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EXHIBIT 10.15
EXECUTION COPY
LOAN AND WARRANT AGREEMENT
DATED AS OF MARCH 26, 2001
AMONG
XXXXX PET CARE ENTERPRISES, INC.,
XXXXX PET CARE COMPANY,
AND
EACH OF THE LENDERS NOW OR HEREAFTER PARTY HERETO
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
SECTION 1.01 TERMS DEFINED ABOVE.............................................1
SECTION 1.02 CERTAIN DEFINED TERMS...........................................1
ARTICLE II
TERM LOANS
SECTION 2.01 TERM LOANS......................................................1
SECTION 2.02 INTEREST RATE AND CERTAIN OTHER TERMS...........................1
SECTION 2.03 PRINCIPAL PAYMENTS..............................................2
SECTION 2.04 INTEREST........................................................3
SECTION 2.05 APPLICATION OF PAYMENTS; PRO RATA TREATMENT.....................3
SECTION 2.06 SET-OFF, SHARING OF PAYMENTS, ETC...............................3
ARTICLE III
WARRANTS
SECTION 3.01 PURCHASE OF WARRANT.............................................4
SECTION 3.02 REPRESENTATIONS OF EACH LENDER..................................4
SECTION 3.03 INVESTORS' AGREEMENT............................................5
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.01 INITIAL FUNDING DATE............................................6
SECTION 4.02 SECOND FUNDING DATE.............................................8
SECTION 4.03 FINAL FUNDING DATE..............................................8
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.01 CORPORATE EXISTENCE; CAPITALIZATION.............................8
SECTION 5.02 COMPLIANCE WITH LAWS............................................9
SECTION 5.03 LIABILITIES; LITIGATION.........................................9
SECTION 5.04 NO BREACH.......................................................9
SECTION 5.05 CORPORATE ACTION................................................9
SECTION 5.06 APPROVALS......................................................10
SECTION 5.07 USE OF TERM LOANS..............................................10
SECTION 5.08 TAXES..........................................................10
SECTION 5.09 SUBSIDIARIES AND PARTNERSHIPS..................................10
SECTION 5.10 NO MATERIAL MISSTATEMENTS......................................10
SECTION 5.11 INVESTMENT COMPANY ACT.........................................11
SECTION 5.12 PUBLIC UTILITY HOLDING COMPANY ACT.............................11
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SECTION 5.13 STATUS AS SENIOR INDEBTEDNESS..................................11
SECTION 5.14 FINANCIAL CONDITION............................................11
SECTION 5.15 NO DEFAULT.....................................................11
SECTION 5.16 SOLVENCY.......................................................11
ARTICLE VI
EVENTS OF DEFAULT; REMEDIES
SECTION 6.01 EVENTS OF DEFAULT..............................................12
SECTION 6.02 ACCELERATION...................................................12
SECTION 6.03 OTHER REMEDIES.................................................13
SECTION 6.04 WAIVER OF PAST DEFAULTS........................................13
SECTION 6.05 CONTROL BY MAJORITY............................................13
SECTION 6.06 RIGHTS OF LENDERS TO RECEIVE PAYMENT...........................13
SECTION 6.07 INCORPORATION OF TERMS OF SECURED CREDIT AGREEMENT.............13
ARTICLE VII
MISCELLANEOUS
SECTION 7.01 GOVERNING LAW; JURISDICTION....................................13
SECTION 7.02 NOTICES........................................................13
SECTION 7.03 INDEMNITIES AND PAYMENTS.......................................14
SECTION 7.04 AMENDMENTS, ETC................................................14
SECTION 7.05 SUCCESSORS AND ASSIGNS.........................................15
SECTION 7.06 INVALIDITY.....................................................15
SECTION 7.07 COUNTERPARTS...................................................15
SECTION 7.08 CAPTIONS.......................................................15
SECTION 7.09 NO ORAL AGREEMENTS.............................................15
SECTION 7.10 WAIVER OF JURY TRIAL...........................................16
SECTION 7.11 REPRESENTATION OF COUNSEL......................................16
SECTION 7.12 ALLOCATION FOR TAX PURPOSES....................................16
SECTION 7.13 EXISTENCE; GOOD STANDING; CLASS B SHARES.......................16
Schedules
Schedule 2.01 - Amounts of Term Loans
Schedule 2.02 - Interest Accrued (PIK) and Payments of Principal and Interest
on Note
Schedule 5.09 - Subsidiaries and Partnerships
Annexes and Exhibits
Annex 1 - Defined Terms
Exhibit A - Form of Note
Exhibit B - Form of Warrant
Exhibit C - Summary of Terms of Amendment to Investors' Agreement
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Exhibit D - Form of Supplement
Exhibit E - Form of Amendment No. 1 to Secured Credit Agreement
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This Loan and Warrant Agreement, dated as of March 26, 2001, is among Xxxxx
Pet Care Enterprises, Inc., a corporation duly organized and validly existing
under the laws of the State of Delaware ("Holdings"), Xxxxx Pet Care Company, a
corporation duly organized and validly existing under the laws of the State of
Delaware (the "Borrower"), and each Person that executes this Agreement or a
Supplement as a "Lender" or that acquires all or a portion of any Note pursuant
to Section 7.05 (each individually a "Lender" and collectively the "Lenders").
In consideration of the mutual agreements herein contained and of the loans
hereinafter referred to, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Terms Defined Above. As used in this Agreement, the terms
"Holdings," "Borrower," "Lender" and "Lenders" shall have the meanings indicated
above.
Section 1.02 Certain Defined Terms. As used herein, (a) each term used
herein and defined in Annex 1 hereto shall have the meaning ascribed to such
term in Annex 1, and (b) any term used herein and not defined in Annex 1 hereto
shall have the meaning ascribed to such term in the Secured Credit Agreement, in
each case, with each such term so defined in the singular to have the same
meaning when used in the plural and vice versa.
ARTICLE II
TERM LOANS
Section 2.01 Term Loans. Subject to the terms and conditions of this
Agreement,
(a) each Initial Lender severally agrees to make a Term Loan to the
Borrower on the Initial Funding Date in the principal amount set forth
opposite such Lender's name on Schedule 2.01 hereto; provided that the
aggregate principal amount of all Term Loans made on the Initial Funding
Date shall be at least equal to $20,000,000;
(b) each Second Advance Lender agrees to make a Term Loan to the
Borrower on the Second Funding Date in the principal amount set forth
opposite such Lender's name on Schedule 2.01 hereto; provided that the
aggregate principal amount of all outstanding Term Loans immediately after
the Second Funding Date shall be at least equal to $25,000,000; and
(c) each Final Advance Lender severally agrees to make a Term Loan to
the Borrower on the Final Funding Date in the principal amount set forth in
such Lender's Supplement;
provided, that the aggregate principal amount of all Term Loans described in
clauses (a), (b) and (c) above shall not be greater than $29,700,000.
Section 2.02 Interest Rate and Certain Other Terms. The Term Loan made by
each Lender shall be evidenced by a promissory note substantially in the form of
Exhibit A hereto (each, a "Note"), dated either as of the date hereof or in
connection with any Notes delivered in
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connection with a Supplement, on or before May 15, 2001, payable to the order of
such Lender in a principal amount equal to the principal amount of the Term Loan
made by such Lender hereunder and otherwise duly completed. The interest shall
accrue on the outstanding principal amount of the Term Loan at such rates and
calculated in such manner as provided in each Note. The amount of accrued
interest (including PIK Interest) and all payments and prepayments made on
account of the principal and interest thereof shall be recorded for each Note by
the Borrower which, absent manifest error, shall be prima facie evidence of
actual interest accruals and principal and interest payments. No later than the
date of delivery of the financial statements required to be delivered pursuant
to Section 6.1 of the Secured Credit Agreement (whether or not the Secured
Credit Agreement remains in effect), the Borrower shall deliver to each Lender,
(a) copies of such financial statements and the Compliance Certificate delivered
under the Secured Credit Agreement, (b) an updated schedule for each Lender,
indicating (i) the outstanding principal balance at the beginning of the fiscal
quarter then ended (giving effect to the capitalization of all PIK Interest in
preceding quarters) and including a running total of total PIK Interest accrued
to such date, (ii) all interest accrued on the Notes during the fiscal quarter
then ended, (iii) a reasonably detailed calculation demonstrating whether the
Payment Test has been met and if so, the maximum Excess Liquidity, and (iv) the
amount of (x) principal, if any, to be repaid in cash on the applicable Payment
Date, (y) interest principal, if any, to be paid in cash on the applicable
Payment Date, and (z) PIK Interest, if any, to be paid on the applicable Payment
Date. Updated schedules for the Notes shall be maintained by the Borrower at its
principal place of business and shall be available for inspection by any Lender
at any reasonable time and from time to time upon reasonable prior notice. The
failure of any Lender to object to any of the information delivered pursuant to
this Section 2.02 shall under no circumstances constitute a waiver by such
Lender of any amounts owed to it under any Loan Documents or any rights, powers
or remedies in respect thereof.
Section 2.03 Principal Payments.
(a) Mandatory Prepayments. The Borrower is obligated to make the
following mandatory prepayments of principal:
(i) If the Payment Test has been met as of any Payment Date, the
Borrower shall prepay on such day the outstanding principal balance of
the Notes (including any PIK Interest which has been capitalized as
principal) in an aggregate amount equal to the lesser of (A) 100% of
Excess Liquidity as of such Payment Date and (B) the maximum amount
that can be paid without causing the Payment Test to be violated by
such payment.
(ii) On the date on which Holdings, the Borrower or any of its
Subsidiaries receives any Net Cash Proceeds from any asset
dispositions (other than sales of inventory in the ordinary course of
business) having a fair market value of $1,000,000 or more or any
offering of equity securities by Holdings, the Borrower or any of its
Subsidiaries, the recipient shall pay on such day the outstanding
principal balance of the Notes in an equal to such Net Cash Proceeds
but only to the extent: (A) the lenders under the Secured Credit
Agreement do not require such proceeds to be applied to repay amounts
owing under the Secured
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Credit Agreement and (B) before and after giving effect to such
prepayment, the Payment Test has been, and continues to be, met.
(b) Maturity. On the Final Maturity Date, the aggregate unpaid
principal amount of each Note then outstanding, together with all accrued and
unpaid interest (including, to the extent permitted by law, all interest on
interest) shall be due and payable in full.
Section 2.04 Interest.
(a) Capitalization of Interest. If the Payment Test has not been met
as of any Payment Date, all accrued and unpaid interest on the Notes shall,
instead of being paid in cash on such Payment Date, be deemed to increase the
principal amount outstanding (such capitalized interest being "PIK Interest")
and shall thereafter, bear interest at the Interest Rate.
(b) Satisfaction of Payment Test. If the Payment Test has been met as
of any Payment Date, the Borrower shall pay in cash on such Payment Date all
accrued and unpaid interest (other than PIK Interest) on the Notes.
(c) OID. Notwithstanding any other provision herein, the Borrower
shall, at any time after the fifth anniversary of the Initial Funding Date, make
cash payments on account of the Note at such time and in such amounts as are
necessary for the Notes not to have "significant original issue discount" as
that term is defined in Section 163(i) of the Internal Revenue Code of 1986, as
amended (the "Code") to the extent that such cash payments are expressly
permitted to be made under the Secured Credit Agreement.
Section 2.05 Application of Payments; Pro Rata Treatment. Except to
the extent otherwise provided herein, each Lender agrees that: (a) each payment
of principal on the Term Loans by the Borrower shall be made for account of the
Lenders pro rata in accordance with the respective unpaid principal amount of
the Term Loans held by the Lenders; and (b) each payment of interest on the Term
Loans by the Borrower shall be made for account of the Lenders pro rata in
accordance with the amounts of interest due and payable to the Lenders. On each
Payment Date, all amounts received by the Lenders shall be applied first to
interest accrued and unpaid for the quarterly period immediately preceding such
Payment Date and then to the outstanding principal on the Notes (including all
PIK Interest that has been capitalized as principal).
Section 2.06 Set-off, Sharing of Payments, Etc. If any Lender shall
obtain payment of any principal of or interest on the Term Loan made by it to
the Borrower under this Agreement through the exercise of any right of set-off,
banker's lien or counterclaim or similar right or otherwise, and, as a result of
such payment, such Lender shall have received a greater percentage of the
principal or interest then due hereunder by the Borrower to such Lender than the
percentage received by any other Lenders, it shall promptly (a) notify each
other Lender thereof and (b) purchase from such other Lenders participations in
(or, if and to the extent specified by such Lender, direct interests in) the
Term Loans made by such other Lenders (or in interest due thereon, as the case
may be) in such amounts, and make such other adjustments from time to time as
shall be equitable, to the end that all the Lenders shall share the benefit of
such excess payment (net of any expenses which may be incurred by such Lender in
obtaining or preserving
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such excess payment) pro rata in accordance with the unpaid principal on the
Term Loans held by each of the Lenders. To such end all the Lenders shall make
appropriate adjustments among themselves (by the resale of participations sold
or otherwise) if such payment is rescinded or must otherwise be restored. The
Borrower agrees that any Lender so purchasing a participation (or direct
interest) in the Term Loans made by other Lenders (or in interest due thereon,
as the case may be) may exercise all rights of set-off, banker's lien,
counterclaim or similar rights with respect to such participation as fully as if
such Lender were a direct holder of Term Loans in the amount of such
participation. Nothing contained herein shall require any Lender to exercise any
such right or shall affect the right of any Lender to exercise, and retain the
benefits of exercising, any such right with respect to any other indebtedness or
obligation of the Borrower. If under any applicable bankruptcy, insolvency or
other similar law, any Lender receives a secured claim in lieu of a set-off to
which this Section applies, such Lender shall, to the extent practicable,
exercise its rights in respect of such secured claim in a manner consistent with
the rights of the Lenders entitled under this Section to share the benefits of
any recovery on such secured claim.
ARTICLE III
WARRANTS
Section 3.01 Purchase of Warrant. On each Funding Date, Holdings shall
issue to each Lender making Term Loans on such Funding Date, a Warrant
substantially in the form of Exhibit B, initially exercisable for the number of
shares of common stock of Holdings set forth opposite such Lender's name on
Schedule 2.01 hereto or in the applicable Supplement; provided, that the number
of warrant shares issuable upon exercise of any Warrant delivered in connection
with a Term Loan made pursuant to Section 2.01(c) on the Final Funding Date
shall bear the same proportion to the original principal amount of such Term
Loan as the proportion that the number of warrant shares issuable upon any
Warrant delivered on the prior Funding Dates bears to the original principal
amount of the Term Loan related to such Warrant.
Section 3.02 Representations of Each Lender. Each Lender severally
represents to Holdings (solely as to itself and not as to any other Lender) as
follows:
(a) Lender (i) is an "Accredited Investor," as that term is defined in
Rule 501 of Regulation D under the Securities Act of 1933, as amended (the
"Securities Act"), (ii) has such knowledge, skill and experience in securities,
business and financial matters and investments generally, based on actual
participation, that it is capable of evaluating the merits and risks of an
investment in Holdings and the suitability thereof as an investment for Lender,
and (iii) has reviewed the offering letter dated March 20, 2001, and all its
attachments, has received from Holdings and the Borrower such other documents
and information that it has requested and has had adequate opportunity to ask
questions of and receive answers from Holdings' and the Borrower's officers,
directors and representatives concerning the terms and conditions of the
investment proposed herein and the business, financial condition, properties,
operations, prospects and proposed acquisitions, and all such questions have
been answered to Lender's full satisfaction.
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(b) Such Lender is acquiring the Warrant and any common stock issuable
upon exercise thereof for investment for its own account and not with a view to,
or for resale in connection with, any distribution thereof.
(c) Such Lender understands that the Warrant and any common stock
issuable upon exercise thereof have not been registered under applicable state
or federal securities laws by reason of certain exemptions from the registration
provisions thereof which depend upon, among other things, the bona fide nature
of Lender's representations and investment intent as expressed herein. Except as
provided in the Investors' Agreement, Holdings has not agreed to register the
Warrant or any of the shares of common stock issuable upon the exercise of the
Warrant for distribution in accordance with the provisions of the Securities Act
or applicable state securities laws, or agreed to comply with any exemption from
registration under the Securities Act or applicable state securities laws for
the resale of such shares. Lender understands that by virtue of the provisions
of certain rules respecting "restricted securities" promulgated by the
Securities and Exchange Commission, the shares of common stock issuable upon the
exercise of the Warrant shall be required to be held indefinitely, unless and
until registered under the Securities Act and applicable state securities laws,
or unless an exemption from the registration requirements of the Securities Act
and applicable state securities laws is available, in which case Lender may
still be limited as to the number of such shares that may be sold. Lender agrees
that the Warrant will not be offered, sold or transferred except as permitted by
the Investors' Agreement, and the certificates representing the Warrant and any
common stock issuable upon exercise thereof will bear a conspicuous legend in
substantially the form set forth below (in addition to any other legend required
by law or the Investors' Agreement):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER EITHER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR
APPLICABLE STATE SECURITIES LAWS (THE "STATE ACTS"), AND SHALL NOT BE SOLD,
PLEDGED, HYPOTHECATED, DONATED OR OTHERWISE TRANSFERRED (WHETHER OR NOT FOR
CONSIDERATION) BY THE HOLDER EXCEPT BY REGISTRATION OR PURSUANT TO AN
EXEMPTION FROM REGISTRATION UPON THE ISSUANCE TO THE COMPANY OF A FAVORABLE
OPINION OF COUNSEL OR OTHER EVIDENCE REASONABLY SATISFACTORY TO THE COMPANY
TO THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE A VIOLATION OF THE 1933
ACT AND THE STATE ACTS.
