Document:

Exhibit 10.1

Exhibit 10.1

 

RESTRICTED STOCK UNIT AGREEMENT

THIS RESTRICTED STOCK UNIT AGREEMENT (the "Agreement") made as of this _____
day of _____________, 200_, between Wild Oats Markets, Inc., a Delaware corporation (the
"Company"), and <<Name>> (the "Grantee").

RECITALS

1. As of <<Date_of_Grant>>, the Company grants (the "Grant") the
Grantee Restricted Stock Units ("RSUs"), which are exchangeable for shares of
Company common stock (the "Stock") under the Wild Oats Markets, Inc. 1996 Equity
Incentive Plan (the "Plan") according to the Distribution Election, a form of
which is attached hereto, made by the Grantee and pursuant to this Agreement.

2. The Company and the Grantee wish to provide for the grant of the RSUs on the terms
and conditions set forth below. RSUs shall only be available to non-employee members
("Directors") of the Board of Directors (the "Board") of the Company.

AGREEMENT

1. Grant of RSUs.

(a) Pursuant to the Plan and subject to the terms and conditions of this Agreement, the
Company hereby grants to the Grantee _____ RSUs effective as of _____________, 200_. The
amount of RSUs granted is based upon the following calculation (check all applicable):

___ Board meeting grant: $3,450 (115% of $3,000) divided by the fair market value
("FMV") as determined below, of the Stock on the NASDAQ National Market.

___ Committee meeting grant: $2,300 (115% of $2,000) divided by the FMV of the Stock on
the NASDAQ National Market.

___ Annual service grant: 4,000 RSUs granted each year for service on the Board.

___ Other: ____________________________________________________________________

(b) In the event of a Grant, the FMV of the Stock shall be determined with reference to
the closing price of the Stock as of last day of each board meeting. In the event a board
meeting adjourns on a day during which the Stock is not traded, FMV shall be determined
with reference to the closing price of the Stock on the last trading day immediately
preceding the last day of the board meeting. In all other events, the FMV of the Stock
shall be determined with reference to the closing price on the day prior to the
determination of FMV. 

(c) All fractional shares shall be rounded down.

2. Vesting. 

(a) All RSUs will be vested on the date of grant, other than those granted for annual
service on the Board, which shall vest on the one year anniversary of the Grant. If the
Grantee is not a Director on the one-year anniversary of the Grant and the Grant is not
otherwise vested under this Agreement, then the Grant shall be null and void. 

(b) All units will vest upon a Change-in-Control as defined in paragraph 2(c) below.

(c) A "Change in Control" shall be deemed to have occurred if an event set
forth in any one of the following paragraphs shall have occurred:

(i) any person who is or who becomes the beneficial owner, directly or indirectly, of
securities of the Company (not including in the securities beneficially owned by such
person or any securities acquired directly from the Company or its affiliates)
representing 31% or more of the combined voting power of the Company's then outstanding
securities, excluding any person who becomes a beneficial owner in connection with a
non-control merger (as defined in paragraph (iii) below); or 

(ii) the following individuals cease for any reason to constitute a majority of the
number of Directors then serving: individuals who, on the date hereof, constitute the
Board and any new Director (other than a Director whose initial assumption of office is in
connection with an actual or threatened election contest, including but not limited to a
consent solicitation, relating to the election of Directors of the Company) whose
appointment or election by the Board or nomination for election by the Company's
stockholders was approved or recommended by a vote of at least two-thirds (2/3) of the
Directors then still in office who either were Directors on the date hereof or whose
appointment, election or nomination for election was previously so approved or
recommended; or;

(iii) A merger or consolidation of the Company or any direct or indirect subsidiary of
the Company is consummated with any other corporation, other than a merger or
consolidation (a non-control merger") immediately following which the individuals who
comprise the Board immediately prior thereto constitute at least a majority of the board
of Directors of the Company, the entity surviving such merger or consolidation or any
parent thereof; or

(iv) the stockholders of the Company approve a plan of complete liquidation or
dissolution of the Company or an agreement is consummated for the sale or disposition by
the Company of all or substantially all of the Company's assets, other than a sale or
disposition by the Company of all or substantially all of the Company's assets immediately
following which the individuals who comprise the Board immediately prior thereto
constitute at least a majority of the board of directors of the entity to which such
assets are sold or disposed or any parent thereof.

(d) All RSUs shall vest upon the death or Disability (as that term is defined in
Section 22(e) of the Internal Revenue Code) of the Grantee.

