Exhibit 10.2

MASTER TRANSACTION AGREEMENT

This MASTER TRANSACTION AGREEMENT (this “Agreement”), is executed as of June 13,
2019 (the “Effective Date”), by and between Chewy, Inc., a Delaware corporation
(“Chewy”), and PetSmart, Inc., a Delaware corporation (“PetSmart”). Each party
hereto may be referred to in this Agreement as a “Party” or, collectively, the
“Parties.”

W I T N E S S E T H:

WHEREAS, the Parties are or may in the future be engaged in the business of
developing, manufacturing, distributing, selling and/or providing a range of pet
products, supplies and/or services (together with any similar, complementary,
related, synergistic, incidental or ancillary thereto, the “Business”) and seek
to cooperate and coordinate their purchasing activities to achieve various
benefits including volume discounts and cost reductions;

WHEREAS, Chewy intends to engage PetSmart to provide certain support and other
services (the “Support Services”) as set forth in Annex A hereto, as may be
amended in writing by the Parties from time to time;

WHEREAS, PetSmart has provided several guarantees (the “Existing Guarantees”) as
set forth in Annex B hereto of Chewy’s obligations under certain of its
agreements and other arrangements (the “Guaranteed Chewy Agreements”), and the
Parties seek to agree on the terms under which such guarantees will be provided,
including with respect to any fees (“Guarantee Fees”) that are payable to
PetSmart for the provision of any such Existing Guarantees; and

WHEREAS, the Parties recognize that as of the date of this Agreement Chewy is a
“restricted subsidiary” under certain of PetSmart’s credit agreements and
indentures as set forth in Annex C (“PetSmart Debt Agreements”) and may be
classified as a restricted subsidiary under any future credit facility entered
into by PetSmart.

NOW, THEREFORE, in consideration of the promises and the mutual covenants and
agreements hereinafter contained, the parties hereby agree as follows:

ARTICLE I

DEFINITIONS

For purposes of this Agreement, the following terms shall have the meanings
specified in this A:

“Agreement” shall have the meaning set forth in the Preamble.

“Business” shall have the meaning set forth in the Preamble.

“Business Products” shall mean pet food, pet supplies, pet medicines, equipment,
raw materials, and any other product or service that may be offered for sale or
used or useful in the Business.

“Chewy” shall have the meaning set forth in the Preamble.

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“Claims” shall have the meaning set forth in Section 9.11.

“Confidential Information” shall have the meaning set forth in Article VIII.

“Control” means the possession, control or ownership, directly or indirectly, by
PetSmart or one or more of the subsidiaries of PetSmart or any combination
thereof, of more than 50% of the total voting power of shares of capital stock
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors of Chewy.

“Disclosing Party” shall have the meaning set forth in Article VIII.

“Effective Date” shall have the meaning set forth in the Preamble.

“Existing Guarantees” shall have the meaning set forth in the Preamble.

“Force Majeure” shall include conditions beyond the reasonable control of
PetSmart, including an act of God, acts of terrorism, voluntary or involuntary
compliance with any regulation, law or order of any government, war, acts of war
(whether war be declared or not), labor strike or lock-out, civil commotion,
epidemic, failure or default of public utilities or common carriers, destruction
of production facilities or materials by fire, earthquake, storm or like
catastrophe.

“Guaranteed Chewy Agreements” shall have the meaning set forth in the Preamble.

“Guarantee Fees” shall have the meaning set forth in the Preamble.

“Joint Purchasing Services” shall mean, to the extent permitted by applicable
law, such cooperation and coordination between the Parties and their
Subsidiaries, including by means of information sharing, joint purchasing and
similar arrangements, as is necessary or advisable to achieve benefits for each
Party including volume discounts and cost reductions relating to the purchase of
Business Products.

“Parties” shall have the meaning set forth in the Preamble.

“PetSmart” shall have the meaning set forth in the Preamble.

