Document:

ex10-1.htm

    
      

    

    Exhibit 10.1

     

    
      ESCROW
AGREEMENT

      

      THIS ESCROW AGREEMENT (as the same may
be amended or modified from time to time pursuant hereto, this “Escrow Agreement”) is made and
entered into as of February 12, 2008 by and among Pet DRx Corporation (f/k/a
Echo Healthcare Acquisition Corp.) (“Purchaser”) a Delaware
corporation, and the undersigned Stockholders Representatives (“Representatives”, and together
with Purchaser, sometimes referred to individually as “Party” or collectively as the
“Parties”) in their
capacity as the Stockholders Representatives designated pursuant to the Merger
Agreement (as defined below), and JPMorgan Chase Bank, National Association (the
“Escrow
Agent”).

                 

      WHEREAS, Purchaser has entered
into a Second Amended and Restated Merger Agreement (the “Merger Agreement”) dated as of
October 23, 2007 by and among Purchaser, a wholly-owned subsidiary of Purchaser
(“Merger Sub”) and XLNT
Veterinary Care, Inc., a Delaware corporation (“XLNT”);

      

      WHEREAS, under the Merger
Agreement, XLNT and its stockholders have authorized and empowered the
Stockholders Representatives to act on their behalf in connection with this
Escrow Agreement;

       

      WHEREAS, pursuant to the Merger Agreement, on
January 4, 2008, Merger Sub merged with and into XLNT, with XLNT surviving the
merger as a wholly-owned subsidiary of Purchaser;

       

      WHEREAS, the provisions of the Merger Agreement
are hereby incorporated herein by reference as the context of this Escrow
Agreement may require, provided that the Escrow
Agent shall act only in accordance with the terms and conditions contained
herein; and

      

      WHEREAS, the Parties have
agreed to deposit in escrow certain property and wish such deposit to be subject
to the terms and conditions set forth herein.

      

                      NOW THEREFORE, in
consideration of the foregoing and of the mutual covenants hereinafter set
forth, the parties hereto agree as follows:

      

                     
1.           Appointment. The Parties
hereby appoint the Escrow Agent as their escrow agent for the purposes set forth
herein, and the Escrow Agent hereby accepts such appointment under the terms and
conditions set forth herein.

      

                      
2.           Escrow Fund.                                           

      

      (a)       
 On or as soon as practicable after the date hereof, Purchaser will
cause 1,526,788 shares of common stock of Purchaser, par value $.0001 per
share (the “Common
Stock”), which shares shall be registered in the name of Escrow Agent
f/b/o the Former Holders of Capital Stock of XLNT Veterinary Care, Inc. (the
“Escrow Shares”), to be
delivered to the Escrow Agent in book-entry form, and the Escrow Agent will
acknowledge receipt of the Escrow Shares to the Purchaser and the
Representatives promptly upon receipt thereof.  Subject to the terms
and conditions
of this Escrow Agreement, the Escrow Agent shall hold the Escrow Shares and
shall invest, reinvest and manage any proceeds thereof as directed in Section
3(d) (the “Proceeds”;
the Escrow Shares and such Proceeds are collectively referred to herein as the
“Escrow
Fund”).  The Escrow Agent shall hold, exercise voting rights
with respect to and dispose of, the Escrow Shares only in accordance with the
terms of this Escrow Agreement or joint written instructions of the Purchaser
and the Representatives and shall not release the Escrow Shares or the rest of
the Escrow Fund except in accordance with this Escrow Agreement.  The
parties acknowledge that the Escrow Agent is not acting in a capacity that would
warrant the re-issuance, sale, or denominational breakdown of any shares by the
Escrow Agent.  The Escrow Agent shall not be held liable for any
action taken, suffered or omitted to be taken by it, and shall have no duty to
inform the Purchaser or the Representative that it has received any proxy
materials or other information from the Purchaser, in each case in its capacity
as a registered stockholder.

      

      
        
          
          

        

