the next succeeding
day which is a Business Day) and at the end of such LIBOR Interest Period.

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

         Issuer  shall  mean any Bank  which is an issuer of a Letter of Credit.
The initial Issuer will be Chase.

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

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

         Letter of Credit  Advances  shall  mean all sums which may from time to
time be paid by any and all of the Banks  pursuant to the Letters of Credit,  or
any of them,  together  with  all  other  sums,  fees,  reimbursements  or other
obligations  which may be due to any or all of the Banks pursuant to the Letters
of Credit, or any of them.


<PAGE>

         Letter of Credit  Exposure Amount shall mean at any time the sum of (i)
the aggregate  undrawn amount of all Letters of Credit  outstanding at such time
plus (ii) the  aggregate  amount of all Letter of Credit  Advances for which the
Banks have not been reimbursed and which remain unpaid at such time.

         Letter of Credit Fee  Payment  Date  shall  mean,  with  respect to any
Letter of Credit,  the date of issuance  thereof and the last day of each March,
June, September and December which occurs after the date of issuance,  but prior
to the expiry date of said Letter of Credit.

         Letter of Credit  Termination Date shall mean a date which is three (3)
months prior to the Maturity Date.

         Letters of Credit shall mean all irrevocable  standby letters of credit
and all commercial  letters of credit issued by the Issuer pursuant to the terms
set forth in this Agreement,  including all outstanding letters of credit issued
by Chase  prior to the date  hereof for the account of the Company or any of its
Subsidiaries.

         Leverage  Ratio  shall  mean as of any day that the  Leverage  Ratio is
calculated, the ratio of Funded Indebtedness of the Company and its Subsidiaries
on a  consolidated  basis  as of  such  day to  EBITDA  of the  Company  and its
Subsidiaries  on a  consolidated  basis for the Rolling Four Quarters as of such
day.

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

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

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

         (b)      on the last day of the  immediately  preceding  LIBOR Interest
                  Period  in  the  case of a  roll-over  to a  successive  LIBOR
                  Interest Period,

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

         LIBOR  Rate shall  mean,  for the  entire  term of each LIBOR  Interest
Period,  a rate per annum equal to the lesser of (a) the sum of (1) the Adjusted
LIBOR Rate in effect on the first day of such LIBOR Interest Period plus (2) the
Applicable  Margin  from time to time in effect  during  such term,  and (b) the
Highest Lawful Rate.

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

         Lien shall mean any mortgage,  pledge,  charge,  encumbrance,  security
interest,  collateral  assignment  or other  lien or  restriction  of any  kind,
whether based on common law, constitutional provision,  statute or contract, and
shall include reservations, exceptions, encroachments, easements, rights of way,
covenants, conditions, restrictions, leases and other title exceptions.

         Loan Documents  shall mean this Agreement,  the Notes,  the Guaranties,
the Contribution Agreement,  the Joinder Agreements,  the Letters of Credit, the
Applications,  all  instruments,  certificates  and  agreements now or hereafter
executed  or  delivered  to the Agent  and/or the Banks  pursuant  to any of the

<PAGE>

foregoing, and all amendments,  modifications,  renewals, extensions,  increases
and rearrangements of, and substitutions for, any of the foregoing.

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

         London  Interbank Rate shall mean, for each  applicable  LIBOR Interest
Period, the rate of interest per annum quoted by the Agent as the average of the
rates per annum  offered to the Agent by one or more prime  banks in the London,
England  interbank  market of deposits in U.S. Dollars for delivery on the first
day of the applicable Interest Period,  maturing on the last day of the Interest
Period  and in an amount  equal (or as  nearly as equal as  practicable)  to the
related LIBOR Rate Borrowing.  The average of the rates quoted to the Agent will
be  rounded  to the  next  higher  multiple  of 1/16% to  determine  the  London
Interbank Rate. The Agent will select the prime banks for determining the London
Interbank  Rate  in its  sole  discretion,  and  the  Agent  will  request  rate
quotations in accordance with the then existing practice in the London,  England
interbank  market.  The Agent will  determine  the London  Interbank  Rate at or
before  10:00 a.m.,  two (2) LIBOR  Business  Days prior to the first day of the
applicable  LIBOR Interest  Period,  and each  determination by the Agent of the
London Interbank Rate will be conclusive and binding, absent manifest error, and
may be computed using any reasonable averaging and attribution method.

         Majority  Banks  shall  mean two (2) or more  Banks  having  66-2/3% or
greater of the Aggregate Commitment.

         Material  Adverse  Effect shall mean a material  adverse  effect on the
assets, liabilities, financial condition, business or affairs of the Company and
its Subsidiaries on a consolidated basis.

         Maturity  Date shall  mean the  earlier of (a) the date three (3) years
from  the  date  hereof,  (b) the date the  Company  terminates  the  Commitment
pursuant to Section 2.2 hereof, and (c) the date specified by the Agent pursuant
to Section 7.1 hereof.

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

         Net Proceeds  Amount shall mean,  with respect to any  Permitted  Asset
Dispositions  and Permitted Stock  Dispositions by the Company and/or any of its
Subsidiaries,  an  amount  equal to the  difference  between  (a) the  aggregate
consideration  paid to or received by the Company and/or any of its Subsidiaries
in  connection  with such  Permitted  Asset  Dispositions  and  Permitted  Stock
Dispositions and (b) all ordinary and reasonable out of pocket expenses actually
incurred by the Company and/or any of its  Subsidiaries  in connection with such
Permitted Asset Dispositions and Permitted Stock Dispositions.

         Notes shall mean the promissory notes,  each  substantially in the form
of Exhibit A attached hereto,  of the Company  evidencing the Loans,  payable to
the order of the respective Banks in the amount of said Bank's  Commitment,  and
all renewals, extensions, modifications, rearrangements and replacements thereof
and substitutions therefor. Note shall mean any one of them.

         Note Purchase  Agreements  shall have the meaning given to such term in
Section 6.1(l) hereof.

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

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

<PAGE>


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

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

         Parties shall mean all Persons  other than the Agent,  any Bank, or the
Issuer executing any Loan Document.

         Past Due Rate shall  mean,  on any day,  the  Alternate  Base Rate plus
three percent (3%), not to exceed the Highest Lawful Rate in effect on such day.

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

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

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

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

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

         Prime Rate shall mean,  for any day, the prime rate as determined  from
time to time by Chase as being its prime  rate for that day.  Without  notice to
the Company or any other Person,  the Prime Rate shall  automatically  fluctuate
upward and  downward  as and in the amount by which said Prime Rate  fluctuates,
with each  change to be  effective  as of the date of each  change in said Prime
Rate. The Prime Rate is a reference rate and does not necessarily  represent the
lowest or best rate actually  charged to any customer,  and Chase  disclaims any
statement,   representation,  or  warranty  to  the  contrary.  Chase  may  make
commercial  loans or other loans at rates of interest  at,  above,  or below the
Prime Rate.

<PAGE>


         Principal  Office  shall  mean  the  principal  office  of  the  Agent,
presently maintained at 712 Main Street,  Houston, Texas, or at such other place
as the Agent may from time to time by notice to the Company designate.

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

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

         Quarterly  Unaudited  Financial  Statements shall mean, with respect to
each fiscal  quarter of the Company  (except for the last fiscal  quarter),  the
Company's  10-Q Report filed with the  Securities  Exchange  Commission for such
fiscal  quarter.  All of the  Quarterly  Unaudited  Financial  Statements of the
Company are to be prepared in  accordance  with  Generally  Accepted  Accounting
Principles  and  certified as true and correct by the chief  executive  officer,
president, chief operating officer or chief financial officer of the Company.

         Ratable  Portion  shall mean an amount  equal to the product of (a) the
Net Proceeds Amount attributable to the applicable  Permitted Asset Dispositions
and Permitted Stock Dispositions  multiplied by (b) a fraction, the numerator of
which is the  outstanding  principal  balance  of the Loans at such time and the
denominator of which is the aggregate  principal  amount of Funded  Indebtedness
(including  without  limitation,  the Notes) at such time of the Company and its
Subsidiaries on a consolidated basis.

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

         Rate Selection  Notice shall have the meaning ascribed to it in Section
2.10(b)(1) hereof.

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

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

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

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

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


<PAGE>

         Stated  Rate  shall  mean the  effective  weighted  per  annum  rate of
interest applicable to the Loans.

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

         Subsidiary shall mean, as to a particular  parent Business Entity,  any
Business  Entity of which more than fifty  percent (50%) of the capital stock or
other indicia of equity  rights  issued by such  Business  Entity is at the time
directly or indirectly owned by, such parent Business Entity,  or by one or more
of its Affiliates.

         Taxes shall have the meaning ascribed to it in Section 2.11(b) hereof.

         Unsecured  Borrowed  Debt shall mean all  Indebtedness  resulting  from
borrowings of the Company  (exclusive of intercompany  borrowings)  from time to
time owing to Persons  which is not secured by any Liens (other than  borrowings
from  trade  creditors  in the  ordinary  course  of  business),  including  the
Indebtedness  of the  Company  owing to the Banks or the Agent  pursuant to this
Agreement.

         Unused  Commitment  shall  mean,  as to a  particular  Bank,  the daily
difference of such Bank's Commitment on such day less the Current Sum applicable
to such Bank on such day.

         1.2.    Accounting Terms and Determinations.  Except where specifically
 otherwise provided:

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


<PAGE>


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

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

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

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

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

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

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

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

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

2.       Loans; Letters of Credit; Payments; Prepayments; Interest Rates.


<PAGE>

         2.1.     Loans.


          (a) Subject to the terms and  conditions  hereof,  each Bank severally
     agrees to make loans to the Company  from time to time before the  Maturity
     Date,  in an  aggregate  principal  amount  at  any  one  time  outstanding
     (including its liability for the Letter of Credit  Exposure  Amount at such
     time)  up to but not  exceeding  such  Bank's  Commitment.  Subject  to the
     conditions  herein,  any such Loan repaid prior to the Maturity Date may be
     reborrowed pursuant to the terms of this Agreement.  Each Loan which is not
     made to repay a Letter of Credit  Advance  pursuant  to Section  2.4 hereof
     shall  be in an  amount  of at  least  (i)  $500,000  or  (ii)  the  Unused
     Commitment,  whichever is less.  Each repayment of the Loans shall be in an
     amount  of at  least  $500,000  or the  principal  balance  of  the  Notes,
     whichever is less. The Agent,  the Banks and the Company agree that Chapter
     346 of the Texas Finance Code shall not apply to this  Agreement,  any Note
     or any Loan. The Loans shall be evidenced by the Notes.

          (b) The Company shall give the Agent notice of a request for a Loan in
     accordance with Section 3.1 hereof.  Upon receipt of each such notice,  the
     Agent shall  promptly give each of the Banks notice by telephone of receipt
     thereof.  Not later than 12:00 noon on the date specified for the making of
     such Loan,  each Bank shall make  available  to the Agent at the  Principal
     Office,  such  Bank's  Commitment  Percentage  of such Loan in  immediately
     available  funds for the account of the Company.  The amount so received by
     the Agent shall, subject to the terms and conditions of this Agreement,  be
     made available to the Company by depositing same, in immediately  available
     funds, in an account designated by the Company maintained with the Agent at
     the  Principal  Office.  If a  requested  Loan  shall not occur on any date
     specified  by the  Company  as set  forth  in the  applicable  Request  for
     Extension  of Credit  and  Certificate  of No  Default  because  all of the
     conditions  for such  Loan set forth  herein  or in any of the  other  Loan
     Documents  shall have not been met,  the Agent shall  return the amounts so
     received from the Banks in respect of such requested Loan to the applicable
     Banks as soon as practicable;  provided, however, if and to the extent that
     the Agent fails to return any such  amounts to any  applicable  Bank on the
     date that the  requested  Loan was to have been made,  the Agent  shall pay
     interest on such  unreturned  amounts for each date from such date that the
     requested  Loan was to have been  made,  to the date  that such  unreturned
     amounts are returned to such Bank,  such  interest to accrue at the Federal
     Funds Rate and to be payable upon written request from such Bank.

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

         2.2. Commitment Fees;  Termination and Reductions.  In consideration of
each Bank's  Commitment,  the Company agrees to pay to the Agent for the account
of each Bank a commitment fee (each a "Commitment  Fee")  (computed on the basis
of the actual number of days elapsed in a year composed of 360 days,  subject to
the terms of Section  9.6  hereof) in an amount  equal to the product of (A) the
Applicable  Commitment  Fee  Percentage  in effect  for the period for which the
Commitment Fee is being computed  times (B) such Bank's Unused  Commitment.  The
Commitment  Fee shall be due and payable in arrears on the last  Business Day of
each March,  June,  September and December prior to the Maturity Date and on the
Maturity Date, with each Commitment Fee to commence as of the date hereof and to
be effective as to any reduction in the  Commitment or change in the  Applicable
Commitment  Fee  Percentage as of the date of any such  decrease or change,  and
each  Commitment  Fee shall  cease to accrue  (except  with  respect to past due
interest on any unpaid  portion  thereof)  on the  Maturity  Date.  All past due
Commitment  Fees shall bear  interest  at the Past Due Rate and shall be payable
upon demand by the Agent. The Aggregate Commitment may be permanently terminated
or reduced as follows, which such reductions shall be applied prorata:


<PAGE>

(a)      the Company may, upon ten (10) Business  Days' prior written  notice to
         the Agent,  permanently terminate or reduce the Aggregate Commitment in
         an  amount  of at  least  $5,000,000  or the  amount  of the  Aggregate
         Commitment at such time, whichever is less;

(b)      any prepayment of the Loans and Letter of Credit Advances in accordance
         with the provisions of Section  2.3(c)(3) hereof shall  permanently and
         automatically reduce the Aggregate Commitment in an amount equal to any
         such prepayment; and

(c)      if the ten percent (10%) of Consolidated Net Worth threshold  discussed
         in Section  2.3(c)  hereof  shall be  reached in  any fiscal  year with
         respect   to  Permitted   Asset   Dispositions   and  Permitted   Stock
         Dispositions, the  Banks may, with the unanimous written consent of all
         of the Banks,  unilaterally  reduce  the  Aggregate  Commitment  by  an
         amount up to,  but not in excess of,  the  difference  between  (1) the
         aggregate  consideration paid to  or received by the Company and/or its
         Subsidiaries  with   respect  to  Permitted  Assets   Dispositions  and
         Permitted  Stock  Dispositions  in  excess of such ten percent (10%) of
         Consolidated Net Worth threshold and  (2) the amount that the Aggregate
         Commitment is permanently reduced in  accordance with the provisions of
         subparagraph   (b) above (with the effective date of any such permanent
         reduction  of  the  Aggregate   Commitment  in   accordance  with  this
         subparagraph  (c) being the date upon which the Agent has provided  the
         Company  with  written  notice  of  such  permanent  reduction  of  the
         Commitment).


         2.3      Mandatory Prepayments.


         (a) If the Current Sum  applicable  to a Bank at any time  exceeds such
Bank's  Commitment,  the Agent  shall  notify  the  Company  in  writing  of the
deficiency  by  overnight  priority  delivery  service  provided by a nationally
recognized  delivery  service  or, if the  officer of the Agent  providing  such
notice to the Company is located in Austin, Texas, by hand delivery confirmed by
written  receipt.  Within three  Business Days after the actual  receipt of such
notice,  the Company  shall make a  prepayment  on such Bank's Note or otherwise
reimburse  the Agent for  Letter  of  Credit  Advances  or cause the one or more
Letters of Credit to be canceled  and  surrendered  in an amount  sufficient  to
reduce such Current Sum to an amount no greater than such Commitment.


         (b) If the aggregate  consideration  paid to the Company  and/or any of
its Subsidiaries  from all Permitted Asset  Dispositions and all Permitted Stock
Dispositions  during any fiscal year  exceeds  $20,000,000,  but is less than or
equal  to ten  percent  (10%)  of the  Consolidated  Net  Worth  of the  Company
determined as of the end of the Company's  preceding  fiscal year,  within three
(3) Business  Days after the  consummation  of the  applicable  Permitted  Asset
Dispositions  or  Permitted  Stock  Dispositions,   the  Company  shall  make  a
prepayment  against the Loans and Letter of Credit Advances then  outstanding in
an amount  equal to the Net Proceeds  Amount  attributable  to  Permitted  Asset
Dispositions  and Permitted  Stock  Dispositions  in excess of such  $20,000,000
threshold.

         (c) If the aggregate  consideration  paid to the Company  and/or any of
its Subsidiaries  from all Permitted Asset  Dispositions and all Permitted Stock
Dispositions   during  any  fiscal  year  exceeds  ten  percent   (10%)  of  the
Consolidated Net Worth of the Company  determined as of the end of the Company's
preceding  fiscal  year,  the  Company  shall  fully  comply  with  each  of the
following:

         (1)      within  three (3)  Business  Days  after the  consummation  of
                  Permitted Asset  Dispositions and Permitted Stock Dispositions
                  in  excess  of  the   $20,000,000   threshold   described   in
                  subparagraph  (b)  above,  but less  than or equal to such ten
                  percent (10%) of Consolidated Net Worth threshold, the Company
                  shall make a prepayment against the Loans and Letter of Credit
                  Advances  then  outstanding  in an  amount  equal  to the  Net
                  Proceeds   Amount   attributable   to  such  Permitted   Asset
                  Dispositions and Permitted Stock Dispositions;

         (2)      within  six (6) months  after the  consummation  of  Permitted
                  Asset  Dispositions and Permitted Stock Dispositions in excess
                  of the  above-described  ten percent (10%) of Consolidated Net
                  Worth  threshold,  the  Company  shall  apply  all of the  Net
                  Proceeds   Amount   attributable   to  such  Permitted   Asset
                  Dispositions  and  Permitted  Stock  Dispositions  as required
                  under Section 10.6 of the Note Purchase Agreements  (including
                  without limitation,  any prepayment of the Loans and Letter of
                  Credit Advances  required pursuant to subparagraph (3) below);
                  and

<PAGE>


         (3)      within the six (6) month period  described in subparagraph (2)
                  above,  the Company shall make a prepayment  against the Loans
                  and the  Letter  of Credit  Advances  then  outstanding  in an
                  amount equal to the Ratable  Portion for such Loans and Letter
                  of Credit Advances  outstanding  hereunder  (unless all of the
                  Banks  elect in writing  to not  require  any such  prepayment
                  against  the  Loans  and  Letter  of  Credit   Advances   then
                  outstanding).

(d)      If the Net  Proceeds  Amount  otherwise  payable  to the  Agent for the
         ratable  benefit of the Banks pursuant to Sections  2.3(b) or (c) above
         exceeds  the  amount  of Loans  and  Letter  of  Credit  Advances  then
         outstanding,   the  Company   shall  be  entitled  to  retain  for  its
         unrestricted  use any  portion of such Net  Proceeds  Amount  remaining
         after the  outstanding  Loans and Letter of Credit  Advances  have been
         fully paid.

(e)      The  Company  shall  have the right to extend  for up to six months any
         mandatory  prepayment  date provided for in Sections  2.3(b) and (c) as
         necessary to avoid payment of any Consequential  Loss, but only for the
         applicable  portion  of any such  prepayment  that would  otherwise  be
         applied to one or more LIBOR Rate Borrowings then outstanding as of the
         date that such prepayment is otherwise required hereunder.


