Document:

exv10w2

Exhibit 10.2

FIRST AMENDMENT TO THE

EMPLOYMENT AGREEMENT WITH RONALD A. KLEIN

     This First Amendment to the Employment Agreement (this “Amendment”) is made by and between Origen
Financial, Inc, a Delaware corporation (“Parent”), Origen Financial, L.L.C, a Delaware limited
liability company (“Company”), and Ronald A. Klein (“Executive”) on July 1, 2008. Capitalized
terms used but not defined herein shall have the meanings set forth in the Employment Agreement
with Executive effective as of July 14, 2006 (the “Agreement”).

RECITALS:

     A. The Company and Executive entered into that certain Employment Agreement dated July 14, 2006.

     B. The Internal Revenue Service issued final regulations regarding the application of Internal
Revenue Code (“Code”) section 409A to nonqualified deferred compensation, with an effective date of
January 1, 2008.

     C. Because the Agreement provides for certain deferrals of compensation, it is subject to Code
section 409A.

     D. Section 17(k) of the Agreement provides that the Agreement will be timely amended to comply with
the requirements of Code section 409A and published guidance in a manner that will not have a
material adverse impact to either party of the Agreement.

     E. Parent, Company and Executive desire to amend the Agreement to conform to the provisions of
Code section 409A and the accompanying final regulations in compliance with Internal Revenue
Service Notice 2007-86 and generally applicable published guidance.

     F. This Amendment shall supersede the provisions of the Agreement to the extent those
provisions are inconsistent with the provisions of this Amendment.

     Now, therefore, effective January 1, 2008, the Agreement is hereby amended as follows:

     1. Paragraph 2(a) is amended by the addition of the following sentence at the end of the
paragraph:

“Base Salary for each successive one-year extension shall be paid on a
bi-weekly basis as services are rendered.”

     2. Paragraph 4(c), entitled “Target Bonus,” is amended by the addition of the following
sentence:

“Any Target Bonus to which Executive shall be entitled will be paid to
Executive during the period February 15 through March 15 each year immediately
following the taxable year to which the Target Bonus relates.”

     3. Paragraph 4(f), entitled “Disability,” is amended by deleting the last two sentences of
Paragraph 4(e) in their entirety and replacing them with the following:

“For purposes of this paragraph 4(f) only, Executive shall be deemed to be
‘Disabled,’ and on a bona fide leave of absence, if he is eligible to
receive disability benefits under any disability benefit plan or policy
provided by Company to its employees generally or to Executive specifically
(a ‘Company Sponsored Plan’). If Company does not provide
coverage to Executive under a Company Sponsored Plan, Executive shall be deemed

 

 

to be
‘Disabled’ if he is unable to perform the essential functions of his
duties hereunder (with or without reasonable accommodation by the Company)
as a result of incapacity due to physical or mental illness.”

     4. Paragraph 7(a)(iii) is amended by deleting it in its entirety and replacing it with the
following:

“(iii) upon Executive’s death or if Executive is Totally Disabled as defined
in paragraph 7(c) below.”

     5. Paragraph 7, entitled “Termination of Employment,” is amended by the addition of the
following new paragraph 7(c):

“(c) For purposes of this paragraph 7 and payment of compensation and
benefits pursuant to paragraph 8(d), Executive shall be considered ‘Totally
Disabled’ if, by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to
last for a continuous period of not less than 12 months, (i) he is unable to
engage in any substantial gainful activity, or (ii) he is receiving income
replacement benefits for a period of not less than 3 months under an
accident and health plan covering employees of the Company.”

     6. The first sentence of Paragraph 8(a) is amended by deleting it in its entirety and
replacing it with the following:

“If Company terminates this Agreement without Cause pursuant to paragraph
7(a)(i) hereof or if Executive voluntarily terminates this Agreement for
Good Reason (as defined below) then (i) Company shall pay to Executive or
his estate, if applicable, within thirty (30) days after the effective date
of such termination any unpaid Base Salary accrued and earned by him
hereunder up to and including the effective date of such termination plus a
pro rata amount of the Target Bonus (determined by multiplying the Target
Bonus amount by the number of days elapsed in the year of the termination of
this Agreement and dividing by 365) (the ‘Pro Rata Target Bonus Amount’),
(ii) during the Severance Period (as defined below) Company will continue to
pay to Executive the Base Salary plus a pro rata amount of the Target Bonus
(determined by multiplying the applicable Target Bonus amount by the number
of days in each interval period and dividing by 365) (the total Base Salary
plus Target Bonus paid Executive during the Severance Period, the “Severance
Payment”) at the usual payroll intervals, but only if Executive fully
complies with paragraph 10 of this Agreement; provided that, the portion of
the Severance Payment Executive receives during the first six (6) months
following the effective date of such termination does not exceed two (2)
times the limit on compensation set forth in section 401(a)(17) of the Code,
with any excess over that limit being paid with the first payroll
immediately following the six- (6-) month anniversary of the termination
date; (iii) if applicable, during the Severance Period, Company shall pay
the premiums to continue those medical care benefits in effect on
Executive’s termination date (provided, that to the extent permitted under
applicable law, the Severance Period will run concurrently with, and not in
addition to, the applicable statutory maximum COBRA continuation period, and
provided further, any change in

