EMPLOYMENT AGREEMENT

          THIS EMPLOYMENT AGREEMENT (“Agreement”) is made effective as of July
25, 2007 (the “Effective Date”), by and between XLNT Veterinary Care, Inc.
(“Company”) and Robert Wallace (“Executive”).

RECITALS

          A. Executive has been employed by the Company as its Chief Executive
Officer, but his employment relationship has not been the subject of a formal
employment agreement.

          B. Company and Executive desire to enter into the Agreement as of the
date hereof, which shall supersede any and all prior agreements, arrangements or
understandings relating to Executive’s employment.

          C. Company has agreed to merge with Echo Healthcare Acquisition Corp.
(“Echo”) pursuant to an Amended and Restated Agreement and Plan of Merger by and
among Echo, Pet DRx Acquisition Company and the Company dated as of February 16,
2007 (the “Merger Agreement”).

          D. Following the closing of the merger contemplated in the Merger
Agreement, it is contemplated that Executive will continue to remain employed
subject to the terms and conditions set forth herein.

          The parties hereby agree as follows:

          1. Position and Duties. Executive shall serve as Chief Executive
Officer of the Company. Executive’s duties and responsibilities be limited to
strategic vision, investor relations and business development and such other
duties as may be determined in consultation with the Company’s Board of
Directors (“Board of Directors”). The parties expressly acknowledge and agree
that Executive shall not be deemed the “principal executive officer” of Company
for purposes of signing the certifications and related materials contemplated by
Rule 13a-14 of the General Rules and Regulations Under the Securities Exchange
Act of 1934, as amended. Executive shall perform faithfully, cooperatively and
diligently all of his job duties and responsibilities. Executive agrees to and
shall devote his full business time, attention and effort to the business of the
Company, its subsidiaries and affiliates, provided that Executive shall be
permitted to (i) engage in political activities, (ii) serve on the board of
directors of other companies and (iii) engage in activities for non-profit
institutions, to the extent that the activities described in the foregoing
clauses (i), (ii) and (iii) do not interfere or conflict with Executive’s
obligations hereunder, and provided that all such activities, and Executive’s
expected time commitments in respect thereof, are disclosed to the Board of
Directors.

          2. Employment Term and Termination. The term of Executive’s employment
under this Agreement shall commence as of the Effective Date and shall continue
until the third anniversary thereof (the “Initial Term”). Thereafter, the term
of Executive’s employment shall continue for additional one-year periods unless
terminated by either Executive or the Company upon no less than 30 days prior
written notice prior to the end of the Initial Term or any such

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additional one-year period. The entire term of Executive’s employment hereunder
is referred to as the “Employment Term.” Subject to the terms of this Agreement,
including, without limitation, Section 8 and Section 11 hereof, either party may
terminate this Agreement at any time prior to the expiration of the Employment
Term, for any reason, with or without “Cause” or “Good Reason.” This Agreement
will automatically terminate upon Executive’s death. Upon termination of this
Agreement, Executive shall be entitled only to the Accrued Obligations, except
as otherwise provided in Section 8.

          3. Compensation.

                    3.1. Base Salary. As compensation for Executive’s
performance of his duties hereunder, Company shall pay to Executive an initial
base salary of Twenty-Five Thousand Dollars ($25,000) per month, starting on the
date hereof, which if annualized, would represent Three Hundred Thousand Dollars
($300,000) (“Annual Base Salary”), payable in accordance with the normal payroll
practices of Company, less required deductions for state and federal withholding
tax, social security and all other employment taxes and payroll deductions. In
January 2008 and in January each year thereafter, the Board of Directors shall
review Executive’s Annual Base Salary and consider an increase thereto. In
addition, the Board of Directors may decrease Executive’s Annual Base Salary in
the event that the Board of Directors determines that financial exigencies
require such decrease, provided that the compensation of all executives of the
Company is also reduced at the same time in a substantially commensurate manner.
Any increase or decrease in Executive’s Annual Base Salary (together with the
then existing Annual Base Salary) shall serve as the “Annual Base Salary” for
future employment under this Agreement.