“PetSmart Agreements” shall mean all agreements between PetSmart or any of its
subsidiaries and a third party related services, goods, or other matters that
inures in whole or in part to the benefit of Chewy and/or is related to the
Support Services, including without limitation any real property lease, license,
or other contract.

“PetSmart Debt Agreements” shall have the meaning set forth in the Preamble.

“PetSmart Representatives” shall have the meaning set forth in Section 9.11.

“Receiving Party” shall have the meaning set forth in Article VIII.

“Required Payment” means any Service Fee or Guarantee Fee that is due and
payable in accordance with the terms of this Agreement.

 

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“Service Fee” shall have the meaning set forth in Section 3.3.

“Subsidiary” of a Party means a corporation, partnership, joint venture, limited
liability company or other business entity of which (i) a majority of the shares
of securities or other interests having ordinary voting power for the election
of directors or other governing body (other than securities or interests having
such power only by reason of the happening of a contingency) are at the time
beneficially owned, (ii) more than half of the issued share capital is at the
time beneficially owned or (iii) the management of which is otherwise
controlled, directly or indirectly, through one or more intermediaries, or both,
by such Party.

“Support Services” shall have the meaning set forth in the Preamble.

“Tax Matters Agreement” shall mean the Tax Matters Agreement expected to be
entered into by and between Argos Intermediate Holdco I, Inc., PetSmart and
Chewy on or about June 13, 2019.

ARTICLE II

JOINT PURCHASING SERVICES

The Parties shall, and shall cause their respective Subsidiaries to, use
commercially reasonable efforts to provide to each other at no cost Joint
Purchasing Services and, to the extent permitted by applicable law, shall use
commercially reasonable efforts to jointly purchase Business Products if and to
the extent such joint purchasing would reduce the cost of such item to either or
both Parties or their respective Subsidiaries without unduly burdening the other
Party.

The Parties shall also cooperate in good faith with each other as needed to
coordinate, to the extent permitted by applicable law, information sharing and
the joint purchasing of Business Products, the provision of Joint Purchasing
Services, reviewing and agreeing to the Support Services being provided, and
reviewing the amounts payable by each Party to the other Party under this
Agreement.

ARTICLE III

SUPPORT SERVICES

3.1 Provision of Services. From time to time, Chewy may request that PetSmart
provide the Support Services as set forth herein or as otherwise agreed between
the Parties from time to time.

3.2 Acceptance of Services. Unless otherwise agreed to by the Parties, and
subject to the terms of this Agreement, acceptance by Chewy of the Support
Services shall be deemed to occur upon the provision of the Support Services by
PetSmart.

3.3 Service Fees. In consideration of the Support Services provided by PetSmart
under this Agreement, Chewy shall pay to PetSmart a service fee (“Service Fee”)
equal to the direct and indirect costs incurred by PetSmart in providing the
Support Services, plus a mark-up equal to fifteen percent (15%), which may be
modified from time to time by the Parties. The Parties may, upon mutual
agreement or if required as part of a governmental agency audit, engage a
qualified third party to conduct a “transfer pricing report,” as defined in the
regulations pursuant to Section 482 of the Internal Revenue Code, regarding the
Services Fee and the Parties may adjust such fee as may be appropriate based on
the findings of such transfer pricing report.

 

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3.4 Purchase or Sale of Goods. A Party may purchase from or sell to the other
Party various goods, equipment, and other assets as agreed to between the
Parties from time to time.

3.5 Use of Third Parties. PetSmart may hire or engage one or more third parties
to perform the Support Services; provided that PetSmart will in all cases remain
responsible for all of its obligations under this Agreement. Under no
circumstances will Chewy be responsible for making any payments directly to any
third Party engaged by PetSmart unless it is otherwise obligated to make such
direct payment under a PetSmart Agreement.