(d) All action on the part of the Lender necessary for the acquisition
of the Warrant and the consummation of the transactions contemplated herein, has
been duly and validly taken, and this Agreement is a valid and binding
obligation of Lender, enforceable against Lender in accordance with its terms,
except to the extent enforceability may be limited by bankruptcy, insolvency and
other similar laws and judicial decisions affecting creditors' rights generally
and by general equitable principles.
Section 3.03 Investors' Agreement. Each Lender that is, immediately
prior to the date hereof, a party to the Investors' Agreement acknowledges and
agrees that the Warrant and the common stock issuable upon exercise of the
Warrant will be subject to the Investors' Agreement.
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ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01 Initial Funding Date. The obligation of the Initial
Lenders to make the Term Loan on the Initial Funding Date is subject to the
receipt by each Initial Lender of the following documents and satisfaction of
the other conditions provided in this Section 4.01, each of which shall be
reasonably satisfactory to each Lender in form and substance:
(a) Certificates of the Secretary or Assistant Secretary of the
Borrower setting forth (i) resolutions of its board of directors with respect to
the authorization of the Notes and this Agreement provided herein, (ii) the
officers of the Borrower (A) who are authorized to sign this Agreement and the
Notes and (B) who will, until replaced by another officer or officers duly
authorized for that purpose, act as its representative for the purposes of
signing documents and giving notices and other communications in connection with
this Agreement and the transactions contemplated hereby, (iii) specimen
signatures of the officers so authorized, and (iv) the certificate of
incorporation and the bylaws of the Borrower, each certified as being true and
complete. Each Lender may conclusively rely on such certificate until it
receives notice in writing from the Borrower to the contrary.
(b) Certificates of the Secretary or Assistant Secretary of each
Guarantor setting forth (i) resolutions of its board of directors with respect
to the authorization of the Guaranty Agreement to which it is a party, (ii) the
officers of such Guarantor (A) who are authorized to sign such Guaranty
Agreement and (B) who will, until replaced by another officer or officers duly
authorized for that purpose, act as its representative for the purposes of
signing documents and giving notices and other communications in connection with
this Agreement and the transactions contemplated hereby, (iii) specimen
signatures of the officers so authorized, and (iv) the certificate of
incorporation and the bylaws or limited liability company agreement (whichever
is applicable) of such Guarantor, each certified as being true and complete.
Each Lender may conclusively rely on such certificate until it receives notice
in writing from such Guarantor to the contrary.
(c) Certificates of the Secretary or Assistant Secretary of Holdings
setting forth (i) resolutions of its board of directors with respect to the
authorization of the Warrants and this Agreement provided herein, (ii) the
officers of the Borrower (A) who are authorized to sign this Agreement and the
Warrants and (B) who will, until replaced by another officer or officers duly
authorized for that purpose, act as its representative for the purposes of
signing documents and giving notices and other communications in connection with
this Agreement and the transactions contemplated hereby, (iii) specimen
signatures of the officers so authorized, and (iv) the certificate of
incorporation and the bylaws of Holdings, each certified as being true and
complete. Each Lender may conclusively rely on such certificate until it
receives notice in writing from the Borrower to the contrary.
(d) Each Lender shall have received a duly executed and delivered Note
in an aggregate amount equal to the Term Loan made by it as set forth on
Schedule 2.01.
(e) The Guaranty Agreement, duly completed and executed.
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(f) Each Lender shall have received a duly executed and delivered
Warrant exercisable for the number of shares of common stock of Holdings as set
forth on Schedule 2.01.
(g) The parties hereto and the trustee under the Senior Subordinated
Note Indenture shall have received a fairness opinion from a nationally
recognized investment banking firm (i) in form and substance reasonably
satisfactory to the Lenders, and (ii) in accordance with the requirements of the
Senior Subordinated Note Indenture.
(h) An opinion of counsel to the Borrower and the Guarantors in form
and substance reasonably satisfactory to the Lenders, including, without
limitation, opinions as to compliance with the Senior Subordinated Note
Indenture and no conflicts with any material documents (including the Investors'
Agreement), that the Term Loans contemplated hereby constitute "Senior
Indebtedness" under the Senior Subordinated Note Indenture, and such other
opinions as the Lenders may reasonably request.
(i) The Borrower and Holdings shall have received an amendment to the
Secured Credit Agreement in substantially the form of Exhibit E hereto.
(j) A Certificate of the Chief Financial Officer of the Borrower
certifying that the incurrence of the Term Loan Obligations contemplated by this
Agreement is permitted under the Senior Subordinated Note Indenture and the Term
Loan Obligations constitute "Senior Indebtedness" under the Senior Subordinated
Note Indenture.
(k) Each Lender that is not an existing party to the Investors'
Agreement will, as a condition to receiving its Note, execute a management
shareholder agreement providing for certain transfer restrictions and drag-along
terms, which agreement shall be in form reasonably satisfactory to the Borrower.
The Investors' Agreement will be amended and restated to incorporate the terms
described on Exhibit C. Each Lender will execute the amended and restated
Investors' Agreement so long as the changes thereto are consistent in all
material respects with the terms described on such summary.
(l) The Lenders shall have received evidence satisfactory to them that
the holders of the warrants issued by Holdings prior to the making of the Term
Loan contemplated hereby have waived application of the anti-dilution provisions
contained in such warrants to the extent, and only to the extent, such
anti-dilution provisions would have been triggered by the issuance of the
Warrants.
(m) All governmental and third party approvals necessary or in the
discretion of the Lenders advisable in connection with the transactions
contemplated hereby and the continuing operations of the Borrower and its
Subsidiaries shall have been obtained and be in full force and effect.
(n) The representations and warranties of each Loan Party set forth in
the Loan Documents qualified as to materiality shall be true and correct and
those not so qualified shall be true and correct in all material respects (such
determination of materiality and material respects being made in the reasonable
judgment of the Majority Lenders) on and as of the date of such Loan Documents
(or if made as of a specific date, shall have been true and correct as of such
specific date).
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(o) Such other documents and conditions as the Lenders or special
counsel to the Lenders may reasonably request.
Section 4.02 Second Funding Date. The obligation of each Second Advance
Lender to make the Term Loan on the Second Funding Date is subject only to the
conditions that (a) the Initial Lenders shall have made Term Loans to the
Borrower in an aggregate amount of at least $20,000,00, (b) the receipt by each
Second Advance Lender of the Warrants contemplated by Schedule 2.01 and (c) the
execution and delivery by the Borrower of a Note representing the Term Loan made
by it. Each Second Advance Lender hereby absolutely, unconditionally and
irrevocably commits and agrees to make a Term Loan to the Borrower on the Second
Funding Date in the principal amount set forth opposite such Lender's name on
Schedule 2.01 hereto.
Section 4.03 Final Funding Date. The obligation of each Final Advance
Lender executing a Supplement to make the portion of the second advance
contemplated thereby on or before May 15, 2001 (as such date may be extended by
the Majority Lenders) that such Lender has committed to make is subject to (a)
the satisfaction of the conditions provided in Section 4.01 (unless otherwise
waived by the Majority Lenders), (b) the receipt by each Lender of the Warrants
contemplated by this Agreement and its Supplement and (c) the execution and
delivery by the Borrower of a Supplement and a Note representing the Term Loan
contemplated thereby.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Holdings and the Borrower jointly and severally represent and warrant to
the Lenders as follows:
Section 5.01 Corporate Existence; Capitalization. Holdings, the Borrower
and each of its Subsidiaries: (a) is duly organized, validly existing and in
good standing under the laws of the jurisdiction in which it is formed; (b) has
all requisite power, and has all material governmental licenses, authorizations,
consents and approvals necessary to own its assets and carry on its business as
now being or as proposed to be conducted; and (c) is qualified to do business in
all jurisdictions in which the nature of the business conducted by it makes such
qualification necessary and where failure so to qualify could reasonably be
expected to have a Material Adverse Effect. The authorized capital stock of
Holdings consists solely of: 65,000,000 shares of Class A Common Stock, of which
16,073,403 shares are issued and outstanding as of the date of this Agreement;
5,000,000 shares of Class B Common Stock, of which 2,560,093 shares are issued
and outstanding as of the date of this Agreement; and 10,000,000 shares of
preferred stock, none of which is outstanding as of the date of this Agreement.
In addition, Holdings has issued warrants (for nominal exercise price) to
purchase an aggregate of 5,417,912 shares of common stock and unexercised
employee stock options exercisable for an aggregate of 2,526,439 shares of
common stock. Except for the warrants and the employee stock options described
above neither Holdings nor the Borrower has any contracts (including options and
warrants) obligating either of them to issue, sell, pledge, dispose of or
encumber any shares of any class of its capital stock or other equity interest
or any securities convertible, exercisable or exchangeable into any class of its
capital stock or other equity interests. There are no outstanding or authorized
stock appreciation, phantom stock, profit participation or similar rights
affecting the capital stock or other common equity interests of Holdings or the
Borrower. On a
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fully-diluted basis, assuming the exercise, conversion or exchange of all
warrants, options and securities convertible, exercisable or exchangeable into
any class of its capital stock or other equity interests and any rights
whatsoever to acquire capital stock of Holdings, the capital stock of Holdings
consists of 80,000,000 authorized shares of capital stock, of which 26,577,847
shares would be deemed issued and outstanding.
Section 5.02 Compliance with Laws. Neither Holdings, the Borrower or any of
its Subsidiaries has violated any Requirement of Law or failed to obtain any
license, permit, franchise or other governmental authorization necessary for the
ownership of any of their respective Properties or the conduct of their
respective business; which violation or failure could reasonably be expected to
have (in the event such violation or failure were asserted by any Person through
appropriate action) a Material Adverse Effect. Each of Holdings, the Borrower
and its Restricted Subsidiaries is in compliance with all Requirements of Law
except to the extent that the failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
Section 5.03 Liabilities; Litigation. Except for liabilities incurred in
the normal course of business, the Borrower and its Subsidiaries have no
(individually or in the aggregate) liabilities, direct or contingent, which, if
adversely determined, could reasonably be expected to have a Material Adverse
Effect. Other than relating to the 1998 recall of certain dry dog food products
manufactured at Borrower's Temple, Texas plant, no litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of Holdings or the Borrower, threatened by or against Holdings,
the Borrower or any of its Subsidiaries or against any of their respective
properties or revenues (a) with respect to any of the Loan Documents or any of
the transactions contemplated hereby or thereby, or (b) that could reasonably be
expected to have a Material Adverse Effect.
Section 5.04 No Breach. Neither the execution and delivery of this
Agreement, the Notes or the Loan Documents nor compliance with the terms and
provisions thereof will conflict with or result in a breach of, or require any
consent under, the respective charter or by-laws of Holdings, the Borrower or
any of its Subsidiaries, or any applicable law or regulation, or any order,
writ, injunction or decree of any court or Governmental Authority, or any
Contractual Obligation to which any of Holdings, the Borrower or any Subsidiary
is a party or by which any of Holdings, the Borrower or any Subsidiary is bound
or to which Holdings, the Borrower or any Subsidiary is subject, or constitute a
default under any such Contractual Obligation, or result in the creation or
imposition of any Lien upon any of the revenues or assets of any of Holdings,
the Borrower or any Subsidiary pursuant to the terms of any such Contractual
Obligation.
Section 5.05 Corporate Action. Each of Holdings, the Borrower and its
Subsidiaries is duly authorized and empowered to execute, deliver and perform
under the Loan Documents to which it is a party, including this Agreement, and
the Borrower is duly authorized and empowered to create and issue the Notes; all
corporate action on Holdings', the Borrower's and each Subsidiary's part
requisite for the due execution, delivery and performance of the Loan Documents
to which it is a party has been duly and effectively taken, on the Borrower's
part requisite for the creation and issuance of the Notes and on the part of
Holdings for the issuance of the Warrants. This Agreement does, and the Notes
and other Loan Documents to which Holdings, the Borrower and each Subsidiary
respectively are parties upon their creation,
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issuance, execution and delivery will, constitute valid and binding obligations
of Holdings, the Borrower and the Subsidiaries, respectively, enforceable in
accordance with their terms, except to the extent enforceability may be limited
by bankruptcy, insolvency and other similar laws and judicial decisions
affecting creditors' rights generally and by general equitable principles.
Section 5.06 Approvals. No consent or authorization of, filing with, notice
to or other act by or in respect of, any Governmental Authority or any other
Person is required in connection with the transactions hereunder or with the
execution, delivery, performance, validity or enforceability of this Agreement
or any of the Loan Documents, except consents, authorizations, filings and
notices as have been obtained or made and are in full force and effect.
Section 5.07 Use of Term Loans. All of the proceeds of the Term Loans shall
be used by the Borrower to repay revolving loans under the Secured Credit
Agreement pursuant to Section 2.10 thereof. Neither the Borrower nor any
Subsidiary is engaged principally, or as one of its important activities, in the
business of extending credit for the purpose, whether immediate, incidental or
ultimate, of buying or carrying margin stock (within the meaning of Regulations
U or X of the Board of Governors of the Federal Reserve System) and no part of
the proceeds of any Term Loan hereunder will be used to buy or carry any margin
stock.
Section 5.08 Taxes. Each of Holdings, the Borrower and each of its
Restricted Subsidiaries has filed or caused to be filed all federal, state and
other material tax returns that are required to be filed and has paid all taxes
shown to be due and payable on said returns or on any assessments made against
it or any of its property and all other taxes, fees or other charges imposed on
it or any of its property by any Governmental Authority (other than any the
amount or validity of which are currently being contested in good faith by
appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided on the books of Holdings, the Borrower or its Restricted
Subsidiaries, as the case may be); no material tax Lien has been filed, and, to
the knowledge of Holdings and the Borrower, no claim is being asserted, with
respect to any such tax, fee or other charge.
Section 5.09 Subsidiaries and Partnerships. The Borrower has no
Subsidiaries and no interest in any partnerships other than as set forth on
Schedule 5.09. Holdings has no Subsidiaries and no interest in any partnerships
other than the Borrower.
Section 5.10 No Material Misstatements. No statement or information
contained in this Agreement, any other Loan Document, or any other document,
certificate or statement furnished by or on behalf of any Loan Party to the
Lenders, or any of them, for use in connection with the transactions
contemplated by this Agreement or the other Loan Documents, contained as of the
date such statement, information, document or certificate was so furnished, any
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements contained herein or therein not misleading.
There is no fact known to any Loan Party that could reasonably be expected to
have a Material Adverse Effect that has not been expressly disclosed herein, in
the other Loan Documents or in any other documents, certificates and statements
furnished to the Lenders for use in connection with the transactions
contemplated hereby and by the other Loan Documents.
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Section 5.11 Investment Company Act. None of Holdings, the Borrower nor any
Subsidiary is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
Section 5.12 Public Utility Holding Company Act. None of Holdings, the
Borrower nor any Subsidiary is a "holding company," or a "subsidiary company" of
a "holding company," or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company," or a "public utility" within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
Section 5.13 Status as Senior Indebtedness. The Term Loan Obligations
constitute "Senior Indebtedness" and "Refinancing Indebtedness" of the Borrower
under and as defined in the Senior Subordinated Note Indenture. The obligations
of each Guarantor under the Guaranty Agreement constitute "Guarantor Senior
Indebtedness" of such Subsidiary under and as defined in the Senior Subordinated
Note Indenture.
Section 5.14 Financial Condition.
(a) The audited consolidated balance sheet of the Borrower and its
Subsidiaries as at January 1, 2000, and the related consolidated statements of
income and of cash flows for the fiscal year ended on such date, reported on by
and accompanied by an unqualified report from KPMG Peat Marwick present fairly
in all material respects the consolidated financial condition of the Borrower
and its Subsidiaries as at such date, and the consolidated results of its
operations and its consolidated cash flows for the fiscal year then ended. All
such financial statements, including the related schedules and notes thereto,
have been prepared in accordance with GAAP (except as approved by the
aforementioned firm of accountants and disclosed therein). During the period
from January 1, 2000 to and including March 26, 2001, there has been no
Disposition by the Borrower of any material part of its business or property.
(b) The unaudited consolidated balance sheet of the Borrower and its
Subsidiaries as September 30, 2000, and the related consolidated statements of
income and of cash flows for the fiscal quarter ended on such date present
fairly in all material respects the consolidated financial condition of the
Borrower and its Subsidiaries as at such date, and the consolidated results of
its operations and its consolidated cash flows for the fiscal quarter then
ended, subject to normal year-end audit adjustments. All such financial
statements, including the related schedules and notes thereto, have been
prepared in accordance with GAAP.