 

 

benefits under the medical plan for active executive employees will also apply
to Executive), and continue to provide Executive with such other employee benefits
for which Executive continues to qualify during the Severance Period, but only if Executive fully complies with paragraph 10 of
this Agreement, and (iv) Executive’s outstanding stock options and
restricted shares shall accelerate and be fully vested upon a termination
without ‘Cause.’ ”

     7. Paragraph 8(c) is amended by deleting it in its entirety and replacing it with the
following:

“If this Agreement is terminated on a Contract Term Date because Company
notifies Executive that this Agreement will not be renewed pursuant to
paragraph 2(a), (i) Company shall pay to Executive or his estate, if
applicable, within thirty (30) days after the effective date of such
termination any unpaid Base Salary and the Pro Rata Target Bonus Amount
accrued and earned by him hereunder up to and including the effective date
of such termination, (ii) Company will continue to pay to Executive the Base
Salary at the usual payroll intervals until the first anniversary of the
termination date, but only if Executive fully complies with paragraph 10 of
this Agreement; provided that, the portion of the Base Salary Executive
receives during the first six (6) months following the effective date of
such termination does not exceed two (2) times the limit on compensation set
forth in section 401(a)(17) of the Code, with any excess over that limit
being paid with the first payroll immediately following the six- (6-) month
anniversary of the termination date;

Company shall pay to Executive at the usual payroll intervals on the day
that is six (6) months after the effective date of such termination an
amount equal to the Executive’s Base Salary as of the termination date, and
(iii) Executive’s outstanding stock options and restricted shares shall
accelerate and be fully vested.”

     8. Paragraph 8 is amended by the addition of the following new paragraph 8(d) and renumbering
existing paragraphs 8(d), 8(e) and 8(f) as paragraphs 8(e), 8(f) and 8(g), respectively.

“If Company terminates this Agreement pursuant to paragraph 7(a)(iii)
hereof, (i) the Company shall pay Executive or his Designated Beneficiary,
as applicable, within thirty (30) days after the effective date of such
termination any unpaid Base Salary, Pro Rata Target Bonus Amount and
benefits accrued and earned by him hereunder up to and including the
effective date of such termination, (ii) in the event this Agreement is
terminated because of Executive’s death, during the Severance Period Company
will continue to pay to Executive’s Designated Beneficiary the Base Salary
plus a pro rata amount of the Target Bonus (determined by multiplying the
applicable Target Bonus amount by the number of days in each interval period
and dividing by 365) at the usual payroll intervals; (iii) in the event this
Agreement is terminated because Executive is Totally Disabled, during the
Severance Period Company will continue to pay to Executive the Base Salary
plus a pro rata amount of the Target Bonus

 

 

(determined by multiplying the applicable Target Bonus amount by the number of days in each interval period
and dividing by 365) at the usual payroll intervals, but only if Executive
fully complies with paragraph 10 of this Agreement; provided that, the portion of the Severance Payment
Executive receives during the first six (6) months following the effective
date of such termination does not exceed two (2) times the limit on
compensation set forth in section 401(a)(17) of the Code, with any excess
over that limit being paid with the first payroll immediately following the
six- (6-) month anniversary of the termination date, and (iv) if applicable,
during the Severance Period, Company shall pay the premiums to continue
those medical care benefits in effect on Executive’s termination date
(provided, that, to the extent permitted under applicable law, the Severance
Period will run concurrently with, and not in addition to, the applicable
statutory maximum COBRA continuation period, and provided further, any
change in benefits under the medical plan for active executive employees
will also apply to Executive). Notwithstanding any other provision of this
Agreement to the contrary, (A) Company’s obligations under this paragraph
8(d) shall be contingent, in the case of a termination upon Disability, on
Executive executing and delivering to Company a general release of claims,
substantially in the form attached hereto as Exhibit A, and (B) if Executive
engages in full-time employment after the termination of this Agreement
(whether as an executive or as a self-employed person), any employee benefit
and welfare benefits received by Executive in consideration of such
employment which are similar in nature to the employee benefit and welfare
benefits provided by Company will relieve Company of its obligations under
paragraph 8(d)(iv) to provide comparable benefits to the extent of the
benefits so provided.”

     9. Paragraph 9, entitled “Change in Control,” is deleted in its entirety and replaced with the
following paragraph 9:

     “9. Change in Control.

