EX-10.61






Exhibit 10.61




INTERCREDITOR, SUBORDINATION AND STANDBY AGREEMENT




THIS INTERCREDITOR, SUBORDINATION AND STANDBY AGREEMENT (this “Agreement”) is made as of this
     day of December, 2007, by and between RBS Citizens, National Association, a national banking
association, with a principal place of business at 875 Elm Street, Manchester, New Hampshire 03101
(“Lender”); Dover Saddlery, Inc., a Delaware corporation, Dover Saddlery, Inc. a Massachusetts
corporation, Smith Brothers, Inc., a Texas corporation, Dover Saddlery Retail, Inc., a
Massachusetts corporation, Old Dominion Enterprises, Inc., a Virginia corporation and Dover
Saddlery Direct, Inc., a Massachusetts corporation, all with an address of 525 Great Road,
Littleton, Massachusetts 01460 (hereinafter, each individually a “Borrower”, and collectively
“Borrowers”); and BCA Mezzanine Fund, L.P., a Delaware limited partnership, with a principal place
of business at One Turks Head Place, Suite 1492, Providence, Rhode Island 02903 (“Junior Lender”).



W I T N E S S E T H




WHEREAS, Borrowers have borrowed Eighteen Million Dollars ($18,000,000.00) from Lender
pursuant to a Loan and Security Agreement of near or even date (as the same may be amended,
supplemented or otherwise modified from time to time the “Loan Agreement”) and a Revolving Credit
Note of near or even date in the original principal amount of Eighteen Million Dollars
($18,000,000.00) (as the same may be amended, supplemented or otherwise modified from time to time
the “Note”), and such other and further loan documents, hedging agreements, swap contracts,
instruments and agreements executed in connection with the above Loan Agreement and Note
(hereinafter, as the same may be amended, supplemented or otherwise modified from time to time,
collectively with the Loan Agreement and the Note, referred to as the “Senior Loan Documents”); and



WHEREAS, Borrowers desire to obtain said loan and other financial accommodations from Lender;
and



WHEREAS, Lender is unwilling to provide such loans unless Junior Lender and Borrowers enter
into this Agreement with Lender; and



WHEREAS, Lender as a condition of entering into the Senior Loan Documents, has required that
all existing loans and all future loans made by Junior Lender to Borrowers, including the
collateral therefor, be subordinated to the Bank Debt (as herein defined) and the Senior Loan
Documents.



NOW, THEREFORE, Lender, Borrowers and Junior Lender hereby mutually agree as follows:



1. Definitions. In addition to the terms defined in the Senior Loan Documents and
elsewhere in this Agreement, the following terms shall have the indicated meanings:



“Bank Debt” means all amounts of every kind and description now or hereafter owing by
the Borrowers (whether joint or several) to Lender pursuant to the Senior Loan Documents and any
extensions, amendments, modifications or renewals of any of the same, and includes, without
limitation, (a) all principal and interest from time to time owing to Lender under the Senior Loan
Documents including, but not limited to, all advances, re-advances and over-advances, if any, which
may be made by Lender; (b) all amounts from time to time advanced and re-advanced by Lender to or
for the benefit of the Borrowers, in order to protect or enforce Lender’s rights under the Senior
Loan Documents; (c) all expenses of Lender including but not limited to those expenses described in
or secured by the Senior Loan Documents; and (d) all future debts and obligations of Borrowers to
Lender.



“Permitted Junior Securities” means securities, including debt or equity securities,
issued in exchange for or in connection with the Subordinated Debt in any bankruptcy or other
proceeding for the relief of debts of the Borrower, the payment of which is subordinate, at least
to the full extent and in the manner provided in this Agreement with respect to Subordinated Debt,
to the payment in full of all Bank Debt and to the payment in full of all securities issued in
exchange therefor to the Lender.



“Reimbursement Expenses” means (i) reasonable costs and expenses, including without
limitation reasonable attorneys’ fees and disbursements, of Junior Lender and its participants,
reimbursable by the Borrower under the terms of the Subordinated Documents, and (ii) filing and
recording fees, and the like incurred by Junior Lender in order to file, record, continue or
perfect security interests granted under the Subordinated Documents.



