Exhibit 10.39

 

Echo Healthcare Acquisition Corp.

8000 Towers Crescent Drive, Suite 1300

Vienna, Virginia 22182

 

 

Re:

Lock-Up Agreement

Ladies and Gentlemen:

The undersigned party (referred to herein as the “Undersigned”) is delivering
this letter agreement (this “Lock-Up Agreement”) to you in connection with and
as a condition to the closing under the Agreement and Plan of Merger, dated as
of September 11 2006, as amended (the “Merger Agreement”), by and among Echo
Healthcare Acquisition Corp., a Delaware corporation (“Parent”), Pet DRx
Acquisition Corp., a Delaware corporation (“Merger Sub”) and XLNT Veterinary
Care, Inc., a Delaware corporation (the “Company”), whereby Merger Sub will
merge with and into the Company (the “Merger”). Capitalized terms used but not
otherwise defined herein shall have the meanings assigned to such terms in the
Merger Agreement.

The Undersigned currently holds unregistered shares of common stock of Parent,
par value $.0001 per share (the “Parent Common Stock”), as well as warrants to
purchase unregistered shares of Parent Common Stock (“Founding Director
Warrants”). The undersigned’s shares of Parent Common Stock, Founding Director
Warrants and shares of Parent Common Stock issuable upon the exercise thereof
are entitled to registration rights pursuant to the terms and conditions of that
certain Registration Rights Agreement, dated March 22, 2006 among Parent and the
founding stockholders party thereto. As a condition to the consummation of the
Merger, Parent and the Company have required that the Undersigned enter into
this Lock-Up Agreement with Parent by which the Undersigned agrees that, unless
otherwise permitted by this Lock-Up Agreement, the Undersigned will not transfer
its shares of Parent Common Stock, the Founding Director Warrants or the shares
of Parrent Common Stock issuable upon the exercise thereof, for a specified
period following the date of the consummation of the Merger (the “Closing
Date”).

In consideration of the foregoing and for other due and adequate consideration,
the sufficiency of which is hereby acknowledged, to induce Parent to consummate
the Merger, the Undersigned hereby:

(a)        agrees that the Undersigned will not, directly or indirectly, during
the Lock-Up Period, (i) offer, sell, contract to sell, grant any option for the
purchase of, pledge, assign, lend or otherwise transfer or dispose of any Parent
Common Stock, Founding Director Warrants or shares of Parent Common Stock
issuable upon the exercise thereof (the “Restricted Securities”), or (ii) enter
into any swap or other arrangement that transfers to another, in whole or in
part, any of the economic characteristics of ownership of the Restricted
Securities, whether any such transaction described in clauses (i) or (ii) above
is to be settled by delivery of Restricted Securities, in cash or otherwise;

(b)       authorizes the Parent during the Lock-Up Period to cause the Parent’s
transfer agent to place a legend on any certificates representing the Restricted
Securities and to decline to transfer and to note stop transfer restrictions on
the transfer books and records of Parent with respect to those Restricted
Securities, unless the transfer is permitted by this Lock-Up Agreement.

For purposes of this Lock-Up Agreement, “Lock-Up Period” shall mean the date
commencing on the Closing Date (inclusive of such date) and ending on the date
that is 180 days immediately following the Closing Date; provided, that if
Parent conducts an underwritten public offering of Parent Common Stock following
the Closing Date in which the Undersigned elects to participate and the
underwriter thereof consents to the Undersigned’s participation in such
offering, then the Lock-Up Period shall terminate on the date that the
registration statement filed with respect thereto is declared effective by the
Securities and Exchange Commission.

This Lock-Up Agreement shall terminate and be of no further force or effect in
the event of a “Change of Control.” For purposes of this Agreement, “Change of
Control” shall mean (i) the sale of all, or substantially all, of the Parent’s
assets in any single transaction or series of related transactions; (ii) the
acquisition by any one person, single entity or group within the meaning of
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, of Parent’s
common stock possessing a majority of the ordinary voting power to elect
directors of Parent; (iii)  any merger or consolidation of Parent with or into
another corporation (regardless of which entity is the surviving

 

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corporation) if, after giving effect to such merger or consolidation the holders
of Parent’s voting securities immediately prior to the merger or consolidation
own voting securities of the surviving or resulting corporation representing
less than a majority of the ordinary voting power to elect directors of the
surviving or resulting corporation; or (iv)  a liquidation or dissolution of
Parent.

Notwithstanding anything to the contrary contained herein, the Undersigned may
transfer all or part of the Restricted Securities (i) in case of death, by way
of either testamentary provisions or mandatory provisions of law, (ii) as a bona
fide gift or gifts, provided that the donee or donees thereof agree to be bound
in writing by the restrictions set forth herein, and (iii) to any immediate
family member or any trust, family limited partnership or similar entity
primarily for the direct or indirect benefit of the Undersigned and/or the
immediate family members of the Undersigned, provided, that the immediate family
member, trustee of the trust, family limited partnership or other transferee
entity agrees to be bound in writing by the restrictions set forth herein; and
provided, further, that any such transfer shall not involve a disposition for
value. For purposes of this Lock-Up Agreement, “immediate family” shall mean any
relationship by blood, marriage or adoption, not more remote than first cousin
(including, without limitation, lineal descendants, stepchildren, father,
mother, brother or sister of the Undersigned or the Undersigned’s spouse). In
addition to the foregoing limitations, in the event that the Undersigned is an
entity rather than an individual, this Lock-Up Agreement will not prevent any
transfer of any or all of the Restricted Securities to the stockholders of such
entity, if it is a corporation, to the members of such entity, if it is a
limited liability company or to the partners of such entity, if it is a
partnership; provided, however, that in each such case, it shall be a condition
to the transfer that such transferee agrees to be bound in writing by the
restrictions set forth herein.

The Undersigned represents and warrants that the Undersigned has full power and
authority to enter into the agreements set forth in this Lock-Up Agreement, and
that, upon request, the Undersigned will execute any additional documents
reasonably necessary in connection with its enforcement. The Undersigned
understands that the obligations set forth in this Lock-Up Agreement are
irrevocable on the part of the Undersigned and shall survive the Undersigned’s
death or incapacity. Any obligations created by this Lock-Up Agreement shall be
binding upon the heirs, devisees, personal representatives, successors and
assigns of the Undersigned.

Any of the Restricted Securities subject to this Lock-Up Agreement may be
released in whole or in part from the terms hereof upon the approval of the
board of directors of Parent.

This Lock-Up Agreement shall be governed by and interpreted and construed in
accordance with the laws of the State of New York applicable to contracts formed
and to be performed entirely within the State of New York, without regard to the
conflicts of law provisions thereof to the extent such principles or rules would
require or permit the application of the laws of another jurisdiction.

No term or provision of this Lock-Up Agreement may be amended, changed, waived,
altered or modified except by written instrument executed and delivered by the
party against whom such amendment, change waiver, alteration or modification is
to be enforced.

 

[Signature Page Follows.}

 

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Very truly yours,

 

                                                                                                  
Signature

 

                                                                                                  
Printed Name

 

ADDITIONAL SIGNATURE:

 

                                                                                                  
(If held jointly)

 

                                                                                                  
Printed Name

Dated:                                               

 

 

 

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