     (a) If there is a Change in Control Event, the Company will pay Executive the
Change in Control Payment upon the first Permissible Payment Event to occur
following the Change in Control Event, subject to any applicable six- (6-) month
delay required under section 409A of the Internal Revenue Code of 1986, as amended.

     (b) A ‘Permissible Payment Event’ shall be deemed to have occurred for purposes
of this Agreement upon the first to occur of:

     (i) One- (1-) year anniversary of the
Change in Control Event;

     (ii) Date Executive resigns for Good Reason during the six- (6-) month
period following the Change in Control Event;

     (iii) Date Company terminates Executive’s employment without Cause
during the six- (6-) month period following a Change in Control Event;

 

 

     (iv) Date Executive becomes Totally Disabled during the one- (1-) year
period following the Change in Control Event; or

     (v) Date Executive Dies during the one- (1-) year period following the
Change in Control Event.

     (c) In no event will a Change in Control Payment be made to Executive if he is
terminated for Cause or resigns without Good Reason.

     (d) ‘Change in Control Payment’ means an amount equal to the product of two and
99/100 (2.99) times the sum of (i) Executive’s Base Salary as of the Change in
Control Event, plus (ii) fifty (50%) percent of Executive’s Target Bonus.

     (e) ‘Good Reason’ means the occurrence of any of the following events: (a) a
substantial adverse change, not consented to by Executive, in the nature and scope
of Executive’s responsibilities, authorities or duties hereunder, (b) a substantial
involuntary reduction in Executive’s Base Salary except for an across-the-board
salary reduction similarly affecting all or substantially all employees, or (c) the
relocation of Executive’s principal place of employment to another location of the
Company outside a sixty (60) mile radius from the location of Executive’s principal
place of employment as of the date hereof. Executive must provide notice to the
Company of the existence of a condition, or conditions, described in this paragraph
9(e) within ninety (90) days of the initial existence of such condition(s). Upon
receipt by the Company of Executive’s notice, the Company will have thirty (30) days
to remedy the condition(s). If the Company remedies the condition(s) of which it
received notice from Executive within thirty (30) days, the Executive may not resign
for Good Reason.

     (f) Any of the following will be deemed the ‘Change in Control Event,’ which
shall serve as a vesting event only:

     (i) The date on which any ‘person,’ as such term is used in Section
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
‘Exchange Act’) (other than the Parent, any Parent subsidiary, or any
trustee, fiduciary or other person or entity holding securities under any
employee benefit plan or trust of the Parent), together with all
‘affiliates’ and ‘associates’ (as such terms are defined in Rule 12b-2 of
the Exchange Act) of such person, shall become the ‘beneficial owner’
(within the meaning of Rule 13d-3 under the Exchange Act), directly or
indirectly, through an event or series of events, of more than 50% of the
combined voting power of Parent’s then outstanding securities having the
right to vote in an election of Parent’s Board (other than as a result of an
acquisition of securities directly from Parent);

     (ii) The consummation of: (1) any consolidation or merger of Parent in
which the stockholders of Parent immediately prior to the consolidation or
merger would not, immediately after the consolidation or merger,
‘beneficially own’ (as such term is defined in Rule 13d-3 of the Exchange
Act), directly or indirectly, shares representing in the aggregate

 

 

more than fifty percent (50%) of the voting shares of the corporation issuing cash or
securities in the consolidation or merger (or of its ultimate parent
corporation, if any), or (2) any sale, lease, exchange or other transfer to
an unrelated party (in one transaction or a series of transactions contemplated or
arranged by any party as a single plan) of all or substantially all of Parent’s assets;

     (iii) The date Parent’s stockholders approve any plan or proposal for
the liquidation or dissolution of Parent; or

     (iv) Where the persons who, as of the Effective Date, constitute
Parent’s Board of Directors (the ‘Incumbent Directors’) cease for any
reason, including, without limitation, as a result of a tender offer, proxy
contest, merger or similar transaction, to constitute at least a majority of
the Board, provided that any person becoming a director of Parent subsequent
to such date shall be considered an Incumbent Director if such person’s
election was approved by or such person was nominated for election by either
(1) a vote of at least two-thirds of the Incumbent Directors or (2) a vote
of at least a majority of the Incumbent Directors who are members of a
nominating committee of the Board comprised, in the majority, of Incumbent
Directors; provided further, however, that notwithstanding the foregoing,
any director designated by a person or entity that has entered into an
agreement with the Company to effect a transaction described in clauses (i),
(ii) or (iii) above, shall not be deemed to be an Incumbent Director.

     (g) Anything to the contrary in this Agreement notwithstanding, in no event
shall more than one Change in Control Payment be made to Executive under this
Agreement, regardless of whether more than one Change in Control Event occurs during
the term of this Agreement.