Section 5.15 No Default. After giving effect to the Amendment No. 1 dated
on or about March 23, 2001 to the Secured Credit Agreement: neither Holdings,
the Borrower nor any of its Subsidiaries is in default under or with respect to
any of its Contractual Obligations in any respect that could reasonably be
expected to have a Material Adverse Effect, and no default has occurred and is
continuing under the Secured Credit Agreement or the Senior Subordinated Note
Indenture.
Section 5.16 Solvency. Each Loan Party is, and after giving effect to the
incurrence of all Term Loan Obligations (assuming incurrence of all Term Loan
Obligations on the Initial
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Funding Date) and the other obligations being incurred in connection herewith
and therewith will be and will continue to be, Solvent.
ARTICLE VI
EVENTS OF DEFAULT; REMEDIES
Section 6.01 Events of Default. An "Event of Default" occurs if:
(a) any Indebtedness under the Secured Credit Agreement is accelerated
prior to its stated maturity; or
(b) (i) Holdings, the Borrower or any of its Restricted Subsidiaries
shall commence any case, proceeding or other action (A) under any existing or
future law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it as bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator
or other similar official for it or for all or any substantial part of its
assets, or Holdings, the Borrower or any of its Restricted Subsidiaries shall
make a general assignment for the benefit of its creditors; or (ii) there shall
be commenced against Holdings, the Borrower or any of its Restricted
Subsidiaries any case, proceeding or other action of a nature referred to in
clause (i) above that (A) results in the entry of an order for relief or any
such adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced against
Holdings, the Borrower or any of its Restricted Subsidiaries any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part of
its assets that results in the entry of an order for any such relief that shall
not have been vacated, discharged, or stayed or bonded pending appeal within 60
days from the entry thereof; or (iv) Holdings, the Borrower or any of its
Restricted Subsidiaries shall take any action in furtherance of, or indicating
its consent to, approval of, or acquiescence in, any of the acts set forth in
clause (i), (ii), or (iii) above; or (v) Holdings, the Borrower or any of its
Restricted Subsidiaries shall generally not, or shall be unable to, or shall
admit in writing its inability to, pay its debts as they become due.
Section 6.02 Acceleration. If an Event of Default (other than an Event of
Default specified in Section 6.01(b) with respect to the Borrower) occurs and is
continuing, the Majority Lenders by notice to the Borrower may declare the
principal of and accrued and unpaid interest on all the Notes to be due and
payable. Upon such a declaration, such principal and interest shall be due and
payable immediately. If an Event of Default specified in Section 6.01(b) with
respect to the Borrower occurs and is continuing, the principal of and accrued
and unpaid interest on all the Notes shall ipso facto become and be immediately
due and payable without any declaration or other act on the part of any Lender.
The Majority Lenders by notice to the Borrower may rescind an acceleration and
its consequences if the rescission would not conflict with any judgment or
decree and if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of
acceleration. No such rescission shall affect any subsequent Default or Event of
Default or impair any right consequent thereto.
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Section 6.03 Other Remedies. If an Event of Default occurs and is
continuing, the Majority Lenders may pursue any available remedy to collect the
payment of principal of or interest on the Notes or to enforce the performance
of any provision of any Loan Document. A delay or omission by any Lender or the
Majority Lenders in exercising any right or remedy accruing upon an Event of
Default shall not impair the right or remedy or constitute a waiver of or
acquiescence in the Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative.
Section 6.04 Waiver of Past Defaults. The Majority Lenders by notice to the
Borrower may waive an existing Default or Event of Default and its consequences
except a Default or Event of Default in the payment of the principal of or
interest on a Note. When a Default or Event of Default is waived, it is deemed
cured, but no such waiver shall extend to any subsequent or other Default or
Event of Default or impair any consequent right.
Section 6.05 Control by Majority. The Majority Lenders may direct the time,
method and place of conducting any proceeding for any remedy or of exercising
any power.
Section 6.06 Rights of Lenders to Receive Payment. Notwithstanding any
other provision of this Agreement, the right of any Lender to receive payment of
principal of and interest on the Notes held by it, on or after the respective
due dates expressed in the Notes, or to bring suit for the enforcement of any
such payment on or after such respective dates, shall not be impaired or
affected without the consent of such Lender.
Section 6.07 Incorporation of Terms of Secured Credit Agreement. Upon the
payment in full of the Secured Credit Agreement and the termination of the
commitments of the lenders thereunder to advance any additional funds, the
covenants contained in Sections 6 and 7 thereof and the "Events of Default" and
remedial provisions contained in Section 8 thereof shall be incorporated herein
by reference, mutatis mutandis, as if such terms were set forth fully herein.
For the avoidance of doubt, no such provisions shall exist or be incorporated
herein for so long as any Indebtedness, interest or fees or any commitment to
lend or furnish accommodations in the form of letters of credit shall be
outstanding under the Secured Credit Agreement.
ARTICLE VII
MISCELLANEOUS
Section 7.01 Governing Law; Jurisdiction. This Agreement and the Notes
shall be governed by, and construed in accordance with, the laws of the State of
New York. The parties hereto irrevocably consent and submit to the non-exclusive
jurisdiction of the courts of the State of New York and the federal courts for
the southern district of New York.
Section 7.02 Notices. All notices and other communications provided for
herein and in the other Loan Documents (including, without limitation, any
modifications of, or waivers or consents under, this Agreement or the other Loan
Documents) shall be given or made by in the manner set forth in the Investors'
Agreement. Except as otherwise provided in the Investors' Agreement, all
communications between the parties hereto shall be deemed to have been duly
given when transmitted by telecopier (upon transmittal confirmation) or
personally delivered or,
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in the case of a mailed notice, upon the earlier of receipt or five Business
Days after deposit in the U.S. mail, postage prepaid.
Section 7.03 Indemnities and Payments.
(a) The Borrower agrees to indemnify each Lender and its partners,
members, officers, directors, employees, representatives, agents and affiliates
("Indemnified Parties") from, hold each of them harmless against, promptly upon
demand pay or reimburse each of them for, and refrain from creating or asserting
against any of them, any and all actions, suits, proceedings (including any
investigations, litigation or inquiries), claims, demands, causes of action,
losses, liabilities, damages and reasonably incurred costs or expenses of any
kind or nature whatsoever regardless of whether foreseeably caused by the
ordinary negligence of any Indemnified Party (collectively the "Indemnity
Matters") which may be incurred by or asserted against or involve any of them
(whether or not any of them is designated a party thereto) as a result of,
arising out of or related to (i) any actual or proposed use by the Borrower of
the proceeds of any of the Term Loans made hereunder or (ii) any other aspect of
this Agreement, the Notes, and the other Loan Documents, including, without
limitation, the reasonable fees and disbursements of counsel and all other
reasonable expenses incurred in connection with investigating, defending or
preparing to defend any such action, suit, proceeding (including any
investigations, litigation or inquiries) or claim, but excluding herefrom all
Indemnity Matters arising solely by reason of the gross negligence or willful
misconduct on the part of the party to be so indemnified. To the extent that an
Indemnified Party is found to have committed an act of gross negligence or
willful misconduct, this contractual obligation of indemnification shall
continue but shall only extend to the portion of the claim that is deemed to
have occurred by reason of events other than the gross negligence or willful
misconduct of the Indemnified Party.
(b) The Borrower's obligations under this Section 7.03 shall survive
any termination of this Agreement and the payment of the Notes.
(c) If any amount becomes payable under this Section 7.03, such amount
shall only be paid if the Payment Test has been satisfied; however, such payment
shall not exceed the maximum amount that can be paid without causing the Payment
Test to be violated by such payment; provided, that this Section 7.03(c) shall
not limit or prohibit the payment of any out-of-pocket costs and expenses
(including, without limitation, fees and disbursements of professionals,
advisors and consultants to the Indemnified Parties) incurred by the Indemnified
Parties that are indemnifiable, payable or reimbursable pursuant to Section
7.03(a), all such costs and expenses to be paid regardless of whether the
Payment Test is satisfied or violated.
Section 7.04 Amendments, Etc. No provision of this Agreement or any other
Loan Documents may be amended, modified or waived without the express written
consent of the Borrower and Majority Lenders, provided that no such amendment,
modification or waiver of the definition of "Majority Lenders", or of Sections
2.03, 2.04, 2.05, 2.06 or 7.04 shall be effective without the consent of all of
the Lenders; provided further, that no such amendment, modification or waiver
shall (i) reduce the principal amount of any Note or reduce the rate of interest
thereon, or reduce any fees payable hereunder, without the written consent of
each Lender affected thereby, or (ii) postpone the scheduled date of payment of
the principal amount
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of any Note, or any interest thereon, on any fees payable hereunder, or postpone
the scheduled date of expiration of any Note, without the written consent of
each Lender affected thereby.
Section 7.05 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns. This Agreement may not be assigned, either in whole or in
part, by the Borrower without the express written consent of the Majority
Lenders. Any Lender may assign all or a portion of its Note to any Affiliate of
such Lender or any other Person who at the time of such assignment is a
shareholder (or an Affiliate of a shareholder) (on a fully diluted basis) of
Holdings. No assignment by a Lender shall be valid and effective hereunder
unless the assigning Lender provides five Business Days' prior written notice of
such contemplated assignment to the Borrower. Upon consummation of any
assignment, the assigning Lender shall immediately send to the Borrower a second
written notice (an "Assignment Notice"), which shall be executed by the
assigning Lender and the assignee and shall specify the closing date of the
assignment, the assigning lender, the assignee and the portion of the Note being
assigned. The Borrower shall maintain at its principal place of business a copy
of each Assignment Notice delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the portions of the Notes owing to,
each Lender pursuant to the terms hereof from time to time (the "Register"). No
entry may be made in the Register unless the Borrower has received a properly
executed and completed Assignment Notice. The entries in the Register shall be
conclusive, absent manifest error, and the Borrower and the Lenders may treat
each Person whose name is recorded in the Register pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement notwithstanding notice
to the contrary. The Register shall be available for inspection by any Lender at
any reasonable time and from time to time upon reasonable prior notice. Upon
receipt of a duly executed and completed Assignment Notice, the Borrower shall
accept such Assignment Notice and record the information contained therein in
the Register and will provide prompt written notice to all the Lenders of the
effectiveness of such assignment. No assignment shall be effective for purposes
of this Agreement unless (i) five Business Days' prior written notice is given
to Borrower and (ii) such assignment is recorded in the Register as provided in
this paragraph.
Section 7.06 Invalidity. In the event that any one or more of the
provisions contained in any Note, this Agreement or in any other Loan Document
shall, for any reason, be held invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provision of such Note, this Agreement or any other Loan Document.
Section 7.07 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
Section 7.08 Captions. Captions and section headings appearing herein are
included solely for convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement.
Section 7.09 No Oral Agreements. THIS WRITTEN AGREEMENT, THE NOTES AND THE
OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF
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PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
Section 7.10 Waiver of Jury Trial. EACH OF THE PARTIES HERETO WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO A TRIAL BY JURY IN
ANY ACTION OR PROCEEDING TO ENFORCE OR TO DEFEND ANY RIGHTS UNDER THIS
AGREEMENT, ANY NOTE OR ANY OTHER LOAN DOCUMENT OR UNDER ANY AMENDMENT,
INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE
DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY RELATIONSHIP
EXISTING IN CONNECTION WITH THIS AGREEMENT, ANY NOTE OR ANY OTHER LOAN DOCUMENT
AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND
NOT BEFORE A JURY.
Section 7.11 Representation of Counsel. Each party hereto acknowledges that
Xxxxxx & Xxxxxx L.L.P. has represented the Borrower in the course of negotiating
and preparing this Agreement and the other Loan Documents and that each party
has been afforded the opportunity to engage its own counsel.
Section 7.12 Allocation for Tax Purposes. Each party hereto (including,
without limitation, Holdings and the Borrower) agrees that, for tax purposes,
66.7% of the Term Loan advanced by it will be deemed to be the issue price of
the Note and the remaining 33.3% will be deemed to be consideration for the
purchase of the related Warrant. Each party hereto agrees that it will not take
any position inconsistent with such allocation on any tax return.
Section 7.13 Existence; Good Standing; Class B Shares. Notwithstanding any
other provision of this Agreement or any other Loan Document to the contrary, no
default, violation or breach shall be deemed to have occurred under this
Agreement or any other Loan Document the extent arising from (i) the failure of
Xxxxx/Xxxxx Xxxx Joint Venture L.L.C. to be validly existing under the laws of
the state of Texas or in good standing in any state or (ii) the failure of
Holdings to have a sufficient number of shares of its Class B Common Stock
authorized for issuance to enable Holdings to reserve and issue shares of its
Class B Common Stock upon exercise of the Warrants.
[Signature pages follow.]
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The parties hereto have caused this Agreement to be duly executed as of the
day and year first above written.
XXXXX PET CARE ENTERPRISES, INC.
By: __________________________________
Name: ________________________________
Title: _______________________________
XXXXX PET CARE COMPANY
By: __________________________________
Name: ________________________________
Title: _______________________________
S-1
22
LENDERS:
[_________________________________]
By: __________________________________
Name: ________________________________
Title: _______________________________
S-2
23
SCHEDULE 2.01
AMOUNTS OF TERM LOANS AND WARRANT SHARES
Initial Lenders:
Name of Lender Principal Amount Warrant Shares*
-------------- ---------------- --------------
Xxxxxxx X. Xxxxxxxx $70,000 31,893
Xxxxxx X. Xxxxxxxxxx $150,000 68,343
Xxxxxx X. Xxxxxxxx $50,000 22,781
Xxxxx X. Xxxxxxxx $50,000 22,781
Xxxxxxx Xxx Xxxxxx $100,000 45,562
Xxxxx Xxxxxx $50,000 22,781
Bruckmann Xxxxxx Xxxxxxxx & Co II LP $755,737.97 344,330
Xxxxx Xxxxx $987.47 450
Summit/DPC Partners, L.P. $ 5,000,000 2,278,101
X. X. Xxxxxx Partners (B.H.C.A.), L.P. $13,873,874 6,321,218
Second Advance Lenders:
Name of Lender Principal Amount Warrant Shares
-------------- ---------------- --------------
Xxxxx X. Xxxxx $3,765.94 1,716
Xxxx X. Xxxxxxxx $14,084.80 6,417
Xxxxxxx X. Xxxxxxxx $96,664.60 44,042
H. Xxxxxx Xxxxxxxx $62,771.12 28,600
--------
* The number of warrant shares will be increased if necessary so that, after
giving effect to the warrant shares issued in connection with the Term Loans
made on the Final Funding Date, the warrant shares issuable to the persons
listed on this Schedule 2.01 equal 30% of the fully diluted common equity of
Holdings.
Schedule 2.01-1
24
Xxxxx X. Xxxxxxxxx $96,664.60 44,042
Xxxxxx X. Xxxxxx $18,830.79 8,580
Bruckmann Xxxxxx Xxxxxxxx & Co LP $4,586,061.82 2,089,503
NAZ Family Partners LP $2,604.77 1,187
BCB Family Partners LP $5,397.91 2,459
Estate of Xxxxxx Xxxxxxxxx $12,554.22 5,720
Schedule 2.01-1
25
SCHEDULE 2.02
INTEREST ACCRUED (PIK) AND PAYMENTS OF PRINCIPAL AND INTEREST ON NOTE
Unpaid
Amount of Aggregate Amount of Principal
Amount of Interest Paid Amount of PIK Principal Balance of Notation
Payment Date PIK Interest in Cash Interest Prepaid Term Loan(1) Made by
------------ ------------ ------------- ------------- --------- ------------ --------
------------ ------------ ------------- ------------- --------- ------------ --------
------------ ------------ ------------- ------------- --------- ------------ --------
------------ ------------ ------------- ------------- --------- ------------ --------
------------ ------------ ------------- ------------- --------- ------------ --------
------------ ------------ ------------- ------------- --------- ------------ --------
------------ ------------ ------------- ------------- --------- ------------ --------
------------ ------------ ------------- ------------- --------- ------------ --------
------------ ------------ ------------- ------------- --------- ------------ --------
------------ ------------ ------------- ------------- --------- ------------ --------
------------ ------------ ------------- ------------- --------- ------------ --------
------------ ------------ ------------- ------------- --------- ------------ --------
------------ ------------ ------------- ------------- --------- ------------ --------
------------ ------------ ------------- ------------- --------- ------------ --------
------------ ------------ ------------- ------------- --------- ------------ --------
------------ ------------ ------------- ------------- --------- ------------ --------
------------ ------------ ------------- ------------- --------- ------------ --------
------------ ------------ ------------- ------------- --------- ------------ --------
----------
(1) Includes accreted PIK Interest not yet paid.
Schedule 2.02-1
26
SCHEDULE 5.09
SUBSIDIARIES AND PARTNERSHIPS
JURISDICTION OF PERCENTAGE
NAME FORMATION OWNED
---- --------------- ----------
DPC Investment Corp. (formerly known as Xxxxx/Xxxxx
Xxxx Joint Venture Corp.) Delaware 100%
Xxxxx Pet Care (Europe) ApS Denmark 100%
A/S Arovit Pet Food Denmark 100%
DPC International Limited United Kingdom 100%
Ipes Iberica, S.A. (formerly known as Xxxxx Pet Care Spain 100%
Spain, S.L.)
Xxxxx Pet Care (UK) Limited United Kingdom 100%
Arovit Petfood Deutschland G.m.b.H. Germany 100%
A/S Arovit Petfood Norway Norway 100%
Arovit Petfood France s.a.r.l. France 100%
Arovit Petfood Italia S.R.L. Italy 100%
Arovit Petfood Spain, S.A. Spain 100%
Arovit Petfood UK Ltd. United Kingdom 100%
Arovit Petfood Benelux B.V. The Netherlands 100%
Carat Tiernahrungsgesellschaft m.b.H. Austria 100%
Pyramid Pet Equipment ApS Denmark 100%
Xxxxx/Xxxxx Xxxx Joint Venture L.L.C. Texas 100%
Effeffe S.p.A Italy 50%
Xxxxx International Pet Products LLC Delaware 50%
Schedule 5.09-1
27
ANNEX 1
DEFINED TERMS
"Affiliate" means any Person controlling, controlled by or under common
control with any other Person. For purposes of this definition, "control"
(including "controlled by" and "under common control with") means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or otherwise
"Average Consolidated Senior Debt Ratio" means, as of the last day of any
fiscal quarter, the ratio of (a) the sum of (i) the average aggregate daily
principal or face amount of Consolidated Senior Debt (other than Consolidated
Senior Debt of Foreign Subsidiaries) during such quarter and (ii) the average
aggregate monthly principal or face amount of Consolidated Senior Debt of
Foreign Subsidiaries determined as of the end of each month during such quarter
to (b) Consolidated EBITDA for the period of four consecutive fiscal quarters of
the Borrower ending on such day.
"Agreement" means this Loan and Warrant Agreement, as the same may from
time to time be amended, supplemented or modified.
"Assignment Notice" has the meaning assigned to such term in Section 7.05.
"Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code, or any similar Federal
or state law for the relief of debtors.
"Business Day" means any day other than a day on which commercial banks are
authorized or required to close in Nashville, Tennessee or New York, New York.
"Capital Lease Obligation" has the meaning assigned to such term in the
Secured Credit Agreement.
"Consolidated EBITDA" has the meaning assigned to such term in the Secured
Credit Agreement.
"Consolidated Senior Debt" has the meaning assigned to such term in the
Secured Credit Agreement.
"Contractual Obligation" has the meaning assigned to such term in the
Secured Credit Agreement.
"Custodian" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
"Default" means an Event of Default or an event that with notice or lapse
of time or both would become an Event of Default.
Annex 1-1
28
"Disposition" has the meaning assigned to such term in the Secured Credit
Agreement.
"Dollars" and "$" means lawful money of the United States of America.
"Event of Default" has the meaning assigned to that term in Section 6.01.
"Excess Liquidity" means, as of any Payment Date, the Revolving Commitment
then in effect under the Secured Credit Agreement minus (i) the amount of the
Revolving Extensions of Credit (as defined in the Secured Credit Agreement) as
of such Payment Date, (ii) $35,000,000 and (iii) interest accrued and unpaid for
the preceding fiscal quarter to the extent required to be paid in cash on such
Payment Date on the unpaid principal of the Notes (including interest on the PIK
Interest which has been capitalized on a previous Payment Date as principal).
"Final Advance Lenders" means each Lender which after the date of the
Agreement executes a Supplement pursuant to which it agrees to make a Term Loan
to the Borrower on or before May 15, 2001, in the principal amount set forth in
such Lender's Supplement.
"Final Funding Date" means the date on or prior to May 15, 2001 on which
each of the conditions set forth in Section 4.03 shall have been satisfied.
"Final Maturity Date" means March 31, 2007, unless sooner accelerated
pursuant to Section 6.02.
"Foreign Subsidiary" has the meaning assigned to such term in the Secured
Credit Agreement.
"Funding Date" means any or all of the Initial Funding Date, the Second
Funding Date and/or the Final Funding Date, as the context may require.
"GAAP" means generally accepted accounting principals consistently applied.
"Governmental Authority" has the meaning assigned to such term in the
Secured Credit Agreement.
"Guarantee Obligations" has the meaning assigned to such term in the Second
Credit Agreement.
"Guarantors" means all Subsidiaries of the Borrower that are guarantors
under the Senior Subordinated Note Indenture.
"Guaranty Agreement" means an agreement executed by the Guarantors in form
and substance reasonably satisfactory to the Lenders guarantying unconditionally
payment of the Indebtedness.
"Holdings" means Xxxxx Pet Care Enterprises, Inc., a Delaware corporation.
"Indebtedness" has the meaning assigned to such term in the Secured Credit
Agreement.
"Indemnified Parties" has the meaning assigned to that term in Section
7.03.
Annex 1-2
29
"Indemnity Matters" has the meaning assigned to that term in Section 7.03.
"Initial Lenders" means the Lenders signatory to this Agreement as of the
date of the Agreement required to make a Term Loan to the Borrower on the
Initial Funding Date in the principal amount set forth opposite such Lender's
name on Schedule 2.01 hereto.
"Initial Funding Date" means the date of this Agreement or such other date
on which each of the conditions set forth in Section 4.01 shall have been
satisfied.
"Interest Expense" means, for any period, total interest expense paid in
cash on Indebtedness of the Borrower and its Subsidiaries during such period,
determined on a consolidated basis in accordance with GAAP.
"Interest Rate" means, for any day, a rate per annum equal to 15%; provided
that past due principal and interest shall bear interest at a rate per annum
equal to 17%.
"Investors' Agreement" has the meaning assigned to such term in the Secured
Credit Agreement.
"Liens" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, a Person shall be deemed to own subject to a
Lien any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement relating to such asset.
"Loan Document" means this Agreement, the Notes, the Warrants, the Guaranty
Agreement, and any and all other agreements or instruments now or hereafter
executed and delivered by the Borrower, any Guarantor or any other Person in
connection with, or as security for the payment or performance of, the Notes, or
this Agreement, as such agreements may be amended or supplemented from time to
time.
"Loan Party" means any or each of Holdings, the Borrower and the
Guarantors, individually or collectively, as the context may require.
"Majority Lenders" means, at any time while Notes are outstanding, the
Lenders having greater than 50% of the principal amounts outstanding.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, property, operations, condition (financial or otherwise) or
prospects of Holdings, the Borrower and its Restricted Subsidiaries taken as a
whole or (b) the validity or enforceability of any material provision of this
Agreement or any of the other Loan Documents or the rights or remedies of the
Lenders hereunder or thereunder.
"Net Cash Proceeds" has the meaning assigned to such term in the Secured
Credit Agreement.
Annex 1-3
30
"Notes" means any Note in substantially the form of Exhibit A hereto
executed by the Borrower in connection with this Agreement and all renewals,
extensions and rearrangements thereof.
"Payment Date" means (a) the tenth Business Day after the date on which
financial statements of the Borrower for the preceding fiscal quarter are
prepared and filed with the Securities and Exchange Commission or (b) at any
time the Borrower is not required to file financial statements with the
Securities and Exchange Commission, the 90th day following the end of each
fiscal quarter of the Borrower.
"Payment Test" has been met if:
(a) no default or event of default shall have occurred and be continuing,
or will occur as a result of such payment, under the Secured Credit Agreement;
(b) the Borrower shall have an Average Consolidated Senior Debt Ratio,
determined as at the last day of each of the two most recent fiscal quarters
prior to the date of such payment for which financial statements are available
calculated on a pro forma basis as if such payment proposed to be made on a
Payment Date had been made on the first day of the first quarter of such two
consecutive quarters, of no greater than 2.75:1.00; and
(c) after giving effect to any proposed payment of principal of and/or
interest on the Notes, the sum of (i) cash on hand (determined as at the last
day of the most recent fiscal quarter prior to the date of such payment based
upon the most recent financial statements available) plus (ii) the aggregate
unused amount of the Revolving Commitments then in effect (as defined in the
Secured Credit Agreement) (excluding the portion (if any) of the Revolving
Commitments that may not be borrowed at such time by reason of the last sentence
of Section 2.4(a) of the Secured Credit Agreement, unless such amount would
become available as of the date of such payment as a result of the occurrence of
the Revolving Commitment Suspension Termination Date (as defined in the Secured
Credit Agreement)) would be at least $35,000,000.
"Person" means any individual, corporation, company, voluntary association,
partnership, joint venture, trust, unincorporated organization or government or
any agency, instrumentality or political subdivision thereof, or any other form
of entity.
"PIK Interest" has the meaning set forth in Section 2.04(a).
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
"Register" has the meaning assigned to such term in Section 7.05.
"Requirement of Law" has the meaning assigned to such term in the Secured
Credit Agreement.
"Restricted Subsidiary" has the meaning assigned to such term in the
Secured Credit Agreement.
Annex 1-4
31
"Revolving Commitment" has the meaning assigned to such term in the Secured
Credit Agreement.
"Second Advance Lenders" means the Lenders signatory to this Agreement as
of the date of the Agreement required to make a Term Loan to the Borrower on the
Second Funding Date in the principal amount set forth opposite such Lender's
name on Schedule 2.01 hereto.
"Second Funding Date" means a date no later than 15 days after the date of
this Agreement.
"Secured Credit Agreement" means the Amended and Restated Credit Agreement,
dated as of May 8, 2000, among Holdings, the Borrower, the several banks and
other financial institutions or entities from time to time parties thereto, and
The Chase Manhattan Bank, as administrative agent (as may be amended, waived,
restated or modified from time to time).
"Securities Act" has the meaning assigned to such term in Section 3.02(a).
"Senior Subordinated Note Indenture" means that certain Indenture dated as
of November 12, 1998 between the Borrower, as issuer and Wilmington Trust
Company, as trustee, as amended, pursuant to which the Borrower has issued its
$150,000,000 9-3/4% Senior Subordinated Notes due 2007.
"Solvent" has the meaning assigned to such term in the Secured Credit
Agreement.
"Subsidiary" means, as to any Person, any other Person of which at least a
majority of the outstanding shares of stock or similar ownership interests
having by the terms thereof ordinary voting power to elect a majority of the
board of directors or similar governing body of such other Person (irrespective
of whether or not at the time stock or similar ownership interests of any other
class or classes of such other Person shall have or might have voting power by
reason of any contingency) is at the time directly or indirectly owned or
controlled by such Person or one or more of its Subsidiaries. Unless otherwise
indicated, references to Subsidiaries are Subsidiaries of the Borrower.
"Supplement" means a Supplement to this Agreement in substantially the form
of Exhibit D.
"Term Loan Obligations" means the unpaid principal of and interest on
(including interest accruing after the maturity of the Term Loans and interest
accruing after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding, relating to the Borrower,
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding) the Term Loans and all other obligations and liabilities of the
Borrower to any Lender, whether direct or indirect, absolute or contingent, due
or to become due, or now existing or hereafter incurred, which arises under, out
of, or in connection with, this Agreement, any Note, any other Loan Document or
any other document made, delivered or given in connection herewith or therewith,
whether on account of principal, interest, reimbursement obligations, fees,
indemnities, costs or expenses (including all fees, charges and disbursements of
counsel to any Lender that are required to be paid by the Borrower pursuant
hereto or pursuant to any other Loan Document) or otherwise.
Annex 1-5
32
"Term Loans" means any loan made by any Lender pursuant to this Agreement.
"Warrants" means any warrant in substantially the form of Exhibit B hereto
issued to the Lenders in connection with this Agreement to purchase Class A
Common Stock or, if elected by any Lender, Class B Common Stock of Holdings.
Annex 1-6
33
EXHIBIT A
[FORM OF]
NOTE
XXXXX PET CARE COMPANY
THIS NOTE IS ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") AS DEFINED BY
SECTION 1273(a)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. THE
FOLLOWING INFORMATION IS PROVIDED PURSUANT TO THE INFORMATION REPORTING
REQUIREMENTS SET FORTH IN TREASURY REGULATION 1.1275-3.
THE ISSUE PRICE OF THIS DEBT INSTRUMENT IS $ [ ___________ ]. THE AMOUNT OF
OID ON THIS DEBT INSTRUMENT IS $[ _____________ ]. THE ISSUE DATE OF THIS
DEBT INSTRUMENT IS ____________, 2001. THE PER ANNUM YIELD TO MATURITY OF
THIS DEBT INSTRUMENT IS [ ]% COMPOUNDED QUARTERLY.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER EITHER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR
APPLICABLE STATE SECURITIES LAWS (THE "STATE ACTS"), AND SHALL NOT BE SOLD,
PLEDGED, HYPOTHECATED, DONATED OR OTHERWISE TRANSFERRED (WHETHER OR NOT FOR
CONSIDERATION) BY THE HOLDER EXCEPT BY REGISTRATION OR PURSUANT TO AN
EXEMPTION FROM REGISTRATION UPON THE ISSUANCE TO THE COMPANY OF A FAVORABLE
OPINION OF COUNSEL OR OTHER EVIDENCE REASONABLY SATISFACTORY TO THE COMPANY
TO THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE A VIOLATION OF THE 1933
ACT AND THE STATE ACTS.
$__________________ ___________, 200_
Xxxxx Pet Care Company, a Delaware corporation (the "Borrower"), promises
and agrees to pay on the Final Maturity Date, to the order of
____________________ (the "Lender") at its offices at
____________________________, in United States Dollars, the principal sum of
$_________________, or so much thereof as may be outstanding hereunder.
All capitalized terms which are used but not defined in this Note shall
have the same meanings as in the Loan and Warrant Agreement, dated March 26,
2001, among the Borrower and the lenders party thereto (including the Lender)
(such Loan and Warrant Agreement, together with all amendments or supplements
thereto, being the "Loan and Warrant Agreement").
In addition to the principal sum referred to in the first paragraph of this
Note, the Borrower also agrees to pay interest on the principal sum (including
any portion of the principal
Exhibit A-1
34
sum attributable to PIK Interest capitalized as principal) advanced and
remaining from time to time unpaid hereon from the date of advance until paid in
full at the Interest Rate.
Accrued interest is due and payable quarterly on each Payment Date as set
forth in the Loan and Warrant Agreement, provided that if the Payment Test has
not been met, such interest shall be capitalized as contemplated by Section 2.04
of the Loan and Warrant Agreement. PIK Interest shall, to the extent permitted
by law, bear interest at the Interest Rate.
All payments of interest shall be computed on the per annum basis of a year
of 360 days and for the actual number of days (including the first day but
excluding the last day) elapsed.
The Borrower shall prepay the principal amount of this Note outstanding as
set forth in Section 2.03(a) of the Loan and Warrant Agreement, and in the event
of any such notice being given, the amount so notified shall be due and payable
on the said day, together with accrued interest thereon (including PIK Interest)
to the date of prepayment.
The Borrower is hereby authorized to record all payments and prepayments
hereunder on account of principal and interest on the schedule for this Note
kept at the offices of the Borrower, such schedule being made a part hereof for
all purposes, and to provide continuations to such schedule as may be necessary.
Each payment and prepayment made by the Borrower under this Note shall be
made in immediately available funds before 1:00 p.m., New York City time, on the
date that such payment or prepayment is required to be made. If the date for any
payment or prepayment hereunder falls on a day which is not a Business Day, then
for all purposes of this Note the same shall be deemed to have fallen on the
next following Business Day, and such extension of time shall in such case be
included in the computation of payments of interest.
The Borrower and any and each co-maker, guarantor, accommodation party,
endorser or other Person liable for the payment or collection of this Note
expressly waive demand and presentment for payment, notice of nonpayment,
protest, notice of protest, notice of dishonor, notice of intent to accelerate,
notice of acceleration, bringing of suit, and diligence in taking any action to
collect amounts called for hereunder and in the handling of Property at any time
existing as security in connection herewith, and shall be directly and primarily
liable for the payment of all sums owing and to be owing hereon, regardless of
and without any notice, diligence, act or omission as or with respect to the
collection of any amount called for hereunder.
If default is made in the payment of this Note (whether of principal,
interest or other amounts) when due (regardless of how the maturity of this Note
may be brought about) and the same is placed in the hands of an attorney for
collection, or suit is filed hereon, or proceedings are had in bankruptcy,
probate, receivership, or other judicial proceedings for the establishment or
collection of any amount called for hereunder, or any amount payable or to be
payable hereunder is collected through any such proceedings, the Borrower agrees
and is also to pay to the owner and holder of this Note the reasonable
attorneys' fees incurred by the holder in connection therewith.
This Note is issued pursuant to and is entitled to the benefits of the Loan
and Warrant Agreement. Reference is made to the Loan and Warrant Agreement for
Exhibit A-2
35
provisions for the acceleration of the maturity hereof on the occurrence of
certain events specified therein and for all other pertinent purposes.
This Note may not be transferred or assigned except in compliance with
Section 7.05 of the Loan and Warrant Agreement.
XXXXX PET CARE COMPANY
By:
-------------------------------------
Name:
Title:
Exhibit A-3
36
EXHIBIT B
FORM OF
WARRANT
XXXXX PET CARE ENTERPRISES, INC.
WARRANT FOR THE PURCHASE OF SHARES OF
COMMON STOCK OF XXXXX PET CARE ENTERPRISES, INC.
NO. __ WARRANT TO PURCHASE
___________ SHARES
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED OR SOLD EXCEPT
IN COMPLIANCE THEREWITH. THIS SECURITY IS ALSO SUBJECT TO ADDITIONAL
RESTRICTIONS ON TRANSFER, VOTING AND OTHER MATTERS AS SET FORTH IN THE
INVESTORS' AGREEMENT (AS HEREIN DEFINED), COPIES OF WHICH MAY BE OBTAINED
UPON REQUEST FROM THE COMPANY.
FOR VALUE RECEIVED, XXXXX PET CARE ENTERPRISES, INC., a Delaware
corporation (the "Company"), hereby certifies that
___________________________________, its successor or permitted assigns (the
"Holder"), is entitled, subject to the provisions of this Warrant, to purchase
from the Company, at the times specified herein _______ fully paid and
non-assessable shares of Common Stock of the Company at a purchase price per
share equal to the Exercise Price (as hereinafter defined). The number of shares
of Common Stock to be received upon the exercise of this Warrant and the price
to be paid for a share of Common Stock are subject to adjustment from time to
time as hereinafter set forth.
(a) DEFINITIONS. (1) The following terms, as used herein, have the
following meanings:
"1995 WARRANTS" means the warrants issued by Xxxxx Pet Care Enterprises,
Inc. on October 5, 1995 to certain purchasers of preferred stock of Xxxxx Pet
Care Company in connection with the leveraged buyout of the Company and its then
existing subsidiaries, which warrants are exercisable for a nominal exercise
price into an aggregate of 5,417,912 shares of common stock of the Company,
subject to adjustment as provided therein.
"AFFILIATE" shall have the meaning given to such term in rule 12b-2
promulgated under the Securities and Exchange Act of 1934, as amended.
Exhibit B-1
37
"BANK HOLDING COMPANY AFFILIATE" shall have the meaning assigned to such
term in the Investors' Agreement.
"BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which commercial banks in the City of New York are authorized by law to close.
"CLOSING DATE" means the date of the closing under the Loan and Warrant
Agreement dated as of March 23, 2001 among the Company, Xxxxx Pet Care Company
and the Lenders thereto.
"COMMON STOCK" means the Class A Common Stock, par value $0.0001 per share,
of the Company ("CLASS A COMMON STOCK"), the Class B Common Stock, par value
$0.0001 per share, of the Company ("CLASS B COMMON STOCK") and other capital
stock of the Company that is not preferred as to liquidation or dividends.
"CURRENT MARKET PRICE PER COMMON SHARE" has the meaning given such term in
paragraph (h)(6) hereof.
"DULY ENDORSED" means duly endorsed in blank by the Person or Persons in
whose name a stock certificate is registered or accompanied by a duly executed
stock assignment separate from the certificate with the signature(s) thereon
guaranteed by a commercial bank or trust company or a member of a national
securities exchange or of the National Association of Securities Dealers, Inc.
"EXERCISE PRICE" means $0.01 per Warrant Share, such Exercise Price to be
adjusted from time to time as provided herein.
"EXPIRATION DATE" means April 1, 2013 at 5:00 p.m. New York City time.
"FAIR MARKET VALUE" means, with respect to one share of Common Stock on any
date, the Current Market Price Per Common Share.
"INITIAL PUBLIC OFFERING" shall have the meaning assigned to such term in
the Investors' Agreement.
"INVESTORS' AGREEMENT" means the Second Amended and Restated Investors'
Agreement dated as of March 26, 2001 among the Company, Xxxxx Pet Care Company,
Summit Capital Inc., Summit/DPC Partners, L.P., DLJ Merchant Banking Partners,
L.P., DLJ International Partners, C.V., DLJ Offshore Partners, C.V., DLJ
Merchant Banking Funding, Inc. and the shareholders listed on the signature
pages thereto, as amended and restated from time to time.
"LENDERS" shall have the meaning assigned to such term in the Loan and
Warrant Agreement.
"LOAN AND WARRANT AGREEMENT" means the Loan and Warrant Agreement dated
March 26, 2001 among the Company, Xxxxx Pet Care Company and the Persons
signatory thereto.
Exhibit B-2
38
"PERSON" means an individual, partnership, corporation, trust, joint stock
company, association, joint venture, or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"PRINCIPAL HOLDER" means the original Holder of this Warrant on the date of
issue, or if such original Holder so elects, any transferee of all or any
portion of this Warrant whom such original Holder shall have designated by
written notice to the Company as the successor Principal Holder. Any successor
Principal Holder designated pursuant to the immediately preceding sentence shall
also have the right upon any subsequent transfer to designate a successor
Principal Holder in the manner described above.
"REGULATION Y" shall have the meaning assigned to such term in the
Investors' Agreement.
"SHAREHOLDERS" shall have the meaning assigned to such term in the
Investors' Agreement.
"TRANSFER" shall have the meaning assigned to such term in the Investors'
Agreement.
"WARRANTS" means the warrants issued to the Lenders under the Loan and
Warrant Agreement in connection with the Term Loans made by the Lenders pursuant
to such agreement.
"WARRANT SHARES" means the shares of Common Stock deliverable upon exercise
of this Warrant, as adjusted from time to time.
(2) Capitalized terms used but not defined herein shall have the meanings
assigned to such terms in the Investors' Agreement.
(b) EXERCISE OF WARRANT.
(1) The Holder is entitled to exercise this Warrant in whole or in
part at any time, or from time to time, until the Expiration Date or, if
such day is not a Business Day, then on the next succeeding day that shall
be a Business Day. At the election of the Holder of this Warrant, the
Common Stock issuable upon exercise thereof may be either Class A Common
Stock or Class B Common Stock or any combination thereof. To exercise this
Warrant, the Holder shall execute and deliver to the Company a Warrant
Exercise Notice substantially in the form annexed hereto. No earlier than
ten days after delivery of the Warrant Exercise Notice, the Holder shall
deliver to the Company this Warrant Certificate, including the Warrant
Exercise Subscription Form forming a part hereof duly executed by the
Holder, together with payment of the applicable Exercise Price, provided
however, that in connection with a public offering of the Common Stock, a
Holder may deliver the Warrant Exercise Notice, the Warrant Exercise
Subscription Form and this Warrant Certificate to the Company
simultaneously. Upon such delivery and payment, the Holder shall be deemed
to be the holder of record of the Warrant Shares subject to such exercise,
notwithstanding that the stock transfer books of the Company shall then be
closed or that certificates representing such Warrant Shares shall not then
be actually delivered to the
Exhibit B-3
39
Holder. Notwithstanding anything herein to the contrary, in lieu of payment
of the applicable Exercise Price, the Holder may elect to receive upon
exercise of this Warrant, the number of Warrant Shares reduced by a number
of shares of Common Stock having the aggregate Fair Market Value equal to
the aggregate Exercise Price for the Warrant Shares.
(2) The Exercise Price may be paid in cash or by certified or official
bank check or bank cashier's check payable to the order of the Company or
by any combination of such cash or check. The Company shall pay any and all
documentary, stamp or similar issue or transfer taxes payable in respect of
the issue or delivery of the Warrant Shares.
(3) If the Holder exercises this Warrant in part, this Warrant
Certificate shall be surrendered by the Holder to the Company and a new
Warrant Certificate of the same tenor and for the unexercised number of
Warrant Shares shall be executed by the Company. The Company shall register
the new Warrant Certificate in the name of the Holder or in such name or
names of its transferee pursuant to paragraph (f) hereof as may be directed
in writing by the Holder and deliver the new Warrant Certificate to the
Person or Persons entitled to receive the same.
(4) Upon surrender of this Warrant Certificate in conformity with the
foregoing provisions, the Company shall transfer to the Holder of this
Warrant Certificate appropriate evidence of ownership of the shares of
Common Stock or other securities or property (including any money) to which
the Holder is entitled, registered or otherwise placed in, or payable to
the order of, the name or names of the Holder or such transferee as may be
directed in writing by the Holder, and shall deliver such evidence of
ownership and any other securities or property (including any money) to the
Person or Persons entitled to receive the same, together with an amount in
cash in lieu of any fraction of a share as provided in paragraph (e) below.
(5) If a Holder is subject to the provisions of Regulation Y, such
Holder shall not, and shall not permit any of its Bank Holding Company
Affiliates to, exercise this Warrant if, after giving effect to such
exercise, (i) such Holder and its Bank Holding Company Affiliates would own
more than 5% of the total issued and outstanding shares of Class A Common
Stock or (ii) such Holder would be deemed under Regulation Y to have the
power to exercise, directly or indirectly, a controlling influence over the
management or policies of, or would otherwise control, the Company (and for
purposes of this clause (ii), a reasoned opinion of counsel to Holder
(which is based on facts and circumstances deemed appropriate by such
counsel) to the effect that such Holder does not so control the Company
shall be conclusive).
(c) RESTRICTIVE LEGEND. Certificates representing shares of Common Stock
issued pursuant to this Warrant shall bear a legend substantially in the form of
the legend set forth on the first page of this Warrant Certificate to the extent
that and for so long as such legend
Exhibit B-4
40
is required pursuant to the Investors' Agreement and such other legend as the
Investors' Agreement requires.
(d) RESERVATION OF SHARES. The Company hereby agrees that at all times
there shall be reserved for issuance and delivery upon exercise of this Warrant
such number of its authorized but unissued shares of Class A Common Stock or
Class B Common Stock or other securities of the Company from time to time
issuable upon exercise of this Warrant as will be sufficient to permit the
exercise in full of this Warrant. All such shares shall be duly authorized and,
when issued and paid for upon such exercise, shall be validly issued, fully paid
and non-assessable, free and clear of all liens, security interests, charges and
other encumbrances or restrictions on sale and free and clear of all preemptive
rights, except to the extent set forth in the Investors' Agreement.
(e) FRACTIONAL SHARES. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant and in lieu
of delivery of any such fractional share upon any exercise hereof, the Company
shall pay to the Holder an amount in cash equal to such fraction multiplied by
the Current Market Price Per Common Share at the date of such exercise.
The Company further agrees that it will not change the par value of the
Common Stock from par value $.0001 per share to any higher par value which
exceeds the Exercise Price then in effect, and will reduce the par value of the
Common Stock upon any event described in paragraph (h) that (i) provides for an
increase in the number of shares of Common Stock subject to purchase upon
exercise of this Warrant, in inverse proportion to and effective at the same
time as such number of shares is increased, but only to the extent that such
increase in the number of shares, together with all other such increases after
the date hereof, causes the aggregate Exercise Price of all Warrants (without
giving effect to any exercise thereof) to be greater than the aggregate par
value of all shares issuable upon exercise of the Warrants or (ii) would, but
for this provision, reduce the Exercise Price below the par value of the Common
Stock.
(f) EXCHANGE, TRANSFER OR ASSIGNMENT OF WARRANT.
(1) This Warrant and the Warrant Shares are subject to the provisions
of the Investors' Agreement, including the restrictions on transfer. Each
taker and holder of this Warrant Certificate by taking or holding the same,
consents and agrees that the registered holder hereof may be treated by the
Company and all other persons dealing with this Warrant Certificate as the
absolute owner hereof for any purpose and as the person entitled to
exercise the rights represented hereby. The Holder, by its acceptance of
this Warrant, will be subject to the provisions of, and will have the
benefits of, the Investors' Agreement to the extent set forth therein,
including the transfer restrictions and the registration rights included
therein.
(2) Subject to compliance with the transfer restrictions set forth in
the Investors' Agreement, upon surrender of this Warrant to the Company,
together with the attached Warrant Assignment Form duly executed, the
Company shall, without charge, execute and deliver a new Warrant in the
name of the assignee or
Exhibit B-5
41
assignees named in such instrument of assignment and, if the Holder's
entire interest is not being assigned, in the name of the Holder and this
Warrant shall promptly be canceled.
(g) LOSS OR DESTRUCTION OF WARRANT. Upon receipt by the Company of evidence
satisfactory to it (in the exercise of its reasonable discretion) of the loss,
theft, destruction or mutilation of this Warrant Certificate, and (in the case
of loss, theft or destruction) of reasonably satisfactory indemnification, and
upon surrender and cancellation of this Warrant Certificate, if mutilated, the
Company shall execute and deliver a new Warrant Certificate of like tenor and
date.
(h) ANTI-DILUTION PROVISIONS. The Exercise Price of this Warrant shall be
subject to adjustment from time to time upon the occurrence of certain events as
provided in this paragraph (h); provided that notwithstanding anything to the
contrary contained herein, the Exercise Price shall not be less than the par
value of the Common Stock, as such par value may be reduced from time to time in
accordance with paragraph (e).
(1) In case the Company shall at any time after the date hereof (i)
declare a dividend or make a distribution on Common Stock payable in Common
Stock, (ii) subdivide or split the outstanding Common Stock, (iii) combine
or reclassify the outstanding Common Stock into a smaller number of shares,
or (iv) issue any shares of its capital stock in a reclassification of
Common Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing
corporation), the Exercise Price in effect at the time of the record date
for such dividend or distribution or of the effective date of such
subdivision, split, combination or reclassification shall be
proportionately adjusted so that, giving effect to paragraph (h)(9), the
exercise of this Warrant after such time shall entitle the holder to
receive the aggregate number of shares of Common Stock or other securities
of the Company (or shares of any security into which such shares of Common
Stock have been reclassified pursuant to clause (iii) or (iv) above) which,
if this Warrant had been exercised immediately prior to such time, such
holder would have owned upon such exercise and been entitled to receive by
virtue of such dividend, distribution, subdivision, split, combination or
reclassification. Such adjustment shall be made successively whenever any
event listed above shall occur.
(2) In case the Company shall issue or sell any Common Stock (other
than Common Stock issued (I) upon exercise of the 1995 Warrants or any of
the Warrants, (II) pursuant to any Common Stock related employee
compensation plan of the Company approved by the Company's Board of
Directors, or (III) upon exercise or conversion of any security the
issuance of which caused an adjustment under paragraphs (h)(3) or (h)(4)
hereof), in each case, without consideration or for a consideration per
share less than the Current Market Price Per Common Share, the Exercise
Price to be in effect after such issuance or sale shall be determined by
multiplying the Exercise Price in effect immediately prior to such issuance
or sale by a fraction, the numerator of which shall be the sum of
Exhibit B-6
42
(x) the number of shares of Common Stock outstanding immediately prior to
the time of such issuance or sale multiplied by the Current Market Price
Per Common Share immediately prior to such issuance or sale and (y) the
aggregate consideration, if any, to be received by the Company upon such
issuance or sale, and the denominator of which shall be the product of the
aggregate number of shares of Common Stock outstanding immediately after
such issuance or sale and the Current Market Price Per Common Share
immediately prior to such issuance or sale. In case any portion of the
consideration to be received by the Company shall be in a form other than
cash, the fair market value of such noncash consideration shall be utilized
in the foregoing computation. Such fair market value shall be determined by
the Board of Directors of the Company; provided that if the Principal
Holder shall object to any such determination, the Board of Directors shall
retain an independent appraiser reasonably satisfactory to the Principal
Holder to determine such fair market value. The Holder shall be notified
promptly of any consideration other than cash to be received by the Company
and furnished with a description of the consideration and the fair market
value thereof, as determined by the Board of Directors.
(3) In case the Company shall fix a record date for the issuance of
rights, options or warrants to the holders of its Common Stock or other
securities entitling such holders to subscribe for or purchase for a period
expiring within 60 days of such record date shares of Common Stock (or
securities convertible into shares of Common Stock) at a price per share of
Common Stock (or having a conversion price per share of Common Stock, if a
security convertible into shares of Common Stock) less than the Current
Market Price Per Common Share on such record date, the maximum number of
shares of Common Stock issuable upon exercise of such rights, options or
warrants (or conversion of such convertible securities) shall be deemed to
have been issued and outstanding as of such record date and the Exercise
Price shall be adjusted pursuant to paragraph (h)(2) hereof, as though such
maximum number of shares of Common Stock had been so issued for an
aggregate consideration payable by the holders of such rights, options,
warrants or convertible securities prior to their receipt of such shares of
Common Stock. In case any portion of such consideration shall be in a form
other than cash, the fair market value of such noncash consideration shall
be determined as set forth in paragraph (h)(2) hereof. Such adjustment
shall be made successively whenever such record date is fixed; and in the
event that such rights, options or warrants are not so issued or expire
unexercised, or in the event of a change in the number of shares of Common
Stock to which the holders of such rights, options or warrants are entitled
(other than pursuant to adjustment provisions therein which are no more
favorable in their entirety than those contained in this paragraph (h)),
the Exercise Price shall again be adjusted to be the Exercise Price which
would then be in effect if such record date had not been fixed, in the
former event, or the Exercise Price which would then be in effect if such
holder had initially been entitled to such changed number of shares of
Common Stock, in the latter event.
Exhibit B-7
43
(4) In case the Company shall sell or issue rights, options (other
than options issued pursuant to a plan described in clause (II) of
paragraph (h)(2)) or warrants (other than the 1995 Warrants and the
Warrants) entitling the holders thereof to subscribe for or purchase Common
Stock (or securities convertible into shares of Common Stock) or shall
issue convertible securities, and the price per share of Common Stock of
such rights, options, warrants or convertible securities (including, in the
case of rights, options or warrants, the price at which they may be
exercised) is less than the Current Market Price Per Common Share, the
maximum number of shares of Common Stock issuable upon exercise of such
rights, options or warrants or upon conversion of such convertible
securities shall be deemed to have been issued and outstanding as of the
date of such sale or issuance, and the Exercise Price shall be adjusted
pursuant to paragraph (h)(2) hereof as though such maximum number of shares
of Common Stock had been so issued for an aggregate consideration equal to
the aggregate consideration paid for such rights, options, warrants or
convertible securities and the aggregate consideration payable by the
holders of such rights, options, warrants or convertible securities prior
to their receipt of such shares of Common Stock. In case any portion of
such consideration shall be in a form other than cash, the fair market
value of such noncash consideration shall be determined as set forth in
paragraph (h)(2) hereof. Such adjustment shall be made successively
whenever such rights, options, warrants or convertible securities are
issued; and in the event that such rights, options or warrants expire
unexercised, or in the event of a change in the number of shares of Common
Stock to which the holders of such rights, options, warrants or convertible
securities are entitled (other than pursuant to adjustment provisions
therein which are no more favorable in their entirety than those contained
in this paragraph (h)), the Exercise Price shall again be adjusted to be
the Exercise Price which would then be in effect if such rights, options,
warrants or convertible securities had not been issued, in the former
event, or the Exercise Price which would then be in effect if such holders
had initially been entitled to such changed number of shares of Common
Stock, in the latter event. No adjustment of the Exercise Price shall be
made pursuant to this paragraph (h)(4) to the extent that the Exercise
Price shall have been adjusted pursuant to paragraph (h)(3) upon the
setting of any record date relating to such rights, options, warrants or
convertible securities and such adjustment fully reflects the number of
shares of Common Stock to which the holders of such rights, options,
warrants or convertible securities are entitled and the price payable
therefore.
(5) In case the Company shall fix a record date for the making of a
distribution to holders of Common Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is
the continuing corporation) of evidences of indebtedness, cash, assets or
other property (other than dividends payable in Common Stock or rights,
options or warrants referred to in, and for which an adjustment is made
pursuant to, paragraph (h)(3) hereof), the Exercise Price to be in effect
after such record date shall be determined by multiplying the Exercise
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the Current
Exhibit B-8
44
Market Price Per Common Share on such record date, less the fair market
value (determined as set forth in paragraph (h)(2) hereof) of the portion
of the assets, cash, other property or evidence of indebtedness so to be
distributed which is applicable to one share of Common Stock, and the
denominator of which shall be such Current Market Price Per Common Share.
Such adjustments shall be made successively whenever such a record date is
fixed; and in the event that such distribution is not so made, the Exercise
Price shall again be adjusted to be the Exercise Price which would then be
in effect if such record date had not been fixed.
(6) For the purpose of any computation under paragraph (e) or
paragraph (h)(2), (3), (4) or (5) hereof, on any determination date (i) on
or prior to the Company's initial public offering, the Current Market Price
Per Common Share shall, subject to the penultimate sentence of this
paragraph (h)(6), be the fair market value per share of the applicable
class of Common Stock as reasonably determined by the Board of Directors of
the Company, and (ii) after the Company's initial public offering, the
Current Market Price Per Common Share shall be deemed to be the average
(weighted by daily trading volume) of the Daily Prices (as defined below)
per share of the applicable class of Common Stock for the 20 consecutive
trading days ending three days prior to such date. "Daily Price" means (1)
if the shares of such class of Common Stock then are listed and traded on
the New York Stock Exchange, Inc. ("NYSE"), the closing price on such day
as reported on the NYSE Composite Transactions Tape; (2) if the shares of
such class of Common Stock then are not listed and traded on the NYSE, the
closing price on such day as reported by the principal national securities
exchange on which the shares are listed and traded; (3) if the shares of
such class of Common Stock then are not listed and traded on any such
securities exchange, the last reported sale price on such day on the
National Market of the National Association of Securities Dealers, Inc.
Automated Quotation System ("NASDAQ"); (4) if the shares of such class of
Common Stock then are not listed and traded on any such securities exchange
and not traded on the NASDAQ National Market, the average of the highest
reported bid and lowest reported asked price on such day as reported by
NASDAQ; or (5) if such shares are not listed and traded on any such
securities exchange, not traded on the NASDAQ National Market and bid and
asked prices are not reported by NASDAQ, then the average of the closing
bid and asked prices, as reported by The Wall Street Journal for the
over-the-counter market. If on any determination date the shares of such
class of Common Stock are not quoted by any such organization, the Current
Market Price Per Common Share shall be the fair market value of such shares
on such determination date as determined by the Board of Directors, without
regard to considerations of the lack of liquidity, applicable regulatory
restrictions or any of the transfer restrictions or other obligations
imposed on such shares set forth in the Investors' Agreement. If the
Principal Holder shall object to any determination by the Board of
Directors of the Current Market Price Per Common Share, the Current Market
Price Per Common Share shall be the fair market value per share of the
applicable class of Common Stock as determined by an independent appraiser
retained by the Company at its expense and reasonably
Exhibit B-9
45
acceptable to the Principal Holder. For purposes of any computation under
this paragraph (h), the number of shares of Common Stock outstanding at any
given time shall not include shares owned or held by or for the account of
the Company.
(7) No adjustment in the Exercise Price shall be required unless such
adjustment would require an increase or decrease of at least one percent in
such price; provided that any adjustments which by reason of this paragraph
(h)(7) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this paragraph
(h) shall be made to the nearest one tenth of a cent or to the nearest
hundredth of a share, as the case may be.
(8) In the event that, at any time as a result of the provisions of
this paragraph (h), the holder of this Warrant upon subsequent exercise
shall become entitled to receive any shares of capital stock or other
securities of the Company other than Common Stock, the number of such other
shares so receivable upon exercise of this Warrant shall thereafter be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions contained herein.
(9) Upon each adjustment of the Exercise Price as a result of the
calculations made in paragraphs (h)(1), (2), (3), (4) or (5) hereof, the
number of shares for which this Warrant is exercisable immediately prior to
the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Exercise Price, that number of shares of Common
Stock obtained by (i) multiplying the number of shares covered by this
Warrant immediately prior to this adjustment of the number of shares by the
Exercise Price in effect immediately prior to such adjustment of the
Exercise Price and (ii) dividing the product so obtained by the Exercise
Price in effect immediately after such adjustment of the Exercise Price.
(10) The Company shall notify all Holders of the fixing of a record
date for the purpose of payment of a cash dividend to holders of Common
Stock as soon as reasonably practicable, but in no event less than 20 days
prior to any such record date.
(11) Not less than 10 nor more than 30 days prior to the record date
or effective date, as the case may be, of any action which requires or
might require an adjustment or readjustment pursuant to this paragraph (h),
the Company shall forthwith file in the custody of this Secretary or an
Assistant Secretary at its principal executive office and with its stock
transfer agent or its warrant agent, if any, an officers' certificate
showing the adjusted Exercise Price determined as herein provided, setting
forth in reasonable detail the facts requiring such adjustment and the
manner of computing such adjustment. Each such officers' certificate shall
be signed by the chairman, president or chief financial officer of the
Company and by the secretary or any assistant secretary of the Company.
Each such officers' certificate shall be made available at all reasonable
times for
Exhibit B-10
46
inspection by the Holder or any holder of a Warrant executed and delivered
pursuant to paragraph (f) and the Company shall, forthwith after each such
adjustment, mail a copy, by first-class mail, of such certificate to the
Holder.
(12) The Holders shall, upon occurrence of a Majority Election (as
defined below), be entitled to receive, in lieu of the adjustment pursuant
to this paragraph (h) otherwise required as a result of a dividend or other
distribution, (x) in the case of a cash dividend, at the time of payment of
such dividend to holders of Common Stock and (y) in the case of any
dividend or distribution of other than cash, on the date of exercise of the
Warrants, the cash or the evidences of indebtedness, other securities,
property or other assets, as the case may be, which such Holders would have
been entitled to receive if they had exercised their Warrants for shares of
Common Stock immediately prior to the record date with respect to such
dividend. The Holders may exercise their option under this subparagraph
(h)(12) by delivering to the Company a written notice or notices of such
exercise executed by Holders entitled to exercise Warrants covering at
least a majority of the shares of Common Stock issuable under the Warrants
(a "Majority Election") within 10 days of receipt of the certificate of
adjustment required pursuant to subparagraph (h)(10) to be delivered by the
Company in connection with such dividend. All Holders of Warrants will be
bound by a Majority Election whether or not they have furnished notice as
aforesaid.
(i) CONSOLIDATION, MERGER, OR SALE OF ASSETS. In case of any consolidation
of the Company with, or merger of the Company into, any other Person, any merger
of another Person into the Company (other than a merger which does not result in
any reclassification, conversion, exchange or cancellation of outstanding shares
of Common Stock) or any sale or transfer of all or substantially all of the
assets of the Company or of the Person formed by such consolidation or resulting
from such merger or which acquires such assets, as the case may be, the Holder
shall have the right thereafter to exercise this Warrant for the kind and amount
of securities, cash and other property receivable upon such consolidation,
merger, sale or transfer by a holder of the number of shares of Common Stock for
which this Warrant may have been exercised immediately prior to such
consolidation, merger, sale or transfer, assuming (i) such holder of Common
Stock is not a Person with which the Company consolidated or into which the
Company merged or which merged into the Company or to which such sale or
transfer was made, as the case may be ("constituent Person"), or an Affiliate of
a constituent Person and (ii) in the case of a consolidation merger, sale or
transfer which includes an election as to the consideration to be received by
the holders, such holder of Common Stock failed to exercise its rights of
election, as to the kind or amount of securities, cash and other property
receivable upon such consolidation, merger, sale or transfer (provided that if
the kind or amount of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer is not the same for each share of Common
Stock held immediately prior to such consolidation, merger, sale or transfer by
other than a constituent Person or an Affiliate thereof and in respect of which
such rights of election shall not have been exercised ("non-electing share"),
then for the purpose of this paragraph (i) the kind and amount of securities,
cash and other property receivable upon such consolidation, merger, sale or
transfer by each non-electing share shall be deemed to be the kind and amount so
receivable per share by a plurality of the non-electing shares). Adjustments for
events subsequent to the effective date of such a consolidation, merger and sale
of assets shall
Exhibit B-11
47
be as nearly equivalent as may be practicable to the adjustments provided for in
this Warrant. In any such event, effective provisions shall be made in the
certificate or articles of incorporation of the resulting or surviving
corporation, in any contract of sale, conveyance, lease or transfer, or
otherwise so that the provisions set forth herein for the protection of the
rights of the Holder shall thereafter continue to be applicable; and any such
resulting or surviving corporation shall expressly assume the obligation to
deliver, upon exercise, such shares of stock, other securities, cash and
property. The provisions of this paragraph (i) shall similarly apply to
successive consolidations, mergers, sales, leases or transfers.
(j) NOTICES. Any notice, demand or delivery authorized by this Warrant
Certificate shall be in writing and shall be given to the Holder or the Company
as the case may be, at its address (or telecopier number) set forth below, or
such other address (or telecopier number) as shall have been furnished to the
party giving or making such notice, demand or delivery:
If to the Company: Xxxxx Pet Care Enterprises, Inc.
000 Xxxxxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: Chief Financial Officer
If to the Holder: To the most recent address and telecopy
number reflected in the books and records
of the Company.
Each such notice, demand or delivery shall be effective (i) if given by
telecopy, when such telecopy is transmitted to the telecopy number specified
herein and the intended recipient confirms the receipt of such telecopy or (ii)
if given by any other means, when received at the address specified herein.
(i) RIGHTS OF THE HOLDER. Prior to the exercise of any Warrant, the Holder
shall not, by virtue hereof, be entitled to any rights of a shareholder of the
Company, including, without limitation, the right to vote, to receive dividends
or other distributions or to receive any notice of meetings of shareholders or
any notice of any proceedings of the Company except as may be specifically
provided for herein.
(l) GOVERNING LAW. THIS WARRANT CERTIFICATE AND ALL RIGHTS ARISING
HEREUNDER SHALL BE CONSTRUED AND DETERMINED IN ACCORDANCE WITH THE INTERNAL LAWS
OF THE STATE OF NEW YORK, AND THE PERFORMANCE THEREOF SHALL BE GOVERNED AND
ENFORCED IN ACCORDANCE WITH SUCH LAWS.
(m) AMENDMENTS; WAIVERS. Any provision of this Warrant Certificate may be
amended or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by the Holder and the Company, or in the
case of a waiver, by the party against whom the waiver is to be effective. No
failure or delay by either party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other
Exhibit B-12
48
right, power or privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by law.
IN WITNESS WHEREOF, the Company has duly caused this Warrant
Certificate to be signed by its duly authorized officer and to be dated as of
March ___, 2001.
XXXXX PET CARE ENTERPRISES, INC.
By:
----------------------------------------
Xxxxxx X. Xxxxxxxx
Chief Financial Officer
Exhibit B-13
49
WARRANT EXERCISE NOTICE
(To be delivered prior to exercise of the Warrant
by execution of the Warrant Exercise Subscription Form)
To: Xxxxx Pet Care Enterprises, Inc.
The undersigned hereby notifies you of its intention to exercise the
Warrant to purchase shares of Common Stock, par value $.0001 per share, of Xxxxx
Pet Care Enterprises, Inc.
The undersigned intends to exercise the Warrant to purchase ___________ ___
Class A and/or ____ Class B shares (please check as applicable) (the "Shares")
at $_______ per Share (the Exercise Price currently in effect pursuant to the
Warrant). The undersigned intends to pay the aggregate Exercise Price for the
Shares in cash, certified or official bank or bank cashier's check (or a
combination of cash and check) as indicated below:
-OR-
The undersigned intends to exercise the Warrant to purchase _________ ___
Class A and/or ____ Class B shares (please check as applicable) (the "Shares")
and wishes, in lieu of paying the Exercise Price of $___ per share currently in
effect pursuant to the Warrant, to receive that number of shares reduced by a
number of shares of Common Stock having an aggregate Fair Market Value (as
defined in the Warrant) equal to the aggregate Exercise Price for the Shares.
Date: ____________ ____, _____.
-------------------------------------------
(Signature of Owner)
-------------------------------------------
(Street Address)
-------------------------------------------
(City) (State) (Zip Code)
Payment: $ ___________ cash
$ ___________ check
Exhibit B-14
50
WARRANT EXERCISE SUBSCRIPTION FORM
(To be executed only upon exercise of the Warrant
after deliver of Warrant Exercise Notice)
To: Xxxxx Pet Care Enterprises, Inc.
The undersigned irrevocably exercises the Warrant for the purchase of
__________ ___ Class A or __ Class B shares (Please check as applicable) (the
"Shares") of Common Stock, par value $.0001 per share, of Xxxxx Pet Care
Enterprises, Inc. (the "Company") at $____ per Share (the Exercise Price
currently in effect pursuant to the Warrant) and herewith makes payment of
$__________ (such payment being made in cash or by certified or official bank or
bank cashier's check payable to the order of the Company or by any permitted
combination of such cash or check), all on the terms and conditions specified in
the within Warrant Certificate, surrenders this Warrant Certificate and all
right, title and interest therein to the Company and directs that the Shares
deliverable upon the exercise of this Warrant be registered or placed in the
name and at the address specified below and delivered thereto.
-OR-
The undersigned irrevocably exercises the Warrant for the purchase of
_________ __ Class A or __ Class B shares (Please check as applicable) (the
"Shares") of Common Stock, par value $.0001 per share, of Xxxxx Pet Care
Enterprise, Inc. (the "Company") at $____ per Share (the Exercise Price
currently in effect pursuant to the Warrant) (provided that in lieu of payment
of $______, the undersigned will receive a number of Shares reduced by a number
of shares of Common Stock having an aggregate Fair Market Value (as defined in
the Warrant) equal to the aggregate Exercise Price for the Shares), all on the
terms and conditions specified in the within Warrant Certificate, surrenders
this Warrant Certificate and all right, title and interest therein to the
Company and directs that the Shares deliverable upon the exercise of this
Warrant be registered or placed in the name and at the address specified below
and delivered thereto.
Date: ____________ ____, _____.
-------------------------------------------
(Signature of Owner)
-------------------------------------------
(Street Address)
-------------------------------------------
(City) (State) (Zip Code)
Exhibit B-15
51
Securities and/or check to be issued to:
Please insert social security or identifying number:
Name:
Street Address:
City, State and Zip Code:
Any unexercised portion of the Warrant evidenced by the within Warrant
Certificate to be issued to:
Please insert social security or identifying number:
Name:
Street Address:
City, State and Zip Code:
Exhibit X-00
00
XXXXXXX ASSIGNMENT FORM
Dated ____________, ____
FOR VALUE RECEIVED, ____________________________________________________________
hereby sells, assigns and transfers unto
______________________________________________________________ (the "Assignee"),
(please type or print in block letters)
________________________________________________________________________________
(insert address)
its right to purchase up to _________ shares of Common Stock represented by this
Warrant and does hereby irrevocably constitute and appoint __________________
Attorney, to transfer the same on the books of the Company, with full power of
substitution in the premises.
Signature
---------------------------
Exhibit B-17
53
EXHIBIT C
SUMMARY OF CHANGES TO INVESTORS' AGREEMENT
Board Composition. The new Board will consist of 7 members as follows: 2
designated by XX Xxxxxx, 1 by Summit, 1 by XXX, 0 by BRS, the CEO and an
independent director. Xxx Xxxxxxxx and Xxxxx Xxxxxx will resign from the Board
effective as of the closing of the $25 million first tranche Term Loan.
Veto Rights. Certain significant actions currently must be approved by a
majority of the Board and such majority must include the DLJ representative, the
Summit representative and the BRS representative. The amended provision would
apply to the same list of significant actions and would also require the
approval of a majority of the Board. However, the amendment would require the
majority of the Board to include 1 of the XX Xxxxxx representatives and any one
of the Summit representative, the BRS representative or the DLJ representative.
Transfer Restrictions. The rights of first offer contained in the Investors'
Agreement (Section 4.1) terminated as of October 5, 2000. The amended agreement
would reinstate these provisions until the earlier of an initial public offering
or the end of the term of the agreement (which, as described below, will be
extended). The amendment would also make clear that the co-sale (tagalong)
provisions of Section 4.2 will continue in force until the earlier of the dates
described in the preceding sentence. The amendment would eliminate the right to
transfer under Rule 144 of the Securities Act of 1933 prior to an IPO without
first subjecting the transfer to the reinstated rights of first offer provisions
of Section 4.1 and the tagalong provisions of Section 4.2.
Dragalong Terms. Currently, the Investors' Agreement provides that the holders
of two-thirds of the Common Stock are able to require the remaining
securityholders to participate in a sale of the company or the sale of all or
substantially all of the assets of the company. Rather than the two-thirds
approval, the amendment would empower XX Xxxxxx together with Summit, BRS or DLJ
to approve of a transaction of this nature and, upon such approval, drag along
the company's other shareholders.
Preemptive Rights. All accredited investors that are parties to the Investors'
Agreement have preemptive rights with respect to certain securities issued by
the company. The amended agreement would only extend preemptive rights to
holders who own 5% or more of the fully diluted common equity of the company.
Registration Rights. The Warrants issued in the senior unsecured notes offering
would be granted registration rights that would be "senior" to existing
registration rights. That is, if a cutback in registrable securities is ever
required, the newly issued Warrants and common stock issued on the exercise
thereof would be cutback last. The new Warrants would be given 2 demand
registration rights and unlimited piggyback rights. The existing demand rights
would be modified so that no holder of demand rights could require the company
to effect an initial public offering unless approved by the Board
representatives of XX Xxxxxx and any one of the Summit representative, the BRS
representative or the DLJ representative.
Term. The term of the agreement would be extended from August 3, 2003 to
October 5, 2005.
Exhibit C-1
54
EXHIBIT D
[FORM OF]
SUPPLEMENT
SUPPLEMENT, dated as of _________, 2001, is between _______________ (the
"ADDITIONAL LENDER"), Xxxxx Pet Care Enterprises, Inc., a Delaware corporation
("HOLDINGS"), Xxxxx Pet Care Company, a Delaware corporation ("BORROWER"), and
the other Lenders party to the Loan and Warrant Agreement referred to below.
RECITALS:
WHEREAS, Holdings, Borrower and the other Persons signatory thereto (the
"LENDERS"), have entered into a Loan and Warrant Agreement, dated as of March
23, 2001 (as amended, supplemented or otherwise modified from time to time, the
"LOAN AND WARRANT AGREEMENT");
WHEREAS, the Loan and Warrant Agreement contemplates additional Term Loans
being made, and the Additional Lender desires to make a loan to Borrower and to
become a party to the Loan and Warrant Agreement; and
WHEREAS, the parties hereto have agreed to execute and deliver this
Supplement;
NOW, THEREFORE, IT IS AGREED:
1. Supplement. By executing and delivering this Supplement, the Additional
Lender, as provided in Section 2.01 of the Loan and Warrant Agreement, hereby
(i) agrees, subject to satisfaction of the conditions set forth in Section 4.03,
to make a Term Loan to the Borrower on May 15, 2001 for the principal amount of
$_______ and (ii) becomes a party to the Loan and Warrant Agreement as a Lender
thereunder, with the same force and effect as if originally named therein as a
Lender. The information set forth in Annex 1-A hereto is hereby added to the
information set forth in Schedule 2.01 of the Loan and Warrant Agreement. The
Additional Lender hereby represents and warrants that each of the
representations and warranties contained in Section 3.02 of the Loan and Warrant
Agreement is true and correct with respect to such Additional Lender on and as
of the date hereof (after giving effect to this Supplement) as if made on and as
of such date.
2. Defined Terms. Capitalized terms used but not defined herein are as
defined in the Loan and Warrant Agreement.
3. Governing Law. This Supplement shall be governed by, and construed in
accordance with, the laws of the State of New York.
Exhibit D-1
55
IN WITNESS WHEREOF, the undersigned has caused this Supplement to be duly
executed and delivered as of the date first above written.
[ADDITIONAL LENDER]
By:
-----------------------------------
Name:
Title:
Exhibit X-0
00
XXXXX 0-X
XXXXXX XX XXXX LOAN AND NUMBER OF WARRANT SHARES
Name of Lender Principal Amount Warrant Shares
-------------- ---------------- --------------
Exhibit D-3
57
EXHIBIT E
[FORM OF]
AMENDMENT NO. 1 TO SECURED CREDIT AGREEMENT
AMENDMENT NO. 1 dated as of March 26, 2001 to the Credit Agreement
referred to below, among XXXXX PET CARE ENTERPRISES, INC., a Delaware
corporation ("Holdings"), XXXXX PET CARE COMPANY, a Delaware corporation (the
"Borrower"), and THE CHASE MANHATTAN BANK, as administrative agent (in such
capacity, the "Administrative Agent").
Holdings, the Borrower, the Lenders party thereto and the
Administrative Agent are parties to an Amended and Restated Credit Agreement
dated as of May 8, 2000 (as amended, waived or otherwise modified and in effect
immediately prior to the effectiveness of this Amendment No. 1, the "Credit
Agreement"), providing, subject to the terms and conditions thereof, for
extensions of credit to be made by the Lenders to the Borrower in an original
aggregate principal or face amount not exceeding $410,375,000 and *82,000,000.
Holdings, the Borrower, certain of the Lenders party thereto and the
Administrative Agent wish to amend the Credit Agreement in certain respects and,
accordingly, the parties hereto hereby agree as follows:
Section 1. Definitions. Except as otherwise defined in this Amendment
No. 1, terms defined in the Credit Agreement are used herein as defined therein.
Section 2. Amendments. Subject to the satisfaction of the conditions
precedent specified in Section 5 of this Amendment No. 1, but effective as of
the date hereof, the Credit Agreement shall be amended as follows:
2.1. References. References in the Credit Agreement (including
references to the Credit Agreement as amended hereby) to "this Agreement" (and
indirect references such as "hereunder", "hereby", "herein" and "hereof") shall
be deemed to be references to the Credit Agreement as amended hereby.
2.2. Definitions. Section 1.1 of the Credit Agreement shall be amended
by inserting the following definitions (or, in the case of any of the following
terms that are already defined in the Credit Agreement, by amending and
restating in its entirety such term to read as set forth below):
"Amendment No. 1 Effective Date": the effective date of Amendment No.
1 to this Agreement.
"Available Revolving Commitment": as to any Revolving Lender at any
time, an amount equal to the excess, if any, of (a) such Lender's Revolving
Commitment then in effect over (b) such Lender's Revolving Extensions of
Credit then outstanding; provided that (i) in calculating any Lender's
Revolving Extensions of Credit for the purpose of determining such Lender's
Available Revolving Commitment pursuant to Section 2.8(a), the aggregate
principal amount of Swingline Loans then outstanding shall be deemed to
Exhibit E-1
58
be zero and (ii) from and after the Amendment No. 1 Effective Date, the
portion (if any) of the Revolving Commitments in excess of $60,000,000 that
may not be borrowed at such time by reason of the last sentence of Section
2.4(a) shall be included in determining the Available Revolving Commitment
of the Revolving Lenders for purposes of Section 2.8(a).
"Average Consolidated Senior Debt Ratio": as of the last day of any
fiscal quarter, the ratio of (a) the sum of (i) the average aggregate daily
principal or face amount of Consolidated Senior Debt (other than
Consolidated Senior Debt of Foreign Subsidiaries) during such quarter and
(ii) the average aggregate monthly principal or face amount of Consolidated
Senior Debt of Foreign Subsidiaries determined as of the end of each month
during such quarter to (b) Consolidated EBITDA for the period of four
consecutive fiscal quarters of the Borrower ending on such day.
"Consolidated Senior Debt": all Consolidated Total Debt (including,
without limitation, the Shareholder Notes) other than (a) the Senior
Subordinated Notes and (b) any subordinated refinancing thereof.
"Revolving Commitment": as to any Lender, the obligation of such
Lender, if any, to make Revolving Loans and participate in Swingline Loans
and Letters of Credit in an aggregate principal and/or face amount not to
exceed the amount set forth under the heading "Revolving Commitment"
opposite such Lender's name on Schedule 1.1A or in an Assignment and
Acceptance, as the same may be changed from time to time pursuant to the
terms hereof. The amount of the Total Revolving Commitments is $75,000,000
as of the Amendment No. 1 Effective Date.
"Revolving Commitment Suspension Termination Date": the third Business
Day (provided that on such day no Default or Event of Default shall have
occurred and be continuing) after the date on which each of the following
shall have occurred: (i) the Average Consolidated Senior Debt Ratio, as of
the last day of each of the two consecutive fiscal quarters most recently
ended prior to such date calculated on a pro forma basis as if any payment
or prepayment of the Shareholder Notes permitted to be made under Section
7.18 had been made (or if such pro forma calculation is being made in
connection with a proposed payment or prepayment under Section 7.18, as if
such proposed payment or prepayment had been made) on the first day of the
first of such two consecutive fiscal quarters, shall be less than 2.75:1.00
and (ii) concurrently with the delivery of the financial statements for the
most recent of such fiscal quarters pursuant to clause (a) or (b) of
Section 6.01, the Borrower shall have delivered to the Administrative Agent
a certificate of a Responsible Officer, dated the Revolving Commitment
Suspension Termination Date, certifying as to clause (i) above and setting
forth in reasonable detail the calculations with respect to the Average
Consolidated Senior Debt Ratio for each such fiscal quarter and that no
Default or Event of Default shall have occurred and be continuing.
"Shareholder Notes": one or more promissory notes of the Borrower
complying with the following provisions: (i) such notes, in an aggregate
principal amount at least equal to $20,000,000, shall be issued (without
taking into account any warrants issued in
Exhibit E-2
59
connection therewith) at par on the Amendment No. 1 Effective Date, not
less than an additional $5,000,000 of such notes (subject to the
next-following paragraph) shall be issued (without taking into account any
such warrants) at par within 15 days after the Amendment No. 1 Effective
Date (and, in that connection, an unconditional commitment for such
additional $5,000,000, subject to the next-following paragraph, shall be
delivered to the Borrower on the Amendment No. 1 Effective Date) and the
balance of such notes (if any) shall be issued (without taking into account
any such warrants) at par no later than May 15, 2001; (ii) each such note
shall be payable to a shareholder of Holdings (determined on a fully
diluted basis) as of the Amendment No. 1 Effective Date (each an "Existing
Shareholder") and shall at all times be held by an Existing Shareholder (or
any Affiliate thereof), whether or not any Existing Shareholder holds any
such note on the Amendment No. 1 Effective Date; (iii) the aggregate
principal amount of such notes shall not exceed $29,700,0000 (plus any
capitalized or payment in kind interest); (iv) the payment obligations of
the Borrower in respect of each such note may be guaranteed by any or all
of the Subsidiaries that are guarantors of the Senior Subordinated Notes;
(v) the obligations of the Borrower and such guarantors thereof in respect
of each such note shall be unsecured; (vi) Holdings shall not be obligated
with respect to any such note; (vii) each such note shall bear interest at
a fixed rate of interest not greater than 15% per annum (and a default rate
of 17% per annum) and shall not provide for cash payments of interest,
except as permitted under Section 7.18(a); (viii) each such note shall have
a final maturity date not earlier than 91 days after the Tranche C Maturity
Date; (ix) each such note shall not provide for any principal payments,
prepayments, redemptions, sinking fund or like payments prior to such final
maturity date, except as permitted under Section 7.18(a); (x) each such
note shall not contain any covenants or events of default (other than a
cross-acceleration to the Loans and customary bankruptcy events of
default); and (xi) each such note shall otherwise be in form and substance
satisfactory to the Administrative Agent, in each case each as amended in
accordance with the terms thereof and Section 7.18 and in effect from time
to time.
Notwithstanding the foregoing, it shall not be necessary that
commitments for the purchase of an additional $5,000,000 of such notes be
obtained on the Amendment No. 1 Effective Date to the extent that, on such
date the aggregate principal amount of such notes being purchased is
greater than $20,000,000, so long as (i) commitments are obtained on the
Amendment No. 1 Effective Date for the purchase of additional notes in an
amount equal to the difference between $25,000,000 and the amount of such
notes actually issued on the Amendment No. 1 Effective Date and (ii) such
additional notes are in fact purchased not later than 15 days after the
Amendment No. 1 Effective Date.
"Tranche C Maturity Date": December 31, 2006 or the next preceding
Business Day if such date is not a Business Day.
2.3. Revolving Commitments. Section 2.4(a) of the Credit Agreement
shall be amended by inserting a new sentence at the end thereof to read as
follows:
"Notwithstanding anything herein to the contrary, during the period from
and including the Amendment No. 1 Effective Date to and including the
Revolving Commitment
Exhibit X-0
00
Xxxxxxxxxx Xxxxxxxxxxx Date, the Borrower may not borrow, and no Revolving
Lender shall have any obligation to make, Revolving Loans if, after giving
effect to such Revolving Loans, the sum of (i) the aggregate principal
amount of the Revolving Loans then outstanding, (ii) the L/C Obligations
then outstanding and (iii) the aggregate principal amount of the Swingline
Loans then outstanding would exceed $60,000,000."
2.4. Mandatory Prepayments. Section 2.11(a) of the Credit Agreement
shall be amended by inserting a new sentence at the end thereof to read as
follows:
"In addition, upon the issuance of any Shareholder Notes, 100% of the
proceeds thereof shall be applied on the date of such issuance toward the
prepayment of the Revolving Loans without reduction of the Revolving
Commitments."
2.5. Financial Statements. Section 6.1 of the Credit Agreement shall
be amended by inserting a new sentence at the end thereof to read as follows:
"Notwithstanding anything herein to the contrary, the Borrower will furnish
to the Administrative Agent and each Lender the audited financial
statements required to be furnished under clause (a) above for the fiscal
year ending December 30, 2000 no later than April 10, 2001."
2.6. Information. Section 6.2 of the Credit Agreement shall be amended
by (i) deleting the word "and" at the end of clause (e) thereof, (ii) replacing
the period at the end of clause (f) thereof with "; and", and (iii) inserting at
the end of said Section 6.2 a new clause (g) to read as follows:
"(g) as soon as available, and in any event no later than 30 days
after the end of each month ending on or prior to December 31, 2002
(commencing with March, 2001), a projected balance sheet, income statement
and cash flow forecast of the Borrower and its Restricted Subsidiaries for
the 13-week period ending on or nearest to (but not later than) the last
day of such month."
2.7. Financial Condition Covenants. Section 7.1 of the Credit
Agreement shall be amended to read in its entirety as follows:
"7.1 Financial Condition Covenants.