3.6 Allocated Costs and/or Expenses. The following costs and/or expenses shall
be allocated by PetSmart to Chewy in a commercially reasonable manner to be
determined by PetSmart, subject to reallocation in connection with any “transfer
pricing report” prepared consistently with the provisions of Section 3.3. Any
costs and/or expenses allocated to Chewy pursuant to this Section 3.6 shall be
included in the Service Fee but shall not be subject to any mark-up.

(a) Costs and/or expenses for preparing any consolidated, combined or unitary
Tax Return (as defined in the Tax Matters Agreement).

(b) Costs and/or expenses paid or payable to a third party for goods, services,
or products covering both Parties.

ARTICLE IV

PROVISION OF GUARANTEES

In consideration of the Existing Guarantees provided by PetSmart, Chewy shall
pay to PetSmart on a quarterly basis a recurring Guarantee Fee equal to fifty
basis points (50bps) of the aggregate outstanding amount of all Existing
Guarantees that are outstanding for all or any part of the calendar quarter
preceding the calendar quarter in which such fee is payable.

ARTICLE V

COMPLIANCE WITH AGREEMENTS

Chewy agrees, represents, and warrants that it shall at all times comply with
the terms and conditions, to the extent Chewy is aware of such terms and
conditions, of this Agreement, the Guaranteed Chewy Agreements, the PetSmart
Agreements, and the PetSmart Debt Agreements, including without limitation:

(i) Chewy agrees that so long as Chewy is classified as a “restricted
subsidiary” under the terms of any PetSmart Debt Agreement, it shall take no
action nor omit to take any action which may reasonably cause a violation of any
of the representations, warranties, covenants or other terms of such PetSmart
Debt Agreement or any future credit facility or indebtedness, to which PetSmart
or any Subsidiarity may in future become a party and under which Chewy is a
“restricted subsidiary”.

 

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(ii) Chewy shall comply with the terms of each Guaranteed Chewy Agreement for so
long as the Existing Guarantee pertaining to such Guaranteed Chewy Agreement is
effective.

PetSmart shall use commercially reasonably efforts to notify Chewy of any
obligations imposed on Chewy under a PetSmart Agreement or PetSmart Debt
Agreement.

So long as PetSmart and Chewy are considered to be within a “controlled group”
for purposes of any employee benefit plan, the Parties shall cooperate with each
other prior to taking any material action that could have an adverse impact on,
or increase the costs to, the other Party or such employee benefit plan.

ARTICLE VI

PAYMENT TERMS

6.1 Payment Terms. The Service Fee shall be recorded on a financial monthly
basis and be due and payable by Chewy to PetSmart no later than thirty (30) days
following the end of each PetSmart fiscal quarter. The Guarantee Fee shall be
due and payable by Chewy to PetSmart no later than thirty (30) days following
the end of each calendar quarter. All payments shall be made in U.S. dollars
without set off.

6.2 Withholding Taxes. All payments due under this Agreement shall be subject to
all applicable withholding taxes. To the extent that any such taxes are required
to be withheld from payments made under this Agreement, such amounts shall be
treated for all purposes as having been paid by Chewy to PetSmart. Chewy shall
promptly furnish to PetSmart a copy of any receipt for such taxes issued by the
applicable taxing authority. The Parties agree to use commercially reasonable
efforts to the extent legally permissible to minimize any withholding taxes.

ARTICLE VII

TERM AND TERMINATION

7.1 Term of Agreement. This Agreement is effective as of the Effective Date and
shall remain in effect until terminated as provided in Section 7.2 below. (the
“Term”).