     (h) If Executive is entitled to any payments that vest upon a Change in Control
Event or other substantially similar event pursuant to the Origen Financial, Inc.
Retention Plan or any other plan, program, agreement or arrangement with Parent, the
Company or their subsidiaries, the Company shall not be obligated to make such
payments to Executive under both this Agreement and the other plan, program,
agreement or arrangement. Instead, the Company shall be obligated to pay Executive
only the greater of the amounts payable as determined under this Agreement and such
other plan, program, agreement or arrangement.

     (i) Except as set forth in paragraph 9(h) above, if payable, the Change in
Control Payment shall be in addition to, and not in lieu of, the severance payments
to which Executive may be entitled under paragraph 8 above, the non-compete payments
to which Executive may be entitled under paragraph 10 below or payments from any
other plan, program, agreement or arrangement with Parent, the Company or their
subsidiaries

     (j) Prior to and as a condition of any payment under this paragraph 9,
Executive shall execute and deliver to Company a general release of claims to

 

 

other change in control payments in a form acceptable to the Company and, if Executive’s
employment has been terminated, a general release of claims, substantially in the
form attached hereto as Exhibit A.”

     10. Paragraph 11 is amended by deleting it in its entirety and replacing it with the following
paragraph 11:

     “11. Excise Tax Payments. Anything in this Agreement to the contrary
notwithstanding, if any of the payments or benefits received or to be received by
Executive following a Change in Control Event and/or Executive’s termination or
resignation of employment (whether pursuant to the terms of this Agreement or any
other plan, arrangement or agreement with Parent, the Company or their subsidiaries)
(the ‘Aggregate Payment’) is determined to constitute a ‘parachute payment’ as such
term is deemed in Section 280G(b)(2) of the Internal Revenue Code of 1986, as
amended (the ‘Code’), the Company shall pay to Executive an additional amount which,
after the imposition of all income and excise taxes thereon, is equal to the excise
tax imposed by Section 4999 of the Code with respect to the Aggregate Payment. The
determination of whether the Aggregate Payment constitutes a parachute payment and,
if so, the amount to be paid to Executive shall be made by a nationally recognized
United States public accounting firm selected by the Company which has not, during
the two years preceding the date of its selection, acted in any way on behalf of
Parent, the Company or any affiliate thereof. The Company shall pay Executive the
amount payable to him under this paragraph 11 by the end of the taxable year in
which Executive remits these amounts to the taxing authority(s).”

     11. Paragraph 17(k) is amended by deleting it in its entirety and replaced with “Intentionally
left blank.”

     12. Paragraph 17, entitled “Miscellaneous,” is amended by the addition of the following new
paragraph 17(m):

     “(m) Executive may, on a form prescribed by the Company, designate a
beneficiary or beneficiaries (his ‘Designated Beneficiary’) to receive the benefits
under this Agreement in the event of his death. If Executive does not designate a
beneficiary, his benefits will be paid first to his spouse, if surviving him, and if
unmarried or if his spouse does not survive him, in equal shares to his children
surviving him, and if neither his spouse nor children survive him, to his estate.”

     13. Unless otherwise modified by this Amendment, all provisions of the Agreement shall remain
in full force and effect. Copies (whether photostatic, facsimile or otherwise) of this Amendment
may be made and relied upon to the same extent as an original.

[Signatures on next page]

 

 

     In witness whereof, the parties have executed this First Amendment to the Amended and Restated
Employment Agreement by and between Origen Financial, Inc, Origen Financial, L.L.C and Ronald A.
Klein on the date first above written.

	 	 	 	 	 
	 	 	Parent:
	 	 	Origen Financial, Inc.,
	 	 	a Delaware corporation:
	 
	 	 	 	 
	 

	 	By:
	 	/s/ W. Anderson Geater, Jr.
	 

	 	 	 	 
	 

	 	Its:
	 	Chief Financial Officer
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	Company:
	 	 	Origen Financial, L.L.C.,
	 	 	a Delaware limited liability company:
	 
	 	 	 	 
	 

	 	By:
	 	/s/ W. Anderson Geater, Jr.
	 

	 	 	 	 
	 

	 	Its:
	 	 Chief Financial Officer
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	Executive:
	 
	 	 	 	 
	 

	 	 	 	/s/ Ronald A. Klein
	 	 	 
	 	 	Ronald A. KleinEXHIBIT 10.1

Exhibit 10.1

STOCK PURCHASE AGREEMENT

     This Stock Purchase Agreement (this “Agreement”) is made as of July 14, 2008, among American
Animal Hospital Association (“AAHA”), Professional Veterinary Products, Ltd. (“PVPL”), and AAHA
Services Corporation (“Company”).

