Document:

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                                                                   EXHIBIT 10.25

                     NON-QUALIFIED STOCK OPTION AGREEMENT

          Optionee:                            Stephen Whitesmith
                   -------------------------------------------------------------

          Number of Shares Subject to Option:             100,000
                                             -----------------------------------

          Exercise Price per Share:                      $0.46875
                                   ---------------------------------------------

          Date of Grant:                                 January 25, 2001
                        --------------------------------------------------------

     1.   Background. The Optionee named above (the "Optionee") has been offered
          ----------
a position as Chief Information Officer of Harry's Farmers Market, Inc. This
option is granted as an inducement to the Optionee to accept such position.

     2.   Defined Terms.  For purposes of this Agreement, the following terms
          -------------
shall have the following meanings:

     "Board" means the Board of Directors of the Company.

     "Change of Control" has the meaning assigned to such term in any employment
agreement between the Optionee and the Company.

     "Code" means the Internal Revenue Code of 1986, as amended, or any
successor thereto, and the Treasury Regulations and rulings promulgated
thereunder.

     "Committee" means the Compensation Committee of the Board, or any successor
committee.

     "Company" means Harry's Farmers Market, Inc., a corporation organized under
the laws of the State of Georgia.

     "Disability" means a mental or physical disability as determined by the
Board of Directors of the Company in accordance with standards and procedures
similar to those under the Company's employee long-term disability plan, if any.
At any time that the Company does not maintain such a long-term disability plan,
Disability shall mean the inability of Executive, as determined by the Board, to
substantially perform the essential functions of his regular duties and
responsibilities due to a medically determinable physical or mental illness
which has lasted (or can reasonably be expected to last) for a period of six
consecutive months.

     "Exchange Act" means the Securities Exchange Act of 1934, as amended, and
any successor thereto.
<PAGE>

     "Fair Market Value" means, as of any given date, the closing price of the
Stock on such date (or, if no transactions were reported on such date, on the
next preceding date on which transactions were so reported) on the Nasdaq Stock
Market; provided, however, if the Stock is not listed on the Nasdaq Stock Market
on such date, the average of the highest bid and lowest asked prices for the
Stock on such day as reported on the Nasdaq OTC Bulletin Board Service or by the
National Quotation Bureau, Incorporated or a comparable service. If each of the
previous methods are inapplicable at the time Fair Market Value is to be
determined, Fair Market Value shall be determined in good faith by the Board.

     "Non-Qualified Stock Option" means a Stock Option that is not intended to
be an incentive stock option as described in Section 422 of the Code.

     "Retirement" means normal retirement as defined in the Company's
then-current retirement plan, or if the Company does not have a retirement plan,
"Retirement" shall mean voluntary termination after age 65 with ten years of
service.

     "Stock" means the Class A Common Stock of the Company.

     "Subsidiary" means any corporation (other than the Company) in an unbroken
chain of corporations beginning with the Company if each of the corporations
(other than the last corporation in the unbroken chain) owns stock possessing
fifty percent (50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in the chain.

     3.   Grant of Option. The Company hereby grants to the Optionee a Non-
          ---------------
Qualified Stock Option to purchase, on the terms and conditions set forth in
this Agreement, the number of shares of Stock indicated above, at the exercise
price per share set forth above (the "Option").

     4.   Vesting of Option. Unless the exercisability of the Option is
          -----------------
accelerated as provided in Section 5 below, 34,000 Option Shares shall vest
(become exercisable) on the first anniversary of the Effective Date and the
remainder shall vest in equal installments of 33,000 Option Shares on the second
and third anniversaries of the Effective Date.

     5.   Change of Control. Notwithstanding the vesting schedule provided in
          -----------------
Section 4 above, in the event of a Change of Control, unless otherwise
determined by the Committee or the Board in writing prior to the occurrence of
such Change of Control, the Option shall vest and become exercisable in full.