                    3.2. Annual Bonus. In addition to the Annual Base Salary,
Executive shall be eligible to receive an annual cash bonus in an amount equal
to at least fifty percent (50%) of Executive’s then Annual Base Salary based
upon the satisfaction of certain objective criteria and performance standards
established by the Board of Directors (or the Compensation Committee, as
applicable).

                    3.3. Stock Options. Pursuant to a separate written option
agreement, Executive shall be granted an option under the Company’s option plan
to purchase that number of shares Company common stock equal to one-half percent
(0.5%) of the issued and outstanding shares of Company common stock, calculated
immediately after the closing of the merger comtemplated by the Merger
Agreement. The exercise price of such option shall be the Parent Common Stock
Per Share Issue Price (as defined in the Merger Agreement), unless such price
shall give rise to liability under Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”), in which case the exercise price shall be equal
to the fair market value of the Company’s common stock on the date of grant.
Such option shall vest in equal monthly installments over a period of
forty-eight (48) months after the date of grant with such vesting accelerated in
full if Executive is terminated without Cause or resigns for Good Reason. In
addition, Executive shall be eligible to receive stock options, restricted stock
or other equity incentive grants pursuant to one or more equity incentive plans
offered by the Company from time to time, subject to the approval of the Board
of Directors. Any and all stock options previously granted to Executive by
Company will continue to vest throughout the Employment Term.

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          4. Health and Welfare Benefit Plans. The Executive and/or the
Executive’s family, as the case may be, shall be eligible for participation in
and shall receive all benefits under health and welfare benefit plans,
practices, policies and programs provided by the Company (including, without
limitation, health, medical prescription, dental, disability, salary
continuance, employee life, group life, accidental death and travel accident
insurance plans and programs) to the extent generally applicable to employees of
the Company.

          5. Additional Benefits. Executive shall be entitled to all customary
and usual fringe benefits provided to all other Company executives and shall be
entitled to participate in all savings and retirement plans, practices, policies
and programs generally applicable to employees of the Company that are in effect
during the Employment Term, subject to the terms and conditions of Company’s
benefit plan documents, as applicable. Company reserves the right to change or
eliminate the fringe benefits or plans, practices and programs on a
company-wide, prospective basis, at any time.

          6. Business Expenses. Executive shall be entitled to receive prompt
reimbursement for all reasonable, out-of-pocket business expenses incurred in
the performance of his duties on behalf of Company. To obtain reimbursement,
expenses must be submitted promptly with appropriate supporting documentation in
accordance with Company’s policies.

          7. Vacation. Executive shall be entitled to an aggregate of 20
business days of paid vacation, personal and sick days each calendar year, in
accordance with the Company’s plans, policies and programs then in effect.

          8. Severance Package Upon Termination of Employment Other Than for
Cause. If (i) the Company terminates Executive’s employment without Cause (other
than due to Disability), or (ii) Executive resigns as an employee of the Company
for Good Reason, the Company agrees to provide Executive with the Severance
Package described in Section 8.1 below in accordance with the payment schedule
set forth in Section 8.2 below.

                    8.1. Description of Severance Package. The “Severance
Package” will consist of:

 

 

 

          (a) all Accrued Obligations (defined below);

 

 

 

          (b) a “Severance Payment” equal to twelve (12) months of Executive’s
then in effect Base Salary; and

 

 

 

          (c) Upon termination of employment, Executive and Executive’s spouse
and eligible dependents will be allowed to continue in Company’s group health
insurance plan at Executive’s own expense for the period required and in
accordance with Code Section 4980B (“COBRA”). However, if Executive elects COBRA
coverage, Company will either (i) pay the first twelve (12) months of COBRA
coverage, if Company’s health plan is a fully-insured health plan; or (ii) pay
Executive an amount before tax withholding equal to each payment of premiums
paid by Executive for the first twelve (12) months of COBRA coverage, if
Company’s health plan is a self-funded health plan.

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8.2. Payments.