     WHEREAS, PVPL owns 1,250 shares of common stock of Company (the “PVPL Company Stock”)
representing 20% of the issued and outstanding shares of the common stock of Company, and AAHA owns
5,000 shares of common stock of Company, representing 80% of the issued and outstanding shares of
the common stock of Company; and

     WHEREAS, AAHA desires to purchase the PVPL Company Stock from PVPL, and PVPL desires to sell
the PVPL Company Stock to AAHA upon the terms and conditions set forth in this Agreement.

     NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties,
covenants and agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

ARTICLE 1

AGREEMENT TO PURCHASE AND SELL

     1.1 Purchase and Sale. Upon the execution and delivery of this Agreement by the parties, AAHA
is purchasing the PVPL Company Stock from PVPL, and PVPL is selling the PVPL Company Stock to AAHA.

     1.2 Closing. The consummation of the transactions contemplated herein (the “Closing”) is
taking place through the exchange of documents by email (with hard copies being sent by and among
the parties by mail), by the delivery by PVPL to AAHA of the certificates representing the Company
Stock.

ARTICLE 2

CONSIDERATION

     2.1 Purchase Price. AAHA is purchasing the Company Stock from PVPL for an aggregate purchase
price of $1,400,000 (the “Purchase Price”). The Purchase Price is being paid at Closing.

     2.2 Closing Date Payment and Receipt of Shares. At Closing:

 

 

	 	(a)	 	PVPL is selling, assigning, and transferring to AAHA good and
valid title in and to the PVPL Company Stock, free and clear of all liens.
Such sale, assignment and transfer is being evidenced by the delivery to AAHA
at Closing of the stock certificates representing 100% of the PVPL Company
Stock, duly endorsed for transfer;
	 
	 	(b)	 	AAHA is paying the Purchase Price to PVPL by certified check or
wire transfer; and
	 
	 	(c)	 	The parties are delivering to one another certified copies of
resolutions of their respective boards of directors, authorizing the execution,
delivery and performance of this Agreement by each such party.

     2.3 Other Consideration and Actions.

	 	(a)	 	Effective at Closing, the Shareholders Agreement of Company
dated June 16, 2000 (the “Shareholders Agreement”) is terminated, without any
further action required by the parties to such agreement;
	 
	 	(b)	 	Effective at Closing, Dr. Lionel Reilly is resigning from
Company’s Board of Directors and PVPL will no longer be entitled to a Company
board position;
	 
	 	(c)	 	Effective at Closing, the parties are agreeing to enter into
the Mutual Release and Contribution Agreement attached as Exhibit A; and

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF AAHA

     For the purpose of inducing PVPL to enter into this Agreement, AAHA hereby makes the following
representations and warranties to PVPL:

     3.1. Organization of AAHA. AAHA is a non-profit corporation duly organized, validly existing
and in good standing under the laws of the State of Illinois with full power and authority to carry
on the business in which it is engaged and to enter into and perform its obligations under this
Agreement.

     3.2 Authorization of Agreement. The execution and delivery of this Agreement has been duly
authorized and approved by AAHA’s Board of Directors. This Agreement is a valid and binding
obligation of AAHA, enforceable in accordance with its

2

 

terms, subject to limitations imposed by laws and judicial decisions relating to or affecting
the rights of creditors or secured creditors generally or general principles of equity (regardless
of whether enforcement is considered in proceedings at law or in equity), upon the enforceability
of any of the remedies, covenants or other provisions of this Agreement and the availability of
injunctive relief or other equitable remedies. All persons who have executed this Agreement on
behalf of AAHA have been duly authorized to do so by all necessary action of AAHA.

     3.3. Investment Intent. AAHA is acquiring the PVPL Company Stock for investment and not
with a view to distribution thereof, and AAHA will not make any distribution or transfer thereof
except in accordance with the Securities Act of 1933, as amended, and the rules and regulations
there under and applicable exemptions there from.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF PVPL

     For the purpose of inducing AAHA and Company to enter into this Agreement, PVPL hereby makes
the following representations and warranties to AAHA and Company:

     4.1 Organization and Qualification of PVPL. PVPL is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Nebraska with full corporate power and
authority to carry on the business in which it is presently engaged and to enter into and perform
its obligations under this Agreement.

     4.2 Authorization of Agreement. The execution and delivery of this Agreement has been duly
authorized and approved by PVPL’s Board of Directors. This Agreement is a valid and binding
obligation of PVPL, enforceable in accordance with its terms, subject to limitations imposed by
laws and judicial decisions relating to or affecting the rights of creditors or secured creditors
generally or general principles of equity (regardless of whether enforcement is considered in
proceedings at law or in equity), upon the enforceability of any of the remedies, covenants or
other provisions of this Agreement and the availability of injunctive relief or other equitable
remedies. All persons who have executed this Agreement on behalf of PVPL have been duly authorized
to do so by all necessary action of PVPL.