Notwithstanding the foregoing, a "Change in Control" shall not be deemed to
have occurred by virtue of the consummation of any transaction or series of integrated
transactions immediately following which the record holders of the Stock immediately prior
to such transaction or series of transactions continue to have substantially the same
proportionate ownership in an entity which owns all or substantially all of the assets of
the Company immediately following such transaction or series of transactions.

3. Payment for RSUs, Delivery of Stock Certificates. When the
RSUs become payable, the RSUs shall be settled in shares of Stock in accordance with the
Distribution Election made by the Director prior to the first receipt of RSUs under the
Plan (the "Payment Date").

Notwithstanding any distribution election by the Grantee, in the case of death or
Disability, as that term is defined in paragraph 2(d) above, of the Grantee, the RSUs
shall be payable within thirty (30) days following death or determination of Disability.
In the event the 30th day falls on a day during which the Stock is not traded, payment
shall be made on the next trading day following the 30th day. Subject to the provisions of
Section 7 below, stock certificates (the "Certificates") evidencing the Stock
shall be issued to the Grantee as of the Payment Date and registered in the Grantee’s
name on the records of the Company. Subject to and conditioned on the satisfaction of any
withholding obligations, the Certificates shall be delivered to the Grantee as soon as
practicable after the Payment Date. Notwithstanding the foregoing, if, at the time that
payment is due under this Section 3, the Company’s deduction for compensation payable
to the Grantee is subject to the restrictions of Section 162(m) of the Internal Revenue
Code of 1986, as amended ("Section 162(m)"), payment shall not be made until the
Company’s deduction for the compensation attributable to the payment is not limited
by Section 162(m).

4. Dividend Equivalents. The Grantee shall be entitled to
receive cash payments (referred to as dividend equivalents) equal to any cash dividends
and other distributions paid in cash with respect to a corresponding number of shares of
Stock.

5. Adjustments to the RSUs. 

(a) Adjustment by Merger, Stock Split, Stock Dividend, etc. If the shares of Stock, as
presently constituted, shall be changed into or exchanged for a different number or kind
of shares of Stock or other securities of the Company or of another corporation (whether
by reason of merger, consolidation, recapitalization, reclassification, stock split,
spin-off, combination of shares or otherwise), or if the number of shares of Stock shall
be increased through the payment of a stock dividend, or if a dividend on the shares of
Stock or rights or warrants to purchase securities of the Company shall be issued to
holders of all outstanding Stock, then there shall be substituted for or added to each
RSU, the number and kind of shares of Stock or other securities into which each
outstanding share of Stock that may become payable with respect to the RSU shall be so
changed or for which each share shall be exchanged or to which each share shall be
entitled. 

(b) Other distributions and changes in the Stock. In the event there shall be any other
change in the number or kind of the outstanding shares of Stock, or any stock or other
securities into which the Stock is changed or for which it is exchanged, then if the Board
shall, in its sole discretion, determine the change, if any, required to the number of
RSUs held by a Grantee or to which any Award granted under the Plan relates immediately
prior to the making of such adjustment 

6. Reorganization. The Board may also provide for the
assumption or substitution of the RSUs by the surviving entity and make any other
provision for the RSUs as the Board deems appropriate in its sole discretion. The Company,
or any successor or purchaser of the Company, as the case may be, shall make adequate
provision for the assumption of the RSUs or the substitution of new RSUs for the
outstanding RSUs on terms comparable to the terms of this Agreement.

7. Withholding. In the event the Grantee is subject, in the
exclusive judgment of the Company, to withholding, the Grantee shall make appropriate
arrangements with the Company to make payment to the Company of the amount required to be
withheld under applicable federal, state, local, and other tax laws (collectively,
"Withholding Taxes"). The Grantee may elect to pay such Withholding Taxes in
cash by delivering to the Company a check payable to the order of the Company or, if the
Company agrees, by authorizing the Company to withhold the amount due from the
Grantee’s pay during the pay periods immediately preceding and following the date on
which any such Withholding Tax liability arises. If the Withholding Taxes arise on or
after the date the RSUs become payable, the Grantee may, in addition to the methods
described in the preceding sentence, elect to pay such Withholding Taxes (a) by selling a
portion of the Stock then payable under this Agreement if otherwise permitted by this
Agreement or (b) by having the Company withhold from the shares otherwise payable and
deliverable to the Grantee a number of shares having a FMV equal to the amount of the
minimum required Withholding Taxes, or such lesser amount as the Grantee may elect. In
such cases, the value of the shares to be withheld shall be based on the FMV of the shares
on the date the amount of Withholding Taxes is determined (the "Tax Date"). The
Grantee must make an irrevocable election of the manner of payment of the Withholding
Taxes no later that fourteen (14) calendar days prior to the Tax Date; provided however,
if the Grantee is subject to Section 16(b) of the Securities Exchange Act of 1934, the
election shall be made in accordance with the requirements of Rule 16b-3. If, on and after
the time the RSUs become payable, the Grantee has not made arrangements satisfactory to
the Company to pay the Withholding Taxes, the Company shall withhold from the shares, a
number of shares having a FMV equal to the amount required to pay the Withholding Taxes.
The value of the shares to be withheld shall be based on the FMV of the shares on the Tax
Date. The Company shall not deliver any shares of Stock unless and until the Grantee has
delivered to the Company, or has made arrangements satisfactory to the Company to provide
fully for, the required Withholding Taxes. 