 

 

 

          (a) The Severance Package will be paid less required deductions for
state and federal withholding tax, social security and all other employment
taxes as required by law. The Severance Payment described in Section 8.1(b) and
the Accrued Obligations defined in Section 10.1 will be paid in a single lump
sum payment on the date that is thirty (30) days after the Date of Termination
(as defined in Section 12 below), unless otherwise required by law.

 

 

 

          (b) Executive shall designate a beneficiary to receive any payments
due him under this Section 8 in the event of his death by filing a written
designation with the Company. However, any such designation will only be
effective if signed by Executive and received by the Company during Executive’s
lifetime. Executive’s beneficiary designation shall be deemed automatically
revoked if the beneficiary predeceases Executive or if Executive names a spouse
as a beneficiary and the marriage is subsequently dissolved before Executive
dies. If Executive dies without a valid beneficiary designation, all payments
shall be made to Executive’s estate.

 

 

 

          (c) If a payment under this Agreement is payable to a minor, to a
person declared incompetent, or to a person incapable of handling the
disposition of his or her property, the Company may pay such benefit to the
guardian, legal representative or person having the care or custody of such
minor, incompetent person or incapable person. The Company may require proof of
incompetence, minority or guardianship as it may deem appropriate prior to
distribution of the benefit. Such distribution shall completely discharge the
Company from all liability with respect to such benefit.

 

 

 

          (d) As a condition of any obligation to provide any payments or
benefits hereunder in connection with Executive’s termination of employment,
Executive must execute (and not timely revoke) a mutual release in a form
acceptable to the Company and Executive; provided, however, that the Company
will not be required to release Executive from any claims (i) for which
indemnification of any expense related thereto would not be provided under the
Company’s Articles of Incorporation and Bylaws or that certain indemnification
agreement previously entered into between Executive and Company (the “Employer
Claims”) and (ii) any claim based on the fraud or intentional misconduct of
Executive of any act that is determined to be a criminal act under any federal,
state, or local law committed or perpetrated by Executive at any time prior to
and through the date of termination.

          9. Section 409A of the U.S. Internal Revenue Code. If Executive is a
“specified employee” within the meaning of Code Section 409A at the date of his
termination of employment, then such portion of the payments that would result
in a tax under Code Section 409A if paid during the first six (6) months after
termination of employment shall be withheld, starting with the payments latest
in time during such six (6)-month period, and paid to Executive during the
seventh month following the date of his termination of employment.

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          10. Definitions.

                    10.1. Accrued Obligations. For purposes of this Agreement,
“Accrued Obligations” shall mean: (i) payment of Executive’s Annual Base Salary
through the Date of Termination to the extent not theretofore paid; and (ii)
payment of any accrued vacation pay not yet paid by Company.

                    10.2. Cause. For purposes of this Agreement, “Cause” shall
mean: (i) any willful, material violation of any law or regulation applicable to
the business of the Company or any subsidiary of the Company; (ii) conviction
for, or guilty plea to, a felony or a crime involving moral turpitude, or any
willful perpetration of a common law fraud; (iii) commission of an act of
personal dishonesty which involves personal profit in connection with the
Company or any subsidiary of the Company or in connection with a business
relationship of the Company or any subsidiary of the Company with any other
entity; (iv) disregard of the policies of the Company or any subsidiary of the
Company, so as to cause material loss, damage or injury to the property,
reputation or employees of the Company or any subsidiary of the Company if
Executive has been given a reasonable opportunity to comply with such policy or
cure his failure to comply; (v) continued failure by Executive to perform his
duties hereunder if Executive has been given a reasonable opportunity to cure
his failure; or (vi) material breach by Executive of his duties hereunder,
including non-disparagement, or his duties of confidentiality set forth in a
written agreement with the Company.

                    10.3. Disability or Disabled. For purposes of this
Agreement, “Disability” or “Disabled” shall mean the inability of Executive due
to illness or injury to perform each of his material duties under this Agreement
for the duration of the short-term disability period under Company’s policy then
in effect covering Executive, or in the absence of such policy, for a ninety
(90) consecutive day period or one hundred and eighty (180) days (whether or not
consecutive) in any three hundred and sixty-five (365) day period, as certified
by a physician chosen by Company.

                    10.4. Good Reason. For purposes of this Agreement, “Good
Reason” shall mean:

 

 

 

          (a) A substantial diminution in Executive’s position, authority,
duties or responsibilities as Chief Executive Officer as specifically enumerated
in Section 1 of this Agreement, excluding (i) non-substantial changes in title
or office, (ii) any isolated, insubstantial and inadvertent action not taken in
bad faith and which is remedied by Company promptly after receipt of written
notice thereof given by Executive and (iii) a diminution in Executive’s duties
or responsibilities resulting from the employment of any other officer, so long
as Executive retains the duties specified in Section 1 of this Agreement;

 

 

 

          (b) Any failure by Company to comply with any of the provisions of
Section 3 of this Agreement, other than an isolated, insubstantial or
inadvertent failure not occurring in bad faith and which is remedied by Company
promptly after receipt of written notice thereof given by Executive;

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          (c) Any reduction in Executive’s Base Salary except in accordance with
Section 3.1; or

 

 

 

          (d) The Company requiring Executive to be based or spend a material
amount of time at any office or location that is more than twenty-five (25)
miles away from the location where Executive was employed immediately prior to
the date of this Agreement except for business trips required to perform his
duties (which the parties acknowledge will be frequent).

          11. Notice of Termination. Any termination of this Agreement by the
Company or Executive shall be communicated to the other party in a “Notice of
Termination” given in accordance with Section 16.6. Any Notice of Termination
related to a termination by Company for Cause or by Executive for Good Reason
shall: (i) indicate the specific termination provision in this Agreement relied
upon; (ii) to the extent applicable, set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of Executive’s
employment under the provision so indicated; and (iii) if the Date of
Termination is other than the date of receipt of such notice, specify the
termination date (which date shall be not more than fifteen (15) days after the
giving of such notice). The failure by Executive or Company to set forth in the
Notice of Termination any fact or circumstance which contributes to a showing of
Good Reason or Cause, as the case may be, shall not waive any right of Executive
or Company hereunder or preclude Executive or Company from asserting such fact
or circumstance in enforcing Executive’s or Company’s rights hereunder. Any
termination by Company without Cause or by Executive without Good Reason must be
preceded by thirty (30) days’ advance written notice in accordance with the
terms of Sections 11 and 16.6 of this Agreement. If the Company terminates this
Agreement with Cause or the Executive resigns without Good Reason, then the
Company shall pay executive all Accrued Obligations in one lump sump within
thirty (30) days after the Date of Termination.

          12. Date of Termination. “Date of Termination” means the date of
expiration of the Employment Term, Executive’s death, Disability or the date of
delivery of the Notice of Termination or any later date specified therein, as
the case may be; provided, however, that if Executive’s employment is terminated
by Company other than for Cause or Executive resigns without Good Reason, the
Date of Termination shall be at least thirty (30) days after the date of the
applicable Notice of Termination.

          13. Certain Payments. If, in the opinion of tax counsel selected by
the Company and reasonably acceptable to Executive, Executive has received
compensation hereunder which constitutes an “excess parachute payment,” as
defined in Section 280G of the Internal Revenue Code, the Company will pay
Executive an additional amount (the “Additional Amount”) equal to the sum of:
(A) all taxes payable by Executive under Section 4999 of the Internal Revenue
Code applicable to such “excess parachute payment” and the Additional Amount;
and (B) all Federal, state and local income and employment taxes payable by
Executive with respect to the Additional Amount. In the event that the amount of
taxes payable by Executive under Section 4999 of the Internal Revenue Code
applicable to any compensation paid pursuant to this Agreement is subsequently
determined to be in excess of the amount taken into account hereunder (including
by reason of any payment the existence or amount of which cannot be determined
at the time of the payment of any Additional Amounts), the Company shall make

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additional payments of Additional Amounts to Executive in respect of such excess
(plus any interest, penalties or additions payable by Executive with respect to
such excess taxes) at the time such excess is finally determined. The portion of
the Additional Amounts attributable to taxes paid by the Executive will be paid
to the Executive within thirty (30) days after the date he remits the related
taxes to the applicable taxing authorities.

          14. Nondisparagement; Confidentiality. Executive agrees not to
disparage, defame or make any negative or critical public statements, whether
verbally or in writing, regarding the personal or business reputation,
technology, products, practices or conduct of Company or any of Company’s
officers or directors. In addition, except as required by law, Executive shall
not make any public statements regarding Company without the prior written
approval of the Board of Directors. Additionally, the Company agrees not to
disparage, defame or make any negative or critical public statements, whether
verbally or in writing, regarding the personal or business reputation of
Executive. In addition, Executive agrees to sign the Company’s standard
confidentiality agreement.

          15. Injunctive Relief. Executive acknowledges that Executive’s breach
of the covenants contained in Section 14 of this Agreement would cause
irreparable injury to Company and agrees that in the event of any such breach,
Company shall be entitled to seek temporary, preliminary and permanent
injunctive relief without the necessity of proving actual damages or posting any
bond or other security.

          16. General Provisions.

                    16.1. Successors and Assigns. The rights and obligations of
Company under this Agreement shall inure to the benefit of and shall be binding
upon the successors and assigns of Company. Executive shall not be entitled to
assign any of Executive’s rights or obligations under this Agreement.

                    16.2. Waiver. The rights and remedies of the parties to this
Agreement are cumulative and not alternative. Neither the failure nor any delay
by any party in exercising any right, power or privilege under this Agreement or
the documents referred to in this Agreement will operate as a waiver of such
right, power or privilege; and no single or partial exercise of any such right,
power or privilege will preclude any other or further exercise of such right,
power or privilege or the exercise of any other right, power or privilege. To
the maximum extent permitted by applicable law, (i) no claim or right arising
out of this Agreement or the documents referred to in this Agreement can be
discharged by one party, in whole or in part, by a waiver or renunciation of the
claim or right unless in writing signed by the other party; (ii) no waiver that
may be given by a party will be applicable except in the specific instance for
which it is given; and (iii) no notice to or demand on one party will be deemed
to be a waiver of any obligation of such party or of the right of the party
giving such notice or demand to take further action without notice or demand as
provided in this Agreement or the documents referred to in this Agreement.

                    16.3. Severability. In the event any provision of this
Agreement is found to be unenforceable, invalid or illegal by an arbitrator or
court of competent jurisdiction, such provision shall be deemed modified to the
extent necessary to allow enforceability of the provision as so limited, it
being intended that the parties shall receive the benefit contemplated

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herein to the fullest extent permitted by law. If a deemed modification is not
satisfactory in the judgment of such arbitrator or court, the unenforceable,
invalid or illegal provision shall be deemed deleted, and the legality, validity
and enforceability of the remaining provisions shall not be affected thereby.

                    16.4. Interpretation; Construction. The headings set forth
in this Agreement are for convenience only and shall not be used in interpreting
this Agreement.

                    16.5. Governing Law. This Agreement will be governed by and
construed in accordance with the laws of the California, without reference to
its conflicts of laws principles.

                              Any claim, controversy or dispute between
Executive and the Company (including without limitation the Company’s
affiliates, officers, employees, representatives, or agents) arising out of or
relating to the employment of Executive, the cessation of employment of
Executive, or any matter relating to the foregoing shall be submitted to and
settled by arbitration before a single arbitrator in a forum of the American
Arbitration Association (“AAA”) located in Santa Clara County in the State of
California and conducted in accordance with the National Rules for the
Resolution of Employment Disputes.

                              In such arbitration: (a) the arbitrator shall
agree to treat as confidential evidence and other information presented by the
parties, (b) the arbitrator shall have no authority to amend or modify any of
the Company’s policies, and (c) the arbitrator shall have ten business days from
the closing statements or submission of post-hearing briefs by the parties to
render their decision. Any arbitration award shall be final and binding upon the
parties, and any court having jurisdiction may enter a judgment on the award.

                              The foregoing requirement to arbitrate claims,
controversies, and disputes applies to all claims or demands by Executive,
including without limitation any rights or claims Executive may have under the
Age Discrimination in Employment Act of 1967, Section 1981, Title VII of the
Civil Rights Act of 1964, the Americans with Disabilities Act of 1991, the Equal
Pay Act, the Family and Medical Leave Act or any other federal, state or local
laws or regulations pertaining to Executive’s employment or the termination of
Executive’s employment.

