exv10w1



 





Exhibit 10.1




VICAR OPERATING, INC.



SECOND AMENDMENT TO



CREDIT AND GUARANTY AGREEMENT




     This SECOND AMENDMENT, dated as of June 1, 2007 (this “Second Amendment”) is entered into by
and among VICAR OPERATING, INC., a Delaware corporation (“Company”), VCA ANTECH, INC., a Delaware
corporation (formerly known as Veterinary Centers of America, Inc., “Holdings”), CERTAIN
SUBSIDIARIES OF COMPANY, as Guarantors (the “Guarantors”), the Lenders party hereto, GOLDMAN SACHS
CREDIT PARTNERS L.P. (“GSCP”), as Joint Lead Arranger, Joint Bookrunner and as Sole Syndication
Agent (in such capacity, “Syndication Agent”) and WELLS FARGO BANK, N.A. (“Wells Fargo”), as Joint
Lead Arranger, Joint Bookrunner, Administrative Agent (together with its permitted successors in
such capacity, “Administrative Agent”) and as Collateral Agent (together with its permitted
successor in such capacity, “Collateral Agent”) and is made with respect to that certain Credit and
Guaranty Agreement, dated as of May 16, 2005 and amended pursuant to that First
Amendment thereto dated as of February 17, 2006, (the “Credit Agreement”) by and among
Company, Holdings, the Guarantors, the Lenders party thereto from time to time, GSCP, as Joint Lead
Arranger, Joint Bookrunner and as Sole Syndication Agent, and Wells Fargo, as Joint Lead Arranger,
Administrative Agent and as Collateral Agent and Union Bank of California, N.A., as Documentation
Agent. Capitalized terms used herein not otherwise defined herein or otherwise amended hereby
shall have the meanings ascribed thereto in the Credit Agreement.



RECITALS:




     WHEREAS, the Company proposes incurring indebtedness in an aggregate principal amount of not
more than $160,000,000 to facilitate the acquisition of AHP Holding Company, Inc., the parent
corporation of Healthy Pet Corp. (the “AHP Acquisition”);



     WHEREAS, the Credit Parties have requested that Requisite Lenders agree to amend certain
provisions of the Credit Agreement as provided for herein; and



     WHEREAS, subject to certain conditions, Requisite Lenders are willing to agree to such
amendment relating to the Credit Agreement.



     NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants
herein contained, the parties hereto agree as follows:



SECTION I. AMENDMENTS TO CREDIT AGREEMENT




          A. Amendments to Section 1: Changes to Existing Definitions.




          (a) Section 1.1 of the Credit Agreement is hereby amended by deleting the definition of
“Closing Date Term Loan” in its entirety and substituting therefor the following:




 









 









     ““Closing Date Term Loan” means a Term Loan made by a Lender to Company pursuant to
Section 2.1(a)(i)(y).”



          (b) Section 1.1 of the Credit Agreement is hereby amended by deleting the definition of
“Consolidated Capital Expenditures” in its entirety and substituting therefor the following:





     ““Consolidated Capital Expenditures” means, for any period, the aggregate of the
expenditures of Company and its Subsidiaries during such period determined on a consolidated
basis that, in accordance with GAAP, are or should be included in “purchase of property and
equipment” or similar items reflected in the consolidated statement of cash flows of Company
and its Subsidiaries excluding, (i) any acquisition of assets that constitutes a Permitted
Acquisition and (ii) for purposes of Section 6.8(e) only, any expenditures made by Company
pursuant to Sections 2.13(a) and 2.13(b) hereof; provided, however, that
notwithstanding any of the foregoing to the contrary, Consolidated Capital Expenditures
shall include expenditures of Company and its Subsidiaries with respect to assets
constituting a fee interest in real property acquired by Company or its Subsidiaries other
than in connection with a Permitted Acquisition.”



          (c) Section 1.1 of the Credit Agreement is hereby amended by deleting the definition of
“Permitted Acquisition” in its entirety and substituting therefor the following:





     ““Permitted Acquisition” means any acquisition by Company or any of its Subsidiaries,
whether by purchase, merger or otherwise, of (y) all or substantially all of the assets of,
or 51% or more of the Capital Stock of, or a business line or unit or a division of, any
Person or (z) any additional portion, or all, of the Capital Stock of any Permitted
Partially-Owned Subsidiary; provided,




	 	(i)	 	     immediately prior to, and after giving effect thereto, no
Default or Event of Default shall have occurred and be continuing or would
result therefrom;
	 
	 	(ii)	 	     immediately after giving affect to any such Permitted
Acquisition, at least $25,000,000 in cash or undrawn Revolving Commitments
shall remain available;
	 
	 	(iii)	 	     all transactions in connection therewith shall be consummated,
in all material respects, in accordance with all applicable laws and in
conformity with all applicable Governmental Authorizations;
	 
	 	(iv)	 	     in the case of the acquisition of Capital Stock, (i) at least
51% of the Capital Stock (except for any such Securities in the nature of
directors’ qualifying shares required pursuant to applicable law) acquired or
otherwise issued by such Person or any newly formed Subsidiary of Company in
connection with such acquisition shall be owned by Company or a Guarantor
Subsidiary thereof, (ii) in the case of acquisitions where Company owns more
than 51% but less than 100% of such Subsidiary, Company shall designate such
Subsidiary as a Permitted Partially-Owned




2









 






	 	 	 	Subsidiary, and (iii) except in the case of a Permitted Partially-Owned
Subsidiary, Company shall have taken, or caused to be taken, as of the date
such Person becomes a Subsidiary of Company, each of the actions set forth
in Sections 5.10 and/or 5.11, as applicable;
	 
	 	(v)	 	     Any Person or assets so acquired shall be located exclusively
in the United States or Canada;
	 