         2.4.     Letters of Credit.

                  (a) Subject to the terms and conditions  contained herein, the
Company  shall have the right to utilize the Aggregate  Commitment  from time to
time prior to the  Letter of Credit  Termination  Date,  by  obtaining  from the
Issuer one or more  Letters of Credit for the  account of the  Company or any of
its Subsidiaries  (with the Company being jointly and severally liable under the
terms of the  applicable  Application  for any  Letter of Credit  issued for the
account of any of the  Company's  Subsidiaries)  in such amounts and in favor of
such  beneficiaries  as the Company from time to time shall  request;  provided,
that in no event  shall the Issuer  have any  obligation  to issue any Letter of
Credit if (i) the face amount of such Letter of Credit plus the Letter of Credit
Exposure Amount at such time would exceed  $10,000,000,  (ii) the face amount of
such Letter of Credit  plus the  aggregate  of each  Bank's  Current Sum at such
time, would exceed the Aggregate  Commitment,  (iii) such Letter of Credit would
have an expiry  date later than the  Maturity  Date,  (iv) either such Letter of
Credit  is not in such  form  and  does  not  contain  such  terms  as  shall be
satisfactory  to the Agent and the Banks in their  respective  sole and absolute
discretion or the Company has not executed and delivered such  Applications  and
other instruments and agreements  relating to such Letter of Credit as the Agent
shall  have  requested  or (v) an event has  occurred  and is  continuing  which
constitutes  a Default as provided in Section 7 of this  Agreement.  The Company
promises  to pay to the order of the  Issuer  the amount of all Letter of Credit
Advances, together with accrued interest thereon (if any). Each Letter of Credit
Advance shall be considered for all purposes as a demand obligation owing by the
Company  to the  Issuer of the  Letter of Credit to which it  relates,  and each
Letter of Credit  Advance  shall bear interest from the date thereof at the Past
Due Rate, without notice of presentment, demand, protest or other formalities of
any kind (said past due interest on such Letter of Credit  Advance being payable
on demand).  To effect  repayment  of any such Letter of Credit  Advance and any
interest accrued  thereon,  the Agent may, but shall not be obligated to, at any
time deem that the Company has requested an Alternate Base Rate Borrowing  under
the Notes to be made to satisfy  such Letter of Credit  Advance and any interest
accrued  thereon (if any), and if the Agent deems that the Company has requested
an  Alternate  Base Rate  Borrowing  under the Notes to be made to satisfy  such
letter of Credit  Advance and any interest  accrued  thereon (if any), the Banks
shall satisfy such Letter of Credit Advance and any interest accrued thereon (if
any) by (subject to the terms and  conditions  of Section 2.1 hereof)  making an
Alternate Base Rate Borrowing  under the Notes, if such Letter of Credit Advance
is (and such Loan is to be) made prior to the Maturity Date. The Issuer will pay
to each Bank such Bank's Commitment  Percentage of all amounts received from the
Company by the Issuer, if any, for application, in whole or in part, against the
Letter of Credit  Advances  in respect to any Letter of Credit,  but only to the
extent such Bank has made its full pro rata  payment of each  drawing  under the
Letter of Credit to which such  Letter of Credit  Advance  relates.  All rights,
powers, benefits and privileges of this Agreement with respect to the Notes, all
security  therefor and guaranties  thereof  (including the  Guaranties)  and all
restrictions,  provisions for repayment or acceleration and all other covenants,
warranties,  representations  and  agreements  of the Company  contained in this
Agreement  with  respect to the Notes  shall apply to each such Letter of Credit
Advance.

                  (b) In  consideration of the issuance of each Letter of Credit
pursuant to the  provisions  of this  Section  2.4,  the  Company  agrees to pay
(subject  to Section 9.6 hereof) to the Issuer a letter of credit fee in arrears
on each  Letter of Credit  Fee  Payment  Date  equal to the  product  of (A) the
Applicable  Margin then in effect for LIBOR Rate Borrowings times (B) the amount
available for drawings  under such Letter of Credit on such Letter of Credit Fee


<PAGE>

Payment Date times (C) the number of days from, but not  including,  such Letter
of Credit Fee Payment  Date  through and  including  the next to occur Letter of
Credit Fee Payment Date (or expiry date, if sooner) applicable to such Letter of
Credit  divided by 360;  provided,  that in no event shall the fee to be paid on
any Letter of Credit Fee Payment Date for any such Letter of Credit ever be less
than $500. In addition, with respect to each Letter of Credit, the Company shall
pay to the  Issuer,  for the  benefit of the Issuer  only,  a fronting  fee,  in
advance, on such Letter of Credit, which shall be due and payable on each Letter
of Credit Fee Payment Date. The fronting fee amount so payable shall be equal to
the  product  of (A)  one-eighth  of one  percent  (1/8%)  times (B) the  amount
available for drawings  under such Letter of Credit on such Letter of Credit Fee
Payment Date times (C) the number of days from, but not  including,  such Letter
of Credit Fee Payment  Date  through and  including  the next to occur Letter of
Credit Fee Payment Date (or expiry date, if sooner) applicable to such Letter of
Credit divided by 360.

The Issuer will pay to each Bank,  as soon as  practicable  after  receiving any
payment of letter of credit fees (other than any  fronting  fee payable only for
the benefit of the  Issuer),  an amount  equal to the product of (A) such Bank's
Commitment Percentage times (B) the amount of such fees received (other than any
fronting fee payable only for the benefit of the Issuer). If the Issuer fails to
send to any Bank such Bank's pro-rata portion of any payment of letter of credit
fees  timely  received by the Issuer  hereunder  by the close of business on the
Business Day such  payment was  received by the Issuer,  the Issuer shall pay to
such Bank interest on such Bank's pro-rata  portion of the letter of credit fees
timely  received  by the  Issuer  from such date of receipt by the Issuer to the
date that such Bank receives its pro-rata portion of such payment, such interest
to accrue at the Federal Funds Rate and to be payable upon written  request from
such Bank. The obligations of the Company under this Agreement in respect of the
Letters of Credit and Letter of Credit Advances shall be absolute, unconditional
and irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement,   under  all  circumstances   whatsoever,   including  the  following
circumstances:


          (1)  any lack of validity or  enforceability  of this  Agreement,  any
               Letter of Credit or any Loan Document;

          (2)  any  amendment  or  waiver of  default  under or any  consent  to
               departure  from the  terms of this  Agreement  or any  Letter  of
               Credit without the express prior written consent of the Agent and
               the Issuer of such Letter of Credit;

          (3)  the existence of any claim, set-off, defense or other right which
               any beneficiary or any transferee of any Letter of Credit (or any
               entities for whom any such beneficiary or any such transferee may
               be acting), or any Person (other than the Agent or the Banks) may
               have,  whether in connection with this Agreement,  the Letters of
               Credit,  the  transactions  contemplated  hereby or any unrelated
               transaction;

          (4)  any  statement,   draft,  certificate,   or  any  other  document
               presented  under  any  Letter  of Credit  proving  to be  forged,
               fraudulent,  invalid  or  insufficient  in  any  respect  or  any
               statement  therein  being  untrue or  inaccurate  in any  respect
               whatsoever;  provided  that the Issuer will examine each document
               presented  under  each  Letter of Credit to  ascertain  that such
               document  appears on its face to comply  with the terms  thereof;
               and


          (5)  any other  circumstance or happening  whatsoever,  whether or not
               similar to any of the foregoing.

In the event that any restriction or limitation is imposed upon or determined or
held to be  applicable  to the  Agent,  any  Bank or the  Company  by,  under or
pursuant to any Legal Requirement now or hereafter in effect or by reason of any
interpretation  thereof by any Governmental  Authority,  which in the respective
sole  judgment  of the Agent or any Bank  would  prevent  any Bank from  legally
incurring  liability  under a Letter of Credit  issued or  proposed to be issued
hereunder,  then the Agent  shall  give  prompt  written  notice  thereof to the
Company,  whereupon the Banks shall have no  obligation to issue any  additional
Letters of Credit then or at any time thereafter. In addition, if as a result of
any Regulatory  Change which imposes,  modifies or deems applicable (x) any tax,
reserve, special deposit or similar requirement against letters of credit issued
or  participated  to by any Bank;  (y) any fee,  expense or  assessment  against


<PAGE>

Letters  of Credit  issued  by the  Issuer,  the  Agent or any Bank for  deposit
insurance,  or (z) any other charge,  expense or condition  which  increases the
actual cost to the Issuer,  the Agent or any Bank of issuing or maintaining  the
Letters of Credit,  or reduces  any amount  receivable  by the Agent or any Bank
hereunder in respect of any Letter of Credit or any participation therein (which
increase in cost, or reduction in amount receivable,  shall be the result of the
Issuer's,  the Agent's or such Bank's reasonable  allocation of the aggregate of
such  increases  or  reductions  resulting  from such  event),  then the Company
(subject to Section 9.6 hereof) shall pay to the Issuer, the Agent or such Bank,
upon demand and from time to time,  amounts sufficient to compensate such Person
for each such increase  from the effective  date of such increase to the date of
demand therefor.  Each such demand shall be accompanied by a certificate setting
forth in reasonable  detail the calculation of the amount then being demanded in
accordance  with the  preceding  sentence  and each  such  certificate  shall be
conclusive absent manifest error.




<PAGE>


                  (c) THE COMPANY  HEREBY  INDEMNIFIES  AND HOLDS  HARMLESS  THE
ISSUER, EACH BANK AND THE AGENT FROM AND AGAINST ANY AND ALL CLAIMS AND DAMAGES,
LOSSES, LIABILITIES,  COSTS OR EXPENSES WHICH THE ISSUER, SUCH BANK OR THE AGENT
MAY INCUR (OR WHICH MAY BE CLAIMED AGAINST THE ISSUER, SUCH BANK OR THE AGENT BY
ANY PERSON WHATSOEVER) IN CONNECTION WITH THE EXECUTION AND DELIVERY OR TRANSFER
OF OR  PAYMENT OR  FAILURE  TO PAY UNDER ANY  LETTER OF  CREDIT,  INCLUDING  ANY
CLAIMS, DAMAGES,  LOSSES,  LIABILITIES,  COSTS OR EXPENSES WHICH THE ISSUER, THE
AGENT OR SUCH BANK, AS THE CASE MAY BE, MAY INCUR (WHETHER  INCURRED AS A RESULT
OF ITS OWN  NEGLIGENCE  OR  OTHERWISE)  BY REASON OF OR IN  CONNECTION  WITH THE
FAILURE  OF ANY  OTHER  BANK  (WHETHER  AS A  RESULT  OF ITS OWN  NEGLIGENCE  OR
OTHERWISE) TO FULFILL OR COMPLY WITH ITS OBLIGATIONS TO THE ISSUER, THE AGENT OR
SUCH BANK, AS THE CASE MAY BE,  HEREUNDER  (BUT NOTHING HEREIN  CONTAINED  SHALL
AFFECT ANY RIGHTS THE COMPANY MAY HAVE AGAINST SUCH DEFAULTING BANK);  PROVIDED,
THAT THE COMPANY SHALL NOT BE REQUIRED TO INDEMNIFY THE ISSUER,  ANY BANK OR THE
AGENT FOR ANY CLAIMS,  DAMAGES,  LOSSES,  LIABILITIES,  COSTS OR EXPENSES TO THE
EXTENT,  BUT ONLY TO THE EXTENT,  CAUSED BY (I) THE WILLFUL  MISCONDUCT OR GROSS
NEGLIGENCE  OF THE PARTY  SEEKING  INDEMNIFICATION  OR (II) THE  ISSUER'S,  SUCH
BANK'S OR THE  AGENT'S  (AS THE CASE MAY BE)  FAILURE TO PAY UNDER ANY LETTER OF
CREDIT  AFTER THE  PRESENTATION  TO IT OF A REQUEST  REQUIRED  TO BE PAID  UNDER
APPLICABLE  LAW.  NOTHING  IN THIS  SECTION  2.4(C)  IS  INTENDED  TO LIMIT  THE
OBLIGATIONS OF THE COMPANY UNDER ANY OTHER PROVISION OF THIS AGREEMENT.


                  (d) The  Company  shall give the Agent the  Application  for a
Letter of Credit  in  accordance  with the terms of  Section  3.1  hereof.  Upon
receipt of any such Application (which such Application, when so received by the
Agent, shall be deemed received by the Issuer),  the Agent shall promptly notify
each Bank that a Letter of Credit has been requested in the amount  reflected in
such  Application and inform such Bank of the amount of its pro-rata  portion of
such proposed Letter of Credit (based upon such Bank's Commitment Percentage).


                  (e) If at any time the  Issuer  shall have made a payment to a
beneficiary  of a Letter of Credit in  respect  of a drawing or in respect of an
acceptance  created in  connection  with a drawing  under such Letter of Credit,
each other Bank will pay to the Issuer  immediately upon demand by the Issuer at
any time during the period  commencing  after such payment  until  reimbursement
thereof  in full by the  Company,  an amount  equal to the  product  of (A) such
Bank's  Commitment  Percentage  times (B) the amount of such payment made by the
Issuer to a beneficiary  under such Letter of Credit,  together with interest on
such amount for each day from the date of demand by the Issuer for such  payment
(or,  if such  demand is made  after  11:00  a.m.  on such  date,  from the next
succeeding  Business  Day) to the date of  payment by such Bank to the Issuer of
such amount at a rate of interest per annum equal to the Federal  Funds Rate for
such  period.  Nothing  herein shall be deemed to require any Bank to pay to the
Issuer any amount as reimbursement for any payment made by the Issuer to acquire
(discount) for its own account prior to maturity thereof any acceptance  created
under a Letter of Credit.


                  (f) Simultaneously  with the Issuer's issuance and delivery of
any Letter of Credit,  the Issuer shall be deemed,  without further  action,  to
have sold to each other  Bank,  and such  other  Bank  shall be deemed,  without

<PAGE>

further  action  by any party  hereto,  to have  purchased  from the  Issuer,  a
participation  interest equal to such other Bank's Commitment Percentage at such
time in such  Letter of Credit and all of the Letter of Credit  Exposure  Amount
related to such Letter of Credit; provided, that no such Bank shall be obligated
to  participate  in a  particular  Letter of Credit if such Letter of Credit was
issued or honored solely as a result of the Issuer's gross  negligence or wilful
misconduct.


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















                                       44

<PAGE>


         2.6.     Prepayments of Loans.


                  (a) In  addition  to the  mandatory  prepayments  required  by
Section 2.3 hereof,  the Company shall have the right, at its option,  to prepay
the Loans in whole at any time or in part from time to time,  without premium or
penalty,  except as provided in this Section or  subsections  (a), (b) or (c) of
Section 2.11 hereof.  Each partial  prepayment under this subsection shall be an
integral  multiple of $500,000.  Each prepayment  under this subsection shall be
applied to the prepayment of the aggregate unpaid principal amount of the Notes.
Prepayments  under this Agreement  shall be subject to the following  additional
conditions:


                  (1)      In  giving  notice  of   prepayment  as   hereinafter
                           provided,  the Company shall specify, for the purpose
                           of paragraphs (2) and (3) immediately following,  the
                           manner of application  of such  prepayment as between
                           any  outstanding  Alternate Base Rate  Borrowings and
                           LIBOR  Rate  Borrowings;  provided,  that in no event
                           shall any LIBOR Rate Borrowing be partially prepaid.


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


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


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

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

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

                  (e)  The  Company's  obligation  to pay  increased  costs  and
Consequential Loss with regard to each LIBOR Rate Borrowing as specified in this
Section 2.6 hereof shall survive termination of this Agreement.

         2.7. Application of Payments and Prepayments.  Prepayments on the Notes
shall be applied first to principal,  the balance to accrued  interest.  Regular
payments on each Note shall be applied first to accrued interest, the balance to

<PAGE>

the principal. If the Agent receives funds on a date when payments are due under
the Notes and such funds are not sufficient to pay all of the obligations of the
Company  hereunder  then due,  then such funds shall be applied (a) first to the
accrued  interest on and, to the extent  then due,  principal  of the Notes then
outstanding,  and (b) then to the  unpaid  expenses  of the  Agent and the Banks
which  are to be  paid  by the  Company.  Each  payment  received  by the  Agent
hereunder or under any Note for the account of a Bank shall be paid  promptly to
such Bank, in  immediately  available  funds.  If the Agent fails to send to any
Bank the product of such Bank's Commitment Percentage times the aggregate amount
of any such  payment  timely  received  by the Agent for the  account of all the
Banks by the close of  business  on the date such  payment  was  received by the
Agent, the Agent shall pay to such Bank interest on such Bank's pro-rata portion
of such  payment  timely  received by the Agent from such date of receipt by the
Agent to the date that such Bank receives its pro-rata  portion of such payment,
such interest to accrue at the Federal Funds Rate and to be payable upon written
request from such Bank.

         2.8.  Pro Rata  Treatment.  Except  to the  extent  otherwise  provided
herein:  (a) each  borrowing  from the Banks under  Section 2.1 hereof  shall be
made,  each payment of commitment fees shall be made and applied for the account
of the Banks,  and each termination or reduction of the Commitments of the Banks
under  Section 2.2 hereof shall be applied,  pro rata,  according to each Bank's
Commitment  Percentage;  (b) each  payment  by the  Company of  principal  of or
interest  on Loans  shall be made to the Agent for the  account of the Banks pro
rata in accordance with the respective  unpaid  principal  amounts of such Loans
held by the Banks;  (c) each  Letter of Credit will be issued for the account of
the Banks  severally and ratably among the Banks in accordance  with which their
respective  Commitment  Percentages,  and (d) the Banks  (other than the Issuer)
shall purchase from the Issuer  participations  in the Letters of Credit, to the
extent their respective Commitment Percentages.

         2.9.  Interest  Payment  Dates on the Loans.  Subject  to  Section  9.6
hereof,  accrued interest on the unpaid balance of the Loans shall be payable on
the Interest  Payment Dates and at the Maturity Date,  commencing with the first
of such dates to occur after the date hereof.  After the Maturity Date,  accrued
interest on the Loans shall be payable on demand.

         2.10.    Interest Options for Loans.

                  (a) Options  Available.  Subject to Section  9.6  hereof,  the
Notes shall bear interest on their respective  outstanding principal balances at
the Alternate Base Rate; provided,  that (1) all past due principal and interest
shall bear  interest at the Past Due Rate which shall be payable on demand,  and
(2)  subject to the  provisions  hereof,  the  Company  shall have the option of
having all or any portion of the principal balance from time to time outstanding
under the Notes bear interest  until their  respective  maturities at a rate per
annum  equal  to  the  LIBOR  Rate  (together  with  the  Alternate  Base  Rate,
individually   herein  called  an  "Interest  Option"  and  collectively  called
"Interest Options").  The records of the Agent with respect to Interest Options,
LIBOR  Interest  Periods and the  amounts of Loans to which they are  applicable
shall be binding and conclusive,  absent  manifest error.  Interest on the Loans
shall be  calculated  at the  Alternate  Base Rate except  where it is expressly
provided pursuant to this Agreement that the LIBOR Rate is to apply.

                  (b)  Designation  and  Conversion.  The Company shall have the
right to  designate  or convert  its  Interest  Options in  accordance  with the
provisions  hereof.  Provided  no Default has  occurred  and is  continuing  and
subject to the provisions of the last sentence of Subsection 2.10(a) hereinabove
and of Section 2.11  hereof,  the Company may elect to have the LIBOR Rate apply
or  continue  to apply to all or any  portion  of the  principal  balance of the
Notes.  Each change in Interest  Options  shall be a  conversion  of the rate of
interest  applicable to the specified  portion of the Loans, but such conversion
alone shall not change the outstanding  principal  balance of the Notes and such
conversion  alone  shall not be  construed  to make this  Agreement  a revolving
credit  facility.  The Interest  Options shall be designated or converted in the
manner provided below:

                  (1)      The Company shall give the Agent notice by telephone,
                           promptly  confirmed  by  written  notice  (the  "Rate
                           Selection  Notice")  substantially  in  the  form  of
                           Exhibit E hereto.  Each such  telephone  and  written
                           notice   shall   specify   the  amount  and  type  of
                           borrowings  which are the subject of the designation,

<PAGE>

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

                  (2)      No more than five (5) LIBOR Interest Periods shall be
                           in effect at any one time.  Each LIBOR Rate Borrowing
                           shall be in the amount of at least $500,000.