     4.3 Commissions. There are and will be no claims for brokerage commissions, finder’s fees,
fees for fairness opinions or financial advisory services or similar compensation in connection
with the transactions contemplated by this Agreement based on any arrangement or agreement made by
or on behalf of PVPL.

3

 

     4.4 Good Title. Immediately prior to the Closing, (a) PVPL held title to the PVPL Company
Stock free and clear of all liens, claims and encumbrances of any nature whatsoever, (b) there were
no outstanding options, warrants, convertible securities or other rights to acquire any of the PVPL
Company Stock that were created by PVPL, (c) PVPL has not transferred the PVPL Company Stock in
violation of, and the PVPL Company Stock is not currently subject to, any right of first refusal or
similar right of any person, other than as set forth in the Shareholders Agreement, and (d) PVPL
has not subjected the PVPL Company Stock to any voting trust or other voting agreement. Upon the
transfer of the PVPL Company Stock to AAHA in accordance with this Agreement, AAHA will hold good
title to the PVPL Company Stock, free and clear of all liens, claims and encumbrances of any nature
whatsoever (other than any liens, claims and encumbrances created by AAHA).

     4.5 No Claims, Notices, Investigation of Violations. PVPL has not received from any
governmental entity any request for information, notice of claim, demand letter or other
notification, notice or information that: (a) Company is liable for or in violation of any
Controlled Substance Laws, Pedigree Laws or laws relating to Pharmaceutical Products or that (b)
the registration under the Controlled Substance Laws, Pedigree Laws or laws relating to
Pharmaceutical Products (i) is unauthorized, (ii) is inconsistent with the public interest, health
or safety, (iii) may be revoked, or (iv) may be suspended. To PVPL’s knowledge, there have been no
federal, state or local governmental or regulatory investigations, enforcement actions, studies,
audits, reviews or other analyses, the purpose of which was to discover, identify or otherwise
characterize any actual, alleged or potential violations of Controlled Substance Laws, Pedigree
Laws or laws relating to Pharmaceutical Products or to revoke, suspend, deny or prevent the
issuance of the registration of Company. Neither PVPL in connection with Company nor, to PVPL’s
knowledge, Company has (1) been charged with, (2) been served a subpoena or search warrant relating
to, (3) been the subject of an administrative inspection or warrant relating to, (4) settled any
allegations relating to, (5) pled no contest to, (6) conceded liability for, (7) been convicted of,
(8) been assessed or paid any fines or penalties relating to, or (9) been subject to cease and
desist or similar orders relating to, any violations of the Controlled Substance Laws, Pedigree
Laws or relating to Pharmaceutical Products.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF COMPANY

     For the purpose of inducing PVPL and AAHA to enter into this Agreement, Company hereby makes
the following representations and warranties to PVPL and AAHA:

     5.1 Organization and Qualification of Company. Company is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of

4

 

Colorado with full corporate power and authority to carry on the business in which it is
presently engaged and to enter into and perform its obligations under this Agreement.

     5.2 Authorization of Agreement. The execution and delivery of this Agreement has been duly
authorized and approved by Company’s Board of Directors. This Agreement is a valid and binding
obligation of Company, enforceable in accordance with its terms, subject to limitations imposed by
laws and judicial decisions relating to or affecting the rights of creditors or secured creditors
generally or general principles of equity (regardless of whether enforcement is considered in
proceedings at law or in equity), upon the enforceability of any of the remedies, covenants or
other provisions of this Agreement and the availability of injunctive relief or other equitable
remedies. All persons who have executed this Agreement on behalf of Company have been duly
authorized to do so by all necessary action of Company.

ARTICLE 6

POST CLOSING COVENANTS OF PVPL

After Closing, (a) PVPL shall cooperate with AAHA and Company in the transition of logistics
support provided to Company, including taking the actions described in the attached Exhibit B; and
(b) PVPL, except as required by law, shall promptly transfer, convey, or otherwise turn over to
Company all assets belonging to Company (“Assets”) that PVPL has in its possession.
Notwithstanding the forgoing, PVPL shall be permitted to retain copies of Company’s Business
Records to the extent required by law; however, PVPL agrees to use such Business Records solely for
the purposes of complying with applicable federal, state, or local laws, rules, or regulations.
For purposes of this Article 6, “Business Records” shall mean all copyrighted materials, data,
statistics, customer lists, membership lists and other informational materials generated during the
course of the operation of AAHA MARKETLink, whether furnished by Company, PVPL or other parties.

ARTICLE 7

POST CLOSING COVENANT OF COMPANY AND AAHA

     Neither AAHA nor Company shall contract with, or attempt to retain or hire, any employee of
PVPL, including but not limited to any PVPL employee who has performed services in connection with
the logistics agreement entered between PVPL and Company (the “Logistics Agreement”), for a one
year period beginning on the date of this Agreement.