     6.   Period of Option and Limitations on Right to Exercise. The Option
          -----------------------------------------------------
will, to the extent not previously exercised, lapse under the earliest of the
following circumstances; provided, however, that the Committee may, prior to the
lapse of the Option under the circumstances described in paragraphs (b), (c),
(d) and (e) below, provide in writing that the Option will extend until a later
date:

                                      -2-
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          (a)  The Option shall lapse as of 5:00 p.m., Eastern Time, on the
     tenth anniversary of the date of grant (the "Expiration Date").

          (b)  The Option shall lapse three months after the Optionee's
     termination of employment for any reason other than the Optionee's death,
     Disability or Retirement.

          (c)  If the Optionee's employment terminates by reason of Disability
     or Retirement, the Option shall lapse one year after the date of the
     Optionee's termination of employment.

          (d)  If the Optionee dies while employed and before the Option
     otherwise lapses, the Option shall lapse three years after the date of the
     Optionee's death. If the Optionee dies during the three-month period
     described in subsection (b) or during the one-year period described in
     subsection (c) above and before the Option otherwise lapses, the Option
     shall lapse one year after the date of the Optionee's death. Upon the
     Optionee's death, the Option may be exercised by the Optionee's
     beneficiary.

     If the Optionee or his beneficiary exercises an Option after termination of
employment, the Option may be exercised only with respect to the shares that
were otherwise vested on the date of Optionee's termination of employment
(including vesting by acceleration in accordance with Section 5 hereof).

     7.   Exercise of Option. The Option shall be exercised by written notice
          ------------------
directed to the Secretary of the Company at the principal executive offices of
the Company, in substantially the form attached hereto as Exhibit A, or such
                                                          ---------
other form as the Board may approve. Such written notice shall be accompanied by
full payment in cash, shares of Stock previously acquired by the Optionee, or
any combination thereof, for the number of shares specified in such written
notice; provided, however, that if shares of Stock are used to pay the exercise
price, such shares must have been held by the Optionee for at least six months.
The Fair Market Value of the surrendered Stock as of the exercise date shall be
determined in valuing the Stock used as payment. To the extent permitted under
Regulation T of the Federal Reserve Board, and subject to applicable securities
laws, the Option may be exercised through a broker in a so-called "cashless
exercise" whereby the broker sells the Option shares and delivers cash sales
proceeds to the Company in payment of the exercise price.

     Subject to the terms of this Agreement, the Option may be exercised at any
time and without regard to any other option held by the Optionee to purchase
Stock of the Company.

     8.   Limitation of Rights. The Option does not confer to the Optionee or
          --------------------
the Optionee's personal representative any rights of a shareholder of the
Company unless and until shares of Stock are in fact issued to such person in
connection with the exercise of

                                      -3-
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the Option. Nothing in this Agreement shall interfere with or limit in any way
the right of the Company or any Subsidiary to terminate the Optionee's
employment at any time, nor confer upon the Optionee any right to continue in
the employ or the Company or any Subsidiary.

     9.   Stock Reserve. The Company shall at all times during the term of this
          -------------
Agreement keep available such number of shares of Stock as will be sufficient to
satisfy the requirements of this Agreement.

     10.  Optionee's Covenant. The Optionee hereby agrees to use his best
          -------------------
efforts to provide services to the Company in a workmanlike manner and to
promote the Company's interests.

     11.  Restrictions on Transfer and Pledge.  The Option may not be pledged,
          -----------------------------------
encumbered or hypothecated to or in favor of any party other than the Company or
a Subsidiary, or be subject to any lien, obligation or liability of the Optionee
to any other party other than the Company or a Subsidiary.  The Option is not
assignable or transferable by the Optionee other than by will or the laws of
descent and distribution or pursuant to a domestic relations order that would
satisfy Section 414(p)(1)(A) of the Code; provided, however, that the Committee
may (but need not) permit other transfers where the Committee concludes that
such transferability is appropriate and desirable, taking into account any
factors deemed relevant, including without limitation, state or federal tax or
securities laws applicable to transferable options.  The Option may be exercised
during the lifetime of the Optionee only by the Optionee or any permitted
transferee.