7.2 Termination by Agreement or Notice. This Agreement may be terminated (a) by
mutual agreement of the Parties or (b) by either Party hereto on thirty
(30) days’ notice to the other Party. PetSmart may terminate this Agreement
immediately if Chewy is in violation of any Guaranteed Chewy Agreement, PetSmart
Agreement, or PetSmart Debt Agreement and Chewy does not cure such violation
within the time-period set forth in such Guaranteed Chewy Agreement, PetSmart
Agreement, or PetSmart Debt Agreement, as applicable. Either Party may terminate
this Agreement immediately upon written notice to the other Party if:

(i) the other Party voluntarily files a petition (or a petition has been filed
against it) under applicable bankruptcy or insolvency laws;

 

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(ii) a receiver or other custodian is appointed to administer or conduct such a
material part of the other Party’s business or affairs;

(iii) the other Party winds up, dissolves, liquidates or otherwise ceases to
function as a going concern; or

(iv) a Party is in violation of any other agreement between it and the other
Party and such violating Party does not cure such violation within the
time-period set forth in such agreement.

7.3 Effect of Termination and Survival. Upon the termination of this Agreement:

(a) such payments as shall be due from Chewy to PetSmart as of such termination
date shall be recoverable without prejudice; and

(b) any remedy for any breach or default which has not previously been cured
shall be preserved.

Any provisions of this Agreement creating obligations extending beyond the Term
of this Agreement will survive the expiration or termination of this Agreement,
including without limitation Articles III, V, VI, VIII, and IX.

ARTICLE VIII

CONFIDENTIALITY

The Parties acknowledge that, from time to time, one Party (the “Disclosing
Party”) may disclose to the other Party (the “Receiving Party”) confidential
information relating to the Disclosing Party’s business, products and services
or otherwise relating to the Disclosing Party that is of a confidential and
proprietary nature (including any information that is marked as “proprietary” or
“confidential” or which would, under the circumstances, be understood by a
reasonable person to be proprietary and nonpublic) (“Confidential Information”).
The Receiving Party shall retain such Confidential Information in confidence and
shall not disclose it to any third party without the Disclosing Party’s prior
written consent. Each Party shall use at least the same procedures and degree of
care that it uses to protect its own Confidential Information of like
importance, and in no event less than reasonable care, to protect the
confidentiality of the other Party’s Confidential Information. Each Party may
disclose the Confidential Information of the other Party to: (a) its
subsidiaries, any parent company and its and their respective employees,
managers and directors and (b) as required under applicable law or regulation or
by order of a competent governmental authority. In addition, PetSmart may
disclose Confidential Information to the extent required by any PetSmart Debt
Agreement. Notwithstanding the foregoing, Confidential Information will not
include information to the extent that such information:

(i) was already known by the Receiving Party without an obligation of
confidentiality at the time of disclosure hereunder;

(ii) was generally available to the public at the time of its disclosure to the
Receiving Party other than by a breach of confidentiality;

 

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(iii) became generally available to the public after its disclosure other than
through an act or omission of the Receiving Party in breach of this Agreement;

(iv) was subsequently lawfully and independently disclosed to the Receiving
Party by a Person without a duty of confidentiality other than the Disclosing
Party; or

(v) was independently developed by the Receiving Party outside of this
Agreement.

ARTICLE IX

MISCELLANEOUS

9.1 Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of Delaware without regard to any
conflicts of law provisions that would result in the application of the laws of
any other jurisdiction.

9.2 Further Actions. Each of the Parties will take all such lawful action as may
be necessary or appropriate to effect the transactions described in this
Agreement.

9.3 Binding Effect. This Agreement shall be binding upon and shall inure to the
benefit of the Parties hereto and their respective successors and permitted
assigns.

9.4 Counterparts. For the convenience of the parties hereto, any number of
counterparts hereof may be executed and each such counterpart shall be deemed to
be an original instrument.

9.5 Assignment. Except as otherwise provided in this Agreement, no Party shall,
without the prior written consent of the other Party, assign or transfer any of
its rights or obligations under this Agreement to any third party, and any
attempt at such assignment without such written consent shall be voided. No such
consent shall be required in connection with any assignment or transfer of a
Party’s rights or obligations under this Agreement to an affiliate, provided
that such Party shall provide notice of such assignment to the other Party
within thirty (30) days following such assignment.

