Exhibit 10.38

 

AMENDMENT AND REAFFIRMATION OF LOAN DOCUMENTS, dated as of December 12, 2013
(this “Amendment”), by and among Vitamin Cottage Natural Food Markets, Inc., a
Colorado corporation (the “Borrower”), each of the other entities listed as a
“Grantor” on the signature pages hereof (together with the Borrower, the
“Grantors”), and JPMorgan Chase Bank, N.A., as administrative agent (in such
capacity, together with its successors and permitted assigns, the
“Administrative Agent”) for the Lenders and each other Secured Party under the
Amended Credit Agreement referred to below.

 

W I T N E S S E T H:

 

WHEREAS, the Borrower, the lenders party thereto and JPMorgan Chase Bank, N.A.,
as Administrative Agent, entered into that certain Credit Agreement dated as of
September 29, 2006 (as amended, supplemented or otherwise modified from time to
time, the “Existing Credit Agreement”);

 

WHEREAS, the Borrower, the Lenders and the Administrative Agent have agreed to
amend and restate the Existing Credit Agreement in its entirety pursuant to that
certain Amended and Restated Credit Agreement, dated as of the date hereof (as
the same may be amended, restated, supplemented or otherwise modified from time
to time, the “Amended Credit Agreement”);

 

WHEREAS, the Borrower and the other Grantors are members of a group of related
entities, the success of any of which is dependent in part on the success of the
other members of such group;

 

WHEREAS, in connection with the Existing Credit Agreement, the Borrower executed
and delivered to JPMorgan Chase Bank, N.A., as Lender, that certain Third
Amended and Restated Promissory Note, dated October 31, 2012, in the maximum
principal amount of $15,000,000 (the “Exisiting Note”);

 

WHEREAS, the Borrower, the other Grantors, the Lenders and the Administrative
Agent are parties to the Collateral Documents (as defined in the Existing Credit
Agreement, and together with the Existing Note, collectively, the “Reaffirmed
Documents”), as applicable; and

 

WHEREAS, it is a condition precedent to the effectiveness of the Amended Credit
Agreement that each of the Grantors enter into this Amendment amending and
reaffirming the terms of the Reaffirmed Documents to which such Grantor is a
party.

 

NOW, THEREFORE, in consideration of the foregoing premises, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Grantors hereby agree as follows:

 

1.             Credit Agreement References.  The Grantors acknowledge and agree
that each reference to the Existing Credit Agreement, however so defined, in the
Reaffirmed Documents from and after the date hereof shall mean the Existing
Credit Agreement as amended and restated pursuant to the Amended Credit
Agreement and each of the Reaffirmed Documents is hereby amended by
(a) substituting a reference to the Amended

 

--------------------------------------------------------------------------------

 

Credit Agreement as herein defined in place of each reference to the Existing
Credit Agreement (whether referred to by the full name of the Existing Credit
Agreement or by any other name which refers thereto by definition);
(b) substituting a reference to “September 29, 2006” in place of each reference
to the “Effective Date”; (c) substituting for the definition of each capitalized
term defined by reference to the Existing Credit Agreement the definition of
such capitalized term set forth in the Amended Credit Agreement, including
without limitation the definition of the term “Obligations”; (d) amending the
reference to “Section 2.16 of the Credit Agreement” set forth in
Section 14(i) of each of the Parent Guaranty (as defined in the Amended Credit
Agreement), the VC Two Guaranty (as defined in the Amended Credit Agreement) and
the Natural Systems Guaranty (as defined in the Amened Credit Agreement) to
refer to “Section 2.17 of the Credit Agreement”; (e) amending the Borrower
Pledge and Security Agreement (as defined in the Amended Credit Agreement) to
delete in its entirety (i) the definition of “Boulder VC” in
Section 1(a) thereof and substituting therefor “Intentionally Omitted”,
(ii) each reference to “Boulder VC” in Sections 4(k), 6(m) and 14 thereof,
(iii) the definition of “Guaranty” in Section 1(g) thereof and substituting
therefor “Intentionally Omitted”, (iv) each reference to “Guaranty” in Sections
8(a), 10(a)(xiv) and 20 thereof, (v) (A) the “(1)” appearing immediately prior
to the phrase “capital stock” and (B) the phrase “, and (2) the limited
liability company membership interests of Boulder VC pledged by Debtor hereunder
and described in Schedule C hereto (the “BVC Interests”)”, in each case in the
first sentence of Section 1(c)(ii)(A) thereof, (vi) each reference to “BVC
Interests” in Sections 1(f), 1(k), 4(i), 10(d), 10(e), 11(e), 12(a) and
12(b) thereof, (vii) the first two sentences of Section 4(i) thereof and
(viii) the text of Schedule C attached thereto and substituting therefor
“Intentionally Omitted”; and (f) amending the reference to
“Section 6.03(a)(i)(F) of the Credit Agreement” set forth in Section 6(i) of the
Trademark Security Agreement (as defined in the Amended Credit Agreement) to
refer to “Section 6.03(a)(i) of the Credit Agreement”.