        
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      (b)         If
Purchaser at any time or from time to time between the date of this Escrow
Agreement and the final disposition of the Escrow Fund in accordance with this
Escrow Agreement, (i) subdivides (by any stock split, stock dividend,
recapitalization or otherwise) its outstanding shares of Common Stock into a
greater number of shares, or (ii) combines (by reverse stock split or
otherwise) its outstanding shares of Common Stock into a smaller number of
shares, then the Purchaser will deliver notice thereof to the Escrow Agent, and,
unless the applicable authorizing Board of Directors resolutions do not require
delivery of new Escrow Shares as a result of such action, the Purchaser will as
promptly as practicable after the effective date with respect thereto deliver to
the Escrow Agent in book-entry form the requisite Escrow Shares as may be
required to reflect the applicable increase or reduction of such Escrow
Shares.  The Escrow Agent shall be entitled to execute and deliver any
transmittal letter or other documents and share certificates required to
effectuate an exchange of shares if contemplated by the action taken pursuant to
the preceding clauses (i) or (ii).  If Purchaser at any time or from
time to time between the date of this Escrow Agreement and the final disposition
of the Escrow Fund in accordance with this Escrow Agreement pays any
distribution or dividend in respect of the Escrow Shares in additional shares of
Common Stock, then the Purchaser will deliver notice thereof to the Escrow Agent
and the Representatives, and, unless the applicable authorizing Board of
Directors resolutions do not require delivery of additional Escrow Shares as a
result of such action, the Purchaser will as promptly as practicable after the
payment date with respect thereto deliver to the Escrow Agent additional Escrow
Shares representing such additional shares of Common Stock.  Upon such
delivery referred to in this Section 2.1(c), the Escrow Agent shall hold such
additional or substitute Escrow Shares and “Escrow Shares” shall refer to the
shares represented by such new or substitute Escrow Shares for all purposes
under this Escrow Agreement.

      

      (c)         This
Agreement assumes that the Escrow Fund will at all times be comprised only of
Common Stock and cash (and interest earned thereon).  If the Common
Stock is converted into any securities or other property other than Common
Stock, or any securities or other property (in each case, other than cash (and
interest earned thereon) or additional shares of Common Stock) are distributed,
issued or exchanged with respect to any shares of Common Stock (then held in the
Escrow Fund) upon any recapitalization, reclassification, merger, consolidation,
stock dividend or the like, or if for any other reason securities or other
property (in each case, other than cash (and interest earned thereon) or
additional shares of Common Stock) at any time are held in the Escrow Fund, the
Purchaser and the Representatives shall negotiate in good faith, and execute and
deliver, such supplemental written instructions to the Escrow Agent as are
necessary to account for such other securities or property in a manner
consistent with the results that would have prevailed if only Common Stock and
cash (and interest earned thereon) were held in the Escrow Fund, and shall
deliver such supplemental written instructions to the Escrow
Agent.  If the Parties are unable to agree on any such supplemental
instructions contemplated by the preceding sentence within 30 days after such
sentence shall become applicable, then the Escrow Agent shall refrain from
taking any action with respect to such property other than Common Stock and cash
(and interest earned thereon), other than to keep safely such other property
until it shall be directed otherwise in writing jointly by Purchaser and the
Representatives or by final non-appealable order of a court of competent
jurisdiction.  The
Escrow Agent shall be entitled to execute and deliver any transmittal letter or
other documents and Escrow Shares required in connection with such any
recapitalization, reclassification, merger, consolidation or similar event to receive any shares of
stock, securities, properties or cash in exchange for Escrow
Shares.     

      

      
        
          
          

        

        
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      (d)         Upon
written instructions from the Representatives from time to time, the Escrow
Agent shall execute and deliver to the Representative such revocable proxies as
are necessary in order for the Representative to exercise any and all voting
rights relating to the Escrow Shares then held in the Escrow
Fund.  Such proxies shall be revoked by the Escrow Agent with respect
to any Escrow Shares delivered to the Purchaser or the Representatives
hereunder, prior to such delivery.

      

                      3.           Investment of Escrow
Fund.

      

      (a)         The Parties recognize and agree that the
Escrow Agent will not provide supervision, recommendations or advice relating to
either the investment of moneys or any other assets held in the Escrow Fund or the purchase, sale, retention or
other disposition of any investment described herein. The Escrow Agent shall not liquidate,
sell, invest or reinvest any portion of the Escrow Fund except as provided
herein and shall hold the Escrow Shares and any cash or other assets received in
respect thereof in the form initially received.  The Escrow Agent shall not have any
liability for any loss sustained as a result of any investment or the failure to make an investment made pursuant to the terms
of this Escrow Agreement or as a result of any liquidation of any investment
prior to its maturity or for the failure of the Parties to give the Escrow Agent
instructions to invest or reinvest the Escrow Fund.  The Escrow Agent
shall have the right to liquidate any investments held in order to provide funds
necessary to make required payments under this Escrow
Agreement.

      

      (b)         Receipt of the Escrow Shares shall be confirmed by Escrow Agent as
soon as practicable after
receipt thereof by account
statement, and any discrepancies in any such account statement shall be noted by
the Parties to Escrow Agent within thirty
(30) calendar days after receipt thereof.  Failure to inform Escrow
Agent in writing of any discrepