AGREEMENT FOR DISTRIBUTION OF PRODUCTS

Exhibit 10.1

NOTE: A request for confidential treatment has been made with respect to the portions of the following document that are marked with [*CONFIDENTIAL*]. The redacted portions have been filed separately with the SEC.

AGREEMENT FOR DISTRIBUTION OF PRODUCTS

This Agreement for Distribution of Products is entered into to be effective as of January 1, 2005 (the “ Effective Date ”), by and between Whole Foods Market Distribution, Inc., a Delaware corporation having an address at 550 Bowie Street, Austin, Texas 78703 (“ WFM ”) and United Natural Foods, Inc. and its subsidiaries and affiliates having an address at 260 Lake Road, Dayville, Connecticut 06241 (collectively “ UNFI ”).

RECITALS

A. WFM and its affiliates (the “ WFM Affiliates ”) operate certain retail supermarket stores, bakeries and other facilities in the United States which are primarily engaged in the sale of natural and organic products (the “ WFM Stores ”).

B. The parties desire to enter into an agreement pursuant to which UNFI shall sell and distribute to WFM facilities, including WFM Stores, WFM bakeries, WFM distribution centers and other WFM facilities (together the “ WFM Facilities ”) the goods and services specified below on the terms set forth below.

NOW THEREFORE, the parties agree as follows:

1. Term. Subject to earlier termination as set forth herein, this Agreement shall commence on January 1, 2005 (the “ Effective Date ”) and expire on December 31, 2007.

2. Distribution

(a) UNFI shall be the Primary Distributor to WFM for the following types of products (the “ Product Categories ”): (i) natural foods/grocery items, (ii) organic packaged grocery products, (iii) frozen products (including certain grocery and meats), (iv) branded bulk products, (v) vitamins, supplements, body care and other health and beauty aid products, (vi) dairy products and (vii) selected specialty items (but excluding produce, mercantile and other categories not specifically identified above). The foregoing products, along with any other products provided hereunder, are hereinafter defined individually as a “ Product ” and collectively as the “ Products ”). Produce, non-branded bulk items and alcoholic beverages are not included in the Products for purposes of this Agreement.

(b) For purposes of this Agreement, “Primary” shall mean that: (i) WFM Facilities in all regions other than in [*CONFIDENTIAL*], shall purchase a majority of the products they purchase in the Product Categories from UNFI, and (ii) WFM shall purchase a minimum of $[*CONFIDENTIAL*] million in Products (inclusive of orders for Products that are out of stock, hereinafter occasionally defined as “ OOS Products ”) during each 12-month period of the Term, commencing as of the Effective Date.

NOTE: A request for confidential treatment has been made with respect to the portions of the following document that are marked with [*CONFIDENTIAL*]. The redacted portions have been filed separately with the SEC.

3. Pricing, Adjustments, Minimum Orders, Fuel Adjustments

(a) During the Term, UNFI Base Pricing not including freight charges from UNFI distribution centers to WFM Facilities (the “ Freight Up Charge ”) for Products (other than produce, wine, non-branded bulk products and products purchased through Select Nutrition Distributors, Inc.) will be priced based upon UNFI’s “Cost” plus a percentage as set forth as follows: [*CONFIDENTIAL*]. Pricing shall be set based on [*CONFIDENTIAL*].

(b) If WFM maintains a higher Cost plus percentage than is applicable, UNFI agrees to rebate the difference based on the actual amount charged and the actual earned by WFM based on its volume in a manner consistent with the parties’ past pricing adjustments.

(c) For purposes of this Agreement, “Cost” shall be defined as [*CONFIDENTIAL*].

(d) UNFI will look to put on-line new facilities in both [*CONFIDENTIAL*] and in [*CONFIDENTIAL*] during the next 18 months depending on site and economic viability. In addition, UNFI will look at the feasibility of [*CONFIDENTIAL*]. These initiatives will be done in conjunction with WFM.

(e) [*CONFIDENTIAL*] Products on promotion will be priced at [*CONFIDENTIAL*]. WFM will work with UNFI and vendors to improve the pre-order process. In addition, [*CONFIDENTIAL*]. These Products will be priced at [*CONFIDENTIAL*].

(f) Drop Charge for Less than Minimum Orders . WFM and UNFI anticipate that the average minimum dollar amount per order taking into account all WFM Facilities shall be approximately $[*CONFIDENTIAL*]. If any WFM Facility places an order for Products and the total aggregate dollar amount of all Products included in the delivery is less than $[*CONFIDENTIAL*], UNFI shall charge an additional $[*CONFIDENTIAL*] drop charge for the order. This drop charge for orders that are less than $[*CONFIDENTIAL*] shall not apply to any orders placed by any new WFM Facility within the first [*CONFIDENTIAL*] days of such WFM Facility’s opening date. For WFM Facilities that frequently fall below the $[*CONFIDENTIAL*] level, UNFI shall notify WFM of the issue and propose a reduction in the number of regularly scheduled deliveries to such WFM Facilities. After receipt of the UNFI’s notice and proposal, WFM will reduce the number of deliveries to such WFM Facilities, unless the cause for such orders being below the $[*CONFIDENTIAL*] level is due to size of the WFM Facility or backroom issues. Nothing in the two preceding sentences shall affect UNFI’s right to charge and WFM’s obligation to pay the above-referenced drop charge.

NOTE: A request for confidential treatment has been made with respect to the portions of the following document that are marked with [*CONFIDENTIAL*]. The redacted portions have been filed separately with the SEC.

(g) In the event diesel fuel cost weekly average is in excess of $[*CONFIDENTIAL*] per gallon during any three month period during the Term (the “ Base Fuel Price ”), UNFI shall be entitled to charge WFM an energy surcharge as defined below for Products delivered during the following three month period. The energy surcharge shall be calculated by taking [*CONFIDENTIAL*]. In the event that the weekly average price for diesel fuel exceeds $[*CONFIDENTIAL*] per gallon, the parties agree to negotiate in good faith the allocation of cost between them in excess of the $[*CONFIDENTIAL*] threshold. UNFI and WFM shall develop billing procedures to implement this provision. If the parties cannot agree on an adjustment, [*CONFIDENTIAL*]. Should the price fall below $[*CONFIDENTIAL*] per gallon, UNFI will provide a fuel adjustment credit to WFM calculated the same as above.

(h) Cross-Dock Billing . UNFI will, from time to time, and based on UNFI space availability, ship pallets and shipper displays on a cross-dock basis (as opposed to “bill to, ship to”) for WFM at a rate of $[*CONFIDENTIAL*] per pallet.

(i) Payment Terms . WFM shall send a wire transfer every [*CONFIDENTIAL*] as payment for all acceptable invoices received by WFM the preceding [*CONFIDENTIAL*]. A finance charge of [*CONFIDENTIAL*] per month shall be assessed on any delinquent balance.

4. Placement of Personnel and Transfer of Pricing Information

(a) UNFI shall provide, at its cost, a [*CONFIDENTIAL*] at WFM Headquarters in Austin, Texas. In addition, UNFI will provide [*CONFIDENTIAL*].

(b) WFM agrees to assume responsibility for disseminating product pricing information to the regions, stores and departments based on a mutually agreed upon transition schedule. This is presently work being done by UNFI but now that UNFI is electronically transmitting the 889 and 879 files, WFM has all the information necessary to disseminate this information.

(c) In addition, UNFI agrees that it will accept electronic files from WFM on its National and Regional Promotions in a file lay-out acceptable to both parties based on a mutually agreed upon transition schedule. The goal is to streamline and have consistent formats for mutually agreed data related to promotions.

5. Promotional and Marketing Funds . UNFI will provide assistance to WFM in the solicitation of vendor funding for new, remodeled stores and acquired stores at levels requested by WFM.

NOTE: A request for confidential treatment has been made with respect to the portions of the following document that are marked with [*CONFIDENTIAL*]. The redacted portions have been filed separately with the SEC.

6. Out of Stock Performance Criteria

(a) UNFI and WFM will work together to create an approved product list (“ APL ”) beginning with the Northeast Region of WFM. An evaluation of this program will be made with the parties Joint OOS Committee.

(b) UNFI agrees, on a local regional DC by DC basis, to maintain minimum fill rates of [*CONFIDENTIAL*]% for WFM Facility orders which means that the UNFI portion of OOS Product’s should not exceed [*CONFIDENTIAL*]%. In the event that UNFI OOS Product’s exceed [*CONFIDENTIAL*]% for more than [*CONFIDENTIAL*] consecutive weeks, UNFI shall pay WFM a credit (the “ OOS Credit ”) equal to [*CONFIDENTIAL*]. UNFI shall pay the affected WFM Region(s) the OOS Product Credit every week until such time as UNFI fill rates for the applicable DC equal or exceed [*CONFIDENTIAL*]% for a week. UNFI shall issue a weekly check to each affected WFM Region for its prorated share of such OOS Product Credit.

7. Audits WFM and its designated agents shall have the right to perform the following audits of UNFI’s compliance with the terms of the Agreement. [*CONFIDENTIAL*]. The parties anticipate that this will involve the review of [*CONFIDENTIAL*].

(a) Financial – WFM sales, cost, promotions, performance metrics and discounts;

(b) Freight - freight costs, rates, transportation costs;

(c) Vendors – invoices from vendors to UNFI.

8. Private Label . UNFI will purchase and carry Private Label Products requested by WFM subject to space and slot availability pursuant to the terms set forth on Exhibit B . “Private Label Products” shall mean those products that WFM offers from time to time in WFM Facilities under WFM proprietary labels.

9. Termination

(a) WFM may terminate this Agreement immediately upon written notice to UNFI (unless otherwise provided below) for cause if:

(i) UNFI fails to make any payment, credit, rebate or other remittance of monetary consideration provided for herein on the date due, other than as to payments regarding which UNFI has given WFM notice of good faith dispute, and fails to remedy any delinquent payment, credit, rebate or other remittance within fifteen business days after notice thereof from WFM;

(ii) UNFI breaches any non-monetary obligations under the Agreement not specifically referenced above in this Section, and fails to cure such breach after 30 days’ prior written notice of breach;

NOTE: A request for confidential treatment has been made with respect to the portions of the following document that are marked with [*CONFIDENTIAL*]. The redacted portions have been filed separately with the SEC.

(iii) Regulatory violations by UNFI where the violations or the corrective action required materially and adversely affect the continued ability of UNFI to perform all or any material portion of the Agreement; or

(iv) [*CONFIDENTIAL*].

(b) UNFI may terminate the Agreement immediately for cause upon written notice to WFM if:

(i) WFM fails to make any payment, credit, rebate or other remittance of monetary consideration provided for herein on the date due, other than payments regarding which WFM has given UNFI notice of a good faith dispute, and fails to remedy any delinquent payment within five business days after notice thereof from UNFI (which failure to cure shall be an event of default), or if such breach occurs more than twice in any given calendar year;

(ii) WFM fails to purchase $[*CONFIDENTIAL*] of Products in any calendar year during the Term other than where such failure is caused by a Force Majeure event or WFM’s failure is due to UNFI or manufacturer OOS Products; or

(iii) WFM materially breaches any non-monetary obligations under the Agreement not specifically referenced above in this Section, and fails to cure such breach after 30 days’ prior written notice of breach.

10. Facilities; Delivery Standards .

(a) Standards for Facilities . UNFI represents, warrants and covenants that all UNFI distribution centers will be maintained and operated in all material respects in accordance with all applicable laws, in compliance with industry standards and with UNFI warehousing and delivery standards, which will be available for review upon request by WFM. WFM may inspect the physical plant and inventory of any distribution center during normal business hours upon reasonable advance notice to the designated UNFI personnel, but shall not impair or impede the business operations of the center. UNFI shall give at least 60 days notice of its intent to move service for any WFM Store from one facility to another facility. The proposed move shall not result in any increase in cost to WFM, and the parties will have had the opportunity to prepare and implement a plan for a transition to any new distribution facility.