“Subordinated Debt” means all indebtedness and any other obligations evidenced by or
related to a certain Mezzanine Promissory Note, executed and delivered by Borrowers to Junior
Lender, dated December      , 2007, in the original principal amount of $5,000,000 (the “Subordinated
Note”), and any extension, modifications, or renewals of the same, and includes, without
limitation, (a) any indebtedness now or hereafter reflected by or related to any Subordinated
Documents, including any indebtedness hereafter arising between Borrowers and Junior Lender, (b)
any advances, including protective advances as contemplated by the Subordinated Documents, however
documented or evidenced, and whether or not evidenced by written instruments, now or hereafter made
to any Borrower by Junior Lender, and (c) all rights or claims Junior Lender may have or hereafter
acquire against any Borrower by way of subrogation or assignment. It is hereby intended that the
Junior Creditor will not make any advances to the Borrowers except for the Subordinated Debt, and
that the Subordinated Debt shall be strictly limited to the indebtedness evidenced by the
Subordinated Note and that there shall be no further loans or evidences of indebtedness by Junior
Lender to any Borrower without the express written consent of Lender, which consent may be withheld
in Lender’s sole discretion.



“Subordinated Documents” means the Subordinated Note, all other notes and other
evidences of indebtedness, and any security documents given as security therefore, and any
instruments, contracts or agreements now or hereafter given by Borrowers or any of them to Junior
Lender, any replacements, modifications or renewals of any of the foregoing and all other
instruments and documents relating thereto, provided, however, the Warrants issued in favor of
Junior Lender and its participants in connection with closing of the Subordinated Note, and
modifications or replacements therefor which do not involve payments of cash, reduction in amounts
due under the Subordinated Documents or granting of collateral, shall not be deemed to be part of
the Subordinated Documents.



2. Senior Loan Documents; Subordinated Documents. Junior Lender has reviewed the
Senior Loan Documents and, without limiting any other provision of this Agreement, hereby approves
of and consents to the Bank Debt and the Senior Loan Documents. Junior Lender acknowledges and
agrees that the execution, delivery and performance of the Senior Loan Documents will not
constitute an Event of Default (as defined the Subordinated Documents) or an event which, with the
giving of notice or the lapse of time, or both, would constitute an Event of Default under the
Subordinated Documents. Lender has reviewed the Subordinated Documents and, without limiting any
other provision of this Agreement, hereby approves of and consents to the Subordinated Debt and the
Subordinated Documents. Lender acknowledges and agrees that the execution, delivery and
performance of the Subordinated Documents will not constitute an Event of Default (as defined the
Senior Loan Documents) or an event which, with the giving of notice or the lapse of time, or both,
would constitute an Event of Default under the Senior Loan Documents.



3. Subordination. Junior Lender hereby subordinates to Lender all present and future
rights and interests of Junior Lender in and to the Subordinated Debt, and all present and future
rights of Junior Lender in any future Subordinated Debt (if consented to in writing by Lender in
accordance with the terms of Section 7(E)), the Subordinated Documents and all mortgages, financing
statements, security interests, purchase money security interests and other rights now held or
hereafter acquired by Junior Lender thereunder or in connection therewith to the Bank Debt and the
Senior Loan Documents and all mortgages, financing statements, security interests and other rights
and interests now held or hereafter acquired by Lender under the Senior Loan Documents or in
connection with the Bank Debt, all on the terms and conditions set forth in this Agreement, and all
to the end that the right of Lender to payment of the Bank Debt and to realize on any collateral
security provided by any Senior Loan Documents shall be deemed superior in right and prior in time
to all rights of Junior Lender under the Subordinated Documents including, but not limited to, the
right to receive payment from any guarantor of the Bank Debt. Junior Lender hereby postpones and
subordinates, to the extent and in the manner provided in this Agreement, all of the Subordinated
Debt to the payment of all of the Bank Debt. If the Borrowers or any of them, issue or have issued
any instrument or document evidencing the Subordinated Debt, each such instrument and document
shall bear a conspicuous legend that it is subordinated to the Bank Debt. Borrowers’ and Junior
Lender’s books shall be marked to evidence the subordination of all of the Subordinated Debt to
Lender. Upon the request of Lender, Junior Lender hereby agrees to provide evidence to Lender that
the notations required by this Agreement have been made. Junior Lender agrees to execute and
deliver to Lender any assignments and instruments deemed reasonably necessary to Lender to effect
collection of any and all payments which may be made at any time on account of the Subordinated
Debt which are made in violation of this Agreement. Upon execution by all parties hereto, the
parties will file appropriate UCC-3 financing statements, reflecting the terms hereof or the
subordination of any filings or financing statements.



