Exhibit 10.10
THIRD AMENDMENT TO CREDIT AGREEMENT
This Third Amendment to Credit Agreement (the "Second Amendment") is
made as of this 20 day of June, 2002 by and among
PETSMART, INC., a Delaware corporation, having a principal place of
business at 00000 Xxxxx 00xx Xxxxxx, Xxxxxxx, Xxxxxxx 00000, as Lead
Borrower for the Borrowers, being
said PETSMART, INC., and
PETSMART DIRECT, INC., a New York corporation, having a
principal place of business at 0000 Xxxxxxx Xxx, Xxxxxxxxx,
Xxx Xxxx 00000;
PETSMART STORE SUPPORT GROUP, INC., a Delaware corporation,
having a principal place of business at 00000 Xxxxx 00xx
Xxxxxx, Xxxxxxx, Xxxxxxx 00000;
XXXXXXXX.XXX., INC., a Delaware corporation, having a
principal place of business at 00000 Xxxxx 00xx Xxxxxx,
Xxxxxxx Xxxxxxx 00000; and
PET CATALOG, LLC, a Delaware limited liability company, having
a principal place of business at 00000 Xxxxx 00xx Xxxxxx,
Xxxxxxx, Xxxxxxx 00000
each of the Lenders party to the Credit Agreement (defined below)
(together with each of their successors and assigns, referred to
individually as a "Lender" and collectively as the "Lenders"), and
FLEET NATIONAL BANK, as Issuing Bank, a national banking association
having a place of business at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000; and
FLEET RETAIL FINANCE INC., as Administrative Agent and Collateral Agent
for the Lenders, a Delaware corporation, having its principal place of
business at 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000; and
CONGRESS FINANCIAL CORPORATION (WESTERN), as Co-Agent.
In consideration of the mutual covenants herein contained and benefits to be
derived herefrom.
W I T N E S S E T H
A. Reference is made to the Credit Agreement (as amended and in
effect, the "Credit Agreement") dated as of April 30, 2001 by and among the Lead
Borrower, the Borrowers, the Lenders, the Issuing Bank, the Agents, and the
Co-Agent.
B. The parties to the Credit Agreement desire to modify and amend
certain provisions of the Credit Agreement, as provided herein.
1.
Accordingly, the parties hereto agree as follows:
1. Definitions. Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to such terms in the Credit
Agreement.
2. Amendments to Article I of the Credit Agreement. The
provisions of Article I of the Credit Agreement are hereby amended as follows:
a. The definition of "Bonds" is hereby deleted in its entirety
and the following substituted in its stead:
"Bonds" means any unsecured Indebtedness for borrowed money
permitted pursuant to this Agreement.
b. The definition of "Cash Control Event" is hereby deleted in
its entirety and the following substituted in its stead:
"Cash Control Event" means that Excess Availability is less
than $40,000,000. For purposes of Section 2.21(h) hereof, the
occurrence of a Cash Control Event shall be deemed continuing
notwithstanding that Excess Availability may thereafter exceed
the amount set forth in the preceding sentence unless and
until Excess Availability exceeds such amount for sixty (60)
consecutive days, in which case a Cash Control Event shall no
longer be deemed to be continuing for purposes of Section
2.21(h) hereof, provided that a Cash Control Event shall be
deemed continuing (even if Excess Availability exceeds the
required amounts for sixty consecutive days) if a Cash Control
Event has occurred and been discontinued on three (3)
occasions in any twelve month period.
c. The definition of "Maturity Date" is hereby deleted in its
entirety and the following substituted in its stead:
"Maturity Date" means April 30, 2006.
d. The definition of "Payment Conditions" is hereby deleted in
its entirety and the following substituted in its stead:
"Payment Conditions" means, at the time of determination, that
(a) no Default or Event of Default then exists or would arise
as a result of the making of the subject payment, and (b)
prior to, and immediately after giving effect to, the subject
payment, and on a pro forma twelve months basis thereafter,
Excess Availability shall be equal to or greater than
$40,000,000.00.
3. Amendments to Article II of the Credit Agreement. The
provisions of Article II of the Credit Agreement are hereby amended as follows:
a. The provisions of Section 2.01(a)(i) of the Credit Agreement
are hereby amended by deleting the number "$250,000,000"
appearing therein and substituting the number "$200,000,000"
in its stead.
