Exhibit 10.1

 

SECOND AMENDMENT TO AMENDED AND RESTATED
CREDIT AGREEMENT

 

THIS SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this
“Amendment”), dated as of March 25, 2019, is entered into by and among PETIQ,
LLC, an Idaho limited liability company (“PetIQ”), the other Credit Parties
signatory hereto (collectively with PETIQ, the “Borrowers”), the LENDERS
signatory hereto, and EAST WEST BANK, a California banking corporation, as
Administrative Agent for the Lenders (in such capacity, “Administrative Agent”),
with reference to the following facts:

 

RECITALS

 

A.          The Borrowers, the Lenders, and Administrative Agent are parties to
an Amended and Restated Credit Agreement dated as of January 17, 2018, as
amended by the First Amendment to Amended and Restated Credit Agreement and
Joinder dated as of August 9, 2018 and as supplemented by the Consent Agreement
dated as of October 17, 2018 and the Joinder No. 1 to Amended and Restated
Credit Agreement dated as of December 10, 2018 (collectively, the “Credit
Agreement”) and certain other related Loan Documents, pursuant to which the
Lenders provide the Borrowers a revolving credit facility with sub-facilities
for letters of credit and swing line loans.

 

B.           The parties hereto desire to amend the Credit Agreement: (i) to
increase the limit on Cash Management Obligations from $5,000,000 to
$10,000,000; and (ii) to remove Cash Management Obligations as a sub-line of
credit under the Revolving Credit Facility, so that outstanding Cash Management
Obligations no longer will reduce borrowing availability under the Revolving
Credit Facility.

 

NOW, THEREFORE, the parties hereby agree as follows:

 

1.           Defined Terms. All initially capitalized terms used in this
Amendment (including in the recitals hereto) without definition shall have the
respective meanings set forth for such terms in the Credit Agreement.

 

2.           Increase in Permitted Cash Management Obligations.  Section 1.01 of
the Credit Agreement is hereby amended by amending and restating the definition
of “Cash Management Obligations” so that it reads in full as follows (changes to
the text are indicated with a strikethrough or in bold, italicized and
underscored type):

 

“Cash Management Obligations” means, as of any date of determination, the
aggregate outstanding obligations of Borrowers to Cash Management Banks pursuant
to Cash Management Agreements, provided that Cash Management Obligations may not
exceed $5,000,000 $10,000,000 at any time.

 

3.           Removal of Cash Management Obligations as a Sub-Line of the
Revolving Credit Facility.  Section 1.01 of the Credit Agreement is hereby
further amended by amending and restating the definition of “Total Revolving
Credit Outstandings” so that it reads in full as

 

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follows (changes to text are indicated with a strikethrough or in bold,
italicized and underscored    type):

 

“Total Revolving Credit Outstandings” means, as of the date of determination,
the sum of (a) the aggregate Outstanding Amount of all Revolving Credit Loans,
(b) the aggregate Outstanding Amount of all L/C Obligations, and    (iii) (c)
the aggregate Outstanding Amount of all Swingline Loans,  and (iv) the aggregate
Outstanding Amount of all Cash Management Obligations.

 

4.           Reduction of Priority of Cash Management Obligations and Secured
Hedge Obligations.  Section 8.03 of the Credit Agreement is hereby amended and
restated to read in full as follows (changes to text are indicated with a
strikethrough or in bold, italicized and underscored type):

 

“8.03 Application of Funds. In the event that, following the occurrence and
during the continuance of any Event of Default, the Administrative Agent or any
Lender receives any monies in connection with the enforcement of any of the Loan
Documents, or otherwise with respect to the realization upon any of the
Collateral, the Administrative Agent may apply (and shall apply at (a) the
request of the Required Lenders or (b) following the exercise of remedies
pursuant to Section 8.02, including without limitation, pursuant to the proviso
thereof) such monies as follows (and each Lender shall comply with the
instructions of the Administrative Agent in the case of any such monies received
by such Lender):