5

 

ARTICLE 8

MISCELLANEOUS

     8.1 Entire Agreement. This Agreement, together with the exhibits and attachments to this
Agreement, constitutes the entire agreement among the parties and supersedes all prior agreements,
oral or written. This Agreement shall be binding upon and shall inure to the benefit of the
parties and their respective successors and assigns.

     8.2 Severability. If any severable provision of this Agreement is held to be invalid or
unenforceable by any judgment of a court of competent jurisdiction, the remainder of this Agreement
shall not be affected by such judgment, and the Agreement shall be carried out as nearly as
possible according to its original terms and intent.

     8.3 Expenses. Each party shall pay its own expenses incident to the preparation and
performance of this Agreement and the transactions contemplated by it.

     8.4 Notice. Any notice, demand or other communication required or permitted by any provision
of this Agreement shall be deemed to have been sufficiently given or served for all purposes when
delivered in person or sent by facsimile transmission with telephone confirmation of receipt,
national overnight courier, or registered or certified mail, return receipt requested, all postage
and other charges prepaid, as follows:

	 	 	 	 	 
	 
	 	If to PVPL:	 	Professional Veterinary Products, Ltd.
	 
	 	 	 	Attn:  Dr. Lionel Reilly
	 
	 	 	 	10077 S. 34th Street
	 
	 	 	 	Omaha, Nebraska  68138
	 
	 	 	 	 
	 
	 	With a copy to:	 	Rick Putnam, Esq.
	 
	 	 	 	Baird Holm LLP
	 
	 	 	 	1500 Woodmen Tower
	 
	 	 	 	1700 Farnam Street
	 
	 	 	 	Omaha, Nebraska 68102-2068
	 
	 	 	 	 
	 
	 	If to AAHA	 	 
	 
	 	or Company:	 	American Animal Hospital Association
	 
	 	 	 	Attn:  Dr. John Albers
	 
	 	 	 	12575 W. Bayaud Avenue
	 
	 	 	 	Lakewood, Colorado  80228
	 
	 	 	 	 
	 
	 	With a copy to:	 	James F. Wood, Esq.
	 
	 	 	 	Sherman & Howard L.L.C.
	 
	 	 	 	633 17th Street, Suite 3000
	 
	 	 	 	Denver, Colorado  80202

6

 

	 	 	 	 	 
	 
	 	And	 	William E. Walters, Esq.
	 
	 	 	 	Kelly Garnsey Hubbell & Lass LLC
	 
	 	 	 	1441 Eighteenth Street, Suite 300
	 
	 	 	 	Denver, Colorado  80202

or at such other address as may be designated by notice pursuant to this Section 8.4 from such
party to the other party. Notice sent by overnight courier shall be deemed delivered on the
business day immediately following deposit with such courier. Notice sent by facsimile
transmission shall be deemed delivered on the day of transmission if a business day or if not a
business day the first business day following the day of transmission. Notice sent by certified or
registered mail shall be deemed delivered on the fifth day after deposit with the United States
postal service.

     8.5 Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of Colorado.

     8.6 Arbitration. If any dispute arises out of or in connection with this Agreement, the
parties agree that any controversy or claim arising out of or relating in any way to this Agreement
shall be settled by arbitration before a single arbitrator in Denver, Colorado, before the Judicial
Arbiter Group, Inc. (or if it is unwilling or unable to serve, then by the American Arbitration
Association). Any judgment or award rendered by the arbitrator shall be entered in any court
having jurisdiction. Each party agrees to pay its own out-of-pocket expenses associated with the
arbitration, including attorney’s fees, other than as may otherwise be provided herein. This
provision shall not prohibit either party from seeking injunctive or other relief in any court of
competent jurisdiction to enforce their respective rights.

     8.7 Captions. The captions appearing herein are for the convenience of the parties only and
shall not be construed to affect the meaning of the provisions of this Agreement.

     8.8 Amendment. This Agreement may be amended, modified, superseded or cancelled, and any of
the terms, provisions, covenants, representations, warranties or conditions hereof may be waived,
only by a written instrument executed by the parties or, in the case of a waiver, by the party
waiving compliance.

     8.9 Waiver. The failure to enforce or to require the performance at any time of any of the
provisions of this Agreement shall in no way be construed to be a waiver of such provisions and
shall not affect either the validity of this Agreement or any part of it or the right of any party
thereafter to enforce each and every provision in accordance with the terms of this Agreement.

7

 

     8.10 Counterparts. This Agreement may be executed in one or more counterparts, all of which
shall be considered one and the same Agreement. This Agreement shall become effective when one or
more counterparts shall have been signed by each of the parties and delivered to the other parties.

     8.11 Incorporation by Reference. The exhibits referred to in this Agreement are incorporated
in this Agreement as a part of this Agreement as if set forth in full in this Agreement.

