Exhibit 10.49
Patriot Capital Funding, Inc.
274 Riverside Avenue
Westport, CT 06880
March 30, 2007
Dover Saddlery, Inc.
525 Great Road
Littleton, MA 01460
Attn: Stephen L. Day

     
Re:
  Waiver and Amendment No. 3 to the Amended and Restated Senior Subordinated
Note and Warrant Purchase Agreement (“Amendment No. 3”)

Stephen:
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”),
and Consent and Amendment No. 2, dated June 29, 2006, among the Borrower,
Purchaser and Servicer (“Amendment No. 2”) (the Original Note and Warrant
Purchase Agreement, as amended by Amendment No. 1 and Amendment No. 2 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 Note and Warrant Purchase Agreement.
The parties to the Note and Warrant Purchase Agreement desire to make certain
amendments thereto and 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 amendments and waiver must be in a written instrument signed by
Borrower, Servicer and the Required Purchasers. Holder, as sole holder of the
Notes, constitutes the Required Purchasers for purposes of executing this
Amendment No. 3.
Therefore, the parties hereto, intending to be legally bound, hereby agree as
follows:

 

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     1. Amendments to Note and Warrant Purchase Agreement. All of the terms and
provisions of the Note and Warrant Purchase Agreement shall remain in full force
and effect except as follows:
     (i) Section 7.3(a). Section 7.3(a) of the Note and Warrant Purchase
Agreement is hereby amended and restated in its entirety to read as follows:
          (a) Funded Debt Ratio. A maximum Funded Debt Ratio as at any fiscal
quarter-end during any period specified below of not more than the ratio
identified below as applicable to such period:

          Period   Maximum Ratio
 
       
For the fiscal quarter ending on March 31, 2007
    4.40 to 1.0  
 
       
For the fiscal quarter ending on June 30, 2007
    4.40 to 1.0  
 
       
For the fiscal quarter ending on September 30, 2007
    4.40 to 1.0  
 
       
For any fiscal quarter ending on or after December 31, 2007
    3.30 to 1.0  

     (ii) Section 7.3(b). Section 7.3(b) of the Note and Warrant Purchase
Agreement is hereby amended and restated in its entirety to read as follows:
          (b) Funded Senior Debt Ratio. A maximum Funded Senior Debt Ratio as at
any fiscal quarter-end during any period specified below of not more than the
ratio identified below as applicable to such period:

          Period   Maximum Ratio
 
       
For the fiscal quarter ending on March 31, 2007
    3.58 to 1.0  
 
       
For the fiscal quarter ending on June 30, 2007
    3.58 to 1.0  
 
       
For the fiscal quarter ending on September 30, 2007
    3.58 to 1.0  
 
       
For any fiscal quarter ending on December 31, 2007
    2.75 to 1.0  
 
       
For the fiscal quarter ending on March 31, 2008
    2.75 to 1.0  
 
       
For any fiscal quarter ending on or after June 30, 2008
    2.20 to 1.0  

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     (iii) Section 7.3(c). Section 7.3(c) of the Note and Warrant Purchase
Agreement is hereby amended and restated in its entirety to read as follows:
          (c) Operating Cash Flow to Total Debt Service. A minimum ratio of
(i) Operating Cash Flow to (ii) Total Debt Service of not less than the ratio
identified below as applicable to such period, in each case as determined at the
end of each fiscal quarter for the four consecutive fiscal quarters then ending:

          Period   Minimum Ratio
 
       
For the fiscal quarter ending on March 31, 2007
    1.15 to 1.0  
 
       
For the fiscal quarter ending on June 30, 2007
    1.00 to 1.0  
 
       
For the fiscal quarter ending on September 30, 2007
    1.15 to 1.0  
 
       
For any fiscal quarter ending on or after December 31, 2007
    1.30 to 1.0  

For purposes of this section, the calculation of Operating Cash Flow for the
periods ending March 31, 2007, June 30, 2007 and September 30, 2007 shall
exclude $900,000 of Capital Expenditures in connection with the acquisition of
Old Dominion Enterprises, Inc.
     (iv) Section 7.3(d). Section 7.3(d) of the Note and Warrant Purchase
Agreement is hereby amended and restated in its entirety to read as follows:
          (d) Minimum EBITDA Amount. Minimum EBITDA for the then preceding four
quarters of not less than:

          Period   Minimum Amount
 
       
For the fiscal quarter ending on March 31, 2007
  $ 3,150,000  
 
       
For the fiscal quarter ending on June 30, 2007
  $ 3,375,000  
 
       
For the fiscal quarter ending on September 30, 2007
  $ 3,375,000  
 
       
For the fiscal quarter ending on December 31, 2007
  $ 4,050,000  
 
       
For the fiscal quarter ending on March 31, 2008
  $ 4,050,000  
 
       
For any fiscal quarter ending on or after June 30, 2008
  $ 4,500,000  

     2. Waiver of Event of Default. Purchaser and Servicer hereby permanently
waive the Event of Default resulting from Borrower’s breach of Section 7.2(e)
(Capital Expenditures) for the fiscal year 2006, effective as of December 31,
2006, subject to satisfaction of all preconditions to effectiveness of this
Amendment No. 3 set forth in Section 6 below. The waiver

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set forth herein relates solely to the specific instance described in this
Section 2 and no other waiver is granted or intended.
     3. Amendment Fee; Expenses. In consideration of the Servicer’s and
Purchaser’s execution and delivery of this Amendment No. 3 and the amendments
contained herein, Borrower shall pay to Servicer on the date hereof a fully
earned and non-refundable amendment fee (the “Amendment Fee”) in the amount of
Fifteen Thousand Dollars ($15,000). Borrower shall also pay all reasonable
expenses incurred by the 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.
     4. Reaffirmation. Except as specifically amended hereby, the Note and
Warrant Purchase Agreement shall remain unmodified and in full force and effect
and is hereby reaffirmed. In addition, except as specifically provided in
Section 2 above, this Amendment No. 3 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 Warrant Purchase Agreement or any other Transaction Document, as the
same may be amended from time to time.
     5. Representations. To induce Servicer and Purchaser to enter into this
Amendment No. 3, Borrower represents and warrants to each that:
          (a) all of its representations and warranties in the Transaction
Documents, as amended by this Amendment No. 3, are: (i) true and correct as of
the date of this Amendment No. 3, (ii) ratified and confirmed without condition
as if made anew, and (iii) incorporated into this Amendment No. 3 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 Amendment No. 3;
          (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 Amendment No. 3 or, if required, has been
obtained; and
          (d) this Amendment No. 3 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 Transaction
Documents remain outstanding without defense, set off, counterclaim, discount or
charge of any kind as of the date of this Amendment No. 3.
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

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and Purchaser, as modified by this Amendment No. 3 and subject to the
Subordination Agreement.
     6. Preconditions. This Amendment No. 3 is subject to the Servicer having
received the following, all in form, scope and content acceptable to Servicer
and Purchaser in their sole discretion:
          (a) this Amendment No. 3, 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 $15,000 Amendment 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.
     7. Waiver, Release and Indemnity. To induce Servicer and Purchaser to enter
into this Amendment No. 3, 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 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 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 is 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.
     8. Miscellaneous. This Amendment No. 3 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 Amendment No. 3 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 Amendment No. 3 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/ Timothy W. Hassler        
Name:   Timothy W. Hassler        Title:   Chief Operating Officer     

ACKNOWLEDGED and AGREED
this ____ day of March, 2007

                  PURCHASER       PARENT:
 
                PATRIOT CAPITAL FUNDING, LLC I       DOVER SADDLERY, INC.
 
               
By:
  /s/ Clifford Wells       By:   /s/ Stephen L. Day
 
               
 
  Name: Clifford Wells
Title: Chief Investment Officer           Stephen L. Day
President
 
               
By:
               
 
               
 
  Name:            
 
  Title:            
 
                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
Director           Stephen L. Day
Director
 
                OPERATING COMPANY #3:            
 
                DOVER SADDLERY RETAIL, INC.            
 
               
By:
  /s/ Stephen L. Day            
 
               
 
  Stephen L. Day
Director            

 

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ATTACHMENT I
TO AMENDMENT NO. 3
CONSENT OF GUARANTOR
          The undersigned guarantor (the “Guarantor”) consents to the provisions
of the foregoing Waiver and Amendment No. 3 to Senior Subordinated Note and
Warrant Purchase Agreement (“Amendment No. 3”) 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 Amendment No. 3;
          (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 Amendment No. 3.
          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 Amendment No. 3 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 Amendment No. 3, intending to be legally bound hereby.

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

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