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

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

                  (5)      Except as provided in Section 2.11  hereof,  no LIBOR
                           Rate  Borrowing  shall be  converted on any day other
                           than the last day of the  applicable  LIBOR  Interest
                           Period.

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


         2.11.    Special Provisions Applicable to LIBOR Rate Borrowings.

                  (a) Options  Unlawful.  If, after the date of this  Agreement,
the adoption of any applicable Legal Requirement or any change in any applicable
Legal  Requirement or in the  interpretation  or  administration  thereof by any
Governmental  Authority or  compliance by the Agent or any Bank with any request
or  directive  (whether  or not  having  the  force of law) of any  Governmental
Authority  shall at any time  make it  unlawful  or  impossible  for any Bank to
permit  the  establishment  of or to  maintain  any LIBOR  Rate  Borrowing,  the
commitment of the Banks to establish or maintain the LIBOR Rate affected by such
adoption or change shall forthwith be canceled and the Company shall  forthwith,
upon demand by the Agent to the Company, (1) convert the LIBOR Rate with respect
to which such demand was made to the  Alternate  Base Rate;  (2) pay all accrued
and unpaid interest to date on the amount so converted;  and (3) pay any amounts
required  to  compensate  the Agent and the  Banks  for any  additional  cost or
expense which the Agent or any Bank may incur as a result of such adoption of or
change in such Legal  Requirement  or in the  interpretation  or  administration
thereof  and any  Consequential  Loss which the Agent or any Bank may incur as a
result of such  conversion  to the  Alternate  Base Rate.  If, when the Agent so
notifies the Company,  the Company has given a Rate Selection Notice  specifying
one or more  borrowings  of the type with  respect to which such demand was made
but the selected  LIBOR Interest  Period or LIBOR  Interest  Periods has not yet

<PAGE>

begun,  such Rate Selection Notice shall be deemed to be of no force and effect,
as if never made, and the balance of the Loans  specified in such Rate Selection
Notice  shall  bear  interest  at the  Alternate  Base  Rate  until a  different
available Interest Option shall be designated in accordance herewith.

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

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


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


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


                  (4)      impose  on  the Agent or any Bank any other condition
                           regarding any LIBOR Rate Borrowing;

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


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


                  (c) Inadequacy of Pricing and Rate  Determination.  If for any
reason with respect to any LIBOR Interest Period the Agent shall have determined
(which determination shall be conclusive and binding upon the Company) that: (1)
the Agent is unable through its customary  general practices to determine a rate
at which Chase is offered  deposits in United  States  dollars by prime banks in
the  interbank  market in  London,  England  in the  appropriate  amount for the
appropriate period, or by reason of circumstances affecting the interbank market

<PAGE>

in London,  England,  generally,  prime banks are not being offered  deposits in
United  States  dollars  in the  interbank  market in London,  England,  for the
applicable  LIBOR  Interest  Period and in an amount  equal to the amount of the
LIBOR Rate  Borrowing  requested by the Company,  or (2) the LIBOR Rate will not
adequately and fairly reflect the cost to any Bank of making and maintaining any
LIBOR Rate Borrowing  hereunder for any proposed LIBOR Interest Period, then the
Agent  shall  give  the  Company  notice  thereof  and  thereupon,  (A) any Rate
Selection Notice previously given by the Company  designating a LIBOR Rate which
has not  commenced  as of the date of such notice from the Agent shall be deemed
for all purposes hereof to be of no force and effect, as if never given, and (B)
until the Agent shall notify the Company that the  circumstances  giving rise to
such  notice  from  the  Agent no  longer  exist,  each  Rate  Selection  Notice
requesting  a LIBOR Rate shall be deemed a request  for an  Alternate  Base Rate
Borrowing,  and each  outstanding  LIBOR Rate  Borrowing then in effect shall be
converted,  without any notice to or from the Company,  upon the  termination of
the LIBOR Interest Period then in effect, to an Alternate Base Rate Borrowing.

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

                  (e) Rate  Quotes and Lists of  Business  Days.  If the Company
requests  quotes of the LIBOR Rate for different  LIBOR  Interest  Periods being
considered for election by the Company, the Agent will use reasonable efforts to
provide such quotes to the Company promptly.  However,  all such quotes provided
shall be representative  only and shall not be binding on the Agent or any Bank,
nor shall they be  determinative,  directly or indirectly,  of any LIBOR Rate or
any component of any such rate, nor will the Company's failure to receive or the
Agent's  failure to provide any  requested  quote or quotes either (1) excuse or
extend the time for performance of any obligation of the Company or for exercise
of any  right,  option or  election  of the  Company  or (2)  impose any duty or
liability  on the  Agent or any  Bank.  If the  Company  requests  a list of the
Business Days or LIBOR Business Days in any calendar  month,  the Agent will use
reasonable  efforts  to  provide  such  list  promptly.  However,  any such list
provided  shall be  understood  to  identify  only  those  days  which the Agent
believes  in good faith at the time such list is prepared  will be the  Business
Days or LIBOR  Business  Days for such month.  The Agent shall have no liability
for any failure to provide, delay in providing,  error or mistake in or omission
from, any such quote or list.


         2.12.  Recapture.  If on any  Interest  Payment Date the Agent does not
receive for the account of the Banks payment in full of interest computed at the
Stated Rate  (computed  without  regard to any  limitation by the Highest Lawful
Rate) because the Stated Rate (so computed)  exceeds or has exceeded the Highest
Lawful Rate, the Company shall pay to the Agent for the account of the Banks, in
addition  to  interest  otherwise  required,   on  each  Interest  Payment  Date
thereafter,  the Excess Interest  Amount  (calculated as of each such subsequent
Interest Payment Date);  provided that in no event shall the Company be required
to pay, for any  computation  period,  interest at a rate  exceeding the Highest
Lawful Rate applicable to and effective during such period. As used herein,  the
term "Excess  Interest  Amount"  shall mean, on any day, the amount by which (a)
the amount of all  interest  which would have  accrued  prior to such day on the
outstanding  principal  of the Notes (had the  Stated  Rate at all times been in
effect without  limitation by the Highest Lawful Rate) exceeds (b) the aggregate
amount of  interest  actually  paid to the Agent for the account of the Banks on
the Notes on or prior to such day.


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




<PAGE>


         2.14. Sharing of Payments, Etc. The Company agrees that, in addition to
(and without limitation of) any right of set-off,  bankers' lien or counterclaim
a Bank may otherwise have, upon the occurrence and during the continuance of any
Event of Default, each Bank shall be entitled, at its option, to offset balances
held by it for the  account of the  Company at any of its  offices  against  any
principal of or interest on any of such Bank's  Loans to the Company  hereunder,
such Bank's Commitment Percentage of the Letter of Credit Exposure Amount or any
other  obligation of the Company  hereunder,  which is not paid  (regardless  of
whether  such  balances  are then due to the  Company),  in which  case it shall
promptly  notify the Company and the Agent  thereof,  provided  that such Bank's
failure to give such notice  shall not affect the  validity  thereof.  If a Bank
shall  obtain  payment of any  principal  of or  interest on any Loan made by it
under this Agreement,  any Letter of Credit Exposure Amount or other  obligation
then due to such Bank  hereunder,  through the  exercise of any right of set-off
(including,  without  limitation,  any  right of setoff  or lien  granted  under
Section  9.19  hereof),   banker's  lien,  counterclaim  or  similar  right,  or
otherwise, it shall promptly purchase from the other Banks participations in the
Loans made by, the Letter of Credit Exposure Amount of, or the other obligations
of the  Company  hereunder  of, the other Banks in such  amounts,  and make such
other  adjustments  from time to time as shall be  equitable to the end that all
the Banks shall share the benefit of such payment (net of any expenses which may
be incurred by such Bank in obtaining or  preserving  such  benefit) pro rata in
accordance with their  respective  Commitment  Percentages.  To such end all the
Banks shall make  appropriate  adjustments  among  themselves  (by the resale of
participations sold or otherwise) if such payment is rescinded or must otherwise
be restored.  The Company agrees, to the fullest extent it may effectively do so
under  applicable law, that any Bank so purchasing a participation  in the Loans
made by, Letter of Credit Exposure Amount of, or other obligations hereunder of,
the other Banks may exercise,  upon the occurrence and during the continuance of
any Event of Default,  all rights of set-off,  bankers'  lien,  counterclaim  or
similar rights with respect to such  participation as fully as if such Bank were
a direct  holder  of said  Loans,  Letter  of  Credit  Exposure  Amount or other
obligations in the amount of such participation.  Nothing contained herein shall
require  any Bank to  exercise  any such right or shall  affect the right of any
Bank to  exercise,  and retain the benefits of  exercising,  any such right with
respect to any other indebtedness or obligation of the Company.


3.       Conditions.


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


                  (a) the Agent shall have received the following,  all of which
shall be duly executed and in Proper Form: (1) in the case of a Loan, other than
a Loan to be made to repay a Letter of Credit  Advance  pursuant  to Section 2.4
hereof,


                           (A)      by no later than 9:00 a.m. on the applicable
                                    Rate  Selection  Date,  notice by  telephone
                                    from the  Company of the  proposed  date and
                                    amount of such Loan, and


                           (B)      no later than 11:00 a.m.  on the  applicable
                                    Rate Selection Date, a Request for Extension
                                    of Credit  and  Certificate  of No  Default,
                                    signed  by  the  chief  executive   officer,
                                    president,  chief operating officer or chief
                                    financial officer of the Company,


or, in the case of issuance of a Letter of Credit,  a completed  Application (as
may be required by the Agent and Banks) signed by the chief  executive  officer,
president,  chief operating officer or chief financial officer of the Company by
10:00 a.m. five (5) Business Days prior to the proposed date of issuance of such
Letter of Credit and payment of the first quarterly  letter of credit fee as and
by the time required in Section  2.4(b) of this  Agreement,  along with, in each
case,  such  financial  information  as the  Agent  may  reasonably  require  to
substantiate  compliance with all financial  covenants  contained  herein by the
Company;  and (2) such other  Applications,  certificates and other documents as
the Agent may reasonably require;


<PAGE>


                  (b) prior to the making of such Loan or the  issuance  of such
Letter of Credit,  there shall have occurred no material  adverse  change in the
assets, liabilities,  financial condition, business or affairs of the Company or
the Company and its Subsidiaries on a consolidated basis since the date hereof;

                  (c) no Default shall have occurred and be continuing;

                  (d) the making of such Loan or the  issuance of such Letter of
Credit,  shall not be  prohibited  by, or  subject  the Agent or any Bank to any
penalty or onerous condition under, any Legal Requirement;

                  (e) the Company shall have paid all legal fees and expenses of
the type  described  in Section 9.9 hereof  through the date of such Loan or the
issuance of such Letter of Credit; and

                  (f) prior to the  making of any such Loan or the  issuance  of
any such  Letter of Credit at any time after  July 28,  1999,  Biosmart  Direct,
Inc.,  a  Colorado  corporation  which  is a  Subsidiary,  shall  have  become a
Guarantor in compliance with the provisions of Section 5.10 hereof.

         3.2.  First Loan.  In addition to the matters  described in Section 3.1
hereof,  the  obligation of any Bank to make the initial Loan or issue the first
Letter  of  Credit  is  subject  to the  receipt  by the  Agent  of  each of the
following, in Proper Form:

                  (a) the Notes, executed by the Company;

                  (b) an Officer's Certificate,  executed by the chief executive
officer,  president,  chief operating  officer or chief financial officer of the
Company and dated as of the date of this Agreement;

                  (c) a certificate  executed by the secretary or assistant
secretary of the Company dated as of the date thereof, substantially in the form
attached hereto as Exhibit F;

                  (d) a   Guaranty  and  the   Contribution  Agreement   (or  if
applicable,  a  Joinder  Agreement),  each  executed  by  each  of  the  Current
Guarantors;

                  (e) certificates  executed   by  the  secretary  or  assistant
secretary of each of the Current Guarantors,  substantially in the form attached
hereto as Exhibit G;

                  (f) a  certificate  from  the  Secretary  of  State  or  other
appropriate public official of the State of Texas as to the continued  existence
of the Company in the State of Texas;


                  (g) a certificate  from the Office of the  Comptroller  of the
State of Texas as to the good standing of the Company in the State of Texas;


                  (h) with respect to each Current Guarantor,  certificates from
the appropriate  public  officials of the state of incorporation of such Current
Guarantor  and  of  those   jurisdictions  where  the  nature  of  such  Current
Guarantor's  business  makes it  necessary  or  desirable  to be qualified to do
business  as a foreign  corporation,  as to the  existence,  good  standing  and
qualification  as a foreign  corporation (as may be appropriate) of such Current
Guarantor in such jurisdictions;

                  (i) a  legal  opinion  from  Crouch  &  Hallett,  L.L.P.,  the
independent  counsel for the Company and the Current  Guarantors,  acceptable to
the Agent in its sole and  absolute  discretion;  and to the  further  condition
that,  at the time of the  initial  Loan,  all  legal  matters  incident  to the
transactions  herein contemplated shall be satisfactory to counsel for the Agent
and respective counsel for each of the Banks;


<PAGE>


                  (j) any and all existing  Indebtedness of the Company which is
outstanding under the Company's discretionary line of credit with Chase shall be
simultaneously paid in full at the time of the initial Loan; and

                  (k) the Company shall pay all closing,  structuring  and other
invoiced fees owed as of the date of the initial Loan to the Agent and the Banks
by the Company under this Agreement or any other written  agreement  between the
Company and the Agent or the applicable Bank.


4.       Representations and Warranties.


         To induce  the Agent and the Banks to enter  into this  Agreement,  the
Company represents and warrants to the Agent and the Banks as follows:


         4.1.  Organization.  Each of the Company and its  Subsidiaries  is duly
organized,  validly existing and in good standing under the laws of the state of
its  incorporation;  has all power and  authority  to conduct  its  business  as
presently  conducted;  and is duly qualified to do business and in good standing
in each and every  state in the  United  States of  America  where its  business
requires  such  qualification,  except where failure to qualify would not have a
material  adverse effect on the Company and its  Subsidiaries  on a consolidated
basis.

         4.2. Financial Statements.  The financial statements of the Company and
its Subsidiaries on a consolidated basis delivered to the Agent and the Banks in
connection  with this Agreement  fairly  present,  in accordance  with Generally
Accepted  Accounting  Principles,  the  financial  condition  and the results of
operations  of the  Company  and its  Subsidiaries  as of the  dates and for the
periods  indicated.  No  material  adverse  change has  occurred  in the assets,
liabilities,  financial  condition,  business  or affairs of the Company and its
Subsidiaries  on  a  consolidated  basis  since  the  dates  of  such  financial
statements.

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

         4.4. Other Debt.  Neither the Company nor any of its Subsidiaries is in
default  in the  payment  of any  other  Indebtedness  or under  any  agreement,
mortgage, deed of trust, security agreement or lease to which it is a party, the
result  of which  has,  would or could  have a  material  adverse  affect on the
financial  condition  or  operations  of the Company and its  Subsidiaries  on a
consolidated basis.

         4.5.  Litigation.  There is no litigation or administrative  proceeding
pending  or,  to the  knowledge  of the  Company,  threatened  against,  nor any
outstanding  judgment,  order or decree  affecting,  the  Company  or any of its
Subsidiaries  before or by any Governmental  Authority or arbitral body which in
the aggregate have, or if adversely  determined,  could have a material  adverse
effect on the business, condition (financial or otherwise), operations, Property
or prospects of the Company and its  Subsidiaries on a consolidated  basis or on
its  ability  to  perform  any of their  respective  obligations  under any Loan
Document to which it is a party. Neither the Company nor any of its Subsidiaries
is in default  with  respect to any  material  judgment,  order or decree of any
Governmental Authority.


<PAGE>


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

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

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

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


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

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

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

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

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

         4.15.  Public Utility Holding Company Act. The Company is not a "public
utility  company",  or an  "affiliate"  or a  "subsidiary  company" of a "public
utility  company",  or a  "holding  company",  or a  "subsidiary  company"  of a
"registered  holding  company",  or  an  "affiliate"  of a  "registered  holding
company" or of a "subsidiary company" of a "registered holding company", as such
terms are defined in the Public Utility  Holding Company Act of 1935, as amended
("PUHCA").  To the  best  of the  Company's  knowledge,  the  Company  is not an

<PAGE>

"affiliate" or a "subsidiary  company" of an unregistered,  non-exempt  "holding
company" as such terms are defined in PUHCA.

         4.16. Agreements.  Schedule I attached hereto is a complete and correct
list  of  (i)  all  credit   agreements  for  borrowed  money  (other  than  the
indebtedness governed hereby or by the Note Purchase Agreements), indentures and
capitalized   leases  and  all  Property  subject  to  any  Lien  securing  such
Indebtedness  or lease  obligation,  (ii) each letter of credit and guaranty for
which the liability or potential  liability of the Company and its  Subsidiaries
on a  consolidated  basis is in excess of  $50,000,  (iii) all other  letters of
credit and  guaranties if the aggregate of liability and potential  liability of
the Company and its Subsidiaries on a consolidated basis thereunder is in excess
of $250,000, (iv) all other material instruments in effect as of the date hereof
providing for,  evidencing,  securing or otherwise  relating to any indebtedness
for  borrowed  money of the Company or any of its  Subsidiaries  (other than the
Indebtedness  hereunder and Indebtedness  secured by Incidental  Liens), and (v)
all  obligations of the Company or any of its  Subsidiaries to issuers of appeal
bonds issued for account of the Company or any of its Subsidiaries.  The Company
shall, upon request by the Agent,  deliver to the Agent and the Banks a complete
and correct copy of all such credit agreements,  indentures, capitalized leases,
letters of credit,  guarantees  and other  instruments  or leases  described  in
Schedule I or arising  after the date hereof,  including  any  modifications  or
supplements thereto, as in effect on the date hereof.

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

         4.18. Year 2000 Reprogramming. Any reprogramming required to permit the
proper functioning, in and following the year 2000, of (a) the Company's and its
Subsidiaries' computer systems, and (b) equipment containing embedded microchips
(including  systems and equipment supplied by others or with which the Company's
or any of its  Subsidiary's  systems  interface),  and the  testing  of all such
systems and  equipment as so  reprogrammed,  will be completed by September  30,
1999;  provided,  however,  that the  reprogramming  and  testing of  immaterial
computer  systems and other  immaterial  equipment not critical or necessary for
the day-to-day  operations of the Company and/or any of its  Subsidiaries may be
completed  after  September  30, 1999 at times deemed  reasonable by the Company
based  on the  applicable  circumstances.  The  cost  to  the  Company  and  its
Subsidiaries  of such  reprogramming  and testing of the reasonably  foreseeable
consequences  of year  2000 to the  Company  and  its  Subsidiaries  (including,
without limitation,  reprogramming  errors and the failure of others' systems or
equipment)  will not result in a  Default,  an Event of  Default,  or a Material
Adverse  Effect.  Except  for  such  of  the  reprogramming  referred  to in the

<PAGE>

preceding sentence as may be necessary,  the computer and management information
systems of the  Company  and its  Subsidiaries  are and,  with  ordinary  course
upgrading and maintenance, will continue to be, sufficient to permit the Company
and its Subsidiaries to conduct their  respective  business without any Material
Adverse Effect.

5.       Affirmative Covenants.

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

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

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

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


<PAGE>

         5.4.  Inspection.  Permit  the  Agent  and the  Banks  to  inspect  its
Property,  to examine its files, books and records and make and take away copies
thereof,  and to discuss its affairs with its officers and  accountants,  all at
such  times  and  intervals  and to such  extent  as the  Agent  or any Bank may
reasonably desire.