8. Restriction on Transferability. RSUs, whether or not vested,
may not be sold, assigned, transferred by gift or otherwise, pledged or hypothecated, or
otherwise disposed of, by operation of law or otherwise at any time, except by will or the
laws of descent and distribution. 

9. No Rights as a Stockholder. The Grantee shall have no voting
or any other rights as a stockholder of the Company with respect to the RSUs. Upon payment
of the RSUs and the transfer of shares of Stock to the Grantee, the Grantee shall have all
of the rights of a stockholder of the Company. The Grantee’s right to receive Stock
under this Agreement shall be no greater than the right of any unsecured general creditor
of the Company.

10. Miscellaneous.

(a) Administration. This Agreement shall be administered by the Board. Any
determination by the Board shall be final and binding on all parties. 

(b) Notices. Any notice required or permitted to be given under this Agreement shall be
in writing and shall be given by first class registered or certified mail, postage
prepaid, or by personal delivery to the appropriate party, addressed:

(i) If to the Company, to Director of Compensation, 3375 Mitchell Lane, Boulder, CO
80301, with a copy to General Counsel at the same address, or at any other address as may
have been furnished to the Grantee in writing by the Company; or

(ii) If to the Grantee, to the Grantee at the address set forth below under the
signature line, or at other address as may have been furnished to the Company by the
Grantee. 

Any such notice shall be deemed to have been given as of the second day after deposited
in the United States mail, postage prepaid, properly addressed as set forth above, in the
case of mailed notice, or as of the date delivered in the case of personal delivery.

(c) Amendment. Except as provided herein, this Agreement may not be amended or
otherwise modified unless evidenced in writing and signed by the Company and the Grantee.
Notwithstanding the foregoing, this Agreement may be amended in the sole discretion of the
Board by a writing that states specifically it is amending this Agreement if a copy of the
amendment is delivered to the Grantee; provided, however, no amendment may adversely
affect the rights of the Grantee without the Grantee’s written consent. Without
limiting the foregoing, the Board reserves the right to change, by written notice to the
Grantee, the provisions of the RSUs in any way it may deem necessary or advisable to
implement the purposes of the grant and this Agreement as a result of any change in
applicable laws and regulations or any future law, regulation, ruling, or judicial
decision, provided any change shall be applicable only to RSUs that are then subject to
the restrictions provided in this Agreement.

(d) Defined Terms. Capitalized terms shall have the meaning set forth in the Plan or
herein.

(e) Construction; Severability. The section headings contained herein are for reference
purposes only and shall not in any way affect the meaning or interpretation of this
Agreement. The invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement, and each
other provision of this Agreement shall be severable and enforceable to the extent
permitted by law.

(f) Waiver. Any provision contained in this Agreement may be waived, either generally
or in any particular instance, by the Board appointed under the Plan, but only to the
extent permitted under the Plan.

(g) Binding Effect. This Agreement shall be binding upon and inure to the benefit of
the Company and the Grantee and their respective heirs, executors, administrators, legal
representatives, successors and assigns.

(h) Rights to Employment. Nothing contained in this Agreement shall be construed as
giving the Grantee any right to be retained on the Board or any committee of the Board of
the Company and this Agreement is limited solely to governing the rights and obligations
of the Grantee with respect to the RSUs.

(i) Governing Law. This Agreement shall be governed by and construed in accordance with
the laws of the State of Colorado.

 

 

 

 

 

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[SIGNATURE PAGE FOLLOWS]

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year
first above written.

Wild Oats Markets, Inc.