2.
b. The provisions of Section 2.05(b) of the Credit Agreement are
hereby amended by deleting the number "$250,000,000" appearing
therein and substituting the number "$200,000,000" in its
stead.
4. Amendments to Article V of the Credit Agreement. The
provisions of Article V of the Credit Agreement are hereby amended as follows:
a. The provisions of Section 5.01(c) of the Credit Agreement are
hereby amended by adding the following at the beginning
thereof:
at any time that a Cash Control Event exists,
b. The provisions of Section 5.01(f) of the Credit Agreement are
hereby deleted in their entirety and the following substituted
in their stead:
(f) within five (5) days after the end of each month, a
certificate in the form of Exhibit D (a "Borrowing Base
Certificate") showing the Borrowing Base as of the close of
business on the last day of the immediately preceding month,
each such Certificate to be certified as complete and correct
on behalf of the Borrowers by a Financial Officer of the Lead
Borrower, provided, however, if and so long as a Cash Control
Event exists, such Borrowing Base Certificate (showing the
Borrowing Base as of the close of business on the last day of
the immediately preceding week) shall be furnished weekly on
Wednesday of each week;
c. The provisions of Section 5.01(j) of the Credit Agreement by
deleting the number "$5,000,000" and substituting the number
"$20,000,000" in its stead.
d. The provisions of Section 5.03 of the Credit Agreement are
hereby amended by adding the following at the end of clause
(ii) thereof:
provided that, notwithstanding the foregoing, the Lead
Borrower shall only be obligated to furnish a store listing
quarterly within 45 days of the end of each fiscal quarter;
e. The provisions of Section 5.09(b) of the Credit Agreement are
hereby deleted in their entirety and the following substituted
in their stead:
(b) Each Loan Party will, and will cause each of the
Subsidiaries to, from time to time upon the request of the
Collateral Agent or the Required Lenders through the
Administrative Agent, permit any Agent or professionals
(including investment bankers, consultants, accountants,
lawyers and appraisers) retained by the Agents, upon
reasonable prior notice and during normal business hours, to
conduct appraisals, commercial finance examinations and other
evaluations, including, without limitation, of (i) the
Borrowers' practices in the computation of the Borrowing Base
and (ii) the assets included in the Borrowing Base and related
financial information such as, but not limited to, sales,
gross margins, payables, accruals and reserves, and pay the
reasonable fees and expenses of the Agents or such
professionals with respect to such evaluations and appraisals,
provided that
3.
as long as a Default has not occurred and is continuing, in
each fiscal year commencing with the Borrowers' fiscal year
beginning February, 2002, as long as average Excess
Availability for the last six months of the immediately
preceding fiscal year was equal to or greater than (A)
$80,000,000.00, the Borrowers shall not be required to pay for
more than one commercial finance examination and one inventory
appraisal in the then current fiscal year, or (B)
$40,000,000.00 (but less than $80,000,000.00), the Borrowers
shall not be required to pay for more than three commercial
finance examinations and three inventory appraisals in the
then current fiscal year provided that if the average Excess
Availability for any thirty day period in any fiscal year is
equal to or less than $40,000,000.00, the Borrowers shall be
required to pay for all commercial finance examinations and
appraisals undertaken during such fiscal year.
5. Amendments to Article VI of the Credit Agreement. The
provisions of Article VI of the Credit Agreement are hereby amended as follows:
a. The provisions of Section 6.01(a)(v) are hereby deleted in
their entirety and the following substituted in their stead:
(v) Indebtedness of any Loan Party to finance the acquisition,
construction or improvement of any fixed or capital assets or
software, including Capital Lease Obligations and any
Indebtedness assumed in connection with the acquisition of any
such assets or secured by a Lien on any such assets prior to
the acquisition thereof, and extensions, renewals and
replacements of any such Indebtedness that do not increase the
outstanding principal amount thereof or result in an earlier
maturity date or decreased weighted average life thereof,
provided that the aggregate principal amount of Indebtedness
permitted by this clause (v) shall not exceed $50,000,000.00
at any time outstanding;
b. The provisions of Section 6.01(a)(ix) are hereby deleted in
their entirety and the following substituted in their stead:
(ix) other unsecured Indebtedness or subordinated
Indebtedness, provided that the terms of such Indebtedness are
customary for the applicable type of financing;
c. The provisions of Section 6.01(b) are hereby deleted in their
entirety.