 

i.            First, to payment of outstanding Pro Rata Protective Advances and
Out-of-Formula Advances ratably among the holders thereof in proportion to the
respective amounts described in this clause First and if the Revolving Credit
Lenders have declined to participate in Protective Advances pursuant to Section
2.17(a), to payment of outstanding Protective Advances not to exceed 10% of the
Borrowing Base as of the date of the making of such Protective Advances funded
by the Administrative Agent;

 

ii.           Second, to payment of that portion of the Obligations owing to the
Administrative Agent constituting (a) indemnities and expenses due and payable
under this Agreement and the other Loan Documents (including reasonable and
documented fees, charges and disbursements of counsel to the Administrative
Agent), and (b) the fees due and payable under the Fee Letter;

 

iii.          Third, to the payment of that portion of the
Obligations  constituting (i) (a) indemnities and expenses (including reasonable
and documented fees, charges and disbursements of counsel to the Lenders and
amounts payable under Article III) due and payable to the Lenders under this
Agreement and the other Loan Documents, (ii) (b) accrued and unpaid interest and
fees (including Unused Facility Fees, Early Revolving Credit Facility
Termination Fees and Letter of Credit Fees) due and payable to the Lenders, and
(iii) (c) unpaid principal of the Revolving Credit Loans, the L/C Borrowings and
the Swingline Loans, ratably among the holders thereof, (iv) Secured Cash
Management Obligations then owing under Secured Cash Management Agreements, and
(v) Secured Hedge Obligations then owing under Secured Hedge Agreements;

 

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iv.          Fourth,  to the payment of that portion of the Obligations
constituting (a) Secured Cash Management Obligations then owing under Secured
Cash Management Agreements, and (b) Secured Hedge Obligations then owing under
Secured Hedge Agreements;

 

iv.  v.     Fourth, Fifth, if the Revolving Credit Lenders have declined to
participate in Protective Advances pursuant to Section 2.17, to payment of
outstanding Protective Advances funded by the Administrative Agent remaining
outstanding after the application of clause First above;

 

v.  vi.     Fifth, Sixth, to the Administrative Agent for the account of the L/C
Issuer, to Cash Collateralize that portion of L/C Obligations comprised of the
aggregate undrawn amount of Letters of Credit to the extent not otherwise Cash
Collateralized by the Borrowers pursuant to Sections 2.03 and 2.21;

 

vi.  vii.   Sixth, Seventh, the payment in full of all other Obligations due and
payable ratably among the holders thereof; and

 

vii.  viii. Seventh, Eighth, the balance, if any, after all of the Obligations
have been indefeasible paid in full, to the Borrowers or as otherwise required
by Law.

 

All payments applied to the Loans pursuant to this Section 8.03 shall be applied
to the Loans owing to the Lenders in accordance with their respective Applicable
Percentages.”

 

5.         Condition Precedent. The effectiveness of this Amendment shall be
subject to Administrative Agent’s receipt of this Amendment, duly executed by
the Borrowers, the Required Lenders, and Administrative Agent.

 

6.         General Amendment Provisions.

 

A.          The Credit Agreement, as amended hereby, shall be and remain in full
force and effect in accordance with its terms, and Borrowers hereby ratify and
confirm the Credit Agreement in all respects. Except as expressly set forth
herein, the execution, delivery, and performance of this Amendment shall not
operate as a waiver of, an amendment to, or a consent to a deviation from, any
right, power, or remedy of Administrative Agent or the Lender under the Credit
Agreement or any other Loan Document, as in effect prior to the date hereof.

 

B.           The Borrowers represent and warrant to Administrative Agent and the
Lenders that the representations and warranties contained in the Credit
Agreement are true and correct in all material respects as of the date of this
Amendment (except for representations and warranties that expressly relate to an
earlier date, which are true and correct in all material respects as of such
earlier date) and that no Event of Default has occurred and is continuing.

 

C.           This Amendment constitutes the entire agreement of the parties in
connection with the subject matter hereof and cannot be changed or terminated
orally. All prior agreements, understandings, representations, warranties and
negotiations regarding the subject matter hereof, if any, are merged into this
Amendment.

 

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D.          This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one instrument. In the event that any signature is delivered by facsimile
transmission or by e-mail delivery of a “.pdf” format data file, such signature
shall create a valid and binding obligation of the party executing this
Amendment (or on whose behalf such signature is executed) with the same force
and effect as if such facsimile or “.pdf” signature page were an original
hereof.