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

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

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

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

         5.9. Use of  Proceeds.  Subject to the terms and  conditions  contained
herein,  use the  proceeds  of the Loans for general  corporate  purposes of the
Company  and its  Subsidiaries  not  otherwise  prohibited  herein,  to  finance
acquisitions  of assets used in and  Investments  in Persons  engaged in similar
businesses to those businesses of the Company and its Subsidiaries not otherwise
prohibited herein and/or pay the Indebtedness arising pursuant to the Letters of
Credit,  as provided in this Agreement;  provided,  that no proceeds of any Loan
shall  be used  (a) for the  purpose  of  purchasing  or  carrying  directly  or
indirectly any margin stock as defined in Regulation U ("Reg U") of the Board of
Governors  of the  Federal  Reserve  System,  (b) for the purpose of reducing or
retiring any Indebtedness which was originally incurred to purchase or carry any
such margin  stock and (c) for any other  purpose  which  constitute  any Loan a
"purpose  credit" within the meaning of Reg U. No proceeds of the Loans shall be
used in violation of Reg U or any successor  regulation  thereof or of any other
rule, statute or regulation governing margin stock from time to time.

         5.10. Additional Guaranties. Notify the Agent promptly upon creation or
acquisition  by  the  Company  or  any of  its  Subsidiaries  of any  additional
Subsidiary  of the Company after the date hereof,  and in connection  therewith,
furnish the Agent with the  Organizational  Documents of such newly  acquired or
created  Subsidiary  and  sufficient  information  to  disclose  to the Agent in
reasonable detail the ownership structure and capitalization of such Subsidiary,
and if  thereafter  requested  in  writing by the Agent or the  Majority  Banks,
promptly  cause such newly  created or  acquired  Subsidiary  of the  Company to

<PAGE>

execute  and  deliver  to the  Agent  for the  benefit  of the  Banks a  Joinder
Agreement,  together with such related certificates,  opinions, and documents as
the  Agent or any Bank  may  reasonably  require;  provided,  however,  that any
foreign  Subsidiary  shall not be required to become a Guarantor  hereunder  (if
requested  by the Agent or the  Majority  Banks) if the Agent  receives  for the
benefit of the Banks a first priority pledge of no less than sixty-five  percent
(65%) of all issued and outstanding  indicia of equity rights (including capital
stock) in such foreign Subsidiary.

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

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


         5.13. End of Fiscal Years and Fiscal Quarters.  The Company shall cause
(a) each of its fiscal years and each of its  Subsidiaries'  fiscal years to end
on the last Sunday of each September,  (b) each of its first fiscal quarters and
each of its  Subsidiaries'  first fiscal  quarters to end on the Sunday which is
sixteen  weeks  after the end of the  preceding  fiscal year and (c) each of its
second and third  fiscal  quarters  to end on the Sunday  which is twelve  weeks
after the end of the preceding fiscal quarter.

6.       Negative Covenants.

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

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


          (a) Indebtedness to the Banks and the Agent pursuant hereto;


<PAGE>



          (b) in addition to and cumulative of any other Indebtedness  permitted
     in this  Section 6, in the case of the  Company  only,  Unsecured  Borrowed
     Debt;


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


          (d)  Indebtedness  of any one or more of the  Company's  Subsidiaries,
     provided, that the aggregate amount of all such Indebtedness outstanding at
     any time (exclusive of Indebtedness permitted in Section 6.1(h) hereof) may
     not exceed $10,000,000;


          (e) other  liabilities  existing on the date of this Agreement and set
     forth on Schedule I attached  hereto,  and all renewals and extensions (but
     not increases) thereof;


          (f) current accounts payable and unsecured  current  liabilities,  not
     the result of  borrowings,  to vendors,  suppliers  and  persons  providing
     services,  for  expenditures on ordinary trade terms for goods and services
     normally required by the Company or any of its Subsidiaries in the ordinary
     course of its business;

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


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


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

          (j) current and deferred taxes;


          (k) any  obligation  under or in  respect  of  outstanding  letters of
     credit (including without limitation,  the Letters of Credit),  acceptances
     and  similar  obligations  created for the account of the Company or any of
     its Subsidiaries, provided that the sum of (i) the aggregate amount of such
     Indebtedness  and (ii)  the  aggregate  amount  of  Contingent  Obligations
     outstanding  at any  time  for  the  Company  and  its  Subsidiaries,  on a
     consolidated basis, may not exceed $10,000,000;


          (l) Indebtedness of the Company in an original principal amount not to
     exceed  $40,000,000  in the aggregate  privately  placed with  investors by
     Chase Securities Inc. in accordance with the terms and conditions set forth
     in those certain Note Purchase Agreements (the "Note Purchase  Agreements")
     dated May 16,  1996,  by and between the Company and the various  investors
     purchasing  all  or  any  portion  of  such  Indebtedness,   together  with
     guaranties of such  Indebtedness by any or all  Subsidiaries of the Company
     now or hereafter existing;


          (m)  Indebtedness  or other  obligations  of the Company under Capital
     Lease  Obligations for equipment for use in new retail locations  hereafter
     opened and operated by the Company or any of its  Subsidiaries,  so long as
     the capitalized amount of such obligations  hereafter entered into does not
     to exceed  $30,000,000 in the aggregate,  together with  guaranties of such
     obligations  by any or all  Subsidiaries  of the Company  now or  hereafter
     existing; and


          (n)  Indebtedness  evidenced by those certain zero coupon  convertible
     subordinated  debentures of the Company due 2018 which are governed by that
     certain  Indenture  dated March 2, 1998, by and among the Company and Chase
     Bank of Texas, National Association,  Trustee,  accreting to a $308,807,000
     face amount at maturity.




<PAGE>


         The Company,  the Agent, the Banks and each Guarantor (by its execution
of a Guaranty  or a Joinder  Agreement)  agree  that,  notwithstanding  anything
contained  in this  Section  6.1,  in Section  6.7(f) or in any other  provision
contained in this Agreement which may appear to be to the contrary,  any and all
Indebtedness  of (i) the Company from time to time owed to any other  Subsidiary
of the Company or of (ii) any  Subsidiary  of the Company from time to time owed
to the Company or to any Guarantor (together with any and all Liens from time to
time securing the same as permitted by Section 6.2[f] hereof) is hereby made and
at all times  hereafter shall be inferior and subordinate in all respects to the
Indebtedness  from time to time owing to the Agent or any Bank  pursuant  hereto
and to any  Lien,  if any  from  time to  time  hereafter  securing  any of such
Indebtedness pursuant to the terms hereof.

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

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

          (b) Liens securing any Indebtedness  otherwise  permitted  pursuant to
     Sections 6.1(b) and (d) hereof,  provided that the aggregate  amount of all
     such  secured   Indebtedness   outstanding  at  any  time  may  not  exceed
     $10,000,000.00;

          (c) Liens in favor of the Agent for the benefit of the Banks;

          (d) Incidental Liens;

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


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


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

Provided,  however,  that,  notwithstanding  anything  contained  above  in this
Section 6.2 to the  contrary,  in no event may the Company or any  Subsidiary of
the Company (i) ever create or suffer to exist any Lien upon any of the Stock of
any of its  Subsidiaries,  directly or indirectly,  in favor of any Person other
than the Agent for the  benefit of the Banks,  or (ii)  except for the equal and
ratable lien  provisions of Section 9.7 of the Note Purchase  Agreements and the
negative  pledge  provisions  of Section 10.3 of the Note  Purchase  Agreements,
create or suffer to exist any  agreement,  whether oral or in writing,  with any
Person other than the Agent and the Banks  pursuant to this  Section 6.2,  which
would or could prohibit the Company or any of its Subsidiaries  from creating or
permitting  to exist any Lien in favor of the Agent or the Banks for the benefit
of all of the  Banks  for  Indebtedness  from time to time  arising  under  this
Agreement.


<PAGE>


         6.3. Contingent  Obligations.  Except for guaranties by Subsidiaries of
the Company which are otherwise  permitted by Sections 6.1(l) and 6.1(m) hereof,
create, incur, suffer or permit to exist, directly or indirectly, any Contingent
Obligations  if  such  Contingent  Obligations  would  cause  the sum of (a) the
aggregate amount of Contingent  Obligations  outstanding for the Company and its
Subsidiaries, and (b) the aggregate amount of outstanding Indebtedness permitted
by Section  6.1(k),  on a consolidated  basis,  to exceed  $10,000,000 (it being
agreed that any Contingent  Obligations of the Subsidiaries  allowed by Sections
6.1(l) and 6.1(m)  hereof  shall not be included  for  purposes  of  determining
compliance with the other provisions of this Section 6.3).


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

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

                  (b)      Be a party to any merger or consolidation;

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

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

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

                  (f)      Purchase  or    otherwise   acquire,   directly    or
indirectly, in a single transaction or a series of related transactions,  all or
substantially all of the assets of any Person or such Person and its Affiliates,
or any shares of Stock of, or similar interest in, any Person or such Person and
its  Affiliates,  if the total  value of the cash  consideration  (exclusive  of
stock, warrants,  options and other non-cash consideration) given or paid by the
Company  and  its  Subsidiaries  in  connection  with  such  acquisition  and in
connection  with prior  acquisitions,  if any,  during  the fiscal  year of such
acquisition  exceeds in the  aggregate  the greater of (i)  $50,000,000  or (ii)
fifteen percent (15%) of Consolidated Net Worth; provided, however, that so long
as the provisions of clause (f) above are not violated:

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

                  (h)      Any  of the  Company's  Subsidiaries  may  (i)  sell,
transfer  or  otherwise  dispose  of  any  Stock  of the  Company  or any of its
Subsidiaries  to the Company or another  Subsidiary of the Company or (ii) sell,
lease,  transfer or otherwise dispose of any of its assets to another Subsidiary
of the Company;  provided that if all or  substantially  all of the transferring
Subsidiary's  assets are being sold,  leased,  transferred or otherwise disposed


<PAGE>

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

                  (i)      Subject  to  the  limitations set  forth below, (i) a
proposed sale,  lease or conveyance of assets of one or more of the Subsidiaries
of the Company (a "Permitted Asset  Disposition") or (ii) a proposed sale of the
Stock  of  one  or  more   Subsidiaries  of  the  Company  (a  "Permitted  Stock
Disposition"),  in a single transaction or series of related transactions,  to a
Person or Persons  which is not or are not an  Affiliate  or  Affiliates  of the
Company or any of its  Subsidiaries,  on an arms-length  basis, may occur in any
fiscal year of the Company so long as the aggregate  consideration  paid by such
acquiring  Person  or  Persons  (inclusive  of the fair  value  of any  non-cash
Property  received as consideration)  from all Permitted Asset  Dispositions and
all Permitted  Stock  Dispositions  which occur during such fiscal year does not
exceed $20,000,000;  provided,  however,  that no Permitted Asset Disposition or
Permitted Stock  Disposition may occur if a Default shall have then occurred and
is then  continuing  or  would  be  caused  by  such  proposed  Permitted  Asset
Disposition or Permitted Stock Disposition if consummated.

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

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


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


          (a)  Stock of any Subsidiary;

          (b)  Permitted Investment Securities;

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

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

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

          (f)  so long as no Default shall have occurred and is then continuing,
and  subject to the terms of Section  6.2  hereof,  loans by the  Company or any
Guarantor to any Subsidiary of the Company; and

          (g)  so long as no Default has occurred and is then continuing,  loans
to  any  Person  which  is not a  Subsidiary  of  the  Company  or of any of the
Company's  Subsidiaries,  provided, that the aggregate of all of such loans does
not exceed at any time $10,000,000 on a consolidated basis.


<PAGE>

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

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

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

         6.11.  Redemption, Dividends and Distributions.  At any time:

                (a)  Redeem,  retire    or   otherwise   acquire,  directly   or
indirectly, any shares of its Stock if such redemption or repurchase would cause
the aggregate cost paid by the Company for such Stock so redeemed or repurchased
since January 1, 1999, as shown on the consolidated  financial statements of the
Company and its Subsidiaries to be delivered pursuant to Sections 5.2(a) and (b)
hereof,  to ever  exceed  (i)  $50,000,000  until and  including  the end of the
Company's  fiscal year ending in September of 2000 or (ii) twenty  percent (20%)
of  Consolidated  Net Worth at all times after the end of the  Company's  fiscal
year ending in September of 2000;

                  (b) Pay any dividend  except (i) dividends paid to the Company
or any  Subsidiary  of the Company  which is a direct  parent of the  Subsidiary
paying a dividend,  and (ii) dividends payable in Stock or in rights or warrants
to purchase Stock; or

                  (c) Make any other  distribution  of any  Property  or cash to
stockholders as such.

7.       Events of Default and Remedies.


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


                  (a) The Company  shall fail to pay or prepay any  principal of
or interest on any Note, the Commitment Fees or any other  obligation  hereunder
or under any Applications as and when due and such failure remains uncured after
five (5) Business Days from such due date; or

                  (b) The Company or any of its  Subsidiaries  (i) shall fail to
pay at maturity,  or within any applicable  period of grace, any principal of or
interest  on any other  borrowed  money  obligation  in excess  of  $100,000  in
principal  amount  (unless  such  payment  is being  contested  in good faith by
appropriate proceedings and adequate reserves have been provided therefor), (ii)
shall otherwise be in default under the provisions of any instrument or document
evidencing,  securing or guaranteeing any other borrowed money obligation of the
Company or any of its  Subsidiaries in excess of $100,000 in principal amount if
such default  continues beyond any applicable grace or curative period,  if any,
and such default would entitle the holder of such borrowed  money  obligation to

<PAGE>

declare such obligation to be due prior to its stated  maturity,  or (iii) is in
default under or in violation of any Legal  Requirement,  which failure could or
does have a material  adverse  effect on the Company and its  Subsidiaries  on a
consolidated basis; or

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

                  (d)  Default   shall  occur  in  the   punctual  and  complete
performance  of (i) any of the  affirmative  covenants  contained  in  Section 5
(other than  Section  5.3) and such  default  shall not be cured within ten (10)
days after the Agent has given  written  notice to the Company that such default
has occurred, (ii) any of the negative covenants contained in Section 6 and such
default  shall  not be cured  within  five (5) days  after  the  Agent has given
written  notice to the  Company  that such  default has  occurred,  or (iii) any
covenant  contained  in Section 5.3 or any other  covenant of the Company or any
other Person contained in any Loan Document; or

                  (e) Final  judgment  or  judgments  in the  aggregate  for the
payment of money in excess of (1)  $10,000,000  shall be  rendered  against  the
Company or any of its  Subsidiaries at any time,  regardless of whether the same
is being  appealed or  reserves  established  therefor  or paid in full,  or (2)
$5,000,000  shall be rendered against the Company or any of its Subsidiaries and
the same shall remain undischarged for a period of thirty (30) days during which
execution shall not be effectively stayed; or

                  (f) The Company or any  Subsidiary of the Company shall claim,
or any court  shall  find or rule,  that the Agent for the  benefit of the Banks
does not have a valid Lien on any Stock  which may have been  provided to secure
the Indebtedness arising pursuant hereto from time to time by the Company or any
of its Subsidiaries pursuant to Section 5.10 above; or

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

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

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

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

                  (k) A Change of Control shall occur.  In addition, if  any  of
the  following  events shall  occur,  then the Notes  together  with all accrued
interest thereon,  the Commitment Fees and all other fees then payable hereunder
shall automatically,  without demand, presentment,  protest, notice of intent to
accelerate,  notice of  acceleration  or other notice to any Person of any kind,
all of which are hereby expressly WAIVED by the Company,  become immediately due


<PAGE>

and  payable  and  all  Commitments   shall  be  immediately  and  automatically
terminated  and  the  Maturity  Date  shall  immediately  and  automatically  be
accelerated to the date of such occurrence:

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

                  (m) Any such petition or application shall be filed or any
such  proceeding  shall  be  commenced   against  the  Company  or  any  of  its
Subsidiaries  and the Company or such  Subsidiary  by any act or omission  shall
indicate approval thereof,  consent thereto or acquiescence therein, or an order
shall be entered appointing a trustee, custodian,  receiver or liquidator of all
or any substantial  part of the assets of the Company or any of its Subsidiaries
or granting  relief to the Company or any of its  Subsidiaries  or approving the
petition in any such proceeding,  and such order shall remain in effect for more
than sixty (60) days; or

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

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


8.       The Agent and the Issuer.


         8.1. Appointment,  Powers and Immunities.  Each Bank hereby irrevocably
appoints and  authorizes  the Agent to act as its agent  hereunder and under the
Letters  of  Credit  and the  other  Loan  Documents  with  such  powers  as are
specifically  delegated to the Agent by the terms  hereof and thereof,  together
with such other powers as are reasonably  incidental  thereto.  Each Bank hereby
irrevocably  appoints  and  authorizes  the Issuer to act as its agent under the
Letters  of  Credit  which  the  Issuer  has  issued  with  such  powers  as are
specifically  delegated to the Issuer by the terms hereof and thereof,  together
with such other powers as are reasonably  incidental thereto.  Neither the Agent
nor the Issuer (which such terms as used in this Section 8, shall, in each case,
include  reference to its Affiliates and its own and its  Affiliates'  officers,
directors,  employees  and  agents)  (a) shall have  duties or  responsibilities
except those  expressly set forth in this  Agreement,  the Letters of Credit and
the other Loan Documents, and shall not by reason of this Agreement or any other
Loan Document be a trustee for any Bank;  (b) shall be  responsible  to any Bank
for any recitals,  statements,  representations or warranties  contained in this
Agreement,  the  Letters  of  Credit  or  any  other  Loan  Document,  or in any
certificate or other document referred to or provided for in, or received by any
of them under, this Agreement, the Letters of Credit or any other Loan Document,
or for  the  value,  validity,  effectiveness,  genuineness,  enforceability  or
sufficiency of this Agreement,  the Letters of Credit or any other Loan Document
or any other  certificate  or document  referred  to or  provided  for herein or
therein or any property  covered  thereby or for any failure by any Party or any
other Person (other than the Agent or, in the case of a Letter of Credit,  Agent
and the  Issuer of such  Letter of Credit)  to  perform  any of its  obligations
hereunder  or  thereunder;  (c) shall be  required  to  initiate  or conduct any
litigation or collection proceedings hereunder or under the Letters of Credit or
any other Loan Document  except to the extent  requested by the Majority  Banks,
and (d) shall be  responsible  for any action taken or omitted to be taken by it
hereunder or under the Letters of Credit or any other Loan Document or any other
document  or  instrument  referred  to or  provided  for herein or therein or in
connection  herewith or  therewith,  INCLUDING  PURSUANT TO ITS OWN  NEGLIGENCE,
except for its own gross  negligence  or willful  misconduct.  The Agent and the
Issuer may employ agents and  attorneys-in-fact and shall not be responsible for
the negligence or misconduct of any such agents or attorneys-in-fact selected by
them with  reasonable  care.  Without in any way limiting any of the  foregoing,
each Bank  acknowledges  that  neither  the Agent nor the Issuer  shall have any
greater  responsibility  in the  operation  of the  Letters  of  Credit  than is
specified  in the Uniform  Customs and Practice for  Documentary  Credits  (1993
Revision, International Chamber of Commerce Publication No. 500 or any successor

<PAGE>

publication).  In any foreclosure  proceeding  concerning any collateral for the
Notes,  each  holder of a Note if  bidding  for its own  account  or for its own
account and the  accounts of other Banks is  prohibited  from  including  in the
amount of its bid an amount to be  applied as a credit  against  its Note or the
Notes of the other Banks, instead such holder must bid in cash only. However, in
any such foreclosure  proceeding,  the Agent may (but shall not be obligated to)
submit a bid for all Banks  (including  itself) in the form of a credit  against
the Notes of all of the Banks,  and the Agent or its designee may (but shall not
be obligated to), with the consent of the Majority  Banks,  accept title to such
collateral for and on behalf of all Banks.