By: ________________________________

 

 

GRANTEE

_______________________________________

Print Name: ______________________________ 

Address: ________________________________

________________________________

________________________________Exhibit 10.2

Exhibit 10.2

 

 

***CONFIDENTIAL TREATMENT REQUESTED**

***CONFIDENTIAL TREATMENT REQUESTED**

THIRD AMENDMENT TO

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

THIS THIRD AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this "Amendment"),
dated as of November 4, 2004, is entered into by and among:

  
    (1) WILD OATS MARKETS, INC., a Delaware corporation (the "Borrower");

    (2) Each of the financial institutions listed in Schedule I to the Credit Agreement
    referred to in Recital A below (collectively, the "Lenders")
    constituting Required Lenders; and

    (3) WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association ("WFB"),
    as the administrative agent for the Lenders (in such capacity, the "Administrative
    Agent").

  

 

RECITALS

A. The Borrower, the Lenders, the Administrative Agent and WFB in its capacity as L/C
Issuer and Swing Line Lender are parties to that certain Second Amended and Restated
Credit Agreement, dated as of February 26, 2003 (as amended by that
certain First Amendment to Second Amended and Restated Credit Agreement dated as of May
21, 2004 and as further amended by that certain Second Amendment to Second Amended and
Restated Credit Agreement dated as of August 3, 2004, the "Credit Agreement").

B. The Borrower has requested that the Lenders constituting Required Lenders and the
Administrative Agent amend the Credit Agreement in certain respects.

C. The Lenders executing this Amendment and the Administrative Agent are willing to so
amend the Credit Agreement upon the terms and subject to the conditions set forth below.

 

AGREEMENT

NOW, THEREFORE, in consideration of the above recitals and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the Borrower,
the Lenders executing this Amendment and the Administrative Agent hereby agree as follows:

 

1. Definitions, Interpretation. All capitalized terms defined above and
elsewhere in this Amendment shall be used herein as so defined. Unless otherwise defined
herein, all other capitalized terms used herein shall have the respective meanings given
to those terms in the Credit Agreement, as amended by this Amendment. The rules of
construction set forth in Article I of the Credit Agreement shall, to the extent
not inconsistent with the terms of this Amendment, apply to this Amendment and are hereby
incorporated by reference.

 

2

***CONFIDENTIAL TREATMENT REQUESTED**

 

2. Amendments to Credit Agreement. Subject to the satisfaction of the
conditions precedent set forth in paragraph 4 below, the Credit Agreement is hereby
amended as follows:

  
    a) Section 1.01 is hereby amended by changing the definitions of the terms
    "Cash Balances", "Cash Equivalents", "Adjusted Leverage
    Ratio" and "Pricing Grid" to read in their entirety as follows:

    
      
        "Cash Balances" shall mean, with respect to Borrower and its
        Subsidiaries at any time, the remainder, determined on a consolidated basis in accordance
        with GAAP, of:

        
          
            (a) The sum of (i) the unrestricted cash of Borrower and its Subsidiaries (including
            cash restricted by a Lien in favor of the Administrative Agent for the benefit of the
            Lenders pursuant to this Agreement) maintained in one or more deposit accounts located at
            a Lender (or in transit to such deposit accounts so long as the amounts in transit relate
            to credit card payments owed to the Borrower or its Subsidiaries and the actual time in
            transit does not exceed three (3) Business Day) at such time and (ii) the market value of
            the unrestricted Cash Equivalents of Borrower and its Subsidiaries (including cash
            restricted by a Lien in favor of the Administrative Agent for the benefit of the Lenders
            pursuant to this Agreement) maintained in one or more securities accounts at a Lender or
            any Affiliate of a Lender at such time;

            
              
                
                  
                    
                      
                        minus

                      

                    

                  

                

              

            

            (b) The Effective Amount of all Loans and L/C Obligations then outstanding under this
            Agreement.

          

        

        "Cash Equivalents" shall mean:

        
          
            (a) Direct obligations of, or obligations the principal and interest on which are
            unconditionally guaranteed or insured by, the United States of America or obligations of
            any agency of the United States of America, in each case maturing within one year from the
            date of acquisition thereof;

            (b) time deposits, certificates of deposit or bankers’ acceptances, in each case
            maturing within one year from the date of acquisition thereof and issued by a commercial
            bank or trust company organized under the laws of the United States of America or a state
            thereof or that is a Lender, provided that (i) such deposits are denominated in
            Dollars or Canadian Dollars and (ii) such bank or trust company has capital, surplus
            and undivided profits of not less than $100,000,000 at the time of acquisition thereof;

