Exhibit 10.7
FIRST AMENDMENT TO AMENDED AND
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RESTATED CREDIT AGREEMENT
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THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT ("First
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Amendment"), dated as of November 3, 1999, is made and entered into by and among
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WHOLE FOODS MARKET, INC. (the "Company"), a Texas corporation, the banking
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institutions from time to time a party to the Credit Agreement (as hereinafter
defined), as amended by this First Amendment (each, together with its successors
and assigns, a "Bank" and collectively, the "Banks"), and CHASE BANK OF TEXAS,
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NATIONAL ASSOCIATION, as agent for the Banks (in such capacity, together with
its successors in such capacity, the "Agent").
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RECITALS:
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WHEREAS, the Company, the Agent and certain Banks are parties to an Amended
and Restated Credit Agreement dated as of June 28, 1999 (said Credit Agreement
being hereinafter referred to as the "Credit Agreement"); and
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WHEREAS, as a result of corporate reorganizations of certain of the
Company's Subsidiaries and the entry by such Subsidiaries of the Company into
internet strategy lines of business, the Company, the Agent and the Banks have
agreed, on the terms and conditions herein set forth, that the Credit Agreement
be amended in certain respects.
AGREEMENTS:
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NOW, THEREFORE, in consideration of the premises and the mutual agreements,
representations and warranties herein set forth, and for other good and valuable
consideration, the receipt and sufficiency which are hereby acknowledged and
confessed, the Company, the Agent and the Banks do hereby agree as follows:
General Definitions. Except as expressly modified by this First Amendment,
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capitalized terms used herein which are defined in the Credit Agreement shall
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have the same meanings when used herein.
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New Definitions. The following defined terms are hereby added to Section 1 of
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the Credit Agreement to hereafter be and read as follows:
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First Amendment shall mean that certain First Amendment of Amended and Restated
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Credit Agreement dated effective November 3, 1999, by and among the Company, the
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Banks and the Agent.
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Permitted Internet Strategy Investments shall mean (a) those Investments by the
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Company and/or XxxxxXxxxxx.xxx, Inc. in American WholeHealth, Inc. and in Real
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Goods Trading Corporation that are described in Section 4 of the First
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Amendment, (b) those Investments by XxxxxXxxxxx.xxx, Inc. or any of its
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Subsidiaries in internet strategy lines of business to the extent, but only to
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the extent, that such internet strategy Investments are financed by proceeds
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received by XxxxxXxxxxx.xxx, Inc. from the WholePeople Preferred Stock Offering,
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and (c) those Investments by the Company represented and evidenced by its
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ownership, as of the effective date of the First Amendment, of Stock in Amrion,
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Inc., a Colorado corporation, XxxxxXxxxxx.xxx, Inc., a Texas corporation, and
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xxxxxxxxxx.xxx, a Delaware corporation.
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WholePeople Preferred Stock Offering shall mean the sale by XxxxxXxxxxx.xxx,
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Inc. of any of the Preferred Stock of XxxxxXxxxxx.xxx, Inc. consented to by the
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Agent and the Banks under the provisions of Section 4 of the First Amendment.
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Modification of Loans and Investments Covenant.
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(a) Sections 6.7(a) and 6.7(f) of the Credit Agreement are hereby amended and
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restated in their entirety to hereafter be and read as follows:
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(a) Stock of any Subsidiary, subject to the terms of Section 6.7(h) as to
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Investments in internet strategy lines of business.
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(f) so long as no Default shall have occurred and is then continuing,
and subject to the terms of Section 6.2, loans by the Company or any
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Guarantor to any Subsidiary of the Company, provided that the sum of (i)
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the aggregate amount of loans by the Company or any Guarantor to
XxxxxXxxxxx.xxx, Inc., xxxxxxxxxx.xxx, and/or any other Subsidiary of the
Company involved in internet strategy lines of business (other than loans
by XxxxxXxxxxx.xxx, Inc. to any of its Subsidiaries of proceeds received
from any WholePeople Preferred Stock Offering) and (ii) the aggregate
amount of Investments by the Company and/or any Guarantor in internet
strategy lines of business (over and above the Permitted Internet Strategy
Investments), on a consolidated basis, may not exceed $20,000,000.
(b) A new Section 6.7(h) is hereby added to the Credit Agreement to
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hereafter be and read as follows:
(h) so long as no Default shall have occurred and is then continuing,
Investments by the Company and/or any Guarantor in internet strategy lines
of business, provided that the sum of (i) the aggregate amount of loans by
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the Company or any Guarantor to XxxxxXxxxxx.xxx, Inc., xxxxxxxxxx.xxx,
and/or any other Subsidiary of the Company involved in internet strategy
lines of business (other than loans by XxxxxXxxxxx.xxx, Inc. to any of its
Subsidiaries of proceeds received from any WholePeople Preferred Stock
Offering) and (ii) the aggregate amount of Investments by the Company
and/or any Guarantor in internet strategy lines of business (over and above
the Permitted Internet Strategy Investments), on a consolidated basis, may
not exceed $20,000,000.