         8.2. Reliance.  The Agent and the Issuer shall be entitled to rely upon
any  certification,  notice or other  communication  (including  any  thereof by
telephone,  telex,  telegram or cable)  believed by it to be genuine and correct
and to have been signed or sent by or on behalf of the proper Person or Persons,
and upon advice and  statements of legal  counsel  (which may be counsel for the
Company), independent accountants and other experts selected by the Agent or the
Issuer (as the case may be).  As to any matters not  expressly  provided  for by
this Agreement,  the Letters of Credit or any other Loan Document, the Agent and
the Issuer  shall in all cases be fully  protected in acting,  or in  refraining
from acting,  hereunder and thereunder in accordance  with  instructions  of the
Majority Banks, and any action taken or failure to act pursuant thereto shall be
binding on all of the Banks.

         8.3.  Defaults.  The Agent shall not be deemed to have knowledge of the
occurrence of a Default (other than the  non-payment of principal of or interest
on Loans or reimbursements of Letters of Credit Advances) unless it has received
notice from a Bank or the Company  specifying such Default and stating that such
notice is a "Notice of  Default."  In the event that the Agent  receives  such a
notice of the  occurrence  of a  Default,  the Agent  shall give  prompt  notice
thereof  to the Banks  (and  shall  give each  Bank  prompt  notice of each such
non-payment).  The Agent shall  (subject to Section 8.7 hereof) take such action
with  respect to such  Default as shall be  directed by the  Majority  Banks and
within its rights  under the Loan  Documents  and at law or in equity,  provided
that, unless and until the Agent shall have received such directions,  the Agent
may (but shall not be  obligated  to) take such  action,  or refrain from taking
such  action,  permitted  hereby with  respect to such  Default as it shall deem
advisable  in the best  interests  of the Banks and within its rights  under the
Loan Documents, at law or in equity.

         8.4.  Rights as a Bank.  With respect to its  Commitment  and the Loans
made and otherwise any Letter of Credit Exposure  Amount,  Chase in its capacity
as a Bank hereunder shall have the same rights and powers hereunder as any other
Bank and may  exercise  the same as though it were not acting as the Agent,  and
the term  "Bank" or "Banks"  shall,  unless  the  context  otherwise  indicates,
includes the Agent in its individual capacity.  The Agent may (without having to
account  therefor to any Bank) accept deposits from, lend money to and generally
engage in any kind of banking, trust, letter of credit, agency or other business
with the  Company  (and any of its  Affiliates)  as if it were not acting as the
Agent,  and the Agent may accept fees and other  consideration  from the Company
(in addition to the fees heretofore agreed to between the Company and the Agent)
for services in connection  with this  Agreement or otherwise  without having to
account for the same to the Banks.

         8.5.  Indemnification.  The Banks agree to indemnify  the Agent and the
Issuer  (to the extent not  reimbursed  under  Section  2.4[c],  Section  9.9 or
Section 9.10 hereof,  but without  limiting the obligations of the Company under
said Sections 2.4[c], 9.9 and 9.10), ratably in accordance with their respective
Commitments,  for  any  and  all  liabilities,   obligations,  losses,  damages,
penalties,  actions,  judgments,  suits, costs, expenses or disbursements of any
kind and nature whatsoever (INCLUDING THE CONSEQUENCES OF THE NEGLIGENCE OF SUCH
INDEMNIFIED  PERSON, but excluding the gross negligence or willful misconduct of
such  indemnified  person)  which may be imposed  on,  incurred  by or  asserted
against  the Agent or any Bank  acting in its  capacity as the Issuer in any way
relating to or arising out of this Agreement, the Letters of Credit or any other
Loan Document or any other  documents  contemplated  by or referred to herein or
therein or the transactions  contemplated hereby or thereby (including the costs
and expenses  which the Company is obligated to pay under Sections  2.4[c],  9.9
and 9.10 hereof but excluding,  unless a Default has occurred and is continuing,
normal  administrative  costs and expenses  incident to the  performance  of its
agency  duties  hereunder)  or the  enforcement  of any of the  terms  hereof or
thereof  or of any  such  other  documents,  INCLUDING  THE  NEGLIGENCE  OF SUCH
INDEMNIFIED  PERSON, but excluding the gross negligence or willful misconduct of
such  indemnified  person.  The  obligations of the Banks under this Section 8.5
shall  survive  the  termination  of this  Agreement  and the  repayment  of the
Indebtedness arising in connection with this Agreement.

<PAGE>

         8.6.  Non-Reliance  on Agent and Other Banks.  Each Bank agrees that it
has received current  financial  information with respect to the Company and the
other Parties and that it has,  independently  and without reliance on the Agent
or any other Bank and based on such  documents and  information as it has deemed
appropriate,  made its own credit  analysis of the Company and the other Parties
and decision to enter into this  Agreement and that it will,  independently  and
without  reliance upon the Agent or any other Bank,  and based on such documents
and information as it shall deem  appropriate at the time,  continue to make its
own analysis and decisions in taking or not taking  action under this  Agreement
or any of the other Loan Documents. Neither the Agent nor any Bank acting in its
capacity  as the Issuer  shall be  required  to keep  itself  informed as to the
performance or observance by any Party of this Agreement,  the Letters of Credit
or any of the other Loan Documents or any other document referred to or provided
for herein or therein or to inspect  the  properties  or books of the Company or
any Party.  Except for  notices,  reports and other  documents  and  information
expressly  required  to be  furnished  to the Banks by the  Agent or the  Issuer
hereunder, under the Letters of Credit or the other Loan Documents,  neither the
Agent nor the Issuer shall have any duty or  responsibility  to provide any Bank
with any credit or other information concerning the affairs, financial condition
or business of the Company or any other Party (or any of their Affiliates) which
may come into the possession of the Agent or the Issuer.

         8.7. Failure to Act. Except for action expressly  required of the Agent
or the Issuer  hereunder,  under the  Letters of Credit and under the other Loan
Documents,  the Agent and such Issuer  shall in all cases be fully  justified in
failing or refusing to act  hereunder  and  thereunder  unless it shall  receive
further  assurances to its  satisfaction  by the Banks of their  indemnification
obligations  under Section 8.5 hereof  against any and all liability and expense
which may be incurred by it by reason of taking or  continuing  to take any such
action.

         8.8.  Resignation or Removal of Agent.  Subject to the  appointment and
acceptance of a successor Agent as provided  below,  the Agent may resign at any
time by giving notice thereof to the Banks and the Company, and the Agent may be
removed at any time with or without cause by the Majority  Banks.  Upon any such
resignation  or removal,  the  Majority  Banks shall have the right to appoint a
successor Agent  reasonably  acceptable to the Company,  provided  deposits with
such  successor  Agent  shall  be  insured  by  the  Federal  Deposit  Insurance
Corporation or its successor. If no successor Agent shall have been so appointed
by the Majority  Banks and shall have accepted such  appointment  within 30 days
after the  retiring  Agent's  giving of notice of  resignation  or the  Majority
Banks' removal of the retiring Agent,  then the retiring Agent may, on behalf of
the Banks,  appoint a successor Agent reasonably  acceptable to the Company. Any
successor  Agent shall be a bank which has an office in the United States with a
combined capital and surplus of at least $1,000,000,000.  Upon the acceptance of
any  appointment as Agent hereunder by a successor  Agent,  such successor Agent
shall  thereupon  succeed  to and become  vested  with all the  rights,  powers,
privileges  and duties of the retiring  Agent,  and the retiring  Agent shall be
discharged from its duties and obligations hereunder. Such successor Agent shall
promptly  specify  by notice to the  Company  and the Banks its  office  for the
purpose of any  notices  and  payments  hereunder.  After any  retiring  Agent's
resignation  or removal  hereunder as Agent,  the  provisions  of this Section 8
shall  continue  in effect for its  benefit in respect of any  actions  taken or
omitted to be taken by it while it was acting as the Agent.

9.       Miscellaneous.

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


<PAGE>

         9.2. Notices.  All notices under the Loan Documents shall be in writing
and either (i) delivered against receipt therefor,  (ii) mailed by registered or
certified  mail,  return  receipt  requested,  or (iii) sent by telex,  telecopy
(promptly confirmed by mail) or telegram, in each case to the intended recipient
at the "Address for Notices"  specified  below its name on the  signature  pages
hereof;  or, as to any Bank who is a signatory  hereto, at such other address as
shall be  designated by such Bank in a notice to the Company and the Agent given
in  accordance  with this Section  9.2. or to such other  address as a party may
designate. Notices shall be deemed to have been given (whether actually received
or not) when delivered (or, if mailed, on the next Business Day);  however,  the
notices  required  or  permitted  by  Sections  2.1 and 3.1(a)  hereof  shall be
effective only when actually received by the Agent.

         9.3.  Governing Law.  UNLESS  OTHERWISE  SPECIFIED  THEREIN,  EACH LOAN
DOCUMENT  SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE  WITH THE LAWS OF THE
STATE OF TEXAS AND THE UNITED  STATES OF  AMERICA.  Company  hereby  irrevocably
agrees that, provided that the Company can obtain personal jurisdiction over and
service of process upon the Agent or the applicable  Bank, any legal  proceeding
against  the  Agent  or any  Bank  arising  out of or in  connection  with  this
Agreement or the other Loan Documents shall be brought in the district courts of
Travis  County,  Texas,  or in the United States  District Court for the Western
District of Texas, Austin Division.  Nothing contained in this Section or in any
other provision of any Loan Document (unless expressly provided otherwise) shall
be  deemed  or  construed  as an  agreement  by any  Bank to be  subject  to the
jurisdiction of such courts.

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

         9.5. Counterparts.  This Agreement may be executed in several identical
counterparts,  and by the  parties  hereto on  separate  counterparts,  and each
counterpart,  when so  executed  and  delivered,  shall  constitute  an original
instrument,  and all such separate counterparts shall constitute but one and the
same instrument.

         9.6.  Limitation  of  Interest.  The  Company  and the Banks  intend to
strictly  comply with all  applicable  laws,  including  applicable  usury laws.
Accordingly,  the  provisions  of this Section 9.6 shall govern and control over
every  other  provision  of this  Agreement  or any other  Loan  Document  which
conflicts or is inconsistent with this Section,  even if such provision declares
that it controls.  As used in this  Section,  the term  "interest"  includes the
aggregate of all charges,  fees, benefits or other compensation which constitute
interest under applicable law, provided that, to the maximum extent permitted by
applicable  law, (a) any  non-principal  payment  shall be  characterized  as an
expense or as  compensation  for something  other than the use,  forbearance  or
detention  of  money  and not as  interest,  and (b) all  interest  at any  time
contracted  for,  reserved,  charged or received  shall be amortized,  prorated,
allocated  and spread,  in equal parts during the full term of the Loans and the
Commitments.  In no event shall the Company or any other  Person be obligated to
pay, or the Agent or any Bank have any right or privilege to reserve, receive or
retain, (Y) any interest in excess of the maximum amount of nonusurious interest
permitted  under the laws of the State of Texas or the applicable  laws (if any)
of the United States or of any other state,  or (Z) total  interest in excess of
the amount  which the Agent or such Bank could  lawfully  have  contracted  for,
reserved, received, retained or charged had the interest been calculated for the
full term of the Loans at the Highest Lawful Rate. On each day, if any, that the
Stated Rate or such other rate,  respectively,  or any rate called for under any
other Loan Document  exceeds the Highest Lawful Rate, the rate at which interest
shall accrue shall  automatically  be fixed by operation of this sentence at the
Highest  Lawful Rate for that day, and shall remain fixed at the Highest  Lawful
Rate for each day thereafter  until the total amount of interest  accrued equals
the total  amount of  interest  which  would have  accrued if there were no such
ceiling rate as is imposed by this sentence.  Thereafter,  interest shall accrue
at the Stated Rate or such other rate, respectively, unless and until the Stated
Rate or such  other  rate  again  exceeds  the  Highest  Lawful  Rate  when  the
provisions  of the  immediately  preceding  sentence  shall again  automatically


<PAGE>

operate to limit the interest  accrual rate. The daily interest rates to be used
in  calculating  interest at the  Highest  Lawful  Rate shall be  determined  by
dividing the  applicable  Highest Lawful Rate per annum by the number of days in
the calendar year for which such  calculation  is being made.  None of the terms
and  provisions  contained in this Agreement or in any other Loan Document which
directly  or  indirectly  relate to  interest  shall ever be  construed  without
reference  to this  Section 9.6, or be construed to create a contract to pay for
the use,  forbearance or detention of money at an interest rate in excess of the
Highest  Lawful  Rate.  If the term of any  Loans or the Notes is  shortened  by
reason of  acceleration  of  maturity as a result of any Default or by any other
cause, or by reason of any required or permitted prepayment, and if for that (or
any other) reason any Bank at any time,  including the stated maturity,  is owed
or receives (and/or has received)  interest in excess of interest  calculated at
the  Highest  Lawful  Rate,  then and in any such  event all of any such  excess
interest shall be canceled  automatically  as of the date of such  acceleration,
prepayment  or other  event  which  produces  the  excess,  and,  if such excess
interest has been paid to such Bank,  it shall be credited pro tanto against the
then-outstanding  principal balance of the Company's obligations to the Agent or
such Bank,  effective as of the date or dates when the event occurs which causes
it to be  excess  interest,  until  such  excess  is  exhausted  or all of  such
principal has been fully paid and  satisfied,  whichever  occurs first,  and any
remaining balance of such excess shall be promptly refunded to its payor.

         9.7.  Survival.  The obligations of the Company under Sections  2.4(c),
2.7,  9.9, 9.10 and 9.17 hereof shall survive the repayment of the Loans and the
termination of the Commitments and the Letters of Credit.

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

         9.9. Expenses,  Etc. Whether or not any Loan is ever made or any Letter
of Credit ever issued,  the Company shall pay or reimburse on demand each of the
Banks and the Agent for paying:  (a) the  reasonable  fees and expenses of Locke
Liddell & Sapp LLP,  counsel to the Agent or any other legal counsel  engaged by
the Agent,  in connection  with (i) the  preparation,  execution and delivery of
this  Agreement  (including  the  exhibits  and  schedules  hereto) and the Loan
Documents  and the  making of the Loans and the  issuance  of  Letters of Credit
hereunder and (ii) any modification, supplement or waiver of any of the terms of
this  Agreement,  the  Letters  of Credit or any other Loan  Document  made as a
result of any request by the  Company;  (b) all  reasonable  costs and  expenses
(including  reasonable attorneys' fees) of the Banks and the Agent in connection
with the enforcement of this Agreement,  the Letters of Credit or any other Loan
Document;  (c)  all  transfer,   stamp,  documentary  or  other  similar  taxes,
assessments or charges levied by any governmental or revenue authority after the
effective date hereof in respect of this Agreement,  any Letter of Credit or any
other Loan Document or any other document referred to herein or therein; (d) all
costs,  expenses,  taxes,  assessments  and  other  charges  incurred  after the
effective date hereof in connection with any filing, registration,  recording or
perfection  of any  security  interest  contemplated  by  Section  5.10  of this
Agreement; and (e) expenses of mutually agreed due diligence and syndication.

         9.10. Indemnification. The Company shall indemnify the Agent, the Banks
and each Affiliate thereof and their respective directors,  officers, employees,
counsel and agents from,  and hold each of them  harmless  against,  any and all
losses,  liabilities (including  Environmental  Liabilities),  claims (including
Environmental  Claims)  or  damages  to which  any of them may  become  subject,
insofar as such losses,  liabilities,  claims or damages  arise out of or result
from any (a)  actual or  proposed  use by the  Company  of the  proceeds  of any
extension  of  credit  (whether  a Loan  or a  Letter  of  Credit)  by any  Bank
hereunder,  (b)  breach by the  Company  of this  Agreement  or any  other  Loan
Document,  (c) violation by the Company or any of its  Subsidiaries  of any law,
rule,  regulation or order including any Requirements of Environmental  Law, (d)
Liens or security  interests  granted on any  Property  pursuant to or under the
Loan Documents, to the extent resulting from any Hazardous Substance, petroleum,
petroleum  product or petroleum waste located in, on or under any such property,
(e)  ownership by the Banks or the Agent of any Property  following  foreclosure
under the Loan  Documents,  to the extent such  losses,  liabilities,  claims or
damages  arise  out  of or  result  from  any  Hazardous  Substance,  petroleum,
petroleum  product or  petroleum  waste  located in, on or under such  Property,
including losses, liabilities,  claims or damages which are imposed upon Persons
under laws relating to or regulating Hazardous Substances,  petroleum, petroleum
products or petroleum wastes solely by virtue of ownership,  (f) any Bank or the
Agent  being  deemed  an  operator  of any  such  Property  by a court  or other
regulatory  or  administrative  agency or tribunal or other third party,  to the

<PAGE>

extent such losses,  liabilities,  claims or damages arise out of or result from
any Hazardous Substance, petroleum, petroleum product or petroleum waste located
in on or  under  such  Property,  or  (g)  investigation,  litigation  or  other
proceeding  (including any threatened  investigation or proceeding) relating any
of to the  foregoing,  and the Company shall  reimburse the Agent and each Bank,
and each Affiliate thereof and their respective directors,  officers, employees,
counsel and agents, upon demand for any expenses (including legal fees) incurred
in connection with any such  investigation  or proceeding,  AND WHETHER ANY SUCH
LOSS,  LIABILITY,  CLAIM  OR  DAMAGE  RESULTS  FROM THE  NEGLIGENCE  OF ANY SUCH
INDEMNIFIED PERSON; but excluding any such losses, liabilities,  claims, damages
or expenses  incurred by a Person or any Affiliate  thereof or their  respective
directors,  officers,  employees,  counsel  or  agents  by  reason  of the gross
negligence or willful misconduct of such Person, affiliate,  director,  officer,
employee or agent.  Promptly after receipt by an indemnified person of notice of
any claim or the commencement of any action,  such indemnified  person shall, if
any claim in  respect  thereof  is to be made  against  the  Company  under this
Section 9.10,  notify the Company in writing of the claim or the commencement of
that  action.  The Company  shall not be liable for any  settlement  of any such
claim or action  involving the payment of monetary  damages effected without its
written  consent not to be  unreasonably  withheld.  If any such claim or action
shall be brought  against an indemnified  person and it shall notify the Company
thereof,  the  Company  shall be entitled to  participate  in the joint  defense
thereof.

         9.11. Amendments,  Etc. No amendment or waiver of any provision of this
Agreement,  the  Notes  or any  other  Loan  Document,  nor any  consent  to any
departure by the Company  therefrom,  shall in any event be effective unless the
same shall be agreed or consented to by the Majority Banks and the Company,  and
each such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given; provided, that no amendment, waiver or
consent  shall,  unless  in  writing  and  signed  by each  Bank,  do any of the
following: (a) increase other than as increased pursuant to Section 9.12 hereof,
any  Commitment  of any of the Banks or subject the Agent or any of the Banks to
any  additional  obligations;  (b) reduce the  principal of, or interest on, any
Loan, any Letter of Credit  Exposure  Amount or any fee hereunder;  (c) waive or
postpone any  scheduled  date fixed for any payment of principal of, or interest
on, any Loan, any Letter of Credit Exposure Amount or any fee or other sum to be
paid  hereunder;  (d) change the percentage of any of the  Commitments or of the
aggregate  unpaid  principal  amount of any of the  Loans,  any Letter of Credit
Exposure Amount,  or the number of Banks,  which shall be required for the Banks
or any of them to take any action under this Agreement; (e) change any provision
contained  in Sections  2.4(c),  2.7, 9.9 or 9.10 hereof or this Section 9.11 or
Sections  9.16 or 9.19 hereof;  (f) release all or any  substantial  part of the
security  for  the  obligations  of  the  Company  under  this  Agreement,   any
Application or any Note; (g) release any Guarantor from any Guaranty (except for
Guarantors sold by the Company or any of its Subsidiaries  pursuant to the terms
of Section  6.4(y)  hereof);  (h)  change the  definition  of  "Majority  Banks"
contained herein (i) modify the requirement of unanimous written approval by the
Banks of any  unilateral  reduction by the Banks of the Aggregate  Commitment as
provided  for in Section 2.2 of the Credit  Agreement;  or (j) waive or postpone
any prepayment  required by Section 2.3(c)(3) of the Credit Agreement.  Anything
in this Section 9.11 to the contrary,  no amendment,  waiver or consent shall be
made with respect to Section 8 without the consent of the Agent.