     12.  Restrictions on Issuance of Shares.  If at any time the Board shall
          ----------------------------------
determine in its discretion that listing, registration or qualification of the
shares of Stock covered by the Option upon any securities exchange or under any
state or federal law, or the consent or approval of any governmental regulatory
body, is necessary or desirable as a condition to the exercise of the Option,
the Option may not be exercised in whole or in part unless and until such
listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Board.

     13.  Successors.  This Agreement shall be binding upon any successor of the
          ----------
Company, in accordance with the terms of this Agreement.

     14.  Severability.  If any one or more of the provisions contained in this
          ------------
Agreement are invalid, illegal or unenforceable, the other provisions of this
Agreement will be construed and enforced as if the invalid, illegal or
unenforceable provision had never been included.

     15.  Notice.  Notices and communications under this Agreement must be in
          ------
writing and either personally delivered or sent by registered or certified
United States mail, return receipt requested, postage prepaid.  Notices to the
Company must be addressed to:

                                      -4-
<PAGE>

               Harry's Farmers Market, Inc.
               1180 Upper Hembree Road
               Roswell, Georgia 30076
               Attn: Harry A. Blazer

or any other address designated by the Company in a written notice to the
Optionee. Notices to the Optionee will be directed to the address of the
Optionee then currently on file with the Company, or at any other address given
by the Optionee in a written notice to the Company.

  IN WITNESS WHEREOF, Harry's Farmer's Market, Inc., acting by and through its
duly authorized officers, has caused this Agreement to be executed, and the
Optionee has executed this Agreement, all as of the day and year first above
written.

                                        HARRY'S FARMERS MARKET, INC.

                                        By: /s/ Harry A. Blazer
                                           -------------------------------------
                                           Harry A. Blazer
                                           President and Chief Executive Officer

                                        OPTIONEE:

                                        /s/ Stephen Whitesmith
                                        ----------------------------------------
                                        Stephen Whitesmith

                                      -5-
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                                   EXHIBIT A
                                   ---------

                   NOTICE OF EXERCISE OF OPTION TO PURCHASE
              CLASS A COMMON STOCK OF HARRY'S FARMERSMARKET, INC.

                                        Name:___________________________________

                                        Address:________________________________
                                              __________________________________

                                        Date:___________________________________

Harry's Farmers Market, Inc.
1180 Upper Hembree Road
Roswell, Georgia 30076
Attn: Secretary

     Re:  Exercise of Non-Qualified Stock Option

     I elect to purchase _____________ shares of Class A Common Stock of Harry's
Farmers Market, Inc. ("Stock") pursuant to that certain Non-Qualified Stock
Option Agreement dated January 25, 2001 by and between Harry's Farmers Market,
Inc. and Stephen Whitesmith.  The purchase will take place on the exercise date,
which will be as soon as practicable following the date of this notice and the
date on which all other necessary forms and payments are received by the
Company, unless I specify a later date (not to exceed 30 days following the date
of this notice).

     On or before the exercise date, I will pay the full exercise price in the
form specified below (check one):

     [_]  Cash Only: by delivering a check to Harry's Farmers Market, Inc. for
          ---------
          $________________.

     [_]  Cash and Shares: by delivering a check to Harry's Farmers Market, Inc.
          ---------------
          for $_____________, as partial payment of the exercise price.  I will
          pay the balance of the exercise price by delivering to the Company a
          stock certificate with my endorsement for shares of Company Stock that
          I have owned for at least six months.  If the number of shares of
          Company Stock represented by such stock certificate exceeds the number
          needed to pay the exercise price, the Company will issue me a new
          stock certificate for the excess.
<PAGE>

     [_]  Shares Only:  by delivering to the Company a stock certificate with my
          -----------
          endorsement for shares of Company Stock that I have owned for at least
          six months.  If the number of shares of Company Stock represented by
          such stock certificate exceeds the number needed to pay the exercise
          price, the Company will issue me a new stock certificate for the
          excess.

     [_]  Cash From Broker:  by delivering the purchase price from a broker,
          ----------------
          dealer or other "creditor" as defined by Regulation T issued by the
          Board of Governors of the Federal Reserve System (the "Broker").  I
          authorize the Company to issue stock certificate in the number of
          shares indicated above in the name of the Broker in accordance with
          instructions received by the Company from the Broker and to deliver
          such stock certificate directly to the Broker (or to any other party
          specified in the instructions from the Broker) upon receiving the
          exercise price from the Broker.

     Please deliver the stock certificate representing the shares purchased to
me, unless I have chosen to pay the purchase price through a broker.

                                             Very truly yours,

                                             ___________________________________
                                             Stephen Whitesmith

AGREED TO AND ACCEPTED:

HARRY'S FARMERS MARKET, INC.

By:________________________________________
  Name:____________________________________
  Title:___________________________________

Number of Option Shares Exercised:_________

Number of Option Shares Remaining:_________

Date:______________________________________

                                      -2-<PAGE>

                                                                   EXHIBIT 10.26

                              SECOND AMENDMENT TO
                              -------------------
                          LOAN AND SECURITY AGREEMENT
                          ---------------------------

     This Second Amendment to Loan and Security Agreement (the "First
Amendment") is made as of the 13th day of March, 2001 by and among

     Back Bay Capital Funding, LLC (the "Lender"), a Delaware limited liability
     company with offices at 40 Broad Street, Boston, Massachusetts, and

     Harry's Farmers Market, Inc. (the "Borrower") a Georgia corporation with
     its principal executive offices at 1180 Upper Hembree Road, Roswell,
     Georgia 30076

in consideration of the mutual covenants herein contained and benefits to be
derived herefrom.

                                  WITNESSETH
                                  ----------

     WHEREAS, the Lender and the Borrower has entered into a Loan and Security
Agreement dated as of December 2, 1999 (as amended and in effect, the "Loan
Agreement"); and

     WHEREAS, the Borrower has requested that the Lender modify and amend
certain provisions of the Loan Agreement and the Lender is willing to do so on
the terms set forth herein.

     NOW THEREFORE, it is hereby agreed as follows:

     1.  Definitions: All capitalized terms used herein and not otherwise
         -----------
defined shall have the same meaning herein as in the Loan Agreement.

     2.  Amendment to Article 7: The provisions of Article 7 of the Loan
         ----------------------
Agreement are hereby amended as follows:

     a.  The provisions of Section 7-3(b) of the Loan Agreement are hereby
         amended by adding the following at the end thereof:

               (vi)  Provide the Lender, on or before March 8, 2001, with a copy
               of (A) a duly executed contract with an investment banker (an
               "Investment Banker") regarding the solicitation and consummation
               of a Liquidity Event (defined below), reasonably satisfactory in
               form and substance to the Lender and (B) "teaser memorandum"
               prepared by the Investment Banker.  As used herein, the term
               "Liquidity Event" means, without limitation, a sale, merger,
               refinancing, or recapitalization of the Borrower and/or any or
               all of its assets.
<PAGE>

               (vii)  Provide the Lender, on or before March 8, 2001, with an
               offering memorandum prepared by the Investment Banker in final
               form for distribution to Persons who may potentially be
               interested in consummating a Liquidity Event.

               (viii)  Promptly provide the Lender with copies of (A) all
               material correspondence and other material communications, and
               (B) all offers, counteroffers, letters of intent, and definitive
               agreements, with respect to any Liquidity Events (including
               drafts, executed documents, and any amendments or modifications
               thereof.)

     b.  The provisions of Section 7-6(a) of the Loan Agreement are hereby
         amended by deleting the provisions of clause (iv) and substituting the
         following in its stead:

               (iv)  A summary aging of the Borrower's and its Subsidiaries'
               accounts payable, including a separate listing of payables due to
               vendors of perishable goods.