Without limiting the generality of the foregoing, Junior Lender hereby acknowledges, covenants
and agrees (a) that the lien of the Senior Loan Documents given by Borrowers shall be and shall
continue to be, in all respects a lien prior and superior to the lien of the Subordinated Debt and
all Subordinated Documents at any given time by any Borrower to Junior Lender and (b) that Junior
Lender will execute such recordable memoranda of Lender’s rights hereunder as Lender may reasonably
request from time to time.



4. Warranties and Representations



(A) Borrowers and Junior Lender, severally, each hereby represents and warrants: (i) that it
has not relied and will not rely on any representation or information of any nature made by or
received from Lender relative to Borrowers in deciding to execute this Agreement or to permit it to
continue in effect; (ii) that a copy of the Subordinated Note evidencing the Subordinated Debt is
attached hereto as Exhibit A; (iii) that a list of all documents and instruments evidencing the
Subordinated Debt, including all security documents and guaranties, is as set forth on Exhibit B,
copies of which have been provided to Lender, and which documents and instruments have not been
amended or modified; (iv) that Junior Lender is the lawful owner of the Subordinated Debt and no
part thereof is subject to any defense, offset or counterclaim; (v) that Junior Lender has not
heretofore assigned or transferred any of the Subordinated Debt, except for participation interests
therein, or any collateral or security pertaining thereto; (vi) that there is no other collateral
securing the Subordinated Debt except as set forth on Exhibit B; (vii) Junior Lender holds no
mortgage on the real property of any Borrower other than as set forth on Exhibit B; (viii) the
current principal balance of the Subordinated Debt is $5,000,000; (ix) that it has no knowledge of
any previous default or event of default under any of the Subordinated Documents which has not been
cured or waived; and (x) that to its knowledge, there currently exists no default or event of
default of any nature under the terms and provisions of any of the Subordinated Documents, or any
combination thereof, and no condition which, with the giving of notice and/or the passage of time,
would result in such an event of default.



(B) Lender and Borrowers, severally, each hereby represents and warrants: (i) that it has not
relied and will not rely on any representation or information of any nature made by or received
from Junior Lender relative to Borrowers in deciding to execute this Agreement or to permit it to
continue in effect; (ii) that a copy of the Note evidencing the Bank Debt is attached hereto as
Exhibit C; (iii) that a list of all documents and instruments evidencing the Bank Debt, including
all security documents and guaranties, is as set forth on Exhibit D, copies of which have been
provided to Lender, and which documents and instruments have not been amended or modified; (iv)
that Lender is the lawful owner of the Bank Debt and no part thereof is subject to any defense,
offset or counterclaim; (v) that Lender has not heretofore assigned or transferred any of the Bank
Debt, any interest therein or any collateral or security pertaining thereto; (vi) that there is no
other collateral securing the Bank Debt except as set forth on Exhibit D; (vii) Lender holds no
mortgage on the real property of any Borrower other than as set forth on Exhibit D; (viii)that it
has no knowledge of any previous default or event of default under any of the Senior Loan Documents
which has not been cured or waived; and (ix) that to its knowledge, there currently exists no
default or event of default of any nature under the terms and provisions of any of the Senior Loan
Documents, or any combination thereof, and no condition which, with the giving of notice and/or the
passage of time, would result in such an event of default.



5. Negative Covenants. Except as set forth or permitted by this Agreement, and except
as the Lender may otherwise permit in writing, until all of the Bank Debt has been fully and
finally paid: (a) Borrowers shall not, directly or indirectly, make any payment on account of or
grant a security interest in, mortgage, pledge, assign or transfer any properties to secure or
satisfy all or any part of the Subordinated Debt except for the security interests, pledges and
assignments evidencing the Subordinated Debt and set forth on Exhibit B, a copy of each of which
has been provided to Lender, and each of which has not been amended, or modified, and all of which
are subordinated to the Bank Debt in accordance with the terms of this Agreement; (b) Junior Lender
shall not demand (except as permitted under Section 7(B)) or accept (except as permitted under
Section 6) from any Borrower, or any other person, any payment or collateral, nor shall Junior
Lender set off or enforce any part of the Subordinated Debt; (c) except as expressly permitted in
accordance with the terms of this Agreement, Junior Lender shall not hereafter transfer or assign
any of the Subordinated Debt without prior written notice to Lender; (d) Borrowers will not
hereafter issue any instrument, security or other writing evidencing any part of the Subordinated
Debt unless the same is subject to all of the terms of this Agreement, except upon the prior
written approval of Lender or at the request of and in the manner requested by Lender, or except to
further evidence or perfect the lien of Junior Lender permitted under this Agreement; (e) without
Lender’s prior written approval, Junior Lender will not commence or join with any other creditors
of any Borrower in commencing any bankruptcy, reorganization, receivership or insolvency proceeding
against Borrowers; and (f) neither Borrower nor Junior Lender otherwise shall take any action which
would impair or be inconsistent with Lender’s first lien position, or the perfection thereof, on
the collateral securing the Bank Debt.