         9.12.    Successors and Assigns.

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


                  (b) Each Bank may sell  participations to any Person in all or
part of any Loan,  or all or part of its Notes,  the  Letter of Credit  Exposure
Amount or Commitments,  to another bank or other entity, in which event, without
limiting the foregoing,  the  provisions of Sections  2.12,  9.10 and 9.16 shall
inure to the  benefit  of each  purchaser  of a  participation  and the pro rata
treatment of payments,  as described in Section 2.9,  shall be  determined as if
such Bank had not sold such participation.  In the event any Bank shall sell any
participation,  (i) the Company, the Agent and the other Banks shall continue to
deal solely and directly with such selling Bank in connection  with such selling
Bank's rights and obligations under the Loan Documents  (including the Note held
by such  selling  Bank),  (ii)  such  Bank  shall  retain  the  sole  right  and
responsibility  to enforce the obligations of the Company  relating to the Loans
and  Letter of Credit  Exposure  Amount,  including  the  right to  approve  any


<PAGE>

amendment,  modification or waiver of any provision of this Agreement other than
(and then only if expressly permitted by the applicable participation agreement)
amendments,  modifications  or  waivers  with  respect  to (A) any fees  payable
hereunder  to the Banks and (B) the amount of  principal or the rate of interest
payable on, or the dates fixed for the scheduled  repayment of principal of, the
Loans and other sums to be paid to the Banks  hereunder,  and (iii) the  Company
agrees,  to the fullest extent it may  effectively do so under  applicable  law,
that any  participant  of a Bank may  exercise  all rights of set-off,  bankers'
lien, counterclaim or similar rights with respect to such participation as fully
as if such participant were a direct holder of Loans if such Bank has previously
given notice of such participation to the Company.

                  (c) Each  Bank may  assign  to one or more  Banks or  Eligible
Assignees all or a portion of its interests,  rights and obligations  under this
Agreement  (including all or a portion of its Commitment and the same portion of
the related  Loans at the time owing to it, the related Note or Notes held by it
and its Letter of Credit Exposure  Amount) (a "Ratable  Assignment");  provided,
however,  that, (i) the Agent and the Company must give their  respective  prior
written  consent,  which consent will not be  unreasonably  withheld;  provided,
however,  that if a Default or an Event of Default  shall have  occurred  and is
then  continuing,  such consent of the Company  shall not be required;  (ii) the
aggregate  amount of the Commitment,  Loans and Letter of Credit Exposure Amount
(without  duplication)  of the  assigning  Bank subject to each such  assignment
(determined as of the date the Assignment and Acceptance (as defined below) with
respect to such  assignment is delivered to the Agent) shall in no event be less
than $5,000,000 (except for certain  exceptions  approved by the Company and the
Agent) and shall be in an amount  that is an  integral  multiple  of  $1,000,000
(unless  all of the  assigning  Bank's  Commitment,  Loans and  Letter of Credit
Exposure Amount is being assigned); (iii) the aggregate amount of the Commitment
and/or Loans of the assigning  Bank  immediately  after each partial  assignment
must be at least  $5,000,000  (except  for  certain  exceptions  approved by the
Company and the Agent) and shall be in an amount  which is an integral  multiple
of $1,000,000;  and (iv) the parties to each such  assignment  shall execute and
deliver to the Agent,  for its  acceptance  and  recording  in its  records,  an
Assignment  and  Acceptance  in the form of Exhibit H attached  hereto  (each an
"Assignment and Acceptance") with blanks appropriately completed,  together with
any Note or Notes subject to such  assignment and a processing  and  recordation
fee of $2,500  (for  which  the  Company  shall  have no  liability).  Upon such
execution, delivery, acceptance and recording, from and after the effective date
specified in each  Assignment and  Acceptance,  which effective date shall be at
least five Business Days after the execution thereof, unless a shorter period of
time may be agreed to by the Agent in its sole and absolute discretion,  (A) the
assignee  thereunder shall be a party hereto and, to the extent provided in such
Assignment and  Acceptance,  have the rights and obligations of a Bank hereunder
and (B) the Bank thereunder shall, to the extent provided in such assignment, be
released  from its  obligations  under this  Agreement  (and,  in the case of an
Assignment and Acceptance  covering all or the remaining portion of an assigning
Bank's rights and obligations under this Agreement,  such Bank shall cease to be
a party hereto).

                  (d) By executing and delivering an Assignment and  Acceptance,
the Bank assignor  thereunder and the assignee  thereunder  confirm to and agree
with each  other and the other  parties  hereto as  follows:  (i) other than the
representation  and warranty  that it is the legal and  beneficial  owner of the
interest being assigned  thereby free and clear of any adverse claim,  such Bank
assignor makes no representation or warranty and assumes no responsibility  with
respect  to  any  statements,  warranties  or  representations  made  in  or  in
connection  with  any  Loan  Document  or  the  execution,  legality,  validity,
enforceability,  genuineness,  sufficiency  or value of any Loan Document or any
other instrument or document furnished pursuant thereto; (ii) such assignor Bank
makes no representation  or warranty and assumes no responsibility  with respect
to the  financial  condition  of the Company or any of its  Subsidiaries  or the
performance  or observance by the Company of any of its  obligations  hereunder;
(iii) such assignee  confirms that it has received a copy of this  Agreement and
the other Loan  Documents,  together with copies of the financial  statements of
the Company previously delivered in accordance herewith and such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance;  (iv) such assignee will,
independently  and without  reliance  upon the Agent,  such assignor Bank or any
other  Bank and  based  on such  documents  and  information  as it  shall  deem
appropriate at the time,  continue to make its own credit decisions in taking or
not taking  action  under the Loan  Documents;  (v) such  assignee  appoints and
authorizes  the Agent to take such action as agent on its behalf and to exercise
such powers under the Loan  Documents as are delegated to the Agent by the terms
hereof, together with such powers as are reasonably incidental thereto; and (vi)
such  assignee  agrees that it will perform in  accordance  with their terms all
obligations that by the terms of the Loan Documents are required to be performed
by it as a Bank.

<PAGE>

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

                  (f) Upon its receipt of an Assignment and Acceptance  executed
by an assigning Bank and the assignee  thereunder together with the Note subject
to such  assignment,  the written consent to such assignment and the fee payable
in respect thereto,  the Agent shall, if such Assignment and Acceptance has been
completed  with blanks  appropriately  filled,  (i) accept such  Assignment  and
Acceptance,  (ii) record the information  contained  therein in the Register and
(iii) give prompt notice thereof to the Company and the Banks. Contemporaneously
with the receipt by the Company of such Assignment and Acceptance,  the Company,
at its own expense,  shall  execute and deliver to the Agent in exchange for the
surrendered  Note a new Note payable to the order of such  assignee in an amount
equal to the  Commitment,  Loans and Letter of Credit  Exposure  Amount (without
duplication)  assumed by it pursuant to such  Assignment and Acceptance  and, if
the  assigning  Bank has retained  Commitments,  Loans and/or  Letters of Credit
hereunder,  a new Note to the order of the assigning  Bank in an amount equal to
the Commitment,  Loans and/or Letters of Credit  retained by it hereunder.  Such
new Notes  shall be in an  aggregate  principal  amount  equal to the  aggregate
principal amount of such surrendered  Note, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially  the form
of the  surrendered  Note.  Thereafter,  such  surrendered  Note shall be marked
canceled and returned to the Company.


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


                  (h) Each Bank agrees that, in connection  with any  assignment
or  participation  or  proposed  assignment  or  participation  pursuant to this
Section  9.12,  the  Company  will  not be  responsible  for  the  accuracy  and
completeness  of any written  materials  furnished by such Bank to any actual or
prospective  assignee  or  participant,  other  than  copies  of  (i)  documents
furnished  to such Bank  pursuant to clause (a),  (b), (c) or (d) of Section 5.2
hereof,  and (ii) any other  documents which are prepared by the Company for use
in such connection and which contain a statement to such effect.

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


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

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

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

<PAGE>


         9.16.    Capital Adequacy.

                  (a) If after the date of this  Agreement,  any Bank shall have
determined that the adoption or effectiveness  (regardless of whether previously
announced) of any  applicable  Legal  Requirement  or treaty  regarding  capital
adequacy,  or any  change  therein,  or any  change  in  the  interpretation  or
administration  thereof  by any  Governmental  Authority  or  comparable  agency
charged with the interpretation or administration  thereof, or compliance by any
Bank with any request or directive  regarding  capital adequacy  (whether or not
having the force of law) of any such Governmental  Authority,  has or would have
the  effect of  increasing  the cost of, or  reducing  the rate of return on the
capital of such Bank (or any holding  company of which such Bank is a part) as a
consequence  of its  obligations  hereunder or under any Letter of Credit or its
Note to a level  below  that  which  such Bank or  holding  company  could  have
achieved but for such adoption, change or compliance by an amount deemed by such
Bank to be material,  then from time to time, upon written demand to the Company
by such Bank (with a copy to the  Agent),  the  Company  (subject to Section 9.6
hereof) shall pay to such Bank,  but only with respect to periods  arising after
such  demand by such Bank and  applicable  periods  prior to such demand by such
Bank if such adoption, change or compliance is retroactive in application,  such
additional amount or amounts as will compensate such Bank or holding company for
such reduction.

                  (b) The  certificate  of any Bank setting forth such amount or
amounts as shall be necessary to compensate  such Bank or its holding company as
specified in Subsection 9.16(a) above (and setting forth the calculation thereof
in reasonable  detail) shall be delivered as soon as  practicable to the Company
and shall be conclusive and binding,  absent manifest  error.  The Company shall
pay such Bank the amount shown as due on any such  certificate  within five days
after such Bank delivers such certificate.  In preparing such certificate,  such
Bank may employ such  assumptions  and  allocations  of costs and expenses as it
shall in good faith deem  reasonable  and may use any  reasonable  averaging and
attribution method.

         9.17.    Withholding Tax.

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


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


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

                  (b)  If the  Company  is  required  by  any  applicable  Legal
Requirement  to make any deduction or  withholding  for or on account of any Tax
from any payment to be made by it under this Agreement, under the Notes or under
any other Loan Documents,  then the Company shall (i) promptly notify the holder
of Notes  hereunder  that is entitled to such payment of such  requirement to so
deduct or  withhold  such Tax,  (ii) pay to the  relevant  authorities  the full
amount  required to be so deducted or withheld,  (iii) promptly  forward to such
holder an official receipt (or certified copies thereof), or other documentation
reasonably   acceptable  to  such  holder,   evidencing  such  payment  to  such

<PAGE>

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

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

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

                  (e)  Notwithstanding  the  foregoing,  in no event  shall  the
amount  payable  under this  Section 9.17 (to the extent,  if any,  constituting
interest under applicable laws) together with all amounts constituting  interest
under  applicable  laws and payable in  connection  with this  Agreement  or the
Notes,  exceed  the  Highest  Lawful  Rate or the  maximum  amount  of  interest
permitted to be charged by applicable laws.

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

         9.19.  Right of Setoff.  Upon the occurrence and during the continuance
of any Event of Default,  the Banks each are hereby  authorized  at any time and
from time to time,  without notice to the Company or any of the Guarantors  (any
such notice being expressly waived by the Company and by the Guarantors by their
execution of a Guaranty or a Joinder Agreement), to setoff and apply any and all
deposits (general or special,  time or demand,  provisional or final, whether or
not such setoff results in any loss of interest or other penalty,  and including
without  limitation all certificates of deposit) at any time held, and any other
funds or property at any time held, and other  Indebtedness at any time owing by
such  Bank to or for the  credit  or the  account  of the  Company  or any  such
Guarantor  against any and all of the  Indebtedness  arising in connection  with
this  Agreement  irrespective  of  whether  or not such  Bank will have made any
demand under this Agreement,  the Notes or any other Loan Document.  Each of the
Company  and the  Guarantors  (by their  execution  of a  Guaranty  or a Joinder
Agreement)  also hereby  grants to each of the Banks a security  interest in and
hereby  transfers,  assigns,  sets over,  and  conveys to each of the Banks,  as
security for payment of all Loans and Letter of Credit Exposure Amount, all such
deposits, funds or property of the Company or any such Guarantor or Indebtedness
of any Bank to the Company or any such  Guarantor.  Should the right of any Bank
to realize  funds in any  manner set forth  hereinabove  be  challenged  and any
application of such funds be reversed,  whether by court order or otherwise, the
Banks shall make  restitution  or refund to the  Company pro rata in  accordance
with their  respective  Commitment  Percentages.  Each Bank  agrees to  promptly
notify the Company and the Agent after any such setoff and application, provided
that the failure to give such notice will not affect the validity of such setoff
and application. The rights of the Agent and the Banks under this Section are in
addition to other rights and remedies (including without limitation other rights
of setoff) which the Agent or the Banks may have. This Section is subject to the
terms and provisions of Section 2.14 hereof.
<PAGE>


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


                                          WHOLE FOODS MARKET, INC.,
                                          a Texas corporation


                                          By:  /s/  Glenda Flanagan
                                               --------------------
                                               Glenda Flanagan, Secretary

                                          Addresses for Notices:

                                          Whole Foods Market, Inc.
                                          601 N. Lamar Boulevard, Suite 300
                                          Austin, Texas  78703-5413
                                          Attention:  Ms. Glenda Flanagan















<PAGE>


                                CHASE BANK OF TEXAS, NATIONAL  ASSOCIATION,   a
                                national banking association, as a Bank and as
                                Agent

Commitment:                     By:  /s/ Cindy M. Matula
                                     --------------------------
                                     Cindy M. Matula, President
$20,000,000

                                Address for Notices:

                                Chase Bank of Texas,
                                 National Association
                                700 Lavaca, 2nd Floor
                                Post Office Box 550
                                Austin, Texas  78789
                                Attention: Manager/Commercial Lending Group

                                with copies to:

                                Chase Bank of Texas,
                                 National Association
                                1111 Fannin, 9th Floor
                                Houston, Texas  77002
                                Attention: Manager/Loan Syndication Services









<PAGE>



                                WELLS FARGO BANK (TEXAS),  N. A., a national
                                banking association

Commitment:                     By:     /s/ Susan L. Coulter
                                        --------------------
                                Name:   Susan L. Coulter
$20,000,000                     Title:  Vice President

                                Address for Notices:

                                Wells Fargo Bank (Texas), N.A.
                                111 Congress, Suite 300
                                Austin, Texas  78701
                                Attention: Ms. Susan Coulter
















<PAGE>



                                FIRST UNION NATIONAL BANK, a national banking
                                association

Commitment:                     By:  /s/ Randal D. Southern
                                     ----------------------
                                     Randal D. Southern, Vice President
$20,000,000


                                Address for Notices:

                                First Union National Bank
                                1345 Chestnut Street, PA 4821
                                Philadelphia, Pennsylvania  19107
                                Attention:  Mr. Randal D. Southern
                                            and Ms. Irene Marks















<PAGE>



                                     BANKBOSTON, N.A., a national banking
                                     association

Commitment:                           By:   /s/ Judith C.E. Kelly
                                            ---------------------
                                            Judith C.E. Kelly, Vice President
$12,500,000

                                      Address for Notices:

                                      BankBoston, N.A.
                                      100 Federal Street, 01-09-05
                                      Boston, Massachusetts  02110
                                      Attention:  Ms. Judith C.E. Kelly














<PAGE>


                                    GUARANTY FEDERAL BANK, F.S.B.

                                    By:  /s/ Chris D. Harkrider
                                         ----------------------
                                         Chris D. Harkrider, Vice President
Commitment:
$10,000,000
                                    Address for Notices:
                                    Guaranty Federal Bank, F.S.B.
                                    301 Congress Avenue, Suite 1500
                                    Austin, Texas  78701
                                    Attention:  Mr. Jason C. Qunell













<PAGE>


                                 LASALLE BANK NATIONAL ASSOCIATION,
                                 a national banking association


                                 By:  /s/ Thomas J. Ranville
                                      ----------------------
                                      Thomas J. Ranville, First Vice President
Commitment:
$17,500,000

                                 Address for Notices:
                                 LaSalle Bank National Association
                                 125 Ottawa NW, Suite 270
                                 Grand Rapids, Michigan  49503
                                 Attention:  Mr. Thomas J. Ranville












<PAGE>

<TABLE>
<CAPTION>

                         Index to Credit Agreement
                         -------------------------
                                                                                                                Page

<S>                                                                             <C>                              <C>

1.       Definitions..............................................................................................1
         -----------
         1.1.    Certain Defined Terms............................................................................1
                 Accounts.........................................................................................1
                 Adjusted LIBOR Rate..............................................................................1
                 Affiliate 1
                 Aggregate Commitment.............................................................................1
                 Aggregate Unused Commitment......................................................................1
                 Alternate Base Rate..............................................................................2
                 Alternate Base Rate Borrowing....................................................................2
                 Annual Audited Financial Statements..............................................................2
                 Applicable Commitment Fee Percentage.............................................................2
                 Applicable Margin................................................................................3
                 Applications.....................................................................................5
                 Business Day.....................................................................................5
                 Business Entity..................................................................................5
                 Capital Lease Obligations........................................................................5
                 Cash Capital Expenditures........................................................................5
                 Change of Control................................................................................5
                 Beneficially Own.................................................................................5
                 34 Act    5
                 Group     5
                 Unrelated Person.................................................................................5
                 Related Person...................................................................................5
                 Voting Stock.....................................................................................5
                 Chapter One......................................................................................6
                 Closing Fee......................................................................................6
                 Code      6
                 Commitment.......................................................................................6
                 Commitment Fee...................................................................................6
                 Commitment Percentage............................................................................6
                 Consequential Loss...............................................................................6
                 Contingent Obligations...........................................................................7
                 Contribution Agreement...........................................................................7
                 Current Guarantors...............................................................................7
                 Current Ratio....................................................................................7
                 Current Sum......................................................................................7
                 Debt Coverage Ratio..............................................................................7
                 Discontinued Operations..........................................................................8
                 EBITDA    8
                 Eligible Assignee................................................................................8
                 Environmental Claim..............................................................................8
                 Environmental Liabilities........................................................................8
                 Environmental Permit.............................................................................9
                 Equipment 9
                 ERISA     9
                 LIBOR Business Day...............................................................................9
                 London Interbank Rate............................................................................9
                 LIBOR Interest Period............................................................................9
                 LIBOR Rate......................................................................................10
                 LIBOR Rate Borrowing............................................................................10
                 Eurocurrency Reserve Requirement................................................................10
                 Event of Default................................................................................10