(c) The Company, the Agent and the Banks acknowledge and agree that the
above-described $20,000,000 limit as to loans and Investments for internet
strategy lines of business is an aggregate limit for all such loans and
Investments taken as a whole and is not intended to create separate limits of
$20,000,000 for all such loans and $20,000,000 for all such Investments.
Section 1. Limited Consent and Waiver.
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(a) Pursuant to Xxxxxx Xxxxxxxx'x October 13, 1999 letter to the Agent, the
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Company has informed the Agent that the Company's Board of Directors has
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authorized and approved the following specified actions previously taken or to
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be taken by certain of the Company's Subsidiaries:
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1. Creation of XxxxxXxxxxx.xxx, Inc., a Texas corporation which is a
wholly-owned Subsidiary of the Company;
2. Either (i) the merger of XxxxxXxxxxx.xxx, Inc. with and into Amrion,
Inc. (with Amrion, Inc. being the surviving entity which then changes
its name to XxxxxXxxxxx.xxx, Inc.) or (ii) the dissolution of the
Texas corporation named XxxxxXxxxxx.xxx, Inc. and the change by
Amrion, Inc. of its name to XxxxxXxxxxx.xxx, Inc. (with the entity
ultimately conducting business under the name XxxxxXxxxxx.xxx, Inc.
being hereinafter referred to "XX.xxx");
3. xxxxxxxxxx.xxx becoming a wholly-owned Subsidiary of XX.xxx; and
4. XX.xxx's sale of (i) 13.46% of its ownership interests to outside
investors in the form of shares of Series A Preferred Stock (the
"Preferred Stock") for up to $35,000,000 upon the terms set forth in
the term sheet (the "Term Sheet") attached to Xx. Xxxxxxxx'x October
13, 1999 letter and (ii) 20% of its ownership interests to employees
via stock and option pools.
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Additionally, Xx. Xxxxxxxx'x October 13, 1999 letter informs the Agent of the
Company's and XX.xxx's acquisition of a minority ownership interest in American
WholeHealth, Inc. for an aggregate investment of approximately $20,000,000, and
a supplemental October 20, 1999 letter from Xx. Xxxxxxxx to the Agent informs
the Agent of XX.xxx's acquisition of a minority ownership interest in Real Goods
Trading Corporation for an aggregate investment of approximately $3,600,000.
Since the above-described actions result or would result in the violation of
certain covenants set forth in the Credit Agreement as more particularly
described below, the Company has requested that the Agent and the Banks under
the Credit Agreement consent to the above-described actions by the Company and
its applicable Subsidiaries and expressly waive any non-compliance by the
Company and its applicable Subsidiaries of the provisions of the Credit
Agreement described below as a result of the implementation of the above-
described actions.
(b) The Agent and each of the Banks hereby expressly consent to the above-
described actions by the Company and its applicable Subsidiaries and waive the
following provisions of the Credit Agreement, but only insofar as such
provisions apply to and otherwise prevent the above-described actions taken or
to be taken by the Company and its applicable Subsidiaries:
1. The "Liquidation Payment" described in Paragraph III. C. of the
Term Sheet and the "Put Option" described in Paragraph III. G. of the Term
Sheet would each create Contingent Obligations of the Company and XX.xxx in
excess of the permitted amount of Contingent Obligations allowed under
Sections 6.1(k) and 6.3 of the Credit Agreement;
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2. The sale of the Preferred Stock is not permitted under the terms
of Section 6.4(d) of the Credit Agreement since the contemplated
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$35,000,000 sales price for the Preferred Stock exceeds the Permitted Stock
Disposition threshold set forth in Section 6.4(z) of the Credit Agreement;
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3. The transfer to employees of up to 20% of the ownership interests
in XX.xxx via stock and option pools is not permitted under the terms of
Section 6.4(d) of the Credit Agreement;
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4. The expansion by XX.xxx and xxxxxxxxxx.xxx into internet strategy
lines of business not considered to be in the natural foods industry is not
permitted by Section 6.5 of the Credit Agreement;
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5. The approximately $20,000,000 investment by the Company and
XX.xxx in American WholeHealth, Inc. and the approximately $3,600,000
investment by XX.xxx in Real Goods Trading Corporation are not Investments
which are permitted under Section 6.7 of the Credit Agreement prior to the
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amendment of said Section 6.7 in accordance with the terms hereof; and
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6. The dividends contemplated to be paid to the holders of the
Preferred Stock under Paragraph III. B. of the Term Sheet are not permitted
to be paid under the terms of Section 6.11 (b) of the Credit Agreement.