	 	(vi)	 	     Holdings and its Subsidiaries shall be in compliance with the
financial covenants set forth in Section 6.8 on a pro forma basis after giving
effect to such acquisition as of the last day of the Fiscal Quarter most
recently ended (as determined in accordance with Section 6.8(f));
provided, however, that with respect to the financial covenants
set forth in Section 6.8(c), Holdings and its Subsidiaries shall be in pro
forma compliance with the Leverage Ratio at a level 0.25x lower than those
levels otherwise set forth therein;
	 
	 	(vii)	 	     Company shall have delivered to Administrative Agent (A) at
least five Business Days prior to such proposed acquisition, a Compliance
Certificate evidencing compliance with Section 6.8 as required under clause
(vi) above, together with all relevant financial information with respect to
such acquired assets, including, without limitation, the aggregate
consideration for such acquisition and any other information required to
demonstrate compliance with Section 6.8; provided, however,
that Company shall not be required to comply with the provisions of this clause
(vii) with respect to acquisitions unless the consideration of such acquisition
is greater than $30,000,000;
	 
	 	(viii)	 	     any Person or assets or division as acquired in accordance herewith shall be
in a business or lines of business the same as, related, complementary or
ancillary to, the business or lines of business in which Company and/or its
Subsidiaries are engaged as of the Closing Date; and
	 
	 	(ix)	 	     notwithstanding any of the foregoing to the contrary,
“Permitted Acquisition” shall include any acquisition of any assets
constituting a fee interest in real property in connection with such Permitted
Acquisition; provided that an acquisition of a fee interest in real
property “in connection with” a Permitted Acquisition shall include a fee
interest in real property acquired subsequent to the closing date of such
Permitted Acquisition so long as the Company or its Subsidiary is obligated as
of the closing date of such Permitted Acquisition to purchase the fee interest
on a date certain within one year of the closing date of such Permitted
Acquisition.”




3









 











          (d) Section 1.1 of the Credit Agreement is hereby amended by deleting the definition of
“Permitted Partially-Owned Subsidiary” in its entirety and substituting therefor the following:





     ““Permitted Partially-Owned Subsidiary” means (a) those Subsidiaries of Company listed
on Schedule 1.2 existing on the Closing Date, and (b) those Subsidiaries of Company acquired
or created after the Closing Date, including laboratories and other associated veterinary
businesses, and designated by Company as a Permitted Partially-Owned Subsidiary by written
notice to the Administrative Agent, provided, that, with respect to Permitted
Partially-Owned Subsidiaries acquired or created after the Closing Date, (i) Company owns at
least 51% of the outstanding Capital Stock of such Subsidiary, (ii) if the Permitted
Partially-Owned Subsidiary is an animal hospital, the remaining Capital Stock of such
Subsidiary is owned directly or indirectly, by one or more licensed veterinarians who are
actively involved in the business of such Subsidiary, (iii) Company shall use its
commercially reasonable efforts to cause such Subsidiary to become a Guarantor Subsidiary,
(iv) if Company fails to obtain a Guaranty from such Subsidiary, then such Subsidiary shall
not own and lease any Material Real Estate Assets, and (v) Company shall use commercially
reasonable efforts to cause the owner of the remaining Capital Stock of such Subsidiary to
pledge his or her Capital Stock in such Permitted Partially-Owned Subsidiary in favor of the
Collateral Agent for the benefit of the Secured Parties; provided, further,
that at no time shall the total portion of Consolidated Adjusted EBITDA contributed by all
Subsidiaries constituting Permitted Partially-Owned Subsidiaries exceed 20% of Consolidated
Adjusted EBITDA.”



          (e) Section 1.1 of the Credit Agreement is hereby amended by deleting the definition of “Term
Loan” in its entirety and substituting therefor the following:





     ““Term Loan” means a Closing Date Term Loan, a Delayed Draw Term Loan, a New Term Loan
or a Second Amendment Effective Date Term Loan.”



          (f) Section 1.1 of the Credit Agreement is hereby amended by deleting the definition of “Term
Loan Commitment” in its entirety and substituting therefor the following:





     ““Term Loan Commitment” means the Closing Date Term Loan Commitments, the Second
Amendment Effective Date Term Loan Commitments and the DDTL Commitments.”



          (g) Section 1.1 of the Credit Agreement is hereby amended by deleting the definition of “Term
Loan Note” in its entirety and substituting therefor the following:





     ““Term Loan Note” means a promissory note substantially in the form of Exhibit B-1, as
it may be amended, supplemented or otherwise modified from time to time.”




	 	B.	 	Amendments to Section 1: New Definitions.




4









 











          (a) Section 1.1 of the Credit Agreement is hereby amended by adding the following new
definition in the appropriate alphabetical order:





     ““Second Amendment” means that certain Second Amendment to Credit and Guaranty
Agreement dated as of June [1] , 2007 by and among the Company, Holdings, the Guarantors and
the Lenders and Agents party thereto.”



          (b) Section 1.1 of the Credit Agreement is hereby amended by adding the following new
definition in the appropriate alphabetical order:





     ““Second Amendment Effective Date” means June [1], 2007.”



          (c) Section 1.1 of the Credit Agreement is hereby amended by adding the following new
definition in the appropriate alphabetical order:





     ““Second Amendment Effective Date Term Loan” means a Term Loan made by a Lender to
Company pursuant to Section 2.1(a)(i)(z).”



          (d) Section 1.1 of the Credit Agreement is hereby amended by adding the following new
definition in the appropriate alphabetical order:





     ““Second Amendment Effective Date Certificate” means the Second Amendment Effective
Date Certificate substantially in the form of Exhibit M.”