<PAGE>

                 Excess Interest Amount..........................................................................11
                 Extension Approval..............................................................................11
                 Extension Request...............................................................................11
                 Extension Request Periods.......................................................................11
                 FDIC Percentage.................................................................................11
                 Federal Funds Rate..............................................................................11
                 Fixed Charge Coverage Ratio.....................................................................11
                 Funded Indebtedness.............................................................................11
                 Generally Accepted Accounting Principles........................................................12
                 Governmental Authority..........................................................................12
                 Guaranties......................................................................................12
                 Guarantors......................................................................................12
                 Hazardous Substance.............................................................................12
                 Highest Lawful Rate.............................................................................12
                 Incidental Liens................................................................................13
                 Indebtedness....................................................................................13
                 Interest Option.................................................................................14
                 Interest Payment Dates..........................................................................14
                 Investment......................................................................................14
                 Issuer    14
                 Joinder Agreement...............................................................................14
                 Legal Requirement...............................................................................14
                 Letter of Credit Advances.......................................................................14
                 Letter of Credit Exposure Amount................................................................14
                 Letter of Credit Fee Payment Date...............................................................14
                 Letter of Credit Termination Date...............................................................15
                 Letters of Credit...............................................................................15
                 Leverage Ratio..................................................................................15
                 Lien      15
                 Loan Documents..................................................................................15
                 Loans     15
                 Majority Banks..................................................................................15
                 Maturity Date...................................................................................15
                 Net Income......................................................................................15
                 Notes     16
                 Notice of Assumption............................................................................16
                 Officer's Certificate...........................................................................16
                 Organizational Documents........................................................................16
                 Parties   16
                 Past Due Rate...................................................................................16
                 Permitted Asset Dispositions....................................................................16
                 Permitted Investment Securities.................................................................16
                 Permitted Stock Dispositions....................................................................16
                 Person    17
                 Plan      17
                 Prime Rate......................................................................................17
                 Principal Office................................................................................17
                 Principal Payment Date..........................................................................17
                 Proper Form.....................................................................................17
                 Property  17
                 Quarterly Unaudited Financial Statements........................................................17
                 Rate Selection Date.............................................................................18
                 Rate Selection Notice...........................................................................18
                 Reference Bank..................................................................................18
                 Regulation D....................................................................................18
                 Regulatory Change...............................................................................18
                 Request for Extension of Credit and Certificate of No Default...................................18

<PAGE>

                 Requirements of Environmental Law...............................................................18
                 Rolling Four Quarters...........................................................................18
                 Stated Rate.....................................................................................19
                 Stock     19
                 Subsidiary......................................................................................19
                 Tangible Net Worth..............................................................................19
                 Tangible Net Worth Floor........................................................................19
                 Tangible Net Worth Floor Adjustment.............................................................19
                 Taxes     19
                 Termination Date................................................................................20
                 Unsecured Borrowed Debt.........................................................................20
                 Unused Commitment...............................................................................20
         1.2.    Accounting Terms and Determinations.............................................................20

2.       Loans; Letters of Credit; Payments; Prepayments; Interest Rates.........................................21
         ---------------------------------------------------------------
         2.1.    Loans...........................................................................................21
         2.2.    Commitment Fees; Termination and Reductions.....................................................22
         2.3.    Mandatory Prepayments...........................................................................22
         2.4.    Letters of Credit...............................................................................23
         2.5.    Amortization of Notes...........................................................................27
                 Amortized Principal.............................................................................27
         2.6.    Payments........................................................................................27
         2.7.    Prepayments of Loans............................................................................27
         2.8.    Application of Payments and Prepayments.........................................................29
         2.9.    Pro Rata Treatment..............................................................................29
         2.10.   Interest Payment Dates on the Loans.............................................................30
         2.11.   Interest Options for Loans......................................................................30
         2.12.   Special Provisions Applicable to LIBOR Rate Borrowings..........................................31
         2.13.   Recapture.......................................................................................34
         2.14.   Payment Dates...................................................................................35
         2.15.   Sharing of Payments, Etc........................................................................35

3.       Conditions..............................................................................................35
         ----------
3.1.     All Loans...............................................................................................35
         3.2.    First Loan......................................................................................36

4.       Representations and Warranties..........................................................................37
         ------------------------------
         4.1.    Organization....................................................................................37
         4.2.    Financial Statements............................................................................38
         4.3.    Enforceable Obligations; Authorization..........................................................38
         4.4.    Other Debt......................................................................................38
         4.5.    Litigation......................................................................................38
         4.6.    Title...........................................................................................38
         4.7.    Taxes...........................................................................................39
         4.8.    Subsidiaries....................................................................................39
         4.9.    Representations by Others.......................................................................39
         4.10.   Permits, Licenses, Etc..........................................................................39
         4.11.   ERISA...........................................................................................39
         4.12.   Condition of Property...........................................................................39
         4.13.   Assumed Names...................................................................................39
         4.14.   Investment Company Act..........................................................................40
         4.15.   Public Utility Holding Company Act..............................................................40
                 PUHCA...........................................................................................40
         4.16.   Agreements......................................................................................40
         4.17.   Environmental Matters...........................................................................40


<PAGE>

5.       Affirmative Covenants...................................................................................41
         ---------------------
         5.1.    Taxes, Existence, Regulations, Property, Etc....................................................41
         5.2.    Financial Statements and Information............................................................41
         5.3.    Financial Tests.................................................................................42
         5.4.    Inspection......................................................................................42
         5.5.    Further Assurances..............................................................................42
         5.6.    Books and Records...............................................................................42
         5.7.    Insurance.......................................................................................42
         5.8.    ERISA...........................................................................................42
         5.9.    Use of Proceeds.................................................................................43
                 Reg U     43
         5.10.   Additional Guaranties...........................................................................43
         5.11.   Notice of Events................................................................................43
         5.12.   Environmental Matters...........................................................................44
         5.13.   End of Fiscal Years and Fiscal Quarters.........................................................44

6.       Negative Covenants......................................................................................44
         ------------------
         6.1.    Indebtedness....................................................................................44
         6.2.    Liens...........................................................................................46
         6.3.    Contingent Obligations..........................................................................47
         6.4.    Mergers, Consolidations and Dispositions and Acquisitions of Assets.............................47
                 Permitted Asset Disposition.....................................................................48
                 Permitted Stock Disposition.....................................................................48
         6.5.    Nature of Business..............................................................................48
         6.6.    Management......................................................................................48
         6.7.    Transactions with Related Parties...............................................................49
         6.8.    Loans and Investments...........................................................................49
         6.9.    ERISA Compliance................................................................................49
         6.10.   Credit Extensions...............................................................................50
         6.11.   Change in Accounting Method.....................................................................50
         6.12.   Redemption, Dividends and Distributions.........................................................50
         6.13.   Capital Expenditures............................................................................50

7.       Events of Default and Remedies..........................................................................50
         ------------------------------
         7.1.    Events of Default...............................................................................50
         7.2.    Remedies Cumulative.............................................................................53

8.       The Agent and the Issuer................................................................................53
         ------------------------
         8.1.    Appointment, Powers and Immunities..............................................................53
         8.2.    Reliance........................................................................................54
         8.3.    Defaults........................................................................................54
         8.4.    Rights as a Bank................................................................................54
         8.5.    Indemnification.................................................................................55
         8.6.    Non-Reliance on Agent and Other Banks...........................................................55
         8.7.    Failure to Act..................................................................................55
         8.8.    Resignation or Removal of Agent.................................................................56

9.       Miscellaneous...........................................................................................56
         -------------
         9.1.    No Waiver.......................................................................................56
         9.2.    Notices.........................................................................................56
         9.3.    Governing Law...................................................................................57
         9.4.    Survival; Parties Bound.........................................................................57
         9.5.    Counterparts....................................................................................57
         9.6.    Limitation of Interest..........................................................................57
         9.7.    Survival........................................................................................58
         9.8.    Captions........................................................................................58
         9.9.    Expenses, Etc...................................................................................58
         9.10.   Indemnification.................................................................................59
         9.11.   Amendments, Etc.................................................................................60
         9.12.   Successors and Assigns..........................................................................60
                 Ratable Assignment..............................................................................61
                 Assignment and Acceptance.......................................................................61
         9.13.   Entire Agreement................................................................................63
         9.14.   Severability....................................................................................63
         9.15.   Disclosures.....................................................................................63
         9.16.   Capital Adequacy................................................................................63
         9.17.   Withholding Tax.................................................................................64
                 Indemnifiable Tax...............................................................................64
                 Tax       65
         9.18.   Waiver of Claims................................................................................66
         9.19.   Request for Extension...........................................................................66
         9.20.   Right of Setoff.................................................................................67
</TABLE>



<PAGE>




EXHIBITS
--------

A      -     Note Form (ss.1.1)
B      -     Notice of Assumption (ss.1.1)
C      -     Officer's Certificate (ss.1.1)
D      -     Request for Extension of Credit
             and Certificate of No Default (ss.1.1)
E      -     Rate Selection Notice (ss.2.11[b][1])
F      -     Secretary's Certificate (ss.3.2[b])
G      -     Form of Guarantors' Secretary's Certificates (ss.3.2[d])
H      -     Assignment and Acceptance (ss.9.12[c])
I      -     Extension Approval Form (ss.1.1)
J      -     Extension Request Form (ss.1.1)


SCHEDULES
---------

I      -     List of Existing Liens (ss.4.6),
             List of Existing Liabilities (ss.4.16),
             Other Permitted Liabilities (ss.6.1)
II     -     List of Subsidiaries (ss.4.8)
III    -     Assumed Names (ss.4.13)



<PAGE>




                              AMENDED AND RESTATED
                                CREDIT AGREEMENT
                    ($100,000,000 Revolving Credit Facility)

                              made and entered into
                               as of June 28, 1999
                                  by and among

                            WHOLE FOODS MARKET, INC.,
                              a Texas corporation,

                   EACH OF THE FINANCIAL INSTITUTIONS WHICH IS
                              A SIGNATORY HERETO OR
                           WHICH MAY FROM TIME TO TIME
                             BECOME A PARTY HERETO,

                                       and

                   CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
                         a national banking association
                    as Agent for such Financial Institutions



<PAGE>



                                 Houston, Texas
$
 _____________________________________                         _________, 1999

         FOR VALUE RECEIVED, WHOLE FOODS MARKET, INC. (herein called "Company"),
a    Texas    corporation,     promises    to    pay    to    the    order    of
_______________________________________  (herein  called  "Payee"),  a  national
banking  association,  at the  banking  house of CHASE  BANK OF TEXAS,  NATIONAL
ASSOCIATION,  a national  banking  association  acting in its  capacity as Agent
under the Credit Agreement  (together with its successors in such capacity being
herein called "Agent"), at 712 Main Street in the City of Houston,  Texas, or at
such other place as the Agent may hereafter designate in writing, in immediately
available  funds and in  lawful  money of the  United  States  of  America,  the
principal sum of Dollars ($ ) (or the unpaid  balance of all principal  advanced
against this note, if that amount is less), together with interest on the unpaid
principal  balance of this note from time to time outstanding  until maturity at
the rate or rates provided for in the Credit  Agreement and interest on all past
due  amounts,  both  principal  and  accrued  interest,  at the Past  Due  Rate;
provided,  that for the full term of this note the interest rate produced by the
aggregate  of all sums paid or agreed to be paid to the  holder of this note for
the use,  forbearance or detention of the debt evidenced hereby shall not exceed
the Highest Lawful Rate.

         If, for any reason whatever, the interest paid or received on this note
during its full term produces a rate which exceeds the Highest  Lawful Rate, the
holder of this note shall refund to the payor or, at the holder's option, credit
against the  principal  of this note such  portion of said  interest as shall be
necessary to cause the interest paid on this note to produce a rate equal to the
Highest  Lawful  Rate.  All sums paid or agreed to be paid to the holder of this
note for the use, forbearance or detention of the indebtedness  evidenced hereby
shall,  to the extent  permitted  by  applicable  law, be  amortized,  prorated,
allocated  and spread in equal parts  throughout  the full term of this note, so
that the interest rate is uniform throughout the full term of this note.

         This  note has been  issued  pursuant  to the terms of an  Amended  and
Restated  Credit  Agreement  (which,  as it may  have  been  or may be  amended,
restated,  modified  or  supplemented  from time to time,  is herein  called the
"Credit  Agreement")  of even  effective  date  herewith,  by and among Company,
Agent, Payee and certain other signatory financial institutions named therein or
which may be a party thereto from time to time,  to which  reference is made for
all  purposes.  Advances  against  this  note by Payee or other  holder  hereof,
payments and prepayments  hereunder and acceleration hereof shall be governed by
the Credit Agreement.  Capitalized words and phrases used herein and not defined
herein  and  which are  defined  in the  Credit  Agreement  shall  have the same
meanings herein as are ascribed to them in the Credit Agreement.

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

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

                                        SIGNED FOR IDENTIFICATION:
                                        WHOLE FOODS MARKET, INC.
                                        a Texas corporation

                                        By:    ______________________________
                                        Name:  ______________________________
                                        Title: ______________________________






                                Page 1 of 3 Pages

<PAGE>


                                    EXHIBIT A

         This note shall be governed by and  construed  in  accordance  with the
laws of the State of Texas and the United States of America from time to time in
effect.  Travis County,  Texas shall be a proper place of venue for suit hereon.
Company  and  any  and  all  co-makers,   endorsers,   guarantors  and  sureties
irrevocably agree that any legal proceedings in respect of this note or any loan
agreement,  security agreement,  guaranty or other writing relating hereto shall
be brought in the district courts of Travis County,  Texas, or the United States
District Court for the Western District of Texas, Austin Division.

                                            WHOLE FOODS MARKET, INC.
                                            a Texas corporation


                                            By:    ____________________________
                                            Name:  ____________________________
                                            Title: ____________________________







                               Page 2 of 3 Pages

<PAGE>


                                EXHIBIT B

                              NOTICE OF ASSUMPTION


     Reference is made to that certain  Amended and  Restated  Credit  Agreement
dated as of  ________ , 1999,  by and among Whole Foods  Market,  Inc.,  certain
financial  institutions  from time to time a party  thereto  and  Chase  Bank of
Texas,  National  Association,  in its  capacity  as  agent  on  behalf  of said
financial institutions,  as the same may have heretofore been amended, restated,
modified  and  supplemented  from  time  to  time  (collectively,   the  "Credit
Agreement").  Terms  used  herein  and not  defined  herein  shall have the same
meanings herein as are ascribed to them in the Credit Agreement.

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

         EXECUTED the  _______ day of  ______________, ________________.






By:     _________________________
Name:   _________________________
Title:  _________________________


[Attachment:  Exhibit A - List of Merged Guarantors]




<PAGE>




                                    EXHIBIT C


                              OFFICER'S CERTIFICATE

                                     Date:

[Name and address of Bank
  or Agent, as the case may be]

Attention:  __________________


     Re:  Financial  Statements  Required  under  Amended  and  Restated  Credit
          Agreement  (as the same may have been  amended,  modified and restated
          from time to time, the "Credit  Agreement") dated as of _____________,
          1999,  by  and   among   Whole  Foods  Market,  Inc.,  the   financial
          institutions  or party  thereto  from time to time and  Chase  Bank of
          Texas, National Association, as Agent

Gentlemen:

         Capitalized  words and phrases  used herein and not defined  herein and
defined in the Credit  Agreement  are used herein with the same  meanings as are
assigned to them in the Credit Agreement.

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

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


     (2)  The attached financial  statements dated as of  ________________  were
          prepared in conformity with Generally Accepted  Accounting  Principles
          consistently  applied and present fairly the financial position of the
          Company and its  Subsidiaries  on a consolidated  basis as of the date
          thereof  and the  results of its  operations  for the  period  covered
          thereby.

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

          (a)  LEVERAGE RATIO:

               (i)  Funded Indebtedness:                $_______________











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


<PAGE>

<TABLE>

<S>                        <C>      <C>                                         <C>
                           (ii)     EBIT of
                                    the Company and its
                                    Subsidiaries for the
                                    Rolling Four Quarters:                      $ _________

                           (iii)    Depreciation, depletion,
                                    obsolescence and
                                    amortization of the
                                    Company and its  Sub-
                                    sidiaries for the Rolling
                                    Four Quarters:                              $ _________

                           (iv)     EBITDA for the Rolling
                                    Four Quarters [the sum
                                    of (ii) plus (iii)]:                        $ _________

                           (v)      Required Leverage Ratio
                                    (not more than):                                                   3.00 to 1.00

                           (vi)     Actual Leverage Ratio:                                             ____ to 1.00
                                    [(i) to (iv)]

                  (b)      FIXED CHARGE COVERAGE RATIO:

                           (i)      EBIT for the Rolling Four
                                    Quarters [see a(ii) above]:                 $ _________

                           (ii)     Operating Lease Expense for
                                    the Rolling Four Quarters:                  $ _________

                           (iii)    (i) plus (ii) =                             $ _________

                           (iv)     Interest expense for
                                    the Rolling Four
                                    Quarters:                                   $ _________

                           (v)      Operating Lease
                                    Expense for the
                                    Rolling Four
                                    Quarters:                                   $ _________

                           (vi)     Fixed Charge Coverage
                                    Ratio [(iii) to the sum
                                    of (iv) and (v)]:                                                  ____ to 1.00

                           (vii)    Required Fixed Charge
                                    Coverage Ratio for the
                                    Rolling Four Quarters
                                    (not less than):                                                   1.50 to 1.00

         (4)      Based on 3(a)(vi) above:

                  (a)      Applicable Commitment Fee Percentage is ______ %; and

                  (b) Applicable Margin for LIBOR Rate Borrowings is _____%.



                                     Page 2


</TABLE>


<PAGE>


         (5)      (Check either (a) or (b))

                    [ ]  (a) The Company  has  kept,  observed,  performed  and
                         fulfilled each and every one of its  obligations  under
                         the Credit  Agreement  during the period covered by the
                         attached financial statements.

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

                                              __________________________________
                                              Name:  ___________________________










                                     Page 3


<PAGE>


                                   EXHIBIT D


                              [Company Letterhead]

                         REQUEST FOR EXTENSION OF CREDIT
                          AND CERTIFICATE OF NO DEFAULT

                                     Date:


Chase Bank of Texas,
  National Association
712 Main Street
Houston, Texas 77002

Attention:

     Re:  Loan  under  Amended  and  Restated  Credit   Agreement  dated  as  of
          ______________,  1999, by and among Whole Foods Market,  Inc., a Texas
          corporation,  the financial  institutions a party thereto from time to
          time,  and  Chase  Bank of Texas,  National  Association,  a  national
          banking  association,  as Agent  (as the same may have  been  amended,
          modified and/or restated from time to time, the "Credit Agreement")

Gentlemen:

     Capitalized  words and phrases used herein but not defined herein which are
defined in the Credit  Agreement  are used herein with the same  meanings as are
ascribed to them in the Credit Agreement.

     The Company  requests that a Loan be made under the Credit Agreement in the
amount of $___________ and that such Loan be made on ________, 19__ , which is a
Business  Day, or in the case of a LIBOR Rate  Borrowing,  a LIBOR  Business Day
(unless  this  request  for a Loan is  received by the Agent after 12:00 noon in
which case,  then on the next to occur  Business  Day, or in the case of a LIBOR
Rate Borrowing, the next to occur LIBOR Business Day, hereafter).

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

     [The Company further  requests that  simultaneously  with the making of the
Loan described above, the current LIBOR Rate Borrowing which matures on the same
day that said Loan is to be made (i) be converted to a LIBOR Rate Borrowing with
the same  Interest  Period  selected  for such  Loan  and (ii)  have its  unpaid
principal balance be combined with the new Loan so that the aggregate thereof is
treated  as a  single  LIBOR  Rate  Borrowing  for  the  LIBOR  Interest  Period
designated  for the new Loan  above and for all  other  purposes  in the  Credit
Agreement.]

     [The Company further  requests that  simultaneously  with the making of the
Loan described  above, a portion of the current  Alternate Rate Borrowing in the
amount of  $___________  be  converted to a LIBOR Rate  Borrowing  with the same
LIBOR  Interest  Period  selected  for such  Loan and that such  portion  of the
Alternate  Base Rate and the new Loan be combined  and treated as a single LIBOR
Rate Borrowing for the LIBOR Interest Period  designated  above for all purposes
in the Credit Agreement.]

               The Company hereby represents and warrants as follows:

          (i)  each  representation  or warranty of the Company contained in the
               Credit  Agreement is true in all  material  respects on and as of
               the  date   hereof   with  the  same   effect  as   though   such
               representations and warranties had been made on and of this date;


<PAGE>


               (ii)       no  Event of  Default  or  Default  under  the  Credit
                          Agreement has occurred and is still continuing (except
                          for any event of  default  or  default  which may have
                          been expressly waived in writing by the Banks);

               (iii)      the Company is  not  in default in the due performance
                          of any covenant on its part in the Credit Agreement;

               (iv)       so far as is  known  to or is  ascertainable  after  a
                          reasonable and diligent  investigation by the officers
                          of the Company and its Subsidiaries,  the business and
                          operations of the Company and all of its  Subsidiaries
                          as conducted at all times relevant to the transactions
                          contemplated by the Credit  Agreement to and including
                          the close of business on the date hereof have been and
                          are  in   compliance   with   all   applicable   Legal
                          Requirements  materially  affecting  the  business and
                          operations  of the Company and its  Subsidiaries  on a
                          consolidated basis.