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The Company, the Agent and the Banks agree that the actions described above in
this subparagraph (b) which are hereby consented to by the Agent and the Banks
are independent of, and shall not be included within or count towards, any
permitted, applicable threshold(s) for any such actions otherwise provided for
in Article 6 or any other provision of the Credit Agreement.
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(c) Each of the above-described provisions of the Credit Agreement are not
waived for any other event or occurrence and the Company hereafter shall be
required to strictly comply with all of such provisions of the Credit Agreement.
The consent of the Agent and the Banks to the Preferred Stock offering is also
subject to and conditioned upon such offering and sale of the Preferred Stock
being in compliance in all material respects with the terms set forth and
disclosed in the Term Sheet. Except for the express consent and waivers
contained above, no provision, term, covenant, representation or agreement
contained in the Credit Agreement is waived, and all such provisions, terms,
covenants, representations and agreements are in full force and effect.
Representations and Warranties. The Company represents and warrants to the
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Agent and the Banks that the representations and warranties contained in Section
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4 of the Credit Agreement and in all of the other Loan
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Documents are true and correct in all material respects on and as of the
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effective date hereof as though made on and as of such effective date. The
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Company hereby certifies that no event has occurred and is continuing which
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constitutes a Default or an Event of Default under the Credit Agreement or
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which, upon the giving of notice or the lapse of time, or both, would
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constitute a Default or an Event of Default. Additionally, the Company hereby
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represents and warrants to the Agent and the Banks that the resolutions or
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authorizations of the Board of Directors (or other governing parties) of the
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Company and its Subsidiaries which are set out in the following described
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Secretary's Certificates or Authorizations remain in full force and effect as
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of the effective date hereof and have not been modified, amended, superseded or
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revoked:
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(a) That certain Secretary's Certificate dated June 25, 1999, executed and
delivered to the Agent by the Secretary of Whole Foods Market, Inc. in
connection with the Credit Agreement;
(b) That certain Secretary's Certificate dated June 25, 1999, executed and
delivered to the Agent by the Assistant Secretary of Xxx. Xxxxx'x Natural Foods
Market, Inc., The Sourdough: A European Bakery, Inc., WFM Beverage Corp., Whole
Food Company, Inc., Whole Foods Market California, Inc., Whole Foods Market
Services, Inc., Whole Foods Market Distribution, Inc., xxxxxxxxxx.xxx, inc.,
Whole Foods Market Southwest I, Inc., Amrion, Inc., Allegro Coffee Company,
Whole Foods Market Group, Inc., Nature Heartland, Inc. and Whole Foods Market
Southwest Investments, Inc. in connection with the Credit Agreement;
(c) That certain Secretary's Certificate dated July 16, 1999, executed and
delivered to the Agent by the Secretary of Biosmart Direct, Inc. in connection
with that certain Joinder Agreement dated effective July 16, 1999, executed and
delivered to the Agent by Biosmart Direct, Inc.; and
(d) That certain Authorization dated June 28, 1999, executed and delivered
to the Agent by the Members of Whole Foods Market Brand 365, LLC, in connection
with the Credit Agreement.
Limitations. The amendments set forth herein are limited precisely as written
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and shall not be deemed to (a) be a consent to, or waiver or modification of,
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any other term or condition of the Credit Agreement or any of the other Loan
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Documents, or (b) except as expressly set forth herein, prejudice any right or
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rights which the Banks may now have or may have in the future under or in
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connection with the Credit Agreement, the Loan Documents or any of the other
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documents referred to therein. Except as expressly modified hereby or by
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express written amendments thereof, the terms and provisions of the Credit
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Agreement, the Notes and any other Loan Documents or any other documents or
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instruments executed in connection with any of the foregoing are and shall
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remain in full force and effect. In the event of a conflict between this First
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Amendment and any of the foregoing documents, the terms of this First Amendment
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shall be controlling.
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Payment of Expenses. The Company agrees, whether or not the transactions hereby
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contemplated shall be consummated, to reimburse and save the Agent and each of
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the Banks harmless from and against liability for the payment of all reasonable
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substantiated out-of-pocket costs and expenses arising in connection with the
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preparation, execution, delivery, amendment, modification, waiver and
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enforcement of, or the preservation of any rights under this First Amendment,
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including, without limitation, the reasonable fees and expenses of counsel for
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the Agent and other charges which may be payable in respect of, or in respect of
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any modification of, the Credit Agreement and the Loan Documents. The
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provisions of this Section shall survive the termination of the Credit Agreement
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and the repayment of the Loans.
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Descriptive Headings, etc. The descriptive headings of the several Sections of
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this First Amendment are inserted for convenience only and shall not be deemed
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to affect the meaning or construction of any of the provisions hereof.