6. Payment on or Performance of Subordinated Debt. Except as otherwise provided in
Section 7, Junior Lender shall be entitled to receive, and Borrowers shall be authorized to make,
regularly scheduled periodic payments on the Subordinated Debt as set forth in the Subordinated
Note as well as Reimbursement Expenses and other payments set forth herein. No prepayments of
principal or interest may be received and retained by Junior Lender absent the written consent of
Lender, which consent may be withheld in Lender’s sole discretion.



7. Blockage Periods; Other Agreements.



(A) Default Under Senior Loan Documents. If, from time to time, an Event of Default
(as defined in the Senior Loan Documents) has occurred and is continuing, or an event which but for
the passage of time, the giving of notice, or both would constitute an Event of Default pursuant to
the Loan Agreement or Note has occurred (collectively a “Default”), and after written notice of
such Default from Lender to Junior Lender (which notice shall be given contemporaneously with any
such notice given to Borrowers), Borrowers shall not make any payment to Junior Lender related to
the Subordinated Debt or the Subordinated Documents for a period commencing on the day on which
such payment to Junior Lender would have been due and payable until the earliest to occur of (i)
the cure of the aforementioned Default to the reasonable satisfaction of Lender or such Default is
otherwise waived in writing by Lender; (ii) acceleration by Lender of the Bank Debt under the
Senior Loan Documents; (iii) one hundred eighty (180) days from the Junior Lender’s receipt from
Lender of notice of a Default; or (iv) the payment in full of the Bank Debt (collectively “Blockage
Period”). There shall be no restrictions on the number or frequency of Blockage Periods which may
be in effect from time to time during the term of this Agreement; provided further, however, that
if the Blockage Period has expired as a result of (i) above and there is no subsequent Default for
which Junior Lender has received notice, Junior Lender may then once again accept, keep and retain
payments due to it pursuant to the Subordinated Debt unless and until the Lender provides to Junior
Lender, a written notice of a subsequent and unrelated payment Default and the institution by
Lender upon Junior Lender of a Blockage Period. Lender hereby agrees that it shall provide to
Junior Lender prompt written notice of the Lender’s determination that Borrowers have cured an
Default which caused the institution by Lender of a Blockage Period, and such written notice shall
terminate such Blockage Period.



(B) Default Under and Acceleration of Subordinated Debt. If an Event of Default (as
such term is defined in the Subordinated Documents), whether as a result of the payment blockages
described in Section 7(A) above or otherwise (a “Subordinated Debt Default”), occurs and continues
without cure, Junior Lender must furnish Lender written notice of such Subordinated Debt Default in
accordance with the terms of this Agreement. Additionally, Junior Lender must furnish written
notice to Lender of any intent to accelerate the Subordinated Debt and enforce Junior Lender’s
rights and remedies under the Subordinated Documents (“Acceleration and Enforcement Notice”);
provided, however, that Junior Lender shall forbear from exercising any such rights or remedies for
a period of not less than forty five (45) days from the date of receipt of the Acceleration and
Enforcement Notice by Lender. Upon receipt of the Acceleration and Enforcement Notice from Junior
Lender, Lender, by written notice of its own to Junior Lender (“Enforcement Postponement Notice”),
may, at its option, postpone such enforcement and acceleration for a period commencing on the date
of Lender’s receipt of such Enforcement Postponement Notice from Lender to Junior Lender and ending
on the earliest to occur of (i) one hundred seventy-nine (179) days after the date of the
Acceleration and Enforcement Notice, (ii) the commencement by Lender of any action or proceeding
against Borrowers, whether to reduce the claims of Lender to judgment or to enforce the terms of
the Senior Loan Documents, or any act by Lender to obtain possession of, or to exercise control
over, any of Borrowers’ collateral, and (iii) any act by Borrowers or any third party described in
Section 9, clauses (a), (b), (c), or (d) (relating to bankruptcy, insolvency and similar
proceedings). 