          (e) Section 1.1 of the Credit Agreement is hereby amended by adding the following new
definition in the appropriate alphabetical order:





     ““Second Amendment Effective Date Term Loan Commitment” means the commitment of a
Lender to make or otherwise fund a Second Amendment Effective Date Term Loan and “Second
Amendment Effective Date Term Loan Commitments” means such commitments of all Lenders in the
aggregate. The amount of each Lender’s Second Amendment Effective Date Term Loan
Commitment, if any, is set forth on Appendix A-3 or in the applicable Assignment Agreement,
subject to any adjustment or reduction pursuant to the terms and conditions hereof. The
aggregate amount of the Second Amendment Effective Date Term Loan Commitments as of the
Second Amendment Effective Date is $160,000,000.”



          (f) Section 1.1 of the Credit Agreement is hereby amended by adding the following new
definition in the appropriate alphabetical order:





     ““Second Amendment Term Loan Maturity Date” means the earlier of (i) May 16, 2011, and
(ii) the date that all Term Loans shall become due and payable in full hereunder, whether by
acceleration or otherwise.”



5









 






	 	C.	 	Amendments to Section 2.





          (a) Section 2.1 of the Credit Agreement is hereby amended by deleting subsection (a)(i) in its
entirety and replacing it with the following:





          “(i) (y) Subject to the terms and conditions hereof, each Lender severally agrees to
make, on the Closing Date, a Closing Date Term Loan to Company in an amount equal to such
Lender’s Closing Date Term Loan Commitment. Company may make only one borrowing under the
Closing Date Term Loan Commitment which shall be on the Closing Date. Any amount borrowed
under this Section 2.1(a)(i)(y) and subsequently repaid or prepaid may not be reborrowed.
Subject to Sections 2.12(a) and 2.13, all amounts owed hereunder with respect to the Closing
Date Term Loans shall be paid in full no later than the Term Loan Maturity Date. Each
Lender’s Closing Date Term Loan Commitment shall terminate immediately and without further
action on the Closing Date after giving effect to the funding of such Lender’s Closing Date
Term Loan Commitment on such date.




          (z) Subject to the terms and conditions hereof, each Lender severally agrees to make,
on the Second Amendment Effective Date, a Second Amendment Effective Date Term Loan to
Company in an amount equal to such Lender’s Second Amendment Effective Date Term Loan
Commitment. Company may make only one borrowing under the Second Amendment Effective Date
Term Loan Commitment which shall be on the Second Amendment Effective Date. Any amount
borrowed under this Section 2.1(a)(i)(z) and subsequently repaid or prepaid may not be
reborrowed. Subject to Sections 2.12(a) and 2.13, all amounts owed hereunder with respect
to the Second Amendment Effective Date Term Loans shall be paid in full no later than the
Second Amendment Term Loan Maturity Date. Each Lender’s Second Amendment Effective Date
Term Loan Commitment shall terminate immediately and without further action on the Second
Amendment Effective Date after giving effect to the funding of such Lender’s Second
Amendment Effective Date Term Loan Commitment on such date.”



          (b) Section 2.1 of the Credit Agreement is hereby amended by adding the following new
subsection (d):





          “(d) Borrowing Mechanics for Second Amendment Effective Date Term Loans.




          (i) Company shall deliver to Administrative Agent a fully executed Second Amendment
Effective Date Certificate (which shall be deemed to be a Funding Notice with respect to the
Second Amendment Effective Date Term Loans for all purposes hereof) no later than three
Business Days prior to the Second Amendment Effective Date. Promptly upon receipt by
Administrative Agent of such certificate, Administrative Agent shall notify each Lender of
the proposed borrowing.




          (ii) Each Lender shall make its Second Amendment Effective Date Term Loan available to
Administrative Agent not later than 12:00 p.m. (New York City time) on the Second Amendment
Effective Date, by wire transfer of same day funds in Dollars, at the



6









 






Principal Office designated by Administrative Agent. Upon satisfaction or waiver of
the conditions precedent specified herein, Administrative Agent shall make the proceeds of
the Second Amendment Effective Date Term Loans available to Company on the Second Amendment
Effective Date by causing an amount of same day funds in Dollars equal to the proceeds of
all such Loans received by Administrative Agent from Lenders to be credited to the account
of Company at the Principal Office designated by Administrative Agent or to such other
account as may be designated in writing to Administrative Agent by Company.”



          (c) Section 2.5 of the Credit Agreement is hereby amended by adding the following sentence to
the end of the section:





          “The proceeds of the Second Amendment Effective Date Term Loan shall be applied by
Company to consummate a Permitted Acquisition and the other transactions contemplated by the
Second Amendment.”



          (d) Section 2.11 of the Credit Agreement is hereby amended by deleting the first paragraph and
the table therein in their entirety and replacing them with the following:




          The principal amount of the Term Loans shall be repaid in consecutive quarterly installments
(each, an “Installment”) in the aggregate amounts set forth below on the last day of each Fiscal
Quarter (each, an “Installment Date”) commencing June 30, 2007:




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Second Amendment
	 	 	Closing Date Term	 	Effective Date Term
	Fiscal Quarter Ending	 	Loan Installments	 	Loan Installments
	June 30, 2007
	 	$	948,264.91	 	 	$	400,000	 
	September 30, 2007
	 	$	948,264.91	 	 	$	400,000	 
	December 31, 2007
	 	$	948,264.91	 	 	$	400,000	 
	March 31, 2008
	 	$	948,264.91	 	 	$	400,000	 
	June 30, 2008
	 	$	948,264.91	 	 	$	400,000	 
	September 30, 2008
	 	$	948,264.91	 	 	$	400,000	 
	December 31, 2008
	 	$	948,264.91	 	 	$	400,000	 
	March 31, 2009
	 	$	948,264.91	 	 	$	400,000	 
	June 30, 2009
	 	$	948,264.91	 	 	$	400,000	 
	September 30, 2009
	 	$	948,264.91	 	 	$	400,000	 
	December 31, 2009
	 	$	948,264.91	 	 	$	400,000	 
	March 31, 2010
	 	$	948,264.91	 	 	$	400,000	 
	June 30, 2010
	 	$	948,264.91	 	 	$	400,000	 
	September 30, 2010
	 	$	948,264.91	 	 	$	400,000	 
	December 31, 2010
	 	$	948,264.91	 	 	$	400,000	 
	March 31, 2011
	 	$	948,264.91	 	 	$	400,000	 
	Term Loan Maturity Date
	 	$	356,547,604.65	 	 	$	153,600,000	 






          (e) Section 2.13 of the Credit Agreement is hereby amended by deleting subsection (a) in its
entirety and replacing it with the following:




7









 









               “(a) Asset Sales. No later than the first Business Day following the date of
receipt by Holdings or any of its Subsidiaries of any Net Asset Sale Proceeds, Company shall
prepay the Loans and/or the Revolving Commitments shall be permanently reduced as set forth
in Section 2.14(b) in an aggregate amount equal to such Net Asset Sale Proceeds;
provided, (i) so long as no Default or Event of Default shall have occurred and be
continuing, and (ii) so long as the reinvestment of any such Net Asset Sale Proceeds are
considered Consolidated Capital Expenditures in the determination of the Fixed Charge
Coverage Ratio, Company shall have the option, directly or through one or more of its
Subsidiaries, to invest Net Asset Sale Proceeds within two hundred seventy (270) days of
receipt thereof in long term productive assets of the general type used in the business of
Company and its Subsidiaries, including the purchase of one or more businesses and any real
estate related to such businesses; provided further, pending any such
investment all such Net Asset Sale Proceeds shall be applied to prepay Revolving Loans to
the extent outstanding (without a reduction in Revolving Commitments). Notwithstanding the
foregoing, proceeds received by Holdings or any of its Subsidiaries from sale lease back
transactions permitted under Section 6.11 shall be subject to the prepayment requirements
set forth in Section 6.11 and not the prepayment requirements set forth in this Section
2.13(a).”



          (e) Section 2.13 of the Credit Agreement is hereby amended by deleting subsection (b) in its
entirety and replacing it with the following:





               “(b) Insurance/Condemnation Proceeds. No later than the first Business Day
following the date of receipt by Holdings or any of its Subsidiaries, or Administrative
Agent as loss payee, of any Net Insurance/Condemnation Proceeds, Company shall prepay the
Loans and/or the Revolving Commitments shall be permanently reduced as set forth in Section
2.14(b) in an aggregate amount equal to such Net Insurance/Condemnation Proceeds;
provided, (i) so long as no Default or Event of Default shall have occurred and be
continuing, and (ii) so long as the reinvestment of any such Net Insurance/Condemnation
Proceeds are considered Consolidated Capital Expenditures in determination of the Fixed
Charge Coverage Ratio, Company shall have the option, directly or through one or more of its
Subsidiaries to invest such Net Insurance/Condemnation Proceeds within two hundred seventy
(270) days of receipt thereof in long term productive assets of the general type used in the
business of Holdings and its Subsidiaries, which investment may include the repair,
restoration or replacement of the applicable assets thereof; provided
further, pending any such investment all such Net Insurance/Condemnation Proceeds,
as the case may be, shall be applied to prepay Revolving Loans to the extent outstanding
(without a reduction in Revolving Commitments).”



          (f) Section 2.13 of the Credit Agreement is hereby amended by deleting subsection (c) in its
entirety and replacing it with the following:





               “(c) [Reserved].”



          (g) Section 2.13 of the Credit Agreement is hereby amended by deleting subsection (e) in its
entirety and replacing it with the following:




8









 









               “(e) Consolidated Excess Cash Flow. In the event that there shall be
Consolidated Excess Cash Flow for any Fiscal Year (commencing with the Fiscal Year ending
December 31, 2008), Company shall, no later than one hundred (100) days after the end of
such Fiscal Year, prepay the Loans and/or the Revolving Commitments shall be permanently
reduced as set forth in Section 2.14(b) in an aggregate amount equal to 75% of such
Consolidated Excess Cash Flow.”



          (h) Section 2.24 of the Credit Agreement is hereby amended by replacing the reference to
“$25,000,000” with “$100,000,000” and deleting the last paragraph in its entirety and replacing it
with the following:





          “The terms and provisions of the New Term Loans and New Term Loan Commitments of any
Series shall be, except as otherwise set forth herein or in the Joinder Agreement, identical
to the Term Loans. In any event (i) the weighted average life to maturity of all New Term
Loans of any Series shall be no shorter than the remaining weighted average life to maturity
of the Term Loans, (ii) the applicable New Term Loan Maturity Date of each Series shall be
no shorter than the final maturity of the Term Loans, and (iii) the rate of interest and any
non-usage fee applicable to the New Term Loans of each Series shall be as determined by
Company and the applicable new Lenders and shall be set forth in each applicable Joinder
Agreement; provided however that the interest rate applicable to the New
Term Loans after consummation of the transactions contemplated in the Second Amendment shall
not be greater than the highest interest rate that may, under any circumstances, be payable
with respect to Term Loans plus 0.25% per annum unless the interest rate with respect to the
Term Loan is increased so as to equal the interest rate applicable to the New Term Loans.
Each Joinder Agreement may, without the consent of any other Lenders, effect such amendments
to this Agreement and the other Credit Documents as may be necessary or appropriate, in the
opinion of the Syndication Agent and Administrative Agent, to effect the provisions of this
Section 2.24.”




	 	D.	 	Amendments to Section 3.





          (a) Section 3.2 of the Credit Agreement is hereby amended by adding the following subsection
(c):





               “(c) Second Amendment Effective Date Certificate. If the Credit Extension is a
Second Amendment Effective Date Term Loan, Company shall have delivered to Administrative
Agent a fully executed Second Amendment Effective Date Certificate with respect to the
Second Amendment Effective Date Term Loan to be made on the Second Amendment Effective
Date.”




	 	E.	 	Amendments to Section 5





          (a) Section 5.1 of the Credit Agreement is hereby amended by replacing the word “month” with
the word “quarter” in subsection (i).




9









 









	 	F.	 	Amendments to Section 6.





          (a) Section 6.1 of the Credit Agreement is hereby amended by deleting the existing subsection
(k) in its entirety and replacing it with the following:





               “(k) Indebtedness with respect to Capital Leases not involving real property in an
aggregate amount not to exceed at any time $15,000,000;”



          (b) Section 6.1 of the Credit Agreement is hereby amended by deleting the existing subsection
(m) in its entirety and replacing it with the following:





               “(m) Permitted Seller Notes (i) issued by Holdings as consideration in Permitted
Acquisitions; provided, that the aggregate principal amount of such Permitted Seller
Notes issued by Holdings shall not exceed $10,500,000; and (ii) issued by Company as
consideration in Permitted Acquisitions; provided, that the aggregate amount of such
Permitted Seller Notes issued by Company shall not exceed $4,500,000;”



          (c) Section 6.1 of the Credit Agreement is hereby amended by deleting “and” from the end of
subsection (t) and adding “; and” to the end of subsection (u).




          (d) Section 6.1 of the Credit Agreement is hereby amended by adding the following new
subsection (v):





               “(v) Indebtedness with respect to Capital Leases involving real property in an
aggregate amount not to exceed at any time $70,000,000; provided, however,
that to the extent that the amount of Indebtedness incurred under Section 6.1(k) remains
less than $15,000,000, Company may increase the Indebtedness allowed under this Section
6.1(v) by the difference between (x) $15,000,000 and (y) the actual amount of indebtedness
incurred under Section 6.1(k); provided, further, however, that such
an increase in the Indebtedness allowed by this Section 6.1(v) above $70,000,000 shall
reduce the $15,000,000 set forth in Section 6.1(k) on a dollar for dollar basis.”



          (e) Section 6.7 of the Credit Agreement is hereby amended by deleting subsection (m) in its
entirety and replacing it with the following:





               “(m) other Investments in an aggregate amount not to exceed at any time $40,000,000
plus, for any Fiscal Year, the amount carried over to such Fiscal Year pursuant to
the proviso in Section 6.8(e), but not utilized for Consolidated Capital Expenditures in
such Fiscal Year.”



          (f) Section 6.8 of the Credit Agreement is hereby amended by deleting subsection (c) in its
entirety and replacing it with the following:





               “(c) Leverage Ratio. Company shall not permit the Leverage Ratio as of the
last day of any Fiscal Quarter, beginning with the Fiscal Quarter ending March 31, 2007, to
exceed the correlative ratio indicated:”



10









 





	 	 	 	 	 
	 	 	Leverage
	Fiscal Quarter	 	Ratio
	March 31, 2007
	 	 	2.75:1.00	 
	June 30, 2007
	 	 	3.25:1.00	 
	September 30, 2007
	 	 	3.25:1.00	 
	December 31, 2007
	 	 	3.25:1.00	 
	March 31, 2008
	 	 	3.00:1.00	 
	June 30, 2008
	 	 	3.00:1.00	 
	September 30, 2008
	 	 	3.00:1.00	 
	December 31, 2008
	 	 	3.00:1.00	 
	March 31, 2009 and thereafter
	 	 	2.75:1.00	 






          (g) Section 6.8 of the Credit Agreement is hereby amended by deleting subsection (e) in its
entirety and replacing it with the following:





               “(e) Maximum Consolidated Capital Expenditures. Holdings shall not, and shall
not permit its Subsidiaries to, make or incur Consolidated Capital Expenditures (i) in an
aggregate amount in excess of $75,000,000 for Holdings and its Subsidiaries in Fiscal Year
2007 and (ii) in any Fiscal Year beginning with the Fiscal Year 2008, in an aggregate amount
for Holdings and its Subsidiaries in excess of $85,000,000 in any Fiscal Year;
provided, that 75% of any unutilized amount for any Fiscal Year may be utilized in
the next succeeding Fiscal Year, but in no event shall any amount from any Fiscal Year prior
to the immediately preceding Fiscal Year be utilized in the calculations of the foregoing
(for the avoidance of doubt, any amount carried over from the immediately preceding Fiscal
Year shall not be utilized in the current Fiscal Year until the entire amount allotted to
the current Fiscal Year has been utilized);”



          (h) Section 6.8(f) of the Credit Agreement is hereby amended by replacing the reference to
“$7,500,000” with “$10,000,000” and replacing the reference to “20%” with “22%.”




          (i) Section 6.9 of the Credit Agreement is hereby amended by deleting subsection (c) in its
entirety and replacing it with the following:





               “(c) Asset Sales, the proceeds of which (valued at the principal amount thereof in the
case of non-Cash proceeds consisting of notes or other debt Securities and valued at fair
market value in the case of other non-Cash proceeds) (i) are less than $5,000,000 with
respect to any single Asset Sale or series of related Asset Sales (other than sales and
lease backs) and (ii) when aggregated with the proceeds of all other Asset Sales (other than
sales and lease backs) made within the same Fiscal Year, are less than $15,000,000;
provided (1) the consideration received for such assets shall be in an amount at
least equal to the fair market value thereof (determined in good faith by the board of
directors of Company (or similar governing body)), (2) no less than 80% thereof



11









 






shall be paid in Cash, and (3) the Net Asset Sale Proceeds thereof shall be applied as
required by Section 2.13(a);”



          (j) Section 6.9 of the Credit Agreement is hereby amended by deleting subsection (h) in its
entirety and replacing it with the following:





               “(h) Permitted Acquisitions; provided, however, that with respect to
any acquisition the consideration of which is greater than $30,000,000, Company shall not
make such acquisition without the prior consent of Administrative Agent, such consent not to
be unreasonably withheld, and notice to the Syndication Agent; provided,
further, however, that with respect to any Permitted Acquisitions made in
Canada, such Permitted Acquisitions shall not exceed $50,000,000 in the aggregate;”



          (k) Section 6.11 of the Credit Agreement is hereby amended by deleting the text of the
existing section in its entirety and replacing it with the following:





     “No Credit Party shall, nor shall it permit any of its Subsidiaries to, directly or
indirectly, become or remain liable as lessee or as a guarantor or other surety with respect
to any lease of any property (whether real, personal or mixed), whether now owned or
hereafter acquired, which such Credit Party (a) has sold or transferred or is to sell or to
transfer to any other Person (other than Holdings or any of its Subsidiaries), or (b)
intends to use for substantially the same purpose as any other property which has been or is
to be sold or transferred by such Credit Party to any Person (other than Holdings or any of
its Subsidiaries) in connection with such lease; provided, however, that
Company and its Subsidiaries may sell and lease-back real estate assets without limitation
provided, notwithstanding anything to the contrary set forth in this Agreement, that any
proceeds received from such sale and lease back transactions in excess of $25,000,000 in the
aggregate in any Fiscal Year shall be used to prepay (no later than the third Business Day
following the date of receipt of such proceeds) the Loans in accordance with Section
2.14(b).”




	 	G.	 	Amendments to Appendices, Schedules and Exhibits.






     The Credit Agreement is hereby amended by adding thereto Appendix A-3 in the form of
Annex A and Exhibit M in the form of Annex B.



SECTION II. CONDITIONS PRECEDENT TO EFFECTIVENESS; POST EFFECTIVENESS COVENANT




     A. The effectiveness of the amendments set forth at Section I hereof is subject to the
satisfaction, or waiver, of the following conditions on or before the date hereof (the “Second
Amendment Effective Date”):



          (a) Company, Holdings and Requisite Lenders shall have indicated their consent by the
execution and delivery of the signature pages hereof to the Administrative Agent.




12









 








          (b) Company shall have paid all fees and other amounts due and payable on or prior to the
Second Amendment Effective Date, including, to the extent invoiced, reimbursement or other payment
of all out-of-pocket expenses required to be reimbursed or paid by the Company hereunder or under
any other Credit Document.




          (c) (i) All conditions to the consummation of the AHP Acquisition set forth in the Merger
Agreement by and among AHP Holding Company, Inc., Simon HP Acquisition, Inc. and VCA Antech, Inc.
dated as of May 8, 2007 (the “Merger Agreement”) shall have been satisfied or the fulfillment of
any such conditions shall have been waived with the consent of Administrative Agent and Syndication
Agent, (ii) the AHP Acquisition shall have become effective in accordance with the terms of the
Merger Agreement and (iii) the aggregate cash consideration paid to the stockholders of AHP Holding
Company, Inc. as merger consideration pursuant to the terms of the Merger Agreement (excluding cash
and cash equivalents of AHP Holding Company, Inc. as of the Closing Date (as defined in the Merger
Agreement) which will be paid to the stockholders of AHP Holding Company, Inc.) shall not exceed
$160.0 million.




          (d) Administrative Agent and Lenders shall have received such other documents and information
regarding Credit Parties and the Credit Agreement as Administrative Agents or Lenders may
reasonably request.




     B. Company shall, unless waived by the Administrative Agent or the Required Lenders, deliver
within 60 days after the Second Amendment Effective Date (i) mortgages with respect to any recently
acquired material properties (the “New Mortgages”) in form and substance reasonably satisfactory to
Administrative Agent; (ii) modifications of all recorded mortgages in form and substance reasonably
satisfactory to Administrative Agent; (iii) title insurance policies or marked up commitments for
title insurance policies for each of the New Mortgages showing no Liens other than Permitted Liens
and with any endorsements reasonably required by the Administrative Agent; and (iv) date down
endorsements for all previously mortgaged sites showing no Liens other than Permitted Liens and
otherwise in form and substance reasonably satisfactory to the Administrative Agent.



SECTION III. REPRESENTATIONS AND WARRANTIES




          A. Corporate Power and Authority. Each Credit Party has all requisite corporate power
and authority to enter into this Second Amendment and to carry out the transactions contemplated
by, and perform its obligations under the Credit Agreement and the other Credit Documents.




          B. Authorization of Agreements. The execution and delivery of this Second Amendment
and the performance of the Credit Agreement and the other Credit Documents have been duly
authorized by all necessary corporate or partnership (as applicable) action on the part of each
Credit Party.