9.6 Relationship of the Parties. Nothing in the Agreement shall be construed:
(a) to give either Party the power to direct or control the daily activities of
the other Party, or (b) to constitute the Parties as principal and agent,
employer and employee, franchiser and franchisee, partners, joint venturers,
co-owners or otherwise as participants in a joint undertaking. Neither Party is
the agent of the other Party nor is a Party authorized to make any
representation, contract, or commitment on behalf of the other Party unless
specifically requested or authorized to do so by the other Party.

9.7 Entire Agreement. This Agreement sets forth the entire agreement and
understanding between the Parties with respect to the subject matter hereof and
supersedes all prior discussions, negotiations and agreements, written, oral or
implied, between them relating to the subject matter hereof, and none of the
Parties shall be bound by any conditions, definitions, warranties,
understandings or representations with respect to such subject matter except as
expressly provided herein or as duly set forth on or subsequent to the date
hereof, in writing and signed by a proper and duly authorized officer or
representative of each of the Parties.

 

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9.8 Warranty Disclaimer. PETSMART MAKES NO EXPRESS OR IMPLIED REPRESENTATIONS OR
WARRANTIES, INCLUDING, WITHOUT LIMITATION, THE WARRANTIES IMPLIED BY LAW OR
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, REGARDING THIS AGREEMENT,
OR THE PERFORMANCE OF THE SUPPORT SERVICES CONTEMPLATED BY THIS AGREEMENT.

9.9 Limitation of Liability. PetSmart will not be liable to Chewy or to any
other person or entity for any losses, costs or damages caused by, attributable
to or arising in connection with the performance, nonperformance or delayed
performance of the Support Services to be provided to Chewy as contemplated by
this Agreement, except for such losses, costs or damages attributable to
PetSmart’s bad faith, gross negligence or willful misconduct for which damages
PetSmart will be liable. Notwithstanding the foregoing, PetSmart shall not be
liable for any special, indirect, consequential or punitive damages in
connection with the provision of Support Services to Chewy even if PetSmart has
been advised of the possibility of such damages. PetSmart will not be liable for
any failure to perform or any delay in the performance of its obligations
hereunder due to Force Majeure. PetSmart may decline to provide any Support
Services in its sole discretion.

9.10 Indemnification. Chewy agrees to protect, defend, hold harmless and
indemnify PetSmart, its Subsidiaries and its and their respective successors,
assigns, directors, officers, stockholders, members, employees and agents
(collectively, the “PetSmart Representatives”), from and against any and all
claims, demands, actions, liabilities, damages, losses, fines, penalties, costs
and expenses, including reasonable attorneys’ fees (collectively referred to as
“Claims”), actually or allegedly, directly or indirectly, arising out of or
related to any breach or allegation of a breach of this Agreement caused or
alleged to have been caused by Chewy or a Chewy Representative (as defined
below). Notwithstanding the foregoing, except to the extent PetSmart has an
indemnification obligation to a third party, including without limitation under
any Guaranteed Chewy Agreement, PetSmart Agreement, or PetSmart Debt Agreement,
Chewy shall not be liable for any special, indirect, consequential or punitive
damages in connection with any Claim even if Chewy has been advised of the
possibility of such damages.

PetSmart agrees to protect, defend, hold harmless and indemnify Chewy, its
Subsidiaries and its and their respective successors, assigns, directors,
officers, stockholders, members, employees and agents (collectively, the “Chewy
Representatives”), from and against any and all Claims, actually or allegedly,
directly or indirectly, arising out of or related to any breach or allegation of
a breach of this Agreement caused or alleged to have been caused by PetSmart or
a PetSmart Representative. Notwithstanding the foregoing, except to the extent
Chewy has an indemnification obligation to a third-party, PetSmart shall not be
liable for any special, indirect, consequential or punitive damages in
connection with any Claim even if PetSmart has been advised of the possibility
of such damages.