(C) Amendment of Subordinated Documents. Junior Lender agrees not to amend, modify or
revise the Subordinated Documents without the express written consent of the Lender, which consent
shall not be unreasonably withheld or delayed; provided, however, the Lender’s consent shall not be
deemed unreasonably withheld if the Lender refuses to consent to any change or amendment to the
terms of the Subordinated Debt if such change or amendment would have the effect of increasing the
principal amount due on the Subordinated Debt, increasing the rate of or changing the due dates of
payment of interest payable with respect to any liability of Borrowers under the Subordinated Debt,
or the amount of any fees payable under the Subordinated Debt (other than ordinary or customary
fees in connection with giving effect to amendments and waivers otherwise permitted by this
Agreement), shorten the maturity of or require the earlier payment of the Subordinated Debt, impose
any additional prepayment obligations on Borrowers with respect to the Subordinated Debt or adding
any Event of Default with respect to the Subordinated Debt.



(D) Junior Lender Exercise of Remedies. In the event that Junior Lender becomes
entitled to pursue its remedies set forth in clauses A and B of Section 7 hereof to collect upon
the Subordinated Debt or to otherwise enforce its rights and remedies under the Subordinated
Documents, Junior Lender agrees that it will not change, disturb or interfere with (a) the
management team of Borrowers, and (b) the enforcement by Lender of its rights and remedies under
the Senior Loan Documents or hereunder; provided, however, Junior Lender shall continue to have the
protections afforded the holder of a subordinate security interest by the Uniform Commercial Code.
Junior Lender further agrees that it will continue to adhere to and abide by the terms and
conditions of this Agreement.



(E) Limitations on Junior Lender Loans. Junior Lender understands and agrees that,
other than the Subordinated Note, the Subordinated Documents identified on Exhibit B, and Permitted
Junior Securities (if applicable), and notwithstanding anything to the contrary in this Agreement,
they shall make no additional loans to any Borrower nor accept additional collateral from any
Borrower, and each Borrower understands and agrees that they shall not incur additional debt or
pledge additional collateral (except Permitted Junior Securities, if applicable), without the prior
written consent of Lender, which consent may be withheld in Lender’s sole discretion.



(F) Notice of Default. Lender and Junior Lender shall notify each other of any and
all defaults and Events of Default under the Senior Loan Documents and the Subordinated Documents,
as the case may be. Additionally, Lender and Junior Lender shall provide each other with copies of
all written notices of default and Events of Default sent to any Borrower.



(G) Limitations on Lender Loans. Lender understands and agrees that, other than the
Senior Note, and the Bank Debt Documents identified on Exhibit D, and notwithstanding anything to
the contrary in this Agreement, they shall make no additional loans in excess of Five Million
Dollars ($5,000,000.00) to any Borrower, and each Borrower understands and agrees that they shall
not incur additional debt, above said Five Million Dollars ($5,000,000.00) to Lender without the
prior written consent of Junior Lender, which consent may be withheld in Junior Lender’s sole
discretion.



(H) Payments in Securities. Subject to the terms and conditions of this Agreement,
Junior Lender may accept payment of the Subordinated Debt that is exclusively in the form of
capital stock of Borrower.



8. Receipts in Contravention of this Subordination Agreement. If, prior to the
termination of this Agreement, Junior Lender shall receive payment from any Borrowers, or security
not permitted by this Agreement, Junior Lender shall forthwith deliver and assign such payment or
security to Lender in precisely the form received (except for Junior Lender’s endorsement when
necessary), for application on account of Bank Debt, and until so delivered, such payment or
security shall be held in trust by Junior Lender as the property of Lender. In the event of the
failure of Junior Lender to endorse any instrument for the payment of money so received, Lender is
hereby appointed attorney-in-fact for Junior Lender (said appointment being coupled with Lender’s
interests in the Subordinated Debt, the Subordinated Documents, and the Subordinated Debt), with
full power to make such endorsement and with full power of substitution.