          C. No Conflict. The execution and delivery by each Credit Party of this Second Amendment and the
performance by each Credit Party of the Credit Agreement and the other Credit Documents do not (i)
violate (A) any provision of any law, statute, rule or regulation, or of the certificate or
articles of incorporation or partnership agreement, other




13









 







constitutive documents or by-laws of each
Credit Party or any of its Subsidiaries except to the extent such violation could not reasonably be
expected to have a Material Adverse Effect, (B) any applicable order of any court or any rule,
regulation or order of any Governmental Authority except to the extent such violation could not
reasonably be expected to have a Material Adverse Effect or (C) any provision of any indenture,
certificate of designation for preferred stock, agreement or other instrument to which each Credit
Party or any of its Subsidiaries is a party or by which any of them or any of their property is or
may be bound except to the extent such violation could not reasonably be expected to have a
Material Adverse Effect, (ii) be in conflict with, result in a breach of or constitute (alone or
with notice or lapse of time or both) a default under any such indenture, certificate of
designation for preferred stock, agreement or other instrument, where any such conflict, violation,
breach or default referred to in clause (i) or (ii) of this Section III.C., individually or in the
aggregate could reasonably be expected to have a Material Adverse Effect, (iii) result in or
require the creation or imposition of any Lien upon any of the properties or assets of each Credit
Party (other than any Liens created under any of the Credit Documents in favor of Collateral Agent
on behalf of Lenders), or (iv) require any approval of stockholders or partners or any approval or
consent of any Person under any contractual obligation of each Credit Party, except for such
approvals or consents which will be obtained on or before the Second Amendment Effective Date.




          D. Governmental Consents. No action, consent or approval of, registration or filing
with or any other action by any Governmental Authority is required in connection with the execution
and delivery by each Credit Party of this Second Amendment and the performance by each Credit Party
of the Credit Agreement and the other Credit Documents, except for such actions, consents and
approvals the failure to obtain or make which could not reasonably be expected to result in a
Material Adverse Effect or which have been obtained and are in full force and effect.




          E. Binding Obligation. This Second Amendment and the Credit Agreement have been duly
executed and delivered by each Credit Party and each constitutes a legal, valid and binding
obligation of each Credit Party enforceable against each Credit Party in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency, moratorium, reorganization or
other similar laws affecting creditors’ rights generally and except as enforceability may be
limited by general principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).




          F. Incorporation of Representations and Warranties From Credit Agreement. The
representations and warranties contained in Section 4 of the Credit Agreement are and will be true,
correct and complete in all material respects on and as of the Second
Amendment Effective Date to the same extent as though made on and as of that date, except to
the extent such representations and warranties specifically relate to an earlier date, in which
case they were true, correct and complete in all material respects on and as of such earlier date.




          G. Absence of Default. No event has occurred and is continuing or will result from
the consummation of the transactions contemplated by this Second Amendment that would constitute an
Event of Default or a Default.




14









 








SECTION IV. ACKNOWLEDGMENT AND CONSENT




     Each of Holdings and each Domestic Subsidiary of Holdings (other than Company and certain
Permitted Partially-Owned Subsidiaries) has (i) guaranteed the Obligations and (ii) created Liens
in favor of Lenders on certain Collateral to secure its obligations under the Credit Agreement and
the Collateral Documents subject to the terms and provisions of the Credit Agreement. Each of
Holdings and each Domestic Subsidiary of Holdings who has guaranteed the Obligations together with
the Company are collectively referred to herein as the “Credit Support Parties”, and the Credit
Agreement and the Collateral Documents are collectively referred to herein as the “Credit Support
Documents”.



     Each Credit Support Party hereby acknowledges that it has reviewed the terms and provisions of
the Credit Agreement and this Second Amendment and consents to the amendment of the Credit
Agreement effected pursuant to this Second Amendment. Each Credit Support Party hereby confirms and affirms
that each Credit Support Document to which it is a party or otherwise bound and all Collateral
encumbered thereby will continue to guarantee or secure, as the case may be, to the fullest extent
possible in accordance with the Credit Support Documents the payment and performance of all
“Obligations” under each of the Credit Support Documents, as the case may be (in each case as such
terms are defined in the applicable Credit Support Document), including without limitation the
payment and performance of all such “Obligations” under each of the Credit Support Documents, as
the case may be, in respect of the Obligations of the Company now or hereafter existing under or in
respect of the Credit Agreement and hereby pledges and assigns to the Collateral Agent, and grants
to the Collateral Agent a continuing lien on and security interest in and to all Collateral (in each case as such term is defined in the applicable Credit Support Document) as
collateral security for the prompt payment and performance in full when due of the “Obligations”
under each of the Credit Support Documents to which it is a party (whether at stated maturity, by
acceleration or otherwise).



     Each Credit Support Party acknowledges and agrees that any of the Credit Support Documents to
which it is a party or otherwise bound shall continue in full force and effect and that all of its
obligations thereunder shall be valid and enforceable and shall not be impaired or limited by the
execution or effectiveness of this Second Amendment. Each Credit Support Party represents and
warrants that all representations and warranties contained in the Credit Agreement, this Second
Amendment and the Credit Support Documents to which it is a party or otherwise bound are true,
correct and complete in all material respects on and as of the Second Amendment Effective Date to
the same extent as though made on and as of that date, except to the extent such representations
and warranties specifically relate to an earlier date, in which case they were true, correct and
complete in all material respects on and as of such earlier date.



     Each Credit Support Party acknowledges and agrees that (i) notwithstanding the conditions to
effectiveness set forth in this Second Amendment, such Credit Support Party is not required by the
terms of the Credit Agreement or any other Credit Document to consent to the amendments to the
Credit Agreement effected pursuant to this Second Amendment and (ii) nothing in the Credit
Agreement, this Second Amendment or any other Credit Document shall be deemed to require the
consent of such Credit Support Party to any future amendments to the Credit Agreement.



15









 





SECTION V. MISCELLANEOUS




          A. Binding Effect. This Second Amendment shall be binding upon the parties hereto and
their respective successors and assigns and shall inure to the benefit of the parties hereto and
the successors and assigns of Lenders. No Credit Party’s rights or obligations hereunder or any
interest therein may be assigned or delegated by any Credit Party without the prior written consent
of all Lenders.