(a) Consolidated Leverage Ratio. Permit the Consolidated Leverage
Ratio as at the last day of any period of four consecutive fiscal quarters
of the Borrower ending with any fiscal quarter set forth below to exceed
the ratio set forth below opposite such fiscal quarter:
Fiscal Quarter Consolidated Leverage Ratio
-------------- ---------------------------
3/31/01 7.00:1.00
6/30/01 7.00:1.00
Exhibit X-0
00
Xxxxxx Xxxxxxx Consolidated Leverage Ratio
-------------- ---------------------------
9/30/01 6.75:1.00
12/31/01 5.75:1.00
3/31/02 5.25:1.00
6/30/02 5.15:1.00
9/30/02 5.05:1.00
12/31/02 4.95:1.00
3/31/03 3.50:1.00
6/30/03 - 9/30/03 3.25:1.00
12/31/03 - 3/31/04 3.00:1.00
6/30/04 and thereafter 2.75:1.00
(b) Consolidated Senior Debt Ratio. Permit the Consolidated Senior
Debt Ratio as at the last day of any period of four consecutive fiscal
quarters of the Borrower ending with any fiscal quarter set forth below to
exceed the ratio set forth below opposite such fiscal quarter:
Fiscal Quarter Consolidated Leverage Ratio
-------------- ---------------------------
3/31/01 5.25:1.00
6/30/01 5.25:1.00
9/30/01 5.00:1.00
12/31/01 4.25:1.00
3/31/02 3.85:1.00
6/30/02 3.70:1.00
9/30/02 3.60:1.00
12/31/02 3.50:1.00
3/31/03 2.50:1.00
6/30/03 - 9/30/03 2.25:1.00
12/31/03 - 6/30/04 2.00:1.00
9/30/04 and thereafter 1.75:1.00
Exhibit E-5
62
(c) Consolidated Interest Coverage Ratio. Permit the Consolidated
Interest Coverage Ratio as at the last day of any period of four
consecutive fiscal quarters of the Borrower ending with any fiscal quarter
set forth below to be less than the ratio set forth below opposite such
fiscal quarter:
Fiscal Quarter Consolidated Leverage Ratio
-------------- ---------------------------
3/31/01 1.50:1.00
6/30/01 1.50:1.00
9/30/01 1.60:1.00
12/31/01 1.80:1.00
3/31/02 2.00:1.00
6/30/02 2.00:1.00
9/30/02 2.00:1.00
12/31/02 2.00:1.00
3/31/03 2.50:1.00
6/30/03 - 9/30/03 2.60:1.00
12/31/03 - 3/31/04 2.70:1.00
6/30/04 and thereafter 2.75:1.00
(d) Consolidated Fixed Charge Coverage Ratio. Permit the Consolidated
Fixed Charge Coverage Ratio for any period of four consecutive fiscal
quarters of the Borrower ending with any fiscal quarter set forth below to
be less than the ratio set forth below opposite such fiscal quarter:
Fiscal Quarter Consolidated Leverage Ratio
-------------- ---------------------------
3/31/01 0.70:1.00
6/30/01 0.70:1.00
9/30/01 0.80:1.00
12/31/01 - 9/30/05 1.00:1.00
12/31/05 and thereafter 0.50:1.00
(e) Minimum Consolidated EBITDA. Permit Consolidated EBITDA for the
period of four consecutive fiscal quarters of the Borrower ending December
30, 2000 to be less than $104,000,000."
Exhibit E-6
63
2.8. Indebtedness. Section 7.2 of the Credit Agreement shall be
amended by (i) deleting the word "and" at the end of clause (g) thereof; (ii)
replacing the amount "$15,000,000" in clause (h) thereof with "$2,500,000" and
replacing the period at the end of said clause with "; and", and (iii) inserting
a new clause (i) at the end of said Section 7.2 to read as follows:
"(i) the Shareholder Notes (including all capitalized or payment in
kind interest and all Guarantee Obligations of Subsidiaries in respect
thereof)."
2.9. Disposition of Property. Section 7.5(g) of the Credit Agreement
shall be amended and restated in its entirety to read as follows:
"(g) Dispositions of other property for cash having a fair market
value not to exceed $50,000,000 (or its equivalent in other currencies as
of the date of such Disposition, as determined by the Borrower in good
faith based on then prevailing exchange rates) in the aggregate, provided
that, notwithstanding anything herein to the contrary, upon receipt of the
Net Cash Proceeds thereof (other than an aggregate amount thereof not
exceeding $5,000,000 as to which a Reinvestment Notice has been given),
such Net Cash Proceeds shall be applied to the prepayment of the Term Loans
and the reduction of Revolving Commitments as set forth in Section
2.11(e)."
2.10 Capital Expenditures. Section 7.7 of the Credit Agreement shall
be amended by inserting a new sentence at the end thereof to read as follows:
"Notwithstanding anything herein to the contrary, (x) the amount of Capital
Expenditures permitted to be made under clause (a) above for each of the
fiscal years ending on or nearest to December 31, 2001 and December 31,
2002 shall be reduced to $22,500,000 (or its equivalent in other
currencies), (y) there shall no carryover of any unexpended amounts from
the fiscal year ending December 30, 2000 to the next succeeding fiscal year
under the proviso in said clause (a), and (z) the carryover of any
unexpended amounts from each of the fiscal years ending on or nearest to
December 31, 2001 and December 31, 2002 shall not exceed $5,000,000 for
each such fiscal year under such proviso."
2.11 Investments. Section 7.8 of the Credit Agreement shall be amended
by inserting a new sentence at the end thereof to read as follows:
"Notwithstanding anything herein to the contrary, the aggregate amount of
additional Investments made under clauses (h) and (k) above for the period
from and including the Amendment No. 1 Effective Date to and including
December 31, 2002 shall not exceed $5,000,000."
Exhibit E-7
64
2.12 Transactions with Affiliates. ___ Section 7.10 of the Credit
Agreement shall be amended by (a) inserting immediately after the words "Except
as set forth on Schedule 7.10" the following words: "and except for the
Shareholder Notes" and (b) inserting a proviso at the end of said Section 7.10
to read as follows:
"; provided that, notwithstanding anything herein to the contrary, no
management or similar fees shall be paid in cash by Holdings, the Borrower
or any Restricted Subsidiary to any Affiliate during the period from and
including the Amendment No. 1 Effective Date to and including December 31,
2002 (other than fees payable in respect of advisory services rendered
pursuant to (i) the agreements listed in Schedule 7.10 or (ii) any other
agreement entered into after the Amendment No. 1 Effective Date that
complies with clause (c) above)."
2.13 Shareholder Notes. A new Section 7.18 shall be inserted at the
end of Section 7 of the Credit Agreement to read as follows:
"7.18 Shareholder Notes.
(a) Make or offer to make any payment, prepayment, repurchase or
redemption of or otherwise defease or segregate funds with respect to the
principal of or interest on, or any other amount payable in respect of, the
Shareholder Notes, except (i) payments of interest in kind (or capitalizing
interest) in accordance with the terms of the Shareholder Notes and
delivery of warrants as contemplated thereby and (ii) cash payments or
prepayments of principal of and interest on the Shareholder Notes, provided
that with respect to any payments under this clause (ii) the following
conditions shall have been satisfied:
(I) no Default or Event of Default shall have occurred and be
continuing at the time of such payment or would result therefrom;
(II) the Average Consolidated Senior Debt Ratio, determined as at
the last day of each of the two most recent fiscal quarters prior to
the date of such payment, based upon the most recent financial
statements delivered pursuant to clause (a) or (b) of Section 6.01 and
calculated on a pro forma basis as if such payment had been made on
the first day of each such quarter, shall be less than 2.75:1.00;
(III) after giving effect to such payment, the sum of (i) cash on
hand (determined as at the last day of the most recent fiscal quarter
prior to the date of such payment based upon the most recent financial
statements delivered pursuant to clause (a) or (b) of Section 6.01)
plus (ii) the aggregate unused amount of the Revolving Commitments
then in effect (excluding the portion (if any) of the Revolving
Commitments that may not be borrowed at such time by reason of the
last sentence of Section 2.4(a), unless such amount would become
available as of the date of such payment as a result of the occurrence
of the Revolving Commitment Suspension Termination Date) shall be at
least $35,000,000; and
Exhibit E-8
65
(IV) the Borrower shall have delivered to the Administrative
Agent a certificate of a Responsible Officer, dated the date of such
payment, certifying as to the matters set forth in clauses (I), (II)
and (III) above and setting forth in reasonable detail the
calculations with respect to clauses (II) and (III) above;
or (b) amend, modify, supplement or otherwise change, or consent or agree
to any amendment, modification, supplement or other change to, any of the
terms of the Shareholder Notes."
2.14 Events of Default. Section 8(c)(i) of the Credit Agreement shall
be amended by inserting immediately after the words "contained in" the following
words: "the last sentence of Section 6.1,". In addition, Section 8 of the Credit
Agreement shall be amended by inserting the word "or" after Section 8(l) thereof
and inserting the following new Section 8(m):
"(m) the Borrower shall have failed to receive, not later than the
date 15 days after the Amendment No. 1 Effective Date, cash proceeds from
the issuance of the additional Shareholder Notes referred to in the
definition of the term "Shareholder Notes" in Section 1.1 as shall result
in the aggregate amount of cash proceeds from the Shareholder Notes issued
on the Amendment No. 1 Effective Date through the date 15 days after the
Amendment No. 1 Effective Date being at least equal to $25,000,000;"
2.15 Annex A (Pricing Grid). Annex A to the Credit Agreement shall be
amended and restated to read in its entirety as set forth in Annex A to this
Amendment No. 1.
2.16 Schedule 1.1A (Commitments). The column setting forth the
Revolving Commitments in Schedule 1.1A to the Credit Agreement shall be amended
and restated to read in its entirety as set forth in Schedule 1.1A to this
Amendment No. 1.
Section 3. Waivers. Subject to the satisfaction of the conditions
specified in Section 5 of this Amendment No. 1, but with effect on and after the
date hereof, each of the Required Lenders and the Majority Revolving Facility
Lenders waive any Default or Event of Default that has occurred and is
continuing under the Credit Agreement on the date hereof as a result of the
Borrower's failure to comply, as of December 30, 2000, with Sections 7.1(a),
(b), (c) and/or (d) of the Credit Agreement.
Section 4. Representations and Warranties. Each of Holdings and the
Borrower jointly and severally represents and warrants to the Administrative
Agent and the Lenders that, after giving effect to this Amendment No. 1, (a) no
Default or Event of Default shall have occurred and be continuing and (b) the
representations and warranties set forth in Section 4 of the Credit Agreement
(as amended hereby) are true and complete on the date hereof as if made on and
as of the date hereof (or, if any such representations and warranties expressly
relate to any earlier date, as of such earlier date) and as if each reference in
said Section 4 to "this Agreement" and the "Credit Documents" included reference
to this Amendment No. 1.
Exhibit E-9
66
Section 5. Conditions Precedent. As provided in Sections 2 and 3 of
this Amendment No. 1, the amendments to the Credit Agreement set forth in said
Section 2 and the waivers set forth in said Section 3 shall become effective as
of the date hereof upon:
(i) Amendment No. 1. Receipt by the Administrative Agent of one or
more counterparts of this Amendment No. 1 duly executed and delivered by
the Borrower, Holdings and the Administrative Agent (with the written
consent of each of the Required Lenders and the Majority Revolving Facility
Lenders provided in the form of the Lender Consent attached hereto as
Exhibit A);
(ii) Shareholder Notes. Receipt by the Administrative Agent of
evidence satisfactory to the Administrative Agent that (x) one or more
Shareholder Notes shall have been issued by the Borrower to one or more of
the shareholders of Holdings, and that net cash proceeds thereof of
$20,000,000 shall have been received and applied by the Borrower to the
optional prepayment of the Revolving Loans pursuant to Section 2.10 of the
Credit Agreement, (y) the Borrower shall have received an unconditional
commitment for the purchase of additional Shareholder Notes in the amount
required pursuant to the last paragraph of the definition of such term in
Section 2.2 not later than 15 days after the effectiveness of this
Amendment No. 1 (which commitment shall be in form and substance
satisfactory to the Administrative Agent) and (z) the Borrower shall have
complied with the requirements of Section 4.7 of the Senior Subordinated
Note Indenture with respect to the issuance of the Shareholder Notes;
(iii) Opinion of Borrower's Counsel. Receipt by the Administrative
Agent of an opinion of counsel to Holdings, the Borrower and its Restricted
Subsidiaries in form and substance reasonably satisfactory to the
Administrative Agent (and the Borrower hereby instructs each such counsel
to deliver such opinion to the Lenders and the Administrative Agent);
(iv) Amendment Fee. Payment by the Borrower of an amendment fee to the
Administrative Agent for the account of each Lender that has executed a
Lender Consent in the form attached hereto as Exhibit A on or before 12:00
noon, New York City time, on March 20, 2001, such fee to be in an amount
equal to the percentage (as heretofore agreed in writing by the Borrower)
of the sum of the aggregate unpaid principal amount of the Term Loans held
by such Lender and the Revolving Commitment then in effect of such Lender;
(v) Expenses, Etc. Payment by the Borrower of all other fees required
to be paid, and all expenses for which invoices have been presented
(including, without limitation, reasonable fees and disbursements and other
charges of counsel to the Administrative Agent) in connection with this
Amendment No. 1; and
(vi) Additional Matters. All required corporate and other proceedings,
and all documents, instruments and other legal matters in connection with
the transactions contemplated by this Amendment No. 1 being reasonably
satisfactory in form and substance to the Administrative Agent, and receipt
by the Administrative Agent of such
Exhibit E-10
67
other documents in respect of the transactions contemplated hereby as it
shall reasonably request.
Section 6. Miscellaneous. Except as herein provided, the Credit
Agreement shall remain unchanged and in full force and effect. This Amendment
No. 1 may be executed in any number of counterparts, all of which taken together
shall constitute one and the same amendatory instrument and any of the parties
hereto may execute this Amendment No. 1 by signing any such counterpart.
Delivery of an executed signature page of this Amendment No. 1 by facsimile
transmission shall be effective as delivery of a manually executed counterpart
hereof. This Amendment No. 1 shall be governed by, and construed in accordance
with, the law of the State of New York.
Exhibit E-11
68
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No.
1 to be duly executed and delivered as of the day and year first above written.
HOLDINGS
XXXXX PET CARE ENTERPRISES, INC.
By_________________________
Name:
Title:
BORROWER
XXXXX PET CARE COMPANY
By_________________________
Name:
Title:
ADMINISTRATIVE AGENT
THE CHASE MANHATTAN BANK,
as Administrative Agent
By_________________________
Name:
Title:
Exhibit E-12
69
ANNEX A
PRICING GRID
Ratio of Senior Debt to EBITDA
XXXXX 0 XXXXX 0 XXXXX 0 XXXXX 0
XXXX XXXX 2.75
LESS THAN 3.25 BUT BUT GREATER
GREATER THAN OR GREATER THAN OR THAN OR LESS THAN
EQUAL TO 3.25:1 EQUAL TO 2.75:1 EQUAL TO 2.25:1 2.25:1
--------------- ------------------ --------------- ---------
REVOLVING CREDIT LOANS
AND TRANCHE A DOLLAR TERM LOANS:
ABR Loans 2.25% 2.00% 1.50% 1.25%
Eurodollar Loans 3.25% 3.00% 2.50% 2.25%
TRANCHE A EURO TERM LOANS: 3.25% 3.00% 2.50% 2.25%
TRANCHE B TERM LOANS:
ABR Loans 2.75% 2.75% 2.50% 2.50%
Eurodollar Loans 3.75% 3.75% 3.50% 3.50%
TRANCHE C TERM LOANS:
ABR Loans 3.00% 3.00% 2.75% 2.75%
Eurodollar Loans 4.00% 4.00% 3.75% 3.75%
COMMITMENT FEE RATE: 0.50% 0.50% 0.50% 0.375%
Exhibit E-13
70
SCHEDULE 1.1A
REVOLVING COMMITMENTS
REVOLVING
LENDER COMMITMENT
--------------------------------------------------- ---------------
The Chase Manhattan Bank $7,285,715.25
--------------------------------------------------- ---------------
Bank of America N.A. $5,357,142.75
--------------------------------------------------- ---------------
Bank of Tokyo-Mitsubishi Trust Co. $5,357,142.75
--------------------------------------------------- ---------------
Bank One NA $5,537,142.75
--------------------------------------------------- ---------------
Credit Agricole Indosuez $5,357,142.75
--------------------------------------------------- ---------------
First Union National Bank N.C. $6,428,571.35
--------------------------------------------------- ---------------
Firstrust Bank $3,214,285.50
--------------------------------------------------- ---------------
Firstar Bank, N.A. $8,571,428.74
--------------------------------------------------- ---------------
Fleet Boston $7,714,285.50
--------------------------------------------------- ---------------
General Electric Capital Corporation $6,248,571.35
--------------------------------------------------- ---------------
Xxxxxx Trust & Savings Bank $8,571,428.56
--------------------------------------------------- ---------------
SunTrust Bank $5,357,142.75
--------------------------------------------------- ---------------
TOTAL: $75,000,000.00
--------------------------------------------------- ---------------
Exhibit E-14
71
EXHIBIT A
LENDER CONSENT
Reference is made to the Amended and Restated Credit Agreement dated
as of May 8, 2000 (as amended and in effect from time to time, the "Credit
Agreement") among XXXXX PET CARE ENTERPRISES, INC., a Delaware corporation
("Holdings"), XXXXX PET CARE COMPANY, a Delaware corporation (the "Borrower"),
the several banks and other financial institutions or entities from time to time
parties thereto (the "Lenders") and THE CHASE MANHATTAN BANK, as administrative
agent (in such capacity, the "Administrative Agent"), providing, subject to the
terms and conditions thereof, for extensions of credit to be made by the Lenders
to the Borrower in an original aggregate principal or face amount not exceeding
$410,375,000 and *82,000,000. Capitalized terms used and not otherwise
defined herein are deemed to have the respective meanings assigned to such terms
in the Credit Agreement.
The undersigned Lender party to the Credit Agreement hereby (i)
consents to Amendment No. 1 to the Credit Agreement, dated as of March 23, 2001
and effective as of the date thereof, substantially in the form to which this
Lender Consent is attached ("Amendment No. 1") and (ii) authorizes and directs
the Administrative Agent to execute and deliver Amendment No. 1 on behalf of
such Lender.
Full Name of Lender: _____________________________________
By: __________________________________
Name: ________________________________
Title: ________________________________
Date: March __, 2001
Exhibit E-15