9. Distributions. In the event (a) any case is commenced by or against Borrowers or
any of them under the United States Bankruptcy Code; (b) any insolvency, bankruptcy, receivership,
liquidation, reorganization, arrangement or similar proceeding is commenced by or against Borrowers
or any of them or their respective property; (c) any liquidation or dissolution or winding-up the
affairs of Borrowers or any of them shall commence or occur; or (d) an assignment for the benefit
of creditors shall be made by Borrowers, all Bank Debt (including interest accruing after the
commencement thereof) then outstanding shall first be paid in full, or such payment be provided for
in a manner acceptable to Lender, before any payment shall be made to Junior Lender on account of
Subordinated Debt except for Permitted Junior Securities, which shall be pledged to the Lender as
additional collateral for the Bank Debt, and any payment which would have been made on Subordinated
Debt but for this Agreement shall be paid or delivered directly to Lender for application to the
Bank Debt. Notwithstanding the foregoing, however, and subject to the terms and conditions of this
Agreement, Junior Lender shall be entitled to file a proof of claim, and take all other steps as
are reasonably necessary to enforce its claim in Bankruptcy Court and Lender agrees to permit
Junior Lender to exercise such limited right for such limited purpose; provided, however, Junior
Lender shall not without the prior written consent of the Lender: (i) assent to any disclosure
statement objected to by Lender, (ii) vote in favor of any plan objected to by Lender, (iii) object
to any application by Lender for relief from the automatic stay, (iv) object to approval of
post-petition financing secured by collateral senior in lien to that held by Junior Lender, or
adequate protection; and/or (v) assent to the use of cash collateral, if objected to by Lender.



10. Right to Deal with Bank Debt. Subject to the provisions contained in this
Agreement, Junior Lender hereby covenants and agrees that Lender has full power and authority,
without the consent of or notice to Junior Lender, and without affecting Lender’s rights under this
Agreement, to deal in any manner with the Bank Debt, the Senior Loan Documents and any collateral
given as collateral security for the Bank Debt including, but without limiting the generality of
the foregoing, the following powers:



(A) to modify, supplement or otherwise change any terms of the Bank Debt and the Senior Loan
Documents, to grant any extension or renewal of the Bank Debt and the Senior Loan Documents and to
effect any release, compromise or settlement with respect to the Bank Debt or the Senior Loan
Documents.



(B) to waive or enter into any agreement or forbearance with respect to all or any part of the
Bank Debt or the Senior Loan Documents or with respect to all or any part of any other security for
the Senior Loan Documents at any time held by Lender and to change the terms of any such waiver or
agreement of forbearance.



(C) except as hereinafter provided, to consent to the substitution, exchange or release of all
or any part of any collateral security at any time held by Lender and, in case of a substitution or
exchange, whether or not the new security received by Lender shall be of the same or of a different
character or value from the security surrendered.



(D) the right to exercise any rights or remedies pursuant to the Senior Loan Documents,
including, without limitation the sale of any collateral pledged as security or granted to Lender
pursuant to the Senior Loan Documents.



11. Notice to Junior Lender and Opportunity to Cure. Lender agrees to promptly notify
Junior Lender in writing if there is a default under the Senior Loan Documents and Lender agrees
not to take any further action (a) to enforce the Senior Loan Documents; (b) to accelerate the Bank
Debt; and/or (c) commence foreclosure proceedings as to said Senior Loan Documents during the cure
period granted to Junior Lender as set forth in this Section 11. Such notification to Junior
Lender shall be sufficient for purposes hereof if written notice is given in compliance with
Section 17 of this Agreement. Junior Lender shall have the right to satisfy and/or cure any
default under the Senior Loan Documents within twenty (20) days after date of the written notice or
notices as set forth herein in the event that the default is of a nature which may be cured by the
payment of money. In the event that the default is one which may not be cured by the payment of
money, Junior Lender shall be deemed to have satisfied and/or cured such default if, within twenty
(20) days after date of the written notice or notices as set forth herein, Junior Lender has
undertaken reasonable steps to cure said default and thereafter diligently continues its efforts to
cure such default until such curing of the said default has been completed which shall, in any
event, be within forty-five (45) days from the date of the written notice from Lender, or such
additional period as Lender may agree to in writing.



12. Change of Control. Notwithstanding anything to the contrary contained in this
Agreement, in the event of a Change of Control (as defined in the Senior Loan Documents), both the
Lender and Junior Lender shall have all of the rights and remedies afforded to them by the Senior
Loan Documents and Subordinated Documents; provided, however, all Bank Debt then outstanding shall
first be paid in full, or such payment be provided for in a manner acceptable to Lender, before any
payment shall be made to Junior Lender on account of Subordinated Debt except in the form of
capital stock.