          B. Severability. In case any provision in or obligation hereunder shall be invalid,
illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the
remaining provisions or obligations, or of such provision or obligation in any other jurisdiction,
shall not in any way be affected or impaired thereby.




          C. Reference to Credit Agreement. On and after the Second Amendment Effective Date,
each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or
words of like import referring to the Credit Agreement, and each reference in the other Credit
Documents to the “Credit Agreement”, “thereunder”, “thereof” or words of like import referring to
the Credit Agreement shall mean and be a reference to the Credit Agreement as amended by this
Second Amendment.




          D. Effect on Credit Agreement. Except as specifically amended by this Second
Amendment, the Credit Agreement and the other Credit Documents shall remain in full force and
effect and are hereby ratified and confirmed.




          E. Execution. The execution, delivery and performance of this Second Amendment shall
not, except as expressly provided herein, constitute a waiver of any provision of, or operate as a
waiver of any right, power or remedy of any Agent or Lender under, the Credit Agreement or any of
the other Credit Documents.




          F. Headings. Section headings herein are included herein for convenience of reference only and shall not
constitute a part hereof for any other purpose or be given any substantive effect.




          G. APPLICABLE LAW. THIS SECOND AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.




          H. Counterparts. This Second Amendment may be executed in any number of counterparts,
each of which when so executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument. As set forth herein, this Second
Amendment shall become effective upon the execution of a counterpart hereof by each of the parties
hereto and receipt by Company, Holdings and Administrative Agent and Syndication Agent of written
or telephonic notification of such execution and authorization of delivery thereof.




16









 








[The remainder of this page is intentionally left blank.]




17









 





     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and
delivered by their respective officers thereunto duly authorized as of the date first written
above.



	 	 	 	 	 	 	 
	COMPANY:	 	VICAR OPERATING, INC.	 	  
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Robert L. Antin	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Robert L. Antin	 	 
	 

	 	 	 	Title: Chief Executive Officer and President	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Tomas W. Fuller	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Tomas W. Fuller	 	 
	 

	 	 	 	Title: Chief Financial Officer and Assistant

Secretary	 	 
	 
	 	 	 	 	 	 
	HOLDINGS:	 	VCA ANTECH, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Robert L. Antin	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Robert L. Antin	 	 
	 

	 	 	 	Title: Chief Executive Officer and President	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Tomas W. Fuller	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Tomas W. Fuller	 	 
	 

	 	 	 	Title: Chief Financial Officer and Assistant

Secretary	 	 






	 	 	 
	GUARANTORS:
	 	 
	 

	 	ALBANY VETERINARY CLINIC
	 

	 	ANIMAL CARE CENTER AT MILL RUN, INC.
	 

	 	ANIMAL CARE CENTERS OF AMERICA, INC.
	 

	 	ARROYO PETCARE CENTER, INC.
	 

	 	ASSOCIATES IN PET CARE, INC.
	 

	 	DIAGNOSTIC VETERINARY SERVICE, INC.
	 

	 	EDGEBROOK, INC.
	 

	 	INDIANA VETERINARY DIAGNOSTIC LAB, INC.
	 

	 	NATIONAL PETCARE CENTERS, INC.
	 

	 	PET’S CHOICE, INC.
	 

	 	PETS’ RX, INC.
	 

	 	PRESTON PARK ANIMAL HOSPITAL, INC.
	 

	 	SOUND TECHNOLOGIES, INC.
	 

	 	SOUTH COUNTY VETERINARY CLINIC, INC.






 









 






	 	 	 
	 

	 	TOMS RIVER VETERINARY HOSPITAL, P.A.
	 

	 	VCA – ASHER, INC.
	 

	 	VCA ALABAMA, INC.
	 

	 	VCA ALBANY ANIMAL HOSPITAL, INC.
	 

	 	VCA ALL PETS ANIMAL COMPLEX, INC.
	 

	 	VCA ANIMAL HOSPITALS, INC.
	 

	 	VCA CENTERS–TEXAS, INC.
	 

	 	VCA CENVET, INC.
	 

	 	VCA CLINICAL VETERINARY LABS, INC.
	 

	 	VCA CLINIPATH LABS, INC.
	 

	 	VCA DOVER ANIMAL HOSPITAL, INC.
	 

	 	VCA MILLER-ROBERTSON #152
	 

	 	VCA MISSOURI, INC.
	 

	 	VCA NORTHWEST VETERINARY DIAGNOSTICS, INC.
	 

	 	VCA OF NEW YORK, INC.
	 

	 	VCA PROFESSIONAL ANIMAL LABORATORY, INC.
	 

	 	VCA REAL PROPERTY ACQUISITION CORPORATION
	 

	 	VCA TEXAS HOLDINGS, INC.
	 

	 	VCA TEXAS MANAGEMENT, INC.
	 

	 	WEST LOS ANGELES VETERINARY MEDICAL GROUP, INC.






	 	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Robert L. Antin
 

Name: Robert L. Antin
	 	  
	 

	 	 	 	Title: Chief Executive Officer and President	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Tomas W. Fuller	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Tomas W. Fuller	 	 
	 

	 	 	 	Title: Chief Financial Officer and Assistant

Secretary
	 	 
	 
	 	 	 	 	 	 
	 	 	VETERINARY CENTERS OF AMERICA-TEXAS, L.P.	 	 
	 
	 	 	 	 	 	 
	 	 	By: VCA Centers-Texas, Inc., General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Robert L. Antin	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Robert L. Antin	 	 
	 

	 	 	 	Title: Chief Executive Officer and President	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Tomas W. Fuller	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Tomas W. Fuller	 	 
	 

	 	 	 	Title: Chief Financial Officer and Assistant

Secretary