9.11 No Waiver. The failure of any Party to insist on strict performance of a
covenant hereunder or of any obligation hereunder shall not be a waiver of such
Party’s right to demand strict compliance therewith in the future.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective duly authorized officers or representatives, as of the date
first written above.

 

CHEWY, INC. By:    

/s/ Susan Helfrick

 

Name: Susan Helfrick

Title: General Counsel

 

PETSMART, INC. By:    

/s/ Alan M. Schnaid

 

Name: Alan M. Schnaid

Title: Executive Vice President and Chief

Financial Officer

Signature Page to Master Transaction Agreement

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ANNEX A

DESCRIPTION OF SUPPORT SERVICES

 

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Chewy’s use of specified facilities leased by PetSmart or its subsidiaries

 

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PetSmart assistance in coordinating the administration or testing of any 401(k)
or similar employee benefit plan under which the Parties are deemed to be within
the same “control group”, but excluding any health and wellness plans

 

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Chewy’s inclusion on specified insurance and similar policies obtained by
PetSmart and claims management assistance

 

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Management support, as agreed between Chewy and PetSmart from time to time

 

  •  

Corporate filings and other specified administrative support, including:

 

  •  

Business licenses and registrations

 

  •  

Annual state and local corporate filings/reports

 

  •  

Tax filings other than Tax Returns prepared on a consolidated, combined, or
unitary basis, which costs and/or expenses are allocated pursuant to Section 3.6

 

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Excluding any filings with the Securities and Exchange Commission or other
agencies related to Chewy being a publicly traded company

 

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Procurement support

 

  •  

Other corporate or administrative support services as agreed to in writing by
the Parties

 

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ANNEX B

EXISTING GUARANTEES

 

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Corporate Guarantee by PetSmart in favor of Euler Hermes North American
Insurance Company and the current and future suppliers of the Chewy, in
accordance with the terms and conditions set out in the Corporate Guarantee
Agreement dated August 8, 2018.

 

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Guarantee by PetSmart in favor of NP Goodyear AZ Industrial, LLC, in accordance
with the terms and conditions set out in the Limited Guaranty of Payment dated
August 16, 2017.

 

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Guarantee effective as of August 13, 2018 by PetSmart in favor of Harbor Capital
Leasing, Inc.

 

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Guarantee by PetSmart in favor of NP Dayton Chewy, LLC, in accordance with the
terms and conditions set out in the Limited Guaranty of Payment dated July 27,
2018.

 

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Guarantee by PetSmart in favor of NP Salisbury Industry, LLC in accordance with
the terms and conditions set out in the Limited Guaranty of Payment dated April,
2019.

 

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ANNEX C

PETSMART DEBT AGREEMENTS

 

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Credit Agreement, dated March 11, 2015, as amended from time to time, among
Argos Holdings Inc., PetSmart, the lenders from time to time party thereto and
Wilmington Trust, National Association, as administrative agent and collateral
agent.

 

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ABL Credit Agreement, dated as of March 11, 2015, as amended from time to time,
by and among Argos Holdings Inc., PetSmart, PETM Canada Corporation, the lenders
from time to time party thereto, Citibank, N.A., as administrative agent and
collateral agent.

 

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Indenture, dated as of May 31, 2017, as amended and supplemented from time to
time, among PetSmart, the guarantors party thereto and The Bank of New York
Mellon Trust Company, N.A. (the “Trustee”), as trustee and collateral agent,
related to the PetSmart’s 5.875% Senior First Lien Notes due 2025.

 

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Indenture, dated as of May 31, 2017, as amended and supplemented from time to
time, among PetSmart, the guarantors party thereto and the Trustee, as trustee,
related to the Issuer’s 8.875% Senior Notes due 2025.

 

  •  

Indenture, dated as of March 4, 2015, as amended and supplemented from time to
time, among the Issuer, the guarantors party thereto and the Trustee, as
trustee, related to PetSmart’s 7.125% Senior Notes due 2023.

 

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