d. The provisions of Section 6.04(d) are hereby deleted in their
entirety and the following substituted in their stead:
(d) Guarantees constituting Indebtedness permitted by Section
6.01, provided that such Guarantees by the Borrowers, other
than Guarantees of Indebtedness permitted under Section
6.01(a)(ix), shall not exceed $20,000,000.00 in the aggregate
at any time outstanding;
e. The provisions of Section 6.04(f) are hereby deleted in their
entirety and the following substituted in their stead:
4.
(f) loans or advances to employees for the purpose of travel,
entertainment or relocation in the ordinary course of business
in an amount not to exceed $1,000,000.00 to any employee or
$7,500,000.00 in the aggregate at any time outstanding;
f. The provisions of Section 6.04(g) are hereby deleted in their
entirety and the following substituted in their stead:
(g) acquisitions of the capital stock or assets of any other
Person, provided that (i) no Cash Control Event exists
immediately prior to, or after giving effect to, the
acquisition, and (ii) no Default or Event of Default exists
immediately prior to, or after giving effect to, the
acquisition, and (iii) the provisions of Section 5.12 are
satisfied, or if the transaction is an asset acquisition,
reasonably promptly after such acquisition, the applicable
Loan Parties shall have executed such documents and agreements
as the Collateral Agent shall have reasonably requested in
order to create and perfect the Collateral Agent's Lien on the
assets so acquired.
g. The provisions of Section 6.04(h) are hereby deleted in their
entirety and the following substituted in their stead:
(h) equity investments, loans or advances made by any Loan
Party to any Foreign Subsidiary in an aggregate amount not to
exceed $10,000,000 outstanding at any time provided that (i)
the Borrowers shall be in compliance with the provisions of
Section 6.11 hereof, immediately prior to, and immediately
after giving effect to, such investment, loan or advance, and
on a twelve month pro forma basis thereafter, and (ii) no
Default or Event of Default exists immediately prior to, or
after giving effect, to any such investment, loan or advance;
h. The provisions of Section 6.04(i) are hereby deleted in their
entirety and the following substituted in their stead:
(i) working capital advances to veterinarians who are tenants
of properties owned by or leased by a Loan Party in an
aggregate amount not to exceed $15,000,000 outstanding at any
time, provided that no Default or Event of Default exists
immediately prior to, or after giving effect, to any such
advance;
i. The provisions of Section 6.04(j) are hereby deleted in their
entirety and the following substituted in their stead:
(j) loans to, or guarantees of obligations of, officers of any
Loan Party to exercise incentive stock options of the Lead
Borrower, to purchase capital stock of the Lead Borrower or to
pay alternative minimum tax obligations of such officers,
provided that no Default or Event of Default exists
immediately prior to, or after giving effect, to any such loan
or guarantee, and provided further that such loans or
guarantees shall not exceed an amount equal to $7,500,000.00
in the aggregate at any time outstanding;
5.
j. The provisions of Section 6.05 of the Credit Agreement are
hereby amended by deleting the final subparagraph in its
entirety and substituting the following in its stead:
provided that all sales, transfers, leases and other
dispositions permitted hereby (other than sales, transfers and
other disposition permitted under clause (b)) shall be made at
arm's length and for fair value: and further provided that the
authority granted under clauses (b) through (e) hereof may be
terminated in whole or in part b, the Agents upon the
occurrence and during the continuance of any Event of Default.
k. The provisions of Section 6.06(a) are hereby deleted in their
entirety and the following substituted in their stead:
(a) The Loan Parties will not, and will not permit any
Subsidiary to, declare or make, or agree to pay or make,
directly or indirectly, any Restricted Payment, except as long
as no Default or Event of Default exists or would arise
therefrom (i) the Loan Parties may declare and pay dividends
with respect to their capital stock payable solely in
additional shares of their common stock, (ii) the Subsidiaries
of the Lead Borrower may declare and pay dividends ratably
with respect to their capital stock, and (iii) the Lead
Borrower may repurchase its capital stock or declare and pay
cash dividends or other distributions if the Payment
Conditions are then satisfied.
