AMENDMENT NO. 2 TOAMENDED AND RESTATED CREDIT AGREEMENT

This Amendment No. 2 to Amended and Restated Credit Agreement (this"Amendment") is entered into with reference to the Amended andRestated Credit Agreement dated as of August 1, 2000 (as heretofore amended, the"Credit Agreement") among Wild Oats Markets, Inc.("Borrower"), the Lenders party thereto, and Wells Fargo Bank,National Association, as Administrative Agent. Capitalized terms used but notdefined herein are used with the meanings set forth for those terms in theCredit Agreement. Section references herein relate to the Credit Agreementunless otherwise stated.

RECITALSPursuant to 
Section 6.14
, Borrower is required to have      Stockholders' Equity of not less than $110,125,000 as of September 29,      2001, $108,375,000 as of October 27, 2001, $106,175,000 as of November 24,      2001 and $103,605,000 as of December 29, 2001.
Since the date of the First Amendment, Borrower's accountants have      advised Borrower to record certain pre-tax restructuring charges      associated with the closure of certain kitchens, bakeries and warehouses      in Borrower's third Fiscal Quarter 2001 statement of operations rather      than recording such charges during the fourth Fiscal Quarter 2001 (as was      contemplated at the time of the execution and delivery of the First      Amendment).
Borrower's recordation of such restructuring charges against the third      Fiscal Quarter 2001 statement of operations (rather than during the fourth      Fiscal Quarter) will cause Borrower to be in violation of the      Stockholders' Equity covenant as of September 29, 2001 and may cause      further breaches of such covenant as of October 27, 2001 and November 24,      2001.
As a result of the change in timing for recognition of the      aforementioned restructuring charges, Borrower has requested that the      Lenders waive the Event of Default that would otherwise occur as a result      of the foregoing Stockholders' Equity covenant violation as of September      29, 2001 and to amend 
Section 6.14
 to reduce the required levels of      Stockholders' Equity for the October 27, 2001 and November 24, 2001      measurement dates (with no change made to the December 29, 2001      Stockholders' Equity requirement or for any measurement date thereafter).
Subject to the terms and conditions set forth herein, the Administrative      Agent and the Lenders are willing to waive such Event of Default and to      amend the Credit Agreement as set forth below.

 

AGREEMENT
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency ofwhich are hereby acknowledged, Borrower and the Administrative Agent, actingwith the consent of the Requisite Lenders pursuant to Section 11.2 of theCredit Agreement, agree as follows:

 

1. Representation and Warranty. Borrower represents and warrants tothe Lenders that, other than the violation regarding Stockholders' Equitydescribed above and after giving effect to this Amendment, no Default or Eventof Default has occurred and remains continuing under the Credit Agreement.

2. Waiver. In reliance upon the foregoing, the Lenders hereby waiveBorrower's compliance with Section 6.14 for the period ended September29, 2001, provided, however, Stockholders' Equity, as reflected inthe final consolidated financial statements of Borrower and its Subsidiaries tobe delivered to the Lenders pursuant Section 7.1(b) of the CreditAgreement for the Fiscal Quarter ended September 29, 2001, is not less than$109,625,000.

3. Section 6.14-"Stockholders' Equity". Section 6.14is amended and restated to read in full as follows:

6.14 Stockholders' Equity. Permit Stockholders'    Equity, as of (a)  October 27, 2001, to be less than $107,875,000,    (b) November 24, 2001, to be less than $105,675,000,    (c) December 29, 2001, to be less than $103,605,000, and    (d) the last day of any Fiscal Month thereafter, to be less than the sum    of (i) $103,605,000, plus (ii) 90% of Net Income in each    Fiscal Quarter ending after December 29, 2001 (with no deduction for a    net loss in any such Fiscal Quarter) plus (c) 100% of the    proceeds of any issuance by Borrower of equity securities (except to    employees or former employees of Borrower pursuant to an employee stock    option plan or employee stock purchase plan maintained by Borrower) after    the Restructure Date; provided, however, that if the Equity    Achievement occurs, Stockholders' Equity will thereafter be tested on a    Fiscal Quarter basis (rather than on a Fiscal Month basis as set forth    above).

4. Conditions Precedent. The effectiveness of this Amendment shall beconditioned upon the receipt by the Administrative Agent of all of thefollowing, each properly executed by an authorized officer of each party theretoand dated as of the date hereof:

(a) Counterparts of this Amendment executed by all parties hereto;

(b) Written consent of the Requisite Lenders as required under Section    11.2 of the Credit Agreement in the form of Exhibit A to this Amendment;    and

(c) Written consent of the Subsidiary Guarantors in the form of Exhibit B    to this Amendment.

5. Confirmation. In all other respects, the terms of the CreditAgreement and the other Loan Documents are hereby confirmed.

 

IN WITNESS WHEREOF, Borrower and the Administrative Agent have executed thisAmendment by their duly authorized representatives.

Dated: November 12, 2001

WILD OATS MARKETS, INC.