 

2.             Continued Validity of Collateral Documents.  Each of the Grantors
agrees that except as specifically amended by this Amendment, each Reaffirmed
Document (as amended hereby) to which such Grantor is a party shall remain in
full force and effect, and each of the Grantors listed as signatories hereto
reaffirms the continued validity of each such Reaffirmed Document (as amended
hereby) to which it is a party and agrees and confirms that the Obligations are
secured under and in accordance with the Collateral Documents to which such
Grantor is a party.  Each of the Reaffirmed Documents (as amended hereby) and
this Amendment shall be read and construed as a single agreement.  All
references in each of the Reaffirmed Documents or any related agreement or
instrument to the Reaffirmed Documents shall hereafter refer to each of the
Reaffirmed Documents as amended hereby.  Each of the Grantors acknowledges and
agrees that it has no defenses or set-offs against the Administrative Agent, any
Lender, or any of their respective officers, directors, employees, agents or
attorneys with respect to any of the Loan Documents (as defined in the Amended
Credit Agreement), including, without limitation, the Amended Credit Agreement
and the Reaffirmed Documents.

 

3.             Representations and Warranties.  Each of the Grantors represents
and warrants that, except as otherwise set forth in the Amended Credit
Agreement, (a) all the representations and warranties of such Grantor set forth
in any Reaffirmed Document (as amended hereby) to which it is a party are true
and correct in all material respects on and as

 

2

--------------------------------------------------------------------------------

 

of the date hereof (except to the extent of changes resulting from transactions
contemplated or permitted by the Existing Credit Agreement, the Amended Credit
Agreement or such Reaffirmed Document, and to the extent that such
representations and warranties relate expressly to an earlier date); and (b) all
such representations and warranties are hereby ratified, affirmed and
incorporated herein by reference, with the same force and effect as though set
forth herein in their entirety.  In furtherance of the foregoing, (i) Schedule E
to the Borrower Pledge and Security Agreement (as defined in the Amended Credit
Agreement), (ii) Schedule D to each of (A) the Parent Pledge and Security
Agreement (as defined in the Amended Credit Agreement), (B) the VC Two Pledge
and Security Agreement (as defined in the Amended Credit Agreement) and (C) the
Natural Systems Pledge and Security Agreement (as defined in the Amended Credit
Agreement) and (iii) Schedule A to the Trademark Security Agreement (as defined
in the Amended Credit Agreement), are in each case hereby amended and restated
in the respective forms of such Schedules attached to this Amendment.

 

4.             Definitions.  Each capitalized term used herein without specific
definition shall have the same meaning herein as in the Amended Credit
Agreement.

 

5.             No Waiver.  Nothing contained herein shall constitute a waiver
of, impair or otherwise affect any Obligations or any other obligation of any
Grantor.

 

6.             Counterparts.  This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original but which together shall
constitute one and the same instrument.

 

7.             Governing Law.  THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF COLORADO.

 

8.             Severability.  The invalidity or unenforceability of any one or
more phrases, sentences, clauses, paragraphs or sections contained in this
Amendment shall not affect the validity or enforceability of the remaining
portions of this Amendment, or any part thereof.

 

9.             Effectiveness of Amendment.  This Amendment shall become
effective as of the date hereof upon (a) receipt by the Administrative Agent of
counterparts of this Amendment duly executed by each of the Grantors and (b) the
occurrence of the Effective Date under the Amended Credit Agreement.

 

[remainder of page intentionally left blank; signature pages follow]

 

3

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment and
Reaffirmation of Loan Documents to be executed by their duly authorized
representatives as a sealed instrument as of the date first set forth above.

 

 

THE GRANTORS:

 

 

 

VITAMIN COTTAGE NATURAL FOOD MARKETS, INC.

 

 

 

 

By:

/s/ Kemper Isely

 

Name:

Kemper Isely

 

Title:

Co-President

 

 

 

 

NATURAL GROCERS BY VITAMIN COTTAGE, INC.