 

E.           This Amendment shall be governed by, and construed and enforced in
accordance with, the internal laws (as opposed to the conflicts of law
principles) of the State of New York.

 

[Remainder of page intentionally left blank; signature pages follow]

 

 

 

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IN WITNESS WHEREOF,  the undersigned have executed this Amendment by their
respective duly authorized officers as of the date first above written.

 

 

The Borrowers:

 

 

 

PETIQ, LLC,

 

an Idaho limited liability company

 

 

 

By

/s/ John Newland

 

Name:

John Newland

 

Title:

CFO

 

 

 

 

 

TRUE SCIENCE HOLDINGS, LLC,

 

a Florida limited liability company

 

 

 

By

/s/ John Newland

 

Name:

John Newland

 

Title:

CFO

 

 

 

 

 

TRURX LLC,

 

an Idaho limited liability company

 

 

 

By

/s/ John Newland

 

Name:

John Newland

 

Title:

CFO

 

 

 

 

 

TRU PRODIGY, LLC,

 

a Texas limited liability company

 

 

 

By

/s/ John Newland

 

Name:

John Newland

 

Title:

CFO

Second Amendment to Amended and Restated Credit Agreement

 

 

COMMUNITY VETERINARY CLINICS LLC,

 

a Delaware limited liability company

 

 

 

By

/s/ John Newland

 

Name:

John Newland

 

Title:

CFO

 

 

 

 

 

PET SERVICES OPERATING, LLC,

 

a Delaware limited liability company

 

 

 

By

/s/ John Newland

 

Name:

John Newland

 

Title:

CFO

 

 

 

 

 

PAWPLUS MANAGEMENT, LLC,

 

a Delaware limited liability company

 

 

 

By

/s/ John Newland

 

Name:

John Newland

 

Title:

CFO

 

 

 

 

 

VIP PETCARE, LLC,

 

a Delaware limited liability company

 

 

 

By

/s/ John Newland

 

Name:

John Newland

 

Title:

CFO

 

 

 

 

 

COMMUNITY CLINICS, INC.,

 

a California corporation

 

 

 

By

/s/ John Newland

 

Name:

John Newland

 

Title:

CFO

Second Amendment to Amended and Restated Credit Agreement

 

 

 

 

 

 

HBH ENTERPRISES LLC,

 

a Utah limited liability company

 

 

 

By:

PETIQ, LLC

 

Its:

Sole Member

 

 

 

 

By

/s/ John Newland

 

 

Name:

John Newland

 

 

Title:

CFO

 

Second Amendment to Amended and Restated Credit Agreement

 

 

The Agent, L/C Issuer and Swingline Lender:

 

 

 

EAST WEST BANK,

 

as Administrative Agent, LC/Issuer and  Swingline Lender

 

 

 

By:

/s/ David Lehner

 

 

David A. Lehner

 

 

Senior Vice President

Second Amendment to Amended and Restated Credit Agreement

 

 

The Syndication Agent:

 

 

 

KEYBANK NATIONAL ASSOCIATION,

 

as Syndication Agent

 

 

 

By

/s/ Anthony Alexander

 

Name:

Anthony Alexander

 

Title:

Vice President

Second Amendment to Amended and Restated Credit Agreement

 

 

 

 

 

The Lenders:

 

 

 

EAST WEST BANK,

 

as a Lender

 

 

 

By:

/s/ David Lehner

 

 

David A. Lehner

 

 

Senior Vice President

 

Second Amendment to Amended and Restated Credit Agreement

 

 

 

 

 

COMERICA BANK,

 

as a Lender

 

 

 

By

/s/ Daniel Kellow

 

Name:

Daniel Kellow

 

Title:

Portfolio Manager

 

Second Amendment to Amended and Restated Credit Agreement

 

 

 

 

 

KEYBANK NATIONAL ASSOCIATION,

 

as a Lender

 

 

 

By

/s/ Anthony Alexander

 

Name:

Anthony Alexander

 

Title:

Vice President

 

Second Amendment to Amended and Restated Credit Agreement