            (c) Open market commercial paper maturing within 270 days from the date of acquisition
            thereof issued by a corporation organized under the laws of the United States of America
            or a state thereof, provided such commercial paper is rated at least A-1 (or its
            equivalent) by Standard and Poor’s Ratings Group or P-1 (or its equivalent) by
            Moody’s Investors Service, Inc. at the time of acquisition thereof;

          

        

      

    

  

 

3

  
    
      
        
          
            ***CONFIDENTIAL TREATMENT REQUESTED**

             

            (d) Repurchase obligations with a term of not more than 30 days for underlying
            securities of the types described in clause (a) above entered into with any bank meeting
            the qualifications specified in clause (b) above at the time of acquisition thereof;

            (e) Securities with a maturities of one year or less from the date of acquisition
            issued or fully guaranteed by any state or commonwealth of the United States of America,
            or by any political subdivision or taxing authority thereof and rated at least Aa (or its
            equivalent) by Moody’s Investor Service, Inc. or AA (or its equivalent) by Standard
            and Poor’s Rating Group; and

            (f) Investments in money market or mutual funds that invest exclusively in the
            foregoing items. 

          

        

        "Adjusted Leverage Ratio" shall mean:

        As of any date of determination, the ratio of (a) the sum of (i) Average Total Funded
        Debt as of that date plus (ii) six (6) times Net Rents for the four Fiscal Quarter
        period most recently ended minus (iii) the unrestricted cash of Borrower and its
        Subsidiaries (including cash restricted by a Lien in favor of the Administrative Agent for
        the benefit of the Lenders pursuant to this Agreement) maintained in one or more deposit
        accounts located at a Lender (or in transit to such deposit accounts so long as the
        amounts in transit relate to credit card payments owed to the Borrower or its Subsidiaries
        and the actual time in transit does not exceed three (3) Business Day) as of that date minus
        (iv) the market value of the unrestricted Cash Equivalents of the Borrower and its
        Subsidiaries (including cash restricted by a Lien in favor of the Administrative Agent for
        the benefit of the Lenders pursuant to this Agreement) maintained in one or more
        securities accounts at a Lender or any Affiliate of a Lender as of that date to (b)
        EBITDAR for the four Fiscal Quarter period most recently ended (excluding (i) any
        Executive Contract Expense for such period and (ii) Rental Expense for such period not
        otherwise constituting Net Rents).

        "Pricing Grid" shall mean:

      

    

  

  
    
      
        	Pricing Grid

            (rates are expressed in basis points per annum)
	Tier	Adjusted Leverage Ratio	Applicable Margin for LIBOR
            Loans (bps)	Applicable Margin for Base Rate
            Loans (bps)	Commitment Fee (bps)	Letter of Credit

            Fee (bps)
	1	< 4.50	225.0	100.0	62.5	120.0
	2	> 4.50 <
            5.00	250.0	100.0	62.5	125.0
	3	>5.00	275.0	125.0	75.0	125.0

      

    

  

  
    
      
         

      

    

  

 

  
    
      
         

        4

      

    

  

  
    
      
        ***CONFIDENTIAL TREATMENT REQUESTED**

         

        Any increase or decrease in the Applicable Margin resulting from a change in the
        Adjusted Leverage Ratio shall become effective as of the fifth (5th) day following the
        final day by which a Compliance Certificate is required to be delivered pursuant to Section 5.01(a)
        (regardless of when actually delivered); provided, however, that if the
        Borrower fails to deliver a Compliance Certificate for a Fiscal Quarter when due in
        accordance with such Section, then Tier 3 shall apply (or shall continue to apply) as
        of the fifth (5th) day following such failure. The Applicable Margin in effect from
        November 4, 2004 until the first day of the Fiscal Quarter following the Borrower’s
        delivery of its Compliance Certificate for the Fiscal Quarter ending on January 1, 2005
        shall be determined based upon Tier 3.

