exhibit 10.51
Patriot Capital Funding, Inc.
274 Riverside Avenue
Westport, CT 06880
May 15, 2007
Dover Saddlery, Inc.
525 Great Road
Littleton, MA 01460
Attn: Stephen L. Day

Re:   Waiver and Consent to the Amended and Restated Senior Subordinated Note
and Warrant Purchase Agreement (“Waiver and Consent”)

To Whom It May Concern:
Reference is made to the Amended and Restated Senior Subordinated Note and
Warrant Purchase Agreement, dated as of September 16, 2005 (the “Original Note
and Warrant Purchase Agreement”), among Dover Saddlery, Inc., a Delaware
corporation (the “Parent”), Dover Saddlery, Inc., a Massachusetts corporation
and wholly-owned subsidiary of Parent d/b/a “Nashoba Valley Service Co.”
(“Operating Company #1”), Smith Brothers, Inc., a Texas corporation and
wholly-owned subsidiary of Parent (“Operating Company #2”), Dover Saddlery
Retail, Inc., a Massachusetts corporation and wholly-owned subsidiary of Parent
(“Operating Company #3”) and, together with Parent, Operating Company #1, and
Operating Company #2, the “Borrower”), Patriot Capital Funding, LLC I as
successor by assignment from Patriot Capital Funding, Inc. (“Purchaser”) and
Patriot Capital Funding, Inc. (“Servicer”), as amended by Amendment No. 1 dated
March 28, 2006, among the Borrower, Purchaser and Servicer (“Amendment No. 1”),
Consent and Amendment No. 2, dated June 29, 2006, among the Borrower, Purchaser
and Servicer (“Amendment No. 2”) and Waiver and Amendment No. 3 dated March 30,
2007, among the Borrower, Purchaser and Servicer (“Amendment No. 3”) (the
Original Note and Warrant Purchase Agreement, as amended by Amendment No. 1,
Amendment No. 2 and Amendment No. 3 may be referred to herein as the “Note and
Warrant Purchase Agreement”).
Capitalized terms used herein and not otherwise defined shall have the meanings
ascribed to such terms in the applicable Note and Warrant Purchase Agreement.
The parties to the Note and Warrant Purchase Agreement desire to permanently
waive an Event of Default thereunder and, pursuant to Sections 9.10(b) and 10.2
of the Note and Warrant Purchase Agreement, such waiver must be in a written
instrument signed by Borrower, Servicer and the Required Purchasers. Purchaser,
as sole holder of the Notes, constitutes the Required Purchasers for purposes of
executing this Waiver and Consent.
Therefore, the parties hereto, intending to be legally bound, hereby agree as
follows:

 

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     1. Waiver of Event of Default. Effective upon satisfaction of all
conditions to effectiveness of this Waiver and Consent set forth in Section 5
below, Servicer and Purchaser each hereby permanently waive, as of March 31,
2007, the following Events of Default:
          (a) the Event of Default resulting from Borrower’s breach of
Section 7.3(a) of the Note and Warrant Purchase Agreement (Funded Debt Ratio) by
failing to maintain a maximum Funded Debt Ratio for the four consecutive fiscal
quarter period ended March 31, 2007 (calculated in the manner set forth in the
Note and Warrant Purchase Agreement) of not more than 4.40:1.00;
          (b) the Event of Default resulting from Borrower’s breach of
Section 7.3(b) of the Note and Warrant Purchase Agreement (Funded Senior Debt
Ratio) by failing to maintain a maximum Funded Senior Debt Ratio for the four
consecutive fiscal quarter period ended March 31, 2007 (calculated in the manner
set forth in the Note and Warrant Purchase Agreement) of not more than
3.58:1.00;
          (c) the Event of Default resulting from Borrower’s breach of
Section 7.3(c) of the Note and Warrant Purchase Agreement (Operating Cash Flow
to Total Debt Service) by failing to maintain a minimum ratio of (i) Operating
Cash Flow to (ii) Total Debt Service for the four consecutive fiscal quarter
period ended March 31, 2007 (calculated in the manner set forth in the Note and
Warrant Purchase Agreement) of not less than 1.15:1.00; and
          (d) the Event of Default resulting from Borrower’s breach of
Section 7.3(d) of the Note and Warrant Purchase Agreement (Minimum EBITDA
Amount) by failing to maintain a minimum EBITDTA for the four consecutive fiscal
quarter period ended March 31, 2007 (calculated in the manner set forth in the
Note and Warrant Purchase Agreement) of not less than $3,150,000.
     The waiver set forth herein relates solely to the specific instances
described in this Section 1 and no other waiver is granted or intended.
     2. Waiver Fee; Expenses. In consideration of the execution and delivery of
this Waiver and Consent by Servicer and Purchaser, and the accommodations
contained herein, Borrower shall pay to Servicer on the date hereof a fully
earned and non-refundable fee in the amount of Seventeen Thousand Dollars
($17,000) (the “Waiver Fee”). Borrower shall also pay all reasonable expenses
incurred by Servicer in the drafting, review, negotiation and closing of the
documents and transactions contemplated hereby, including the reasonable fees
and disbursements of Servicer’s special counsel.
     3. Reaffirmation. Except as specifically amended hereby, the Note and
Warrant Purchase Agreement shall remain unmodified and in full force and effect
and are hereby reaffirmed. In addition, except as specifically provided in
Section 1 above, this Waiver and Consent shall not be deemed a waiver of any
term or condition of the Note and Warrant Purchase Agreement or any other
Transaction Document, and shall not be deemed to prejudice any right or rights
which any party may now have or may have in the future under or in connection
with the Note and

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Warrant Purchase Agreement or any other Transaction Document, as the same may be
amended from time to time.
     4. Representations. To induce Servicer and Purchaser to enter into this
Waiver and Consent, Borrower represents and warrants to each that:
          (a) all of its representations and warranties in the applicable
Transaction Documents are: (i) true and correct as of the date of this Waiver
and Consent, (ii) ratified and confirmed without condition as if made anew, and
(iii) incorporated into this Waiver and Consent by reference;
          (b) no Event of Default or event that, with the passage of time or the
giving of notice or both, would constitute an Event of Default, exists under any
Transaction Document that will not be cured by the execution and effectiveness
of this Waiver and Consent;
          (c) no consent, approval, order or authorization of, or registration
or filing with, any third party is required in connection with the execution,
delivery and carrying out of this Waiver and Consent or, if required, has been
obtained; and
          (d) this Waiver and Consent has been duly authorized, executed and
delivered so that it constitutes the legal, valid and binding obligation of the
Borrower, enforceable in accordance with its terms.
The Borrower confirms that the obligations arising under the applicable
Transaction Documents remain outstanding without defense, set off, counterclaim,
discount or charge of any kind as of the date of this Waiver and Consent.
The Borrower further confirms that any collateral for the obligations arising
under the Transaction Documents, including liens, security interests, mortgages,
and pledges granted by the Borrower or third parties (if applicable), shall
continue unimpaired and in full force and effect, and shall cover and secure all
of the Borrower’s existing and future obligations to Servicer and Purchaser, as
modified by this Waiver and Consent.
     5. Preconditions. This Waiver and Consent is subject to Servicer having
received the following, all in form, scope and content acceptable to Servicer in
its sole discretion:
          (a) this Waiver and Consent, duly executed by the parties hereto;
          (b) the consent of Old Dominion Enterprises, Inc., as guarantor of the
obligations arising under the Transaction Documents, in the form attached hereto
as Attachment I;
          (c) the $17,000.00 Waiver Fee;
          (d) payment of Servicer’s fees and expenses, including legal fees; and
          (e) a waiver and amendment of the Senior Credit Agreement duly
executed by the Senior Lender.

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     6. Waiver, Release and Indemnity. To induce Servicer and Purchaser to enter
into this Waiver and Consent, the Borrower waives and releases and forever
discharges Servicer, Purchaser and their respective officers, directors,
attorneys, agents and employees from any liability, damage, claim, loss or
expense of any kind that it may now have against Servicer, Purchaser or any of
them arising out of or relating to the obligations arising under the applicable
Transaction Documents. The Borrower further agrees to indemnify and hold
Servicer, Purchaser and their respective officers, directors, attorneys, agents
and employees harmless from any loss, damage, judgment, liability or expense
(including attorneys’ fees) suffered by or rendered against Servicer, Purchaser
or any of them on account of any claims arising out of or relating to the
obligations arising under the applicable Transaction Documents; provided,
however, that the foregoing waiver, release and indemnity agreement shall not
apply to any claims, damages, losses, liabilities, judgments and expenses solely
attributable to the gross negligence or willful misconduct of Servicer,
Purchaser or their respective officers, directors, attorneys, agents and
employees. The Borrower further states that it has carefully read the foregoing
waiver, release and indemnity, knows and understands the contents thereof and
grants the same as its own free act and deed.
     7. Miscellaneous. This Waiver and Consent shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to principles of conflicts of law. This Waiver and Consent may be
executed in two or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument. Delivery
of an executed signature page to this Waiver and Consent by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
hereof or thereof. Borrower ratifies and confirms the indemnification,
confession of judgment and waiver of jury trial provisions contained in the Note
and Warrant Purchase Agreement.
[Signature page follows]

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            Very truly yours,

SERVICER

PATRIOT CAPITAL FUNDING, INC.
      By:   /s/ Clifford Wells         Name:   Clifford Wells        Title:  
Chief Investment Officer     

                  By:   /s/ Matthew Colucci         Name:   Matthew Colucci     
  Title:   Managing Director     

 

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              ACKNOWLEDGED and AGREED
this 15th day of May, 2007        
 
            PURCHASER   PARENT:
 
            PATRIOT CAPITAL FUNDING, LLC I   DOVER SADDLERY, INC.
 
           
By:
  /s/ Clifford Wells   By:   /s/ Stephen L. Day
 
           
 
  Name: Clifford Wells       Stephen L. Day
 
  Title: Chief Investment Officer       President
 
           
By:
  /s/ Matthew Colucci        
 
           
 
  Name: Matthew Colucci        
 
  Title: Managing Director        
 
            OPERATING COMPANY #1:   OPERATING COMPANY #2:
 
            DOVER SADDLERY, INC. d/b/a Nashoba
Valley Service Co.   SMITH BROTHERS, INC.
 
           
By:
  /s/ Stephen L. Day   By:   /s/ Stephen L. Day
 
           
 
  Stephen L. Day       Stephen L. Day
 
  Director       Director
 
            OPERATING COMPANY #3:        
 
            DOVER SADDLERY RETAIL, INC.        
 
           
By:
  /s/ Stephen L. Day        
 
           
 
  Stephen L. Day        
 
  Director        

 

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ATTACHMENT I
TO WAIVER AND CONSENT
CONSENT OF GUARANTOR
     The undersigned guarantor (the “Guarantor”) consents to the provisions of
the foregoing Waiver and Consent to the Amended and Restated Senior Subordinated
Note and Warrant Purchase Agreement (“Waiver and Consent”) and all prior
amendments and confirms and agrees that:
     (a) the Guarantor’s obligations under its Subsidiary Guaranty dated as of
June 29, 2006 (the “Guaranty”), relating to the Guaranteed Obligations defined
therein, shall be unimpaired by Waiver and Consent;
     (b) the Guarantor has no defenses, set offs, counterclaims, discounts or
charges of any kind against Servicer, Purchaser or their respective officers,
directors, employees, agents or attorneys with respect to its Guaranty; and
     (c) all of the terms, conditions and covenants in its Guaranty remain
unaltered and in full force and effect and are hereby ratified and confirmed and
apply to the Obligations, as modified by Waiver and Consent.
     The Guarantor certifies that all representations and warranties made in its
Guaranty are true and correct. Further, Guarantor hereby confirms that any
collateral for the Obligations, including liens, security interests, mortgages,
and pledges granted by the Guarantor or third parties (if applicable), shall
continue unimpaired and in full force and effect, and shall cover and secure all
of the Guarantor’s existing and future Obligations to Servicer and Purchaser, as
modified by Waiver and Consent and subject to the Subordination Agreement. The
Guarantor ratifies and confirms the indemnification, confession of judgment and
waiver of jury trial provisions contained in its Guaranty.
     WITNESS the due execution of this Consent as a document under seal as of
the date of Waiver and Consent, intending to be legally bound hereby.

            OLD DOMINION ENTERPRISES, INC.
      By:   /s/ Stephen L. Day         Name:   Stephen L. Day        Title:  
Director