     8.12 Attorney Fees and Costs. If a dispute arises as whether any party is in default under
this Agreement, the prevailing party shall be awarded reasonable attorney fees and costs in any
suit, action or proceeding, including trial, arbitration, mediation, or appeal, as awarded by the
court, arbiter, or mediator.

     8.13 Interest on Past Due Amounts. If any party becomes liable to another party to this
Agreement by reason of any breach of this Agreement by such breaching party, the breaching party,
in addition to the obligation to pay damages to the other party for such breach, agrees to pay
interest on such damages from the date of the breach until the date the damages are paid or the
breach is otherwise cured, at the rate of 4% per annum above the prime rate published from time to
time by The Wall Street Journal (but such interest shall not in any event exceed the
highest rate permitted by law).

     8.14 Rights Cumulative. Except as expressly provided in this Agreement, and to the extent
permitted by law, any remedies described in this Agreement are cumulative and not alternative to
any other remedies available at law or in equity.

     8.15 Survival of Representations & Warranties. The representations and warranties set forth
in this Agreement shall survive the Closing indefinitely.

[Remainder of page intentionally left blank. Signature page follows.]

8

 

IN WITNESS WHEREOF, the parties have executed this Agreement the day and year first above written.

	 	 	 	 	 
	AAHA SERVICES CORPORATION

 	 	 
	By:  	/s/ John W. Albers, DVM 	 	 
	 	Title: Chief Executive Officer	 	 
	 	 	 	 
	 
	AMERICAN ANIMAL HOSPITAL ASSOCIATION

 	 	 
	By:  	/s/ John W. Albers, DVM 	 	 
	 	Title: Executive Director	 	 
	 	 	 	 
	 
	PROFESSIONAL VETERINARY PRODUCTS, LTD.

 	 	 
	By:  	/s/ Dr. Lionel L. Reilly 	 	 
	 	Title: President	 	 
	 	 	 	 

9

 

	 	 	 	 	 

EXHIBIT A

Mutual Release & Contribution Agreement

10

 

EXHIBIT B

Cooperation between PVPL, AAHA and the Company

11

 

EXHIBIT B

Cooperation between PVPL, AAHA and the Company

1. Provide the following information to AAHA, as requested.

	 	a.	 	On going access (if required), to the current details included in all Servco/MARKETLink
(“ML”)customer files—Including but not limited to hospital name, doctors name, ship to address,
bill to address, sales tax preferences, vet license number and expiration date, DEA number and
expiration date, HIN #.
	 
	 	b.	 	Sales data by account for invoiced and agency business for ML’s last three fiscal years,
including but not limited to sales by vendor, by line item, by month, with cost and sale price.
	 
	 	c.	 	Continue to provide a data feed of all ML sales to Focus Technology Group on a regular
basis until all transactions are reported.
	 
	 	d.	 	Year end recap of actual and estimated manufacturer rebates and commissions earned by ML
including performance incentives, sales out commissions/rebates, agency rebates/commissions, and
logistics commissions. Basically anything currently provided per contract to ML by PVPL for the
quarterly credit due to ML for sales through June 30, 2008
	 
	 	e.	 	All ML year end sales tax information required to complete submissions, payments and
filings for sales and use tax in all states, cities, counties and municipalities in line with
current operating procedures. This will be accomplished by continued access to ML’s database on
PVPL’s AS 400 operating system through September 30, 2008, to be reviewed on October 1, 2008 to
assure tax filings are complete.
	 
	 	f.	 	Recap by ML customer of vendor programs currently being tracked to qualify the customer for
performance/rebate dollars earned, e.g., the Fort Dodge Alliance program.

2. Access to the PVPL AS 400 operating system relative to ML’s financial and operational support
programs. This would include by way of example the monthly financial statement programs, accounts
receivable, accounts payable, tax information,

12

 

customer notes and history. Access to this data from Denver via the VPN will be necessary to close
out the business, complete the year end audit and similar items of this nature. This will be
accomplished by continued access to ML’s database on PVPL’s AS 400 operating system through
September 30, 2008, to be reviewed on Oct 1, 2008 to assure the audit is complete.

3. Cooperation to develop a plan to close out any remaining ML sales or return issues that may be
pending at June 30, 2008.

4. Provide confirmation of termination of all passwords, user names and other access options used
by ML customers to access the website platform provided by PVPL for ML business. This would include
B2B access as well as access to the catalog and other ML specific information.

5. Provide confirmation of transfer to ML all of its Confidential Information including electronic
and hard copy files and data pertaining to ML’s business operations. Please refer to the SERVCO and
PVPL Agreement dated September 1, 2004 for a definition of these items

6. Assistance in responding to reasonable requests for additional account information that may not
be in ML’s files but that is in PVPL’s control or possession.

9. Other matters, including data and information, which may arise and are necessary for the
transfer of assets from Servco to MWI.

13

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