      

    

    b) Section 5.01(a) is hereby amended by (i) deleting the "and"
    appearing at the end of clause (xiii), (ii) re-numbering clause (xiv)
    thereof as clause (xv) and (iii) adding a new clause (xiv) to read in its
    entirety as follows:

    
      
        
          
            (xiv) As soon as possible and in no event later than twenty (20) days after the end of
            each month, copies of all recent bank and brokerage statements evidencing the
            Borrower’s compliance with the minimum cash balances covenant set forth in Section
            5.03(f) hereof; and

          

        

      

    

    c) Section 5.02(a) is hereby amended to change clause (x) thereof to read
    in its entirety as follows:

    
      
        
          
            (x) Acquisition-Related Indebtedness in an aggregate principal amount not exceeding
            $5,000,000 at any one time outstanding;

          

        

      

    

    d) Section 5.02(d) is hereby amended to change clause (iv)(B) thereof to
    read in its entirety as follows:

    
      
        
          
            (B) The aggregate consideration paid by the Loan Parties for all such Acquisitions
            (excluding consideration consisting of the Equity Securities of the Borrower or its
            Subsidiaries or of Net Cash Issuance Proceeds) paid does not exceed $5,000,000; and

          

        

      

    

    e) Section 5.02(f) is hereby amended by (i) deleting clause (v) thereof
    in its entirety, (ii) adding the word "and" at the end of clause (iii)
    thereof, and (iii) amending clause (iv) thereof to read in its entirety as follows:

    
      
        
          
            (iv) The Borrower may repurchase shares of capital stock owned by Perry D. Odak in an
            aggregate amount not to exceed, during the term of this Agreement, the outstanding
            principal amount of the Executive Note (plus any interest accrued thereon), so long as
            (the consideration given by the Borrower for such shares consists only of a non-cash
            charge related to the forgiveness of all or any portion of the indebtedness arising under
            the Executive Note.

             

             

          

        

      

    

  

5

  
    ***CONFIDENTIAL TREATMENT REQUESTED**

     

    f) Section 5.02(f) is hereby further amended by deleting the words "and
    (v)" appearing in the proviso at the end of such section and inserting the word
    "and" in front of the reference to "(iv)" therein.

    g) Section 5.03(a) is hereby amended to read in its entirety as follows:

    
      
        
          
            (a) Adjusted Leverage Ratio. The Borrower shall not permit the Adjusted Leverage
            Ratio as at the end of any Fiscal Quarter to be greater than the following for the
            respective periods set forth below:

          

        

      

    

  

 

	
      
        
          Period

        

      

    

    	Adjusted Leverage Ratio

	Closing Date to and including

    March 27, 2004
	3.75:1.00

	March 28, 2004 to and including June 26,
    2004
	4.75:1.00

	June 27, 2004 to and including

    July 2, 2005
	5.60:1:00

	July 3, 2005 and any time

    thereafter
	5.25:1.00

  
    h) Section 5.03(b) is hereby amended to read in its entirety as follows:

    
      
        
          
            (b) Fixed Charge Coverage Ratio. The Borrower shall not permit the Fixed Charge
            Coverage Ratio (i) as at the end of any Fiscal Quarter through the Fiscal Quarter ending
            on July 2, 2005 to be less than 1.00:1.00 and (ii) as at the end of any Fiscal Quarter
            thereafter, 1.05:1.00.

             

             

          

        

      

    

  

6

  
    ***CONFIDENTIAL TREATMENT REQUESTED**

     

    i) Section 5.03(d) is hereby amended to read in its entirety as follows:

    
      
        
          
            (d) New Leases. The Borrower shall not permit the aggregate amount of New Leases
            for New Stores (excluding relocations of existing Stores) entered into by the Loan Parties
            to be greater than the following amounts for the respective periods set forth below:

          

        

      

    

  

 

	
      
        
          Period

        

      

    

    	
      
        
          Maximum

        

      

    

    
	Fiscal Year 2004
	[CONFIDENTIAL]

	Fiscal Year 2005
    
	[CONFIDENTIAL])

	Fiscal Year 2006
	[CONFIDENTIAL])

 

  
    j) Section 5.03(e) is hereby amended to read in its entirety as follows:

    
      
        
          
            (e) Capital Expenditures. The Borrower shall not permit the aggregate amount of
            Capital Expenditures made by the Loan Parties in any Fiscal Year to be greater than the
            following amounts for the respective Fiscal Years set forth below:

          

        

      

    

  

 

	
      
        Fiscal Year

      

    

    	
      
        Maximum Amount

      

    

    
	
      
        2004

      

    

    	[CONFIDENTIAL]

	
      
        2005 and each Fiscal Year thereafter

      

    

    	[CONFIDENTIAL]

______________________________________

(1)  Confidential treatment has been requested for the redacted
portion. The confidential, redacted portions have been filed separately with the SEC. 

(2)  Confidential treatment has been requested for the redacted
portion. The confidential, redacted portions have been filed separately with the SEC. 

(3)  Confidential treatment has been requested for the redacted
portion. The confidential, redacted portions have been filed separately with the SEC. 