     The  undersigned  person  executing this Request for Extension of Credit on
behalf of the Company is the duly elected, qualified and acting * _________ .

                                   WHOLE FOODS MARKET, INC., a Texas corporation


                                   By:   ________________________________
                                   Name: ________________________________
                                   Title:________________________________


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

                              RATE SELECTION NOTICE
                              ---------------------

     Whole  Foods  Market,   Inc.,  a  Texas   corporation,   certain  financial
institutions  signatory  thereto  (collectively,  the "Banks") and Chase Bank of
Texas, National Association, a national banking association, as agent for and on
behalf of the Banks,  executed and delivered  that certain  Amended and Restated
Credit Agreement (as amended, supplemented and restated, the "Credit Agreement")
dated as of  _______________,  1999.  Any term  used  herein  and not  otherwise
defined  herein  shall  have the  meaning  herein  ascribed  to it in the Credit
Agreement.

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

A.       Current borrowing

         1.       Interest Option now in effect:               ___________

         2.       Amount:                                     $___________

         3.       Expiration of current Interest
                    Period, if applicable:                       ________, 199__

B.       Proposed borrowing

         1.       Amount:                                     $___________

         2.       Date Interest Option is to
                    be effective:                                ________, 199__

         3. Interest Option to be applicable (check one):

                  [  ]     Alternate Base Rate
                  [  ]     LIBOR Rate

         4. LIBOR Interest Period (check one if applicable):

                  [  ]     1 month                   [  ]     3 months
                  [  ]     2 months                  [  ]     6 months


                                     Page 2


<PAGE>

                                    EXHIBIT E

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

                                   WHOLE FOODS MARKET, INC., a Texas corporation


                                   By:      ___________________________________
Date:  ____________, 199___        Name:    ___________________________________
                                   Title:   ___________________________________*





















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


                                     Page 3

<PAGE>


                                    EXHIBIT F

                             SECRETARY'S CERTIFICATE


     I, the undersigned, do hereby certify that I am the duly elected and acting
Secretary of WHOLE FOODS MARKET, INC. (the "Corporation"),  a Texas corporation;
that, by unanimous  written  consent by all members of the Board of Directors of
the Corporation,  the following  resolutions  have been duly adopted;  that said
resolutions  have been recorded in the minute books of the  Corporation  kept by
me, are in accord with and  pursuant to the  Certificate  of  Incorporation  and
Bylaws  of the  Corporation,  have not been  amended,  modified,  superseded  or
revoked, and are now in full force and effect, to-wit:

     RESOLVED:  That this Corporation  enter into an Amended and Restated Credit
     Agreement  with  such  financial  institutions  (together  with  all  other
     financial  institutions  which may become a party  thereto  pursuant to the
     terms of the Credit  Agreement,  the  "Banks" and each of the Banks being a
     "Bank herein) as the officer of this Corporation  executing the same may in
     his or her  discretion  approve,  and with  CHASE  BANK OF TEXAS,  NATIONAL
     ASSOCIATION,  a national banking association,  in its capacity as Agent for
     and on behalf of the Banks (in such capacity,  the "Agent"),  substantially
     in the form of the draft of  ________ , 1999,  presented  to this  meeting,
     together with such changes as the officer of this Corporation executing the
     same may in his or her discretion approve, such Credit Agreement,  together
     with such changes, being herein called the "Credit Agreement";

     RESOLVED,  FURTHER: That pursuant to the Credit Agreement, this Corporation
     execute  and deliver to each Bank a  promissory  note (each a "Note") in an
     original  principal amount equal to such Bank's Commitment (as that term is
     defined in the Credit  Agreement),  payable to the order of such Bank, such
     Note to bear interest on the unpaid principal  balance thereof at the rates
     provided  in the  Credit  Agreement,  this  Corporation  to have the  right
     pursuant to the terms of the Credit Agreement to borrow, repay and reborrow
     prior  to the  Maturity  Date  (as  that  term  is  defined  in the  Credit
     Agreement), with accrued interest on each Note being due and payable on the
     dates set forth in the Credit Agreement;

     RESOLVED,  FURTHER: That pursuant to the Credit Agreement, this corporation
     enter with the  guarantors  under the Credit  Agreement into a Contribution
     Agreement  (the  "Contribution  Agreement")  of even date  with the  Credit
     Agreement,  pursuant to which this Corporation agrees,  among other things,
     to indemnify each  guarantor from time to time a party thereto  against any
     losses incurred  thereby under the guaranty being executed thereby pursuant
     to the Credit Agreement;

     RESOLVED,  FURTHER: That the Credit Agreement,  each Note, the Contribution
     Agreement,  and other instruments as the Agent and the Banks may reasonably
     require  in  connection  with  the  same  shall  be in form  and  substance
     satisfactory to the Agent and the Banks and in form and substance  approved
     by the officer of this Corporation  executing the same, his or her approval
     of each such  instrument  to be  conclusively  evidenced  by the  execution
     thereof;

     RESOLVED,  FURTHER:  That the Chief Executive Officer,  the President,  any
     Vice President,  the Treasurer,  any Assistant Treasurer,  the Secretary or
     any Assistant Secretary of this Corporation be and each acting alone hereby
     is severally  authorized and directed for and on behalf, and as the act and
     deed, of this Corporation to execute and deliver to the Agent and the Banks
     the Credit Agreement,  each Note (including,  without limitation,  each new
     Note executed from time to time  hereafter,  as  contemplated in the Credit
     Agreement),  the Contribution  Agreement and such other  instruments as the
     Agent or any Bank may require in its sole and  absolute  discretion  and to
     take  such  other  action in the  consummation  of the  transaction  herein
     contemplated as the officer acting shall deem to be necessary or desirable,
     and any and all acts heretofore taken by the Chief Executive  Officer,  the
     President,  any Vice President, the Treasurer, any Assistant Treasurer, the
     Secretary or any Assistant  Secretary of this  Corporation  to such end are
     hereby  expressly  ratified  and  confirmed  as the acts and  deeds of this
     Corporation; and


                                     Page 1

<PAGE>


     RESOLVED,  FURTHER:  That the Chief Executive Officer,  the President,  any
     Vice President,  the Treasurer,  any Assistant Treasurer,  the Secretary or
     any Assistant Secretary of this Corporation be and each acting alone hereby
     is severally  authorized and directed for and on behalf, and as the act and
     deed, of this  Corporation to negotiate and agree to on terms acceptable to
     such officer any and all renewals, extensions, increases, modifications and
     amendments to the Credit Agreement,  any Note, the Contribution  Agreement,
     or  any  other  document  executed  in  connection  with  the  transactions
     contemplated  in any of the  foregoing,  and to execute  and deliver to the
     Agent and the Banks such  documents as the Agent or any Bank shall  require
     to  evidence  any  such  renewal,  extension,  increase,   modification  or
     amendment  and  to  take  such  other  action  in the  consummation  of the
     transactions  therein  contemplated  as the officer acting shall deem to be
     necessary or desirable.

     I further  certify  that_________________  is a duly elected and  incumbent
______________of  the  Corporation,  that his true and correct  signature is set
forth  below  and that the seal  affixed  hereto  is the  authentic  seal of the
Corporation:


                                        ____________________________.
                                       (Signature of  ______________)




     I further  certify that attached  hereto as Annex I is a true,  correct and
complete copy of the Certificate of Incorporation  of the Corporation,  together
with all  amendments  thereto;  and that attached  hereto as Annex II is a true,
correct and complete  copy of the Bylaws of the  Corporation,  together with all
amendments thereto.

     IN TESTIMONY  WHEREOF,  I have hereunto  subscribed my name by order of the
Board of Directors thereof on this ___ day of _____________ , 1999.



                                            ___________________________________
                                            Name:  ____________________________

[SEAL]

     I do hereby  certify that I am the duly  elected and acting  ______________
[Vice President] of Whole Foods Market,  Inc. and that  ____________ is the duly
elected and acting Secretary of Whole Foods Market, Inc.


                                             __________________________________
                                             Name:  ___________________________




                                     Page 2


<PAGE>


                                    EXHIBIT G

                             SECRETARY'S CERTIFICATE


     I, the undersigned,  do hereby certify that I am the duly elected Secretary
of each of the  corporations  listed on Annex I attached hereto and incorporated
herein by reference for all purposes (collectively,  the "Corporations");  that,
by unanimous written consent by all members of the Board of Directors of each of
the Corporations,  the following  resolutions have been duly adopted;  that said
resolutions  have been recorded in the minute books of each of the  Corporations
kept by me, are in accord with and pursuant to the corporate  charter and Bylaws
of each of the  Corporations,  have not been  amended,  modified,  superseded or
revoked, and are now in full force and effect, to-wit:

     RESOLVED: That this Corporation, jointly and severally, execute and deliver
     to  CHASE  BANK  OF  TEXAS,  NATIONAL   ASSOCIATION,   a  national  banking
     association,  in its capacity as Agent (in such  capacity,  the "Agent") on
     behalf of the Banks (as that term is hereafter  defined),  a guaranty  (the
     "Guaranty")  whereby  this  Corporation  jointly and  severally  guarantees
     payment  of any and all  indebtedness  of WHOLE  FOODS  MARKET,  INC.  (the
     "Company"),  a  Texas  corporation,  to the  Banks  and  the  Agent  now or
     hereafter  existing,  arising  out of or in  connection  with that  certain
     Amended and  Restated  Credit  Agreement  executed or to be executed by and
     among the  Company,  the Agent and such  financial  institutions  which the
     Company  and the Agent may approve or which  otherwise  may be made a party
     thereto pursuant to the terms thereof  (collectively,  the "Banks"), as the
     same  may  be  amended,   supplemented   or  restated  from  time  to  time
     (collectively,  the "Credit  Agreement") and under the Notes (as defined in
     the Credit  Agreement);  the  Guaranty to cover  interest on the  principal
     amount of said  indebtedness and all expenses of the Agent and the Banks in
     collecting  said  indebtedness  or enforcing  the  Guaranty,  or both,  and
     certain other costs and expenses more fully described in the Guaranty;

     RESOLVED,  FURTHER:  That this Corporation  enter with the other guarantors
     (together with any other party which becomes a guarantor under the Guaranty
     from time to time,  the  "Other  Guarantors"),  under the  Guaranty  into a
     Contribution  Agreement (the "Contribution  Agreement")  pursuant to which,
     among  other  things,  this  Corporation  agrees to pay to any of the Other
     Guarantors  on  which  demand  for  payment  of  any  of  the  indebtedness
     guaranteed  by the Guaranty and payment has been made,  this  Corporation's
     Proportionate  Share (as  defined  in the  Contribution  Agreement)  of the
     payment made under the Guaranty by such Other Guarantor;


     RESOLVED,  FURTHER:  That  the  form  and  content  of  the  Guaranty,  the
     Contribution  Agreement and the Notice be substantially in the forms of the
     drafts of , 1999, submitted to this meeting,  together with such changes as
     the  officer  of this  Corporation  executing  the  same  may in his or her
     discretion, approve;

     RESOLVED, FURTHER: That the execution and delivery of the Guaranty, and the
     Contribution   Agreement  will  benefit,   directly  or  indirectly,   this
     Corporation and its shareholders;

     RESOLVED,  FURTHER: That the Guaranty, the Contribution Agreement and other
     instruments as the Agent and the Banks may reasonably require in connection
     with  the  Guaranty  and the  Contribution  Agreement  shall be in form and
     substance satisfactory to the Agent and the Banks and in form and substance
     approved by the officer of this Corporation  executing the same, his or her
     approval  of each  such  instrument  to be  conclusively  evidenced  by the
     execution thereof; and

     RESOLVED,  FURTHER:  That the Chief Executive Officer,  the President,  any
     Vice President,  the Treasurer,  any Assistant Treasurer,  the Secretary or
     any Assistant Secretary of this Corporation be and each acting alone hereby
     is severally  authorized and directed for and on behalf, and as the act and
     deed, of this Corporation to execute and deliver to the Agent and the Banks
     said  Guaranty,  Contribution  Agreement and such other  instruments as the


                                     Page 1

<PAGE>

     Agent and the  Banks may  require,  and to take  such  other  action in the
     consummation of the transaction  herein  contemplated as the officer acting
     shall deem necessary or desirable, and any and all acts heretofore taken by
     the  Chief  Executive  Officer,  the  President,  any Vice  President,  the
     Treasurer,   any  Assistant  Treasurer,  the  Secretary  or  any  Assistant
     Secretary of this Corporation to such end are hereby expressly ratified and
     confirmed as the acts and deeds of this Corporation; and

     RESOLVED,  FURTHER:  That the Chief Executive Officer,  the President,  any
     Vice President,  the Treasurer,  any Assistant Treasurer,  the Secretary or
     any Assistant Secretary of this Corporation be and each acting alone hereby
     is severally  authorized and directed for and on behalf, and as the act and
     deed, of this  Corporation to negotiate and agree to on terms acceptable to
     such officer any and all renewals, extensions, increases, modifications and
     amendments  to the  Guaranty  the  Contribution  Agreement,  or  any  other
     document  executed in connection with the transactions  contemplated in any
     of the  foregoing,  and to execute  and  deliver to the Agent and the Banks
     such  documents as the Agent or any Bank shall require to evidence any such
     renewal,  extension,  increase,  modification or amendment and to take such
     other action in the consummation of the transactions  therein  contemplated
     as the officer acting shall deem to be necessary or desirable.

     I  further  certify  that__________  is  the  duly  elected  and  incumbent
_____________  of the Corporation,  that the true and correct  signature of such
officer is as set forth below:

                            ______________________ .

     I further certify that true, correct and complete copies of the Certificate
of Incorporation and Articles of Incorporation of the Corporation, together with
all amendments thereto have been delivered, or simultaneously herewith are being
delivered,  to Chase Bank of Texas,  National  Association,  as Agent; and true,
correct and complete copies of the Bylaws of the Corporation,  together with all
amendments  thereto have been delivered,  or  simultaneously  herewith are being
delivered, to Chase Bank of Texas, National Association, as Agent.

     IN WITNESS  WHEREOF,  I have  hereunto  subscribed  my hand by order of the
Board of Directors of the Corporation thereof on this day of ___________, 1999.


                                         _____________________________________
                                         Name: _______________________________




                                     Page 2

<PAGE>



           I do hereby  certify that I am the duly elected and acting of each of
the corporations  listed on Annex I attached hereto,  and that is a duly elected
and acting  _________________  Secretary of each of the  corporations  listed on
Annex I attached hereto.

                                         ______________________________________
                                         Name: ________________________________
















                                     Page 3

<PAGE>
                                    EXHIBIT H

                            ASSIGNMENT AND ACCEPTANCE

                            Dated: ___________ , 199


           Reference is made to the Amended and Restated Credit  Agreement dated
as of __________________, 1999 (as restated, amended, modified, supplemented and
in effect from time to time, the "Credit Agreement"),  among Whole Foods Market,
Inc., a Texas corporation (the "Company"),  the financial institutions from time
to time a party thereto, and Chase Bank of Texas, National Association, as agent
(the "Agent").  Capitalized  terms used herein and not otherwise  defined herein
shall have the  meanings  assigned to such terms in the Credit  Agreement.  This
Assignment  and  Acceptance,  between the  Assignor  (as set forth on Schedule I
attached  hereto and made a part hereof by reference  for all  purposes) and the
Assignee (as set forth on Schedule I hereto and made a part hereof), is dated as
of the Effective Date (as set forth on Schedule I hereto attached).

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

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

           3. The  Assignee  (i)  represents  and  warrants  that it is  legally
authorized  to enter  into  this  Assignment  and  Acceptance  and that it is an
Eligible  Assignee  (as that term is  defined  in the  Credit  Agreement);  (ii)
confirms  that it has  received a copy of the Credit  Agreement,  together  with
copies of the  financial  statements  referred to in Section 4.2 thereof,  or if
later the most recent  financial  statements  delivered  pursuant to Section 5.2
thereof,  and such other documents and information as it has deemed  appropriate
to make its own credit analysis;  (iii) agrees that it will,  independently  and
without  reliance  upon the Agent,  the  Assignor or any other Bank and based on
such  documents  and  information  as it shall  deem  appropriate  at the  time,
continue to make its own credit  decisions in taking or not taking  action under
the Credit Agreement; (iv) appoints and authorizes the Agent to take such action
as agent on its behalf and to exercise such powers under the Credit Agreement as
are  delegated to the Agent by the terms  thereof,  together with such powers as
are  reasonably  incidental  thereto;  (v)  agrees  that it will be bound by the
provisions of the Credit Agreement and will perform in accordance with its terms
all the obligations  which by the terms of the Credit  Agreement are required to
be performed by it as a Bank;  (vi) if the Assignee is organized  under the laws
of a jurisdiction  outside the United States,  attaches the forms  prescribed by
the  Internal  Revenue  Service  of  the  United  States  certifying  as to  the
Assignee's  exemption from United States  withholding  taxes with respect to all
payments to be made to the  Assignee  under the Credit  Agreement  or such other
documents  as are  necessary to indicate  that all such  payments are subject to
such tax at a rate reduced by an applicable  tax treaty,  and (vii) has supplied
the information requested on the administrative questionnaire attached hereto as
Exhibit A.

           4. Following the execution of this Assignment and Acceptance, it will
be delivered to the Agent,  together with a processing  and  recordation  fee of
$2,500, for acceptance by it and the Company and recording by the Agent pursuant
to Section  9.12 of the Credit  Agreement,  effective as of the  Effective  Date


                                     Page 1

<PAGE>

(which Effective Date shall,  unless otherwise agreed to by the Agent in it sole
and absolute  discretion,  be at least five Business Days after the execution of
this Assignment and Acceptance).

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

           6. From and after the  Effective  Date,  (i) the Assignee  shall be a
party to the Credit Agreement and, to the extent provided in this Assignment and
Acceptance,  have the rights and obligations of a Bank thereunder,  and (ii) the
Assignor  shall,  to the extent  provided  in this  Assignment  and  Acceptance,
relinquish  its rights and be  released  from its  obligations  under the Credit
Agreement   provided  that  Assignor   hereby   represents   and  warrants  that
restrictions set forth in Section 9.12 of the Credit Agreement pertaining to the
minimum amount of assignments has been satisfied.

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

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


                     Schedule I to Assignment and Acceptance
              Respecting the Amended and Restated Credit Agreement,
                       dated as of _________, 1999, among
                            Whole Foods Market, Inc.,
                    the financial institutions named therein,
                            and Chase Bank of Texas,
                         National Association, as Agent


Legal Name of Assignor:

Legal Name of Assignee:

Effective Date of Assignment:     ________________ , 199

                                                   Percentage Assigned of the
                                                     Facility (to at least 8
                                                      decimals) (Shown as a
           Principal                                 percentage of aggregate
         Amount Assigned                         principal amount of all Banks)
         ---------------                         -----------------------------

         $ __________                            ___________%




Accepted:

CHASE BANK OF TEXAS, NATIONAL                    _____________________________
  ASSOCIATION, as Agent                          _________________, as Assignor


By:                                              By:
Name:                                            Name:
Title:                                           Title:


WHOLE FOODS MARKET, INC.              ________________, ___________, as Assignee

By:                                              By:
Name:                                            Name:
Title:                                           Title:










                                     Page 2








<PAGE>

<TABLE>
<CAPTION>

Source: OneCLE Business Contracts.