13. Waiver. No waiver shall be deemed to have been made by either Lender or Junior
Lender of any of their respective rights hereunder unless such waiver is in writing, signed by
Lender or Junior Lender, as the case may be, and then only with respect to the specific instance
involved. This Agreement may only be amended by a writing signed by Lender and Junior Lender,
unless such amendment affects Borrowers in a materially adverse manner, in which case Borrowers’
written consent shall also be required. All agreements contained herein are intended to benefit
Lender and Junior Lender, and their respective successors and assigns.



14. Termination. This Agreement shall only be terminated after all Bank Debt has been
paid in full and the Senior Loan Documents have been terminated.



15. Binding Effect; Benefits of Agreement. This Agreement shall be binding upon all
the parties hereto, their respective successors and permitted assigns. Junior Lender agrees that
it will not assign, convey or otherwise transfer any interest in the Subordinated Debt or any
Subordinated Loan Document to any Borrower. Junior Lender agrees that it will not assign, convey
or otherwise transfer any interest in the Subordinated Debt or any Subordinated Loan Document to
any other person or entity without the prior written consent of the Lender which shall consent
shall not be unreasonably withheld, conditioned or delayed and provided the proposed transferee or
assignee assumes and is bound by the terms and conditions of this Agreement. Lender hereby
specifically consents to the collateral assignment and pledge of the Subordinated Debt and all
documentation evidencing such indebtedness to Junior Lender and Junior Lender hereby agrees to be
bound by and comply with the terms and conditions of this Agreement applicable to Junior Lender.
Nothing herein shall be intended to create rights or benefits exercisable by or in favor of any
person not a party hereto, or their respective successors and assigns. The Lender hereby
acknowledges that the Junior Lender will be participating the loan evidence by the Subordinated
Note with Cephas Capital Partners, L.P. and SEED Ventures Finance, LLC, as participants.



Subject to the subordination provisions of this Agreement, nothing contained in this Agreement
is intended to or shall impair, as between Borrowers and Junior Lender, the obligations of
Borrowers, which are absolute and unconditional, to pay to Junior Lender all obligations under the
Subordinated Documents as and when the same shall become due and payable in accordance with their
respective terms, or is intended to or shall affect the relative rights of the creditors of
Borrowers other than the Lender and Junior Lender. Borrowers are not intended to be a third party
beneficiary of any term or provision of this Agreement.



16. Governing Law. This Agreement shall be deemed to have been delivered and accepted
by Lender in the State of New Hampshire, and is governed exclusively by the internal substantive
laws of the State of New Hampshire as the same may exist at the date hereof. The parties hereto
hereby agree that any action hereon between the parties hereto and their successors in interest
shall be maintained in a court of competent jurisdiction located within the State of New Hampshire,
and consent to the jurisdiction of any such New Hampshire court for all purposes connected
herewith.



17. Notices. Receipt of all notices hereunder shall be deemed to be received by a
party hereto upon the earlier to occur of (i) the third (3rd) day following the mailing
of such notice when mailed, certified mail, return receipt requested, to such party at the address
set forth opposite such party’s name below or at such other address as such party shall have
designated for such purposes in writing; or (ii) actual delivery thereof to the addresses so
provided.



	 	 	 	 	 
	Lender:
	 	Jeffrey C. Hickok, Vice President
	 
	 	RBS Citizens, National Association
	 
	 	875 Elm Street
	 
	 	Manchester, New Hampshire 03101
	With a copy to:
	 	Kenneth A. Viscarello, Esquire
	 
	 	Sheehan Phinney Bass + Green, P.A.
	 
	 	1000 Elm Street
	 
	 	Manchester, NH 03101
	Borrowers:
	 	Dover Saddlery, Inc.
	 
	 	Smith Brothers, Inc.
	 
	 	Dover Saddlery Retail, Inc.
	 
	 	Old Dominion Enterprises, Inc.
	 
	 	Dover Saddlery Direct, Inc.
	 
	 	525 Great Road
	 
	 	Littleton, Massachusetts 01460
	With a copy to:
	 	John M. Sullivan, Esq.
	 
	 	Preti Flaherty PLLP
	 
	 	P.O. Box 1318
	 
	 	Concord, NH 03302-1318
	Junior Lender:
	 	BCA Mezzanine Fund, L.P.
	 