 

By:   /s/       Freya R. Brier                   Vice President Legal

 

WELLS FARGO BANK, NATIONAL            ASSOCIATION, as Administrative Agent

By   /s/       Ellen J. Trach                   Vice President

Exhibit A to Amendment No. 2

CONSENT OF LENDER
Reference is hereby made to that certain Amended and Restated CreditAgreement dated as of August 1, 2001 (as heretofore amended, the "CreditAgreement") among Wild Oats Markets, Inc. ("Borrower"), theLenders party thereto and Wells Fargo Bank, National Association, asAdministrative Agent. Capitalized terms used but not defined herein are usedwith the meanings set forth for those terms in the Credit Agreement.

The undersigned Lender hereby consents to the execution and delivery ofAmendment No. 2 to Amended and Restated Credit Agreement by the AdministrativeAgent on its behalf substantially in the form of the most recent draft presentedto the undersigned Lender.

 

Date: November 9, 2001

 

Wells Fargo Bank, National Association

By  /s/          Ellen J. TrachVice President

 

Exhibit A to Amendment No. 2

CONSENT OF LENDER
Reference is hereby made to that certain Amended and Restated CreditAgreement dated as of August 1, 2001 (as heretofore amended, the "CreditAgreement") among Wild Oats Markets, Inc. ("Borrower"), theLenders party thereto and Wells Fargo Bank, National Association, asAdministrative Agent. Capitalized terms used but not defined herein are usedwith the meanings set forth for those terms in the Credit Agreement.

The undersigned Lender hereby consents to the execution and delivery ofAmendment No. 2 to Amended and Restated Credit Agreement by the AdministrativeAgent on its behalf substantially in the form of the most recent draft presentedto the undersigned Lender.

 

Date: November 9, 2001

 

Bank One, NA

By   /s/Phillip D. MartinSenior Vice President

 

Exhibit A to Amendment No. 2

CONSENT OF LENDER
Reference is hereby made to that certain Amended and Restated CreditAgreement dated as of August 1, 2001 (as heretofore amended, the "CreditAgreement") among Wild Oats Markets, Inc. ("Borrower"), theLenders party thereto and Wells Fargo Bank, National Association, asAdministrative Agent. Capitalized terms used but not defined herein are usedwith the meanings set forth for those terms in the Credit Agreement.

The undersigned Lender hereby consents to the execution and delivery ofAmendment No. 2 to Amended and Restated Credit Agreement by the AdministrativeAgent on its behalf substantially in the form of the most recent draft presentedto the undersigned Lender.

 

Date: November 9, 2001

 

Cooperative Centrale Raiffeisen-Boerenleenbank, B.A., "Rabobank            Nederland", New York Branch, as a Lender

By   /s/Edward J. Reyser            Managing Director

By   /s/John McMahon            Vice President

Exhibit A to Amendment No. 2

CONSENT OF LENDER
Reference is hereby made to that certain Amended and Restated CreditAgreement dated as of August 1, 2001 (as heretofore amended, the "CreditAgreement") among Wild Oats Markets, Inc. ("Borrower"), theLenders party thereto and Wells Fargo Bank, National Association, asAdministrative Agent. Capitalized terms used but not defined herein are usedwith the meanings set forth for those terms in the Credit Agreement.

The undersigned Lender hereby consents to the execution and delivery ofAmendment No. 2 to Amended and Restated Credit Agreement by the AdministrativeAgent on its behalf substantially in the form of the most recent draft presentedto the undersigned Lender.

 

Date: November 8, 2001

 

Harris Trust and Savings Bank

By   /s/David C. Fisher            Vice President

Exhibit A to Amendment No. 2

CONSENT OF LENDER
Reference is hereby made to that certain Amended and Restated CreditAgreement dated as of August 1, 2001 (as heretofore amended, the "CreditAgreement") among Wild Oats Markets, Inc. ("Borrower"), theLenders party thereto and Wells Fargo Bank, National Association, asAdministrative Agent. Capitalized terms used but not defined herein are usedwith the meanings set forth for those terms in the Credit Agreement.

The undersigned Lender hereby consents to the execution and delivery ofAmendment No. 2 to Amended and Restated Credit Agreement by the AdministrativeAgent on its behalf substantially in the form of the most recent draft presentedto the undersigned Lender.

 

Date: November 9, 2001

 

Key Bank National Association

By   /s/Michelle K. BusheyVice President

 

Exhibit B to Amendment No. 2
**CONSENT OF SUBSIDIARY GUARANTORS**
Reference is hereby made to that certain Amended and RestatedCredit Agreement dated as of August 1, 2000 among Wild Oats Markets, Inc.("Borrower"), the Lenders party thereto, and Wells Fargo Bank,National Association, as Administrative Agent (as heretofore amended, the"Credit Agreement").

Each of the undersigned Subsidiary Guarantors hereby consentsto Amendment No. 2 to Amended and Restated Credit Agreement in the formexecuted by Borrower and confirms that the Subsidiary Guaranty to which it is aparty remains in full force and effect.

Dated: As of November 12, 2001

"Subsidiary Guarantors"

WILD MARKS,INC.                            SPARKY, INC.

By: /s/                                                      By: /s/KarenNovotny                                        Karen NovotnySecretary                                                 Secretary

WILD OATS FINANCIAL,INC.           WILD OATS OFTEXAS, INC.

By: /s/                                                      By:  /s/MelodyPickett                                        Richard VaraPresident                                                 Secretary