l. The provisions of Section 6.06(b)(iii) are hereby deleted in
their entirety and the following substituted in their stead:
(iii) redemptions of the Indebtedness due under the Bonds, if
the Payment Conditions are then satisfied.
m. The provisions of Section 6.09 are hereby deleted in their
entirety and the following substituted in their stead:
SECTION 6.09 Amendment of Material Documents. The Loan Parties
will not, and will not permit any Subsidiary to, amend, modify
or waive any of its rights under (a) any leases or subleases
relating to real estate, including, without limitation, the
Real Estate, or (b) the Bonds, in each case to the extent that
such amendment, modification or waiver would be materially
adverse to the interests of the Lenders.
n. The provisions of Section 6.11(a) are hereby deleted in their
entirety and the following substituted in their stead:
(a) The Borrowers shall not permit Excess Availability to be
less than $20,000,000.00 at any time.
o. The provisions of Section 6.11(b) are hereby deleted in their
entirety.
6.
6. Amendments to Article VII of the Credit Agreement. The
provisions of Article VII of the Credit Agreement are hereby amended as follows:
a. The provisions of Section 7.01(k) of the Credit Agreement are
hereby amended by deleting the number "$5,000,000" appearing
therein and substituting the number "$25,000,000" in its
stead.
b. The provisions of Section 7.01(o) of the Credit Agreement are
hereby amended by deleting the number "$5,000,000" appearing
therein and substituting the number "$10,000,000" in its
stead.
7. Amendment to Schedules. Schedule 5.01(1) to the Credit
Agreement is hereby deleted in its entirety and a new Schedule 5.01(1) in the
form annexed hereto substituted in its stead.
8. Conditions Precedent to Effectiveness. This Third Amendment
shall not be effective until each of the following conditions precedent have
been fulfilled to the satisfaction of the Administrative Agent:
a. This Third Amendment shall have been duly executed and
delivered by the Required Lenders and the other parties hereto
and, shall be in full force and effect and shall be in form
and substance satisfactory to the Administrative Agent and the
Required Lenders.
b. All action on the part of the Borrowers necessary for the
valid execution, delivery and performance by the Borrowers of
this Third Amendment shall have been duly and effectively
taken and evidence thereof satisfactory to the Administrative
Agent shall have been provided to the Administrative Agent.
c. The Borrower shall have paid to the Administrative Agent, for
the pro rata accounts of the Lenders consenting to and
executing this Third Amendment, an amendment fee in an amount
equal to 25 basis points of the Commitment of each such
Lender. Such amendment fee shall be fully earned upon payment
and shall not be subject to refund or rebate under any
circumstances.
d. The Borrower shall have executed and delivered to each of the
Lenders an Amended and Restated Revolving Credit Note to
reflect the reduction of the Total Commitment.
e. The Borrower and each Facility Guarantor shall have provided
such additional instruments and documents to the
Administrative Agent as the Administrative Agent and its
counsel may have reasonably requested.
9. Miscellaneous.
a. This Third Amendment may be executed in several counterparts
and by each party on a separate counterpart, each of which
when so executed and delivered shall be an original, and all
of which together shall constitute one instrument.
7.
b. This Third Amendment expresses the entire understanding of the
parties with respect to the transactions contemplated hereby.
No prior negotiations or discussions shall limit, modify, or
otherwise affect the provisions hereof.
c. Any determination that any provision of this Third Amendment
or any application hereof is invalid, illegal or unenforceable
in any respect and in any instance shall not affect the
validity, legality, or enforceability of such provision in any
other instance, or the validity, legality or enforceability of
any other provisions of this Third Amendment.
d. The Borrowers shall pay promptly after demand all costs and
expenses of the Agents, including, without limitation,
reasonable attorneys' fees in connection with the preparation,
negotiation, execution and delivery of this Third Amendment.
e. The Borrowers warrant and represent that the Borrowers have
consulted with independent legal counsel of the Borrowers'
selection in connection with this Third Amendment and is not
relying on any representations or warranties of the Agents,
the Lenders or their counsel in entering into this Third
Amendment.
f. Except as provided herein, all terms and conditions of the
Credit Agreement and the other Loan Documents remain in full
force and effect. The Borrower hereby ratifies, confirms, and
reaffirms all of the representations, warranties and covenants
therein contained and acknowledges that the Obligations, as
amended hereby, are and continue to be secured by the
Collateral.