                              All costs of said arbitration, including the
arbitrator’s fees, if any, shall be borne equally by the parties, unless the
arbitration decision and award provides otherwise. All legal fees incurred by
each party in connection with said arbitration shall be borne by the party who
incurs them, unless applicable statutory authority exist providing for the award
of attorneys’ fees to a prevailing party and the arbitration decision and award
provides for the award of such fees.

                    16.6. Notices. All notices, consents, waivers and other
communications under this Agreement must be in writing and will be deemed to
have been duly given when (i) delivered by hand (with written confirmation of
receipt); (ii) sent by facsimile (with written confirmation of receipt); or
(iii) when received by the addressee, if sent by a nationally recognized
overnight delivery service, return receipt requested, in each case to the
appropriate addresses and facsimile numbers set forth below or on the signature
pages hereto (or to such other address as a party may designate by notice to the
other parties):

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If to Company:

XLNT Veterinary Care, Inc.Attention: Chairman of the Board

 

560 South Winchester Blvd.

 

San Jose, California 95128

 

 

If to Executive:

Robert Wallace

 

15466 Los Gatos Blvd. #109-352

 

Los Gatos, California 95032

 

 

 

Telephone: (408) 356-9576

 

Facsimile: (408) 356 - 7417

or to such other address as either party shall have furnished to the other in
writing in accordance herewith.

                    16.7. Counterparts; Facsimile. This Agreement may be
executed in one or more counterparts, all of which when fully executed and
delivered by all parties hereto and taken together shall constitute a single
agreement, binding against each of the parties. To the maximum extent permitted
by law or by any applicable governmental authority, any document may be signed
and transmitted by facsimile with the same validity as if it were an ink-signed
document. Each signatory below represents and warrants by his or her signature
that he or she is duly authorized (on behalf of the respective entity for which
such signatory has acted) to execute and deliver this instrument and any other
document related to this transaction, thereby fully binding each such respective
entity.

                    16.8. Survival. Sections 8 (“Severance Package Upon
Termination of Employment Other than for Cause”), 10 (“Definitions”), 11
(“Notice of Termination”), 14 (“Nondisparagement”), 15 (“Injunctive Relief”), 16
(“General Provisions”) and 17 (“Entire Agreement”) of this Agreement shall
survive Executive’s employment by Company.

          17. Entire Agreement. This Agreement constitutes the entire agreement
between the parties relating to this subject matter and supersedes all prior or
simultaneous representations, discussions, negotiations, and agreements, whether
written or oral. This Agreement may be amended or modified only with the written
consent of Executive and the Company. No oral waiver, amendment or modification
will be effective under any circumstances whatsoever.

          18. Indemnification and Insurance. The Company shall indemnify
Executive in accordance with its articles or incorporation and bylaws. The
Company shall maintain an amount of director’s and officer’s liability insurance
consistent with similarly situated entities, and Executive shall at all times
during the Employment Term be covered by such policy.

[Remainder of Page Intentionally Left Blank]

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THE PARTIES TO THIS AGREEMENT HAVE READ THE FOREGOING AGREEMENT AND FULLY
UNDERSTAND EACH AND EVERY PROVISION CONTAINED HEREIN. WHEREFORE, THE PARTIES
HAVE EXECUTED THIS AGREEMENT ON THE DATES SHOWN BELOW.

 

 

 

 

 

Dated:

 

EXECUTIVE

 

 

 

 

 

 

 

 

/s/ Robert Wallace

 

 

 

 

 

Robert Wallace

 

 

 

 

Dated: 

 

XLNT VETERINARY CARE, INC.

 

 

 

 

 

 

 

 

 

 

 

By: 

/s/ Zubeen Shroff

 

 

 

 

 

 

 

Name: Zubeen Shroff

 

 

 

Title: Chairman of the Board of Directors

[Signature Page to Robert Wallace Employment Agreement]

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