(4)  Confidential treatment has been requested for the redacted
portion. The confidential, redacted portions have been filed separately with the SEC. 

(5)  Confidential treatment has been requested for the redacted
portion. The confidential, redacted portions have been filed separately with the SEC.

 

  
    
      
        
          
             

          

        

      

    

  

7

  
    ***CONFIDENTIAL TREATMENT REQUESTED**

     

  

  
    k) Section 5.03(f) is hereby amended to read in its entirety as follows:

    
      
        
          
            (f) Cash Balances. Borrower shall not permit at any time through the Maturity
            Date the Cash Balances of Borrower and its Subsidiaries to be less than (i) at all times
            on or prior to July 2, 2005, $25,000,000, and (ii) at all times thereafter, $10,000,000.

          

        

      

    

    l) Schedule 4.01(l) is hereby amended by adding thereto the new text set forth
    on Attachment A hereto.

    m) Schedule 4.01(n) is hereby amended to read in its entirety as set forth on Attachment
    B hereto.

    n) Clause 3(b) of Exhibit A to the Credit Agreement (the form of Notice of
    Revolving Loan Borrowing) is hereby amended to read in its entirety as follows:

    
      
        
          
            (b) No Default has occurred and is continuing or will result from such Revolving Loan
            Borrowing;

          

        

      

    

    o) Clause 3(b) of Exhibit D to the Credit Agreement (the form of Notice of Swing
    Line Borrowing) is hereby amended to read in its entirety as follows:

    
      
        
          
            (b) No Default has occurred and is continuing or will result from such Swing Line
            Borrowing;

          

        

      

    

    p) Exhibit N of the Credit Agreement (the form of Compliance Certificate) is
    hereby amended to read in its entirety as set forth on Attachment C hereto.

  

 

3. Representations and Warranties. The Borrower hereby represents and
warrants to the Administrative Agent and the Lenders that the following are true and
correct on the date of this Amendment and that, after giving effect to the amendments set
forth in paragraph 2 above, the following will be true and correct on the Effective
Date:

  
    a) The representations and warranties of the Borrower set forth in Article IV of
    the Credit Agreement and in the other Credit Documents are true and correct in all
    material respects as if made on such date (except for representations and warranties
    expressly made as of a specified date, which are true and correct in all material respects
    as of such date);

    b) No Default has occurred and is continuing; and

    c) The Credit Agreement, the Security Agreement, the Pledge Agreement and the Guaranty
    are in full force and effect.

  

 

  
    
      
        
          
             

          

        

      

    

  

8

  
    ***CONFIDENTIAL TREATMENT REQUESTED**

     

  

4. Effective Date. The amendments effected by paragraph 2 above
shall become effective as of November 4, 2004 (the "Effective Date"),
subject to receipt by the Lenders executing this Amendment and the Administrative Agent of
this Amendment duly executed by the Borrower, the Lenders constituting Required Lenders
and the Administrative Agent, each in form and substance satisfactory to the Lenders
executing this Amendment, the Administrative Agent and their respective counsel, as
applicable:

  
    a) This Amendment duly executed by the Borrower, the Lenders constituting Required
    Lenders and the Administrative Agent;

    b) A letter in the form of Attachment D hereto appropriately completed and duly
    executed by each Guarantor (the "Guarantor Consent Letter");

    c) An updated Collateral Certificate, appropriately completed as of the date hereof and
    duly executed by the Borrower;

    d) A certificate of the Secretary or an Assistant Secretary (or comparable officer) of
    the Borrower, dated the Effective Date, certifying that (i) the certificate of
    incorporation and bylaws of the Borrower delivered to the Administrative Agent on the
    Closing Date and the effective date of the First Amendment to Credit Agreement dated as of
    May 21, 2004 (as applicable) have not been modified since such date and remain in full
    force and effect; and (ii) the resolutions of the board of directors of the Borrower
    which authorized the execution, delivery and on-going performance by the Borrower of its
    obligations under the Credit Agreement (as amended from time to time) remain in full force
    and effect;

    e) A certificate of the Secretary or an Assistant Secretary (or comparable officer) of
    each Guarantor, dated the Effective Date, certifying (i) the certificate of
    incorporation, articles of incorporation, certificate of limited partnership, articles of
    organization or comparable document of such Guarantor and the bylaws, partnership
    agreement, limited liability company agreement or comparable document of such Guarantor,
    in each case delivered to the Administrative Agent on the Closing Date have not been
    modified since the Closing Date and remain in full force and effect; and (ii) the
    resolutions of the board of directors or other governing body of such Guarantor (or other
    comparable enabling action) which authorized the execution, delivery and on-going
    performance by such Guarantor of its obligations under the Guaranty remain in full force
    and effect;