	 	One Turks Head Place, Suite 1492
	 
	 	Providence, Rhode Island 02903
	 
	 	Attention:  Gregory Mulligan
	With a copy to:
	 	Tobias Lederberg, Esq.
	 
	 	Hinckley Allen & Snyder LLP
	 
	 	50 Kennedy Plaza, Suite 1500
	 
	 	Providence, Rhode Island  02903






18. Limited Agency. Lender agrees to act as collateral agent for Junior Lender for
the limited purposes as follows: Upon the liquidation of any of its collateral, Lender shall hold
the cash proceeds resulting therefrom for the benefit of Lender and Junior Lender, solely and for
the limited purpose of allowing Junior Lender to maintain a security interest in such cash
proceeds. Lender shall, upon indefeasible payment in full of the Bank Debt, deliver to Junior
Lender any remaining cash proceeds then in Lender’s possession.



19. Counterparts. This Agreement may be executed in any number of counterparts and
each such counterpart shall be deemed to be one document. Delivery of an executed counterpart of
this Agreement by facsimile shall be equally effective as delivery of an original executed
counterpart of this Agreement. Any party delivery an executed counterpart of this Agreement by
facsimile also shall deliver an original executed counterpart of this Agreement, but the failure to
deliver an original executed counterpart shall not affect the validity, enforceability and binding
effect of this Agreement.



20 Conflict with Other Documents. In the event of any conflict between the terms of
this Agreement, on the one hand, and the terms of the Senior Loan Documents or Subordinated Loan
Documents, on the other hand, the terms of this Agreement shall control. Lender acknowledges that
the Subordinated Loan Documents constitute Permitted Indebtedness and Liens under the Senior Loan
Documents, any language contained in the Senior Loan Documents to the contrary notwithstanding.



IN WITNESS WHEREOF, the parties have signed this Agreement as of the date first above written.



[PAGE ENDS HERE-SIGNATURE PAGES TO FOLLOW]






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LENDER:



RBS CITIZENS, NATIONAL ASSOCIATION



	 	 	 
	     

Witness

	 	By:      

Name: Jeffrey C. Hickok

Title: Vice President
	
 
	 	BORROWERS:
	
 
	 	DOVER SADDLERY, INC.

(a Delaware corporation)
	     

Witness

	 	By:      

Name:
	Title:

	 	

	
 
	 	DOVER SADDLERY, INC.

(a Massachusetts corporation)
	     

Witness

	 	By:      

Name:
	Title:

	 	

	
 
	 	SMITH BROTHERS, INC.
	     

Witness

	 	By:      

Name:
	Title:

	 	

	
 
	 	DOVER SADDLERY RETAIL, INC.
	     

Witness

	 	By:      

Name:
	Title:

	 	

	
 
	 	OLD DOMINION ENTERPRISES, INC.
	     

Witness

	 	By:      

Name:
	Title:

	 	

	
 
	 	DOVER SADDLERY DIRECT, INC.
	     

Witness

	 	By:      

Name:
	Title:

	 	

	
 
	 	JUNIOR LENDER:
	
 
	 	BCA MEZZANINE FUND, L.P.
	     

Witness

	 	By:      

Name:
	
 
	 	Title:






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EXHIBIT A




Subordinated Note






3






EXHIBIT B




Subordinated Debt Documents





4






EXHIBIT C




Senior Note





5






EXHIBIT D




Bank Debt Documents





	 	•	 	Loan and Security Agreement






	 	•	 	Revolving Credit Note






	 	•	 	RSA 399-B Financial Disclosure Statement






	 	•	 	UCC-1 Financing Statements
-Dover Saddlery, Inc.(DE)Delaware Secretary of State
-Dover Saddlery, Inc.(MA)Massachusetts Secretary of State
-Smith Brothers, Inc.Texas Secrtary of State
-Dover Saddlery Retail, Inc.Massachusetts Secretary of State
-Old Dominion Enterprises, Inc.Virginia Secretary of State
-Dover Saddlery Direct, Inc.Massachusetts Secretary of State






	 	•	 	Various Collateral Assignments of Leaseholds Rights from various Borrowers






	 	•	 	Various Landlord’s Consents and Waivers






	 	•	 	Assignment of Life Insurance (Steve Day)






	 	•	 	Commitment Letter dated November 7, 2007







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