     3.  Amendment to Exhibits. The provisions of Exhibit 7-12 to the Loan
         ---------------------
Agreement are hereby amended as follows:

     a.  The provisions of clause (a) are hereby deleted in their entirety and
         the following substituted in their stead:

         The Borrower and its Subsidiaries shall not make or incur Capital
         Expenditures in excess of the following amounts for the following
         periods:

               Fiscal Year Ending            Maximum Capital Expenditures
               January 2000                  $1,200,000.00
               January 2001                  $  800,000.00
               January 2002                  $1,000,000.00

     b.  The EBITDA requirements set forth in clause (c) for the period ending
         January, 2001 shall not be tested until the earlier of the date that
         the Lender received the Borrower's annual financial statements or
         April 30, 2001.

     4.  Limited Consent. Notwithstanding any provisions of the Loan Agreement
         ---------------
to the contrary, the Lender hereby consents to the Borrower's entering into a
Lease for certain premises located at Lot 129 of 7th District, Peachtree City,
Georgia. This consent relates only to such location and the Borrower may not
commit to or open any other new location without the Lender's prior written
consent.
                                      -2-
<PAGE>

     5.  Condition to Effectiveness. This Second Amendment shall not be
         --------------------------
effective until each of the following conditions precedent have been fulfilled
to the satisfaction of the Lender:

     a.  This Second Amendment shall have been duly executed and delivered by
         the Borrower and the Lender. The Lender shall have received a fully
         executed copy hereof.

     b.  All action on the part of the Borrower necessary for the valid
         execution, delivery and performance by the Borrower of this Second
         Amendment shall have been duly and effectively taken. The Lender shall
         have received from the Borrower true copies of its certificate of the
         resolutions authorizing the transactions described herein, each
         certified by its secretary or other appropriate officer to be true and
         complete.

     c.  The Borrower shall have paid the Lender an amendment fee in the sum of
         $5,000.00. The amendment fee shall be fully earned on the execution
         hereof and shall not be subject to refund or rebate under any
         circumstances.

     d.  No default or Event of Default shall have occurred and be continuing,
         after giving effect to this Second Amendment.

     e.  The Borrower shall have provided such additional instruments and
         documents to the Lender as the Lender and its counsel may have
         reasonably requested.

     6.  Miscellaneous.
         -------------

     a.  Except as provided herein, all terms and conditions of the Loan
         Agreement and the other Loan Documents remain in full force and effect.
         The Borrower hereby ratifies, confirms, and reaffirms all of the
         representations, warranties and covenants therein contained. The
         Borrower acknowledges and agrees that it does not have any offsets,
         defenses, or counterclaims against the Lender with respect to the Loan
         Agreement and other Loan Documents, or otherwise, and to the extent
         that any such offsets, defenses or counterclaims may exist, the
         Borrower hereby WAIVES and RELEASES same. The Borrower shall execute
                         ------     --------
         and deliver to the Lender such releases as the Lender may request to
         confirm the foregoing.

     b.  The Borrower shall pay all costs and expenses incurred by the Lender in
         connection with this Second Amendment, including, without limitation,
         all reasonable attorneys' fees.

                                      -3-
<PAGE>

     c.  This Second Amendment may be executed in several counterparts and by
         each party on a separate counterpart, each of which when so executed
         and delivered, each shall be an original, and all of which together
         shall constitute one instrument.

     d.  This Second Amendment expresses the entire understanding of the parties
         with respect to the matters set forth herein and supersedes all prior
         discussions or negotiations hereon.

     IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to
be executed and their seals to be hereto affixed as the date first above
written.

                                           HARRY'S FARMERS MARKET, INC.
                                                   ("Borrower")

                                           By: /s/ Harry A. Blazer
                                               ------------------------

                                  Print Name:  Harry A. Blazer
                                               ------------------------

                                       Title:  President and CEO
                                               ------------------------

                                           BACK BAY CAPITAL FUNDING LLC
                                                     ("Lender")

                                           By: /s/ Joseph V. Balsamo
                                               ------------------------

                                  Print Name:  Joseph V. Balsamo
                                               ------------------------

                                       Title:  Director
                                               ------------------------

                                      -4-

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