(b) Departure Windows . Unless otherwise provided in this Agreement, UNFI agrees to maintain the existing departure windows for scheduled departures from distribution centers for delivery to WFM Facilities. If changes are required by municipal, residential or property owners on delivery hours, parking of trucks, delivery routes, curfews, noise ordinances, lease covenants, neighborhood covenants and/or operating hours, then WFM and UNFI will work together to make the scheduling changes necessary to comply with such restrictions.

NOTE: A request for confidential treatment has been made with respect to the portions of the following document that are marked with [*CONFIDENTIAL*]. The redacted portions have been filed separately with the SEC.

(c) Code Date Policy; Inventory Management . Products shall be distributed to WFM Facilities in compliance with the Code Date Policy attached as Exhibit D related to the minimum number of days prior to expiration of the final code date, for perishable Products, under which such Products will be accepted upon delivery to WFM Facilities. Product delivered with less than the minimum code date shall be deemed out-of-stock for purposes of this Agreement. UNFI agrees to deliver all Products on a “first-in, first-out” inventory management basis, to ensure proper inventory turns and maximize available Product Code Dates.

(d) Quality Standards . Products will be delivered palletized and shrink-wrapped and meet WFM’s quality standards and be free from damage including but not limited to temperature damage and be free from evidence of rodents or insects. The parties will develop a mutually agreeable pallet and tote exchange program. In the event that any product is recalled or withdrawn (the “ Recalled Product ”), UNFI or its designee will pick up the Recalled Product in order to remove any Recalled Product from WFM Facilities and shall dispose of or return any Recalled Products as required. In addition to the foregoing responsibilities, UNFI shall use its best reasonable efforts to cooperate with WFM in removing the Recalled Product and replenishing WFM Facilities with replacement products.

(e) Store Receiving . All product shipments by UNFI to WFM Facilities shall be evidenced by an invoice and signed by both parties. Shipments of product shall be acknowledged as received by execution by store personnel of the delivered invoice a copy of which shall be left with the WFM Facility.

(f) Passage of Title and Risk of Loss . Title and risk of loss shall pass upon delivery to WFM Facilities when delivered by UNFI fleet or by independent carrier.

11. Indemnification

(a) UNFI Indemnity . UNFI shall indemnify, defend and hold harmless WFM and its parent and affiliates, together with their stockholders, general and limited partners, members, managers, directors, officers, employees, agents, representatives, successors and assigns from and against any and all demands, claims, liabilities, losses, costs, expenses (including but not limited to reasonable attorney fees), injuries and damages of any kind (together “ Claims ”) incurred or suffered by or asserted against any of them, arising out of or relating to (i) any actual or alleged violation by UNFI of any federal, state or local law, including any statute, ordinance, administrative order, rule or regulation; (ii) any negligence or willful misconduct on the part of UNFI or any of its employees or agents; (iii) any breach of any term of this Agreement; and/or (iv) the employment, presence or activities of any UNFI applicant, employee or contractor on any premises of WFM or any WFM Affiliates for any purpose related to this Agreement, including but not limited to all personal injury, wage and hour, wrongful termination, harassment, discrimination, workers compensation or disability claims or demands.

NOTE: A request for confidential treatment has been made with respect to the portions of the following document that are marked with [*CONFIDENTIAL*]. The redacted portions have been filed separately with the SEC.

(b) WFM Indemnity . WFM shall indemnify, defend and hold harmless UNFI and its parent and affiliates, together with their stockholders, general and limited partners, members, managers, directors, officers, employees, agents, representatives, successors and assigns from and against any and all Claims incurred or suffered by or asserted against any of them, arising out of or relating to (i) any actual or alleged violation by WFM of any federal, state or local law, including any statute, ordinance, administrative order, rule or regulation; (ii) any negligence or willful misconduct on the part of WFM or any of its employees or agents; (iii) any breach of any term of this Agreement; and/or (iv) the employment, presence or activities of any WFM applicant, employee or contractor on any premises of UNFI for any purpose relate