 

 

 

 

By:

/s/ Kemper Isely

 

Name:

Kemper Isely

 

Title:

Co-President

 

 

 

 

NATURAL SYSTEMS, LLC

 

 

 

 

By:

/s/ Zephyr Isely

 

Name:

Zephyr Isely

 

Title:

Manager

 

 

 

 

VITAMIN COTTAGE TWO LTD. LIABILITY COMPANY

 

 

 

 

By:

/s/ Zephyr Isely

 

Name:

Zephyr Isely

 

Title:

Manager

 

 

 

 

THE ADMINISTRATIVE AGENT:

 

 

 

 

JPMORGAN CHASE BANK, N.A.

 

 

 

 

By:

/s/ Nancy J. Broome

 

 

Name:

Nancy J. Broome

 

 

Title:

Senior Vice President

 

[Signature Page to Amendment and Reaffirmation of Loan Documents]

 

--------------------------------------------------------------------------------

 

SCHEDULE E

TO

 BORROWER PLEDGE AND SECURITY AGREEMENT

 

INTELLECTUAL PROPERTY

 

Domain names:

 

www.naturalgrocers.com

www.vitamincottage.com

 

Registered United States Patents:

 

None.

 

Registered United States Trademarks or Service Marks:

 

Vitamin Cottage, Natural Grocers and Natural Grocers®

Natural Grocers by Vitamin Cottage®

Vitamin Cottage Natural Grocers®

Vitamin Cottage®

Health Hotline®

 

Pending United States Patent Applications:

 

None.

 

Pending United States Trademark or Service Mark Applications:

 

EDAP — Every Day Affordable Price SM

 

Licenses to Intellectual Property:

 

Rights to use trademarks, trade names, service marks and goodwill granted by VC
Two to Borrower and Parent.

 

--------------------------------------------------------------------------------

 

SCHEDULE D

TO

 PARENT PLEDGE AND SECURITY AGREEMENT

 

INTELLECTUAL PROPERTY

 

Domain names:

 

www.naturalgrocers.com

www.vitamincottage.com

 

Registered United States Patents:

 

None.

 

Registered United States Trademarks or Service Marks:

 

Vitamin Cottage, Natural Grocers and Natural Grocers®

Natural Grocers by Vitamin Cottage®

Vitamin Cottage Natural Grocers®

Vitamin Cottage®

Health Hotline®

 

Pending United States Patent Applications:

 

None.

 

Pending United States Trademark or Service Mark Applications:

 

EDAP — Every Day Affordable Price SM

 

Licenses to Intellectual Property:

 

Rights to use trademarks, trade names, service marks and goodwill granted by VC
Two to Borrower and Parent.

 

--------------------------------------------------------------------------------

 

SCHEDULE D

TO

VC TWO PLEDGE AND SECURITY AGREEMENT

 

INTELLECTUAL PROPERTY

 

Domain names:

 

None.

 

Registered United States Patents:

 

None.

 

Registered United States Trademarks or Service Marks:

 

Vitamin Cottage, Natural Grocers and Natural Grocers®

Natural Grocers by Vitamin Cottage®

Vitamin Cottage Natural Grocers®

Vitamin Cottage®

 

Pending United States Patent Applications:

 

None.

 

Pending United States Trademark or Service Mark Applications:

 

None.

 

Licenses to Intellectual Property:

 

None.

 

--------------------------------------------------------------------------------

 

SCHEDULE D

TO

 NATURAL SYSTEMS PLEDGE AND SECURITY AGREEMENT

 

INTELLECTUAL PROPERTY

 

Domain names:

 

None.

 

Registered United States Patents:

 

None.

 

Registered United States Trademarks or Service Marks:

 

None.

 

Pending United States Patent Applications:

 

None.

 

Pending United States Trademark or Service Mark Applications:

 

None.

 

Licenses to Intellectual Property:

 

None.

 

--------------------------------------------------------------------------------

 

SCHEDULE A

TO

TRADEMARK SECURITY AGREEMENT

 

Federal Trademark Registrations for the Marks

 

United States Trademarks:

 

Registration Number

 

Registration Date

 

Mark

3770003

 

April 6, 2010

 

VITAMIN COTTAGE, NATURAL GROCERS AND NATURAL GROCERS

3766174

 

March 30, 2010

 

NATURAL GROCERS BY VITAMIN COTTAGE

2697734

 

March 18, 2003

 

VITAMIN COTTAGE NATURAL GROCERS

1795426

 

September 28, 1993

 

VITAMIN COTTAGE

 

United States Trademarks (Pending):

 

None.

 

--------------------------------------------------------------------------------