8.
IN WITNESS WHEREOF, the parties have duly executed this Third Amendment
as of the day and year first above written.
PETSMART, INC.
as Lead Borrower and Borrower
By /s/ Xxxxx X. Xxxxxxx
---------------------------------------
Name:
Title:
PETSMART DIRECT, INC.
By /s/ Xxxxx X. Xxxxxxx
---------------------------------------
Name:
Title:
PETSMART STORE SUPPORT GROUP, INC.
By /s/ Xxxxx X. Xxxxxxx
---------------------------------------
Name:
Title:
XXXXXXXX.XXX, INC.
By /s/ Xxxxx X. Xxxxxxx
---------------------------------------
Name:
Title:
PET CATALOG, LLC
By /s/ Xxxxx X. Xxxxxxx
---------------------------------------
Name:
Title:
FLEET RETAIL FINANCE INC., as
Administrative Agent, as Collateral Agent,
as Swingline Lender, and as Lender
By /s/ Xxxxx Xxxxxxxxxxx
---------------------------------------
Name: Xxxxx Xxxxxxxxxxx
Title: AVP
FLEET NATIONAL BANK, as Issuing Bank
By /s/ Xxxxx Xxxxxxxxxxx
---------------------------------------
Name: Xxxxx Xxxxxxxxxxx
Title: AVP
GMAC BUSINESS CREDIT, LLC, as Lender
By /s/ Xxxxxx Xxxxxx
---------------------------------------
Name: Xxxxxx Xxxxxx
Title: Director
CONGRESS FINANCIAL CORPORATION (WESTERN),
as Co-Agent and Lender
By /s/ Xxxx Xxxxxxxx
---------------------------------------
Name: Xxxx Xxxxxxxx
Title: VP
FOOTHILL CAPITAL CORPORATION, as Lender
By /s/ Xxxx Xxxxxxx
---------------------------------------
Name: Xxxx Xxxxxxx
Title:
LASALLE BUSINESS CREDIT, INC. as Lender
By /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: F.V.P.
GENERAL ELECTRIC CAPITAL CORPORATION
(successor to Xxxxxx Financial, Inc. and
debis Financial Services, Inc.), as Lender
By /s/ W. Xxxxxx XxXxxxxxx
---------------------------------------
Name: W. Xxxxxx XxXxxxxxx
Title: Duly Authorized Signatory
IBJ WHITEHALL BUSINESS CREDIT CORPORATION,
as Lender
By /s/ Xxxxx Xxxxxxx
---------------------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President
SIEMENS FINANCIAL SERVICES, INC., as
Lender
By /s/ Xxxxx Xxxxxx
---------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President-Credit
ORIX FINANCIAL SERVICES, INC., as Lender
By /s/ J. Xxxx Xxxxx
---------------------------------------
Name: J. Xxxx Xxxxx
Title: First Vice President
THE PROVIDENT BANK, as Lender
By /s/ Xxxx X. Xxxxxxxxxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxxxxxxxxx
Title: Vice President
CONSENT OF FACILITY GUARANTORS
The undersigned, Facility Guarantors, each hereby consent to the Third
Amendment to Agreement and each acknowledge that their Guarantee of the
Obligations, the Security Agreement and all other Loan Documents executed by
each of them remains in full force and effect.
IN WITNESS WHEREOF, the Facility Guarantors have caused this Consent
to Third Amendment to be executed and their seals to be hereto affixed as the
date first above written.
STATE LINE TACK, INC.
PETSMART VETERINARY SERVICES, INC.
AUTHORITY PET FOOD COMPANY
PACIFIC COAST DISTRIBUTING, INC.
PETSTUFF CANADA (USA) HOLDINGS, INC.
PETSTUFF NOVA SCOTIA, INC.
3003300 NOVA SCOTIA COMPANY
By /s/ Xxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxx
Authorized Signatory