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Entire Agreement. This First Amendment and the documents referred to herein
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represent the entire understanding of the parties hereto regarding the subject
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matter hereof and supersede all prior and contemporaneous oral and written
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agreements of the parties hereto with respect to the subject matter hereof,
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including, without limitation, any commitment letters regarding the transactions
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contemplated by this First Amendment.
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Counterparts. This First Amendment may be executed in any number of
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counterparts and by different parties on separate counterparts and all of such
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counterparts shall together constitute one and the same instrument. Complete
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sets of counterparts shall be lodged with the Company and the Agent.
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References to Credit Agreement. As used in the Credit Agreement (including all
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Exhibits thereto) and all other Loan Documents, on and subsequent to the
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effective date hereof, the term "Agreement" shall mean the Credit Agreement, as
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amended by this First Amendment.
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IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to
be duly executed and delivered by their respective duly authorized offices as of
the date first above written.
NOTICE PURSUANT TO TEX. BUS. & COMM. CODE (S)26.02
THIS FIRST AMENDMENT AND ALL OTHER LOAN DOCUMENTS EXECUTED BY ANY OF THE PARTIES
BEFORE OR SUBSTANTIALLY CONTEMPORANEOUSLY WITH THE EXECUTION HEREOF TOGETHER
CONSTITUTE A WRITTEN CREDIT AGREEMENT AND REPRESENT THE FINAL AGREEMENT BETWEEN
THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
WHOLE FOODS MARKET, INC.
a Texas corporation
By: /s/ Xxxxxx Xxxxxxxx
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Xxxxxx Xxxxxxxx
Secretary
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, individually
and as Agent
By:_______________________________
Name:_____________________________
Title:____________________________
XXXXX FARGO BANK (TEXAS), N.A.
By:_______________________________
Name:_____________________________
Title:____________________________
FIRST UNION NATIONAL BANK
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By:________________________________________
Name:______________________________________
Title: ____________________________________
BANKBOSTON, N.A.
By:________________________________________
Name:______________________________________
Title: ____________________________________
GUARANTY FEDERAL BANK, F.S.B.
By:________________________________________
Name:______________________________________
Title: ____________________________________
LASALLE BANK NATIONAL ASSOCIATION
By:________________________________________
Name:______________________________________
Title: ____________________________________
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The undersigned Guarantors (a) acknowledge and consent to the execution of
the foregoing First Amendment, (b) confirm that the Guaranties previously
executed or joined in by each of the undersigned Guarantors apply and shall
continue to apply to all Indebtedness evidenced by or arising pursuant to the
Credit Agreement or any other Loan Documents, notwithstanding the execution and
delivery of this First Amendment by the Company, the Agent and each of the
Banks, and (c) acknowledge that without this consent and confirmation, the Banks
and the Agent would not agree to the modifications of the Credit Agreement which
are evidenced by the foregoing First Amendment.
WHOLE FOODS MARKET SERVICES, INC.,
a Delaware corporation
WFM BEVERAGE CORP., a Texas corporation
WHOLE FOODS MARKET SOUTHWEST I, INC.,
a Delaware corporation
WHOLE FOODS MARKET SOUTHWEST INVESTMENTS, INC., a Delaware corporation
WHOLE FOODS MARKET CALIFORNIA, INC.,
a California corporation
XXX. XXXXX'X NATURAL FOOD MARKETS, INC.,
a California corporation
WHOLE FOODS MARKET GROUP, INC.,
a Delaware corporation
AMRION, INC., a Colorado corporation
ALLEGRO COFFEE COMPANY, a Colorado corporation
WHOLE FOODS MARKET DISTRIBUTION, INC.,
a Delaware corporation
WHOLE FOOD COMPANY, INC., a Louisiana corporation
THE SOURDOUGH: A EUROPEAN BAKERY, INC.
a Texas corporation
NATURE'S HEARTLAND, INC.,
a Massachusetts corporation
xxxxxxxxxx.xxx,
a Delaware corporation
By: /s/ Xxxxxx Xxxxxxxx
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Xxxxxx Xxxxxxxx
Secretary
WHOLE FOODS MARKET BRAND 365, LLC,
a California limited liability company
By: Whole Foods Market Services, Inc.,
a Texas corporation, Member
By: /s/ Xxxxxx Xxxxxxxx
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Xxxxxx Xxxxxxxx, Vice President and
Chief Financial Officer
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WHOLE FOODS MARKET SOUTHWEST, L.P.,
a Texas limited partnership
By: Whole Foods Market Southwest I, Inc.,
a Delaware corporation
By: /s/ Xxxxxx Xxxxxxxx
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Xxxxxx Xxxxxxxx, Secretary
BIOSMART DIRECT, INC.,
a Colorado corporation
By: /s/ Xxxxx Xxxxxxxx
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Xxxxx Xxxxxxxx, President
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