    f) Favorable written opinion of Freya R. Brier, Esq., general counsel to the Borrower,
    dated the Effective Date, addressed to the Administrative Agent for the benefit of the
    Administrative Agent and the Lenders and covering such legal matters as the Administrative
    Agent may reasonably request and otherwise in form and substance reasonably satisfactory
    to the Administrative Agent; and

    g) Such other evidence as the Administrative Agent or any Lender may reasonably request
    to establish the accuracy and completeness of the representations and warranties and the
    compliance with the terms and conditions contained in this Amendment and the other Credit
    Documents.

  

 

  
    
      
        
          
             

          

        

      

    

  

9

  
    ***CONFIDENTIAL TREATMENT REQUESTED**

     

  

5. Post-Effective Date Covenant. The continuing effectiveness of the
amendments set forth in paragraph 2 shall be subject to the receipt on or before
November 9, 2004 by the Administrative Agent on behalf of each Lender that executes this
Amendment on or prior to November 8, 2004, of a non-refundable amendment fee in the amount
of 0.20% of such Lender’s respective Commitment. The Borrower agrees that the failure
to such amendment fee on or before November 9, 2004 result in the occurrence of an Event
of Default.

 

6. Effect of this Amendment. On and after the Effective Date, each
reference in the Credit Agreement and the other Credit Documents to the Credit Agreement
shall mean the Credit Agreement as amended hereby. Except as specifically amended above,
(a) the Credit Agreement and the other Credit Documents shall remain in full force and
effect and are hereby ratified and confirmed and (b) the execution, delivery and
effectiveness of this Amendment shall not, except as expressly provided herein, operate as
a waiver of any right, power, or remedy of the Lenders or Agent, nor constitute a waiver
of any provision of the Credit Agreement or any other Credit Document.

 

7. Miscellaneous.

  
    a) Counterparts. This Amendment may be executed in any number of identical
    counterparts, any set of which signed by all the parties hereto shall be deemed to
    constitute a complete, executed original for all purposes.

    b) Headings. Headings in this Amendment are for convenience of reference only
    and are not part of the substance hereof.

    c) Governing Law. This Amendment shall be governed by and construed in
    accordance with the laws of the State of Colorado without reference to conflicts of law
    rules.

  

 

  
    
      
        
          
             

          

        

      

    

  

10

  
    ***CONFIDENTIAL TREATMENT REQUESTED**

  

IN WITNESS WHEREOF, the Borrower, the Administrative Agent and the Lenders executing
this Amendment have caused this Amendment to be executed as of the day and year first
above written.

 

BORROWER: WILD OATS MARKETS, INC.

 

  
    
      
        
          
            
              
                
                  
                    By: /s/

                    Name: Freya R. Brier

                    Title: Sr. Vice President 

                    
                      
                         

                      

                    

                  

                

              

            

          

        

      

    

  

 

ADMINISTRATIVE AGENT: WELLS FARGO BANK, NATIONAL

ASSOCIATION

 

  
    
      
        
          
            
              
                
                  
                    By: /s/

                    Name: Marc Rosenberg

                    Title: Vice President 

                    
                      
                         

                      

                    

                    By: 

                    Name: 

                    Title: 

                    
                      
                         

                      

                    

                  

                

              

            

          

        

      

    

  

 

LENDERS: WELLS FARGO BANK, NATIONAL

ASSOCIATION

 

  
    
      
        
          
            
              
                
                  
                    By: /s/

                    Name: Marc Rosenberg

                    Title: Vice President

                     

                    By: 

                    Name: 

                    Title: 

                    
                      
                         

                         

                      

                    

                    U.S. BANK NATIONAL ASSOCIATION

                     

                    By: 

                    Name: 

                    Title: 

                     

                    By: 

                    Name: 

                    Title: 

                    
                      
                         

                      

                    

                    VECTRA BANK COLORADO N.A.

                     

                    By: /s/

                    Name: Steven Griffith

                    Title: Sr. Vice President

                     

                    By: 

                    Name: 

                    Title: 

                    
                      
                         

                      

                    

                    BANK OF AMERICA, N.A.

                     

                    By: 

                    Name: 

                    Title: 

                     

                    By: 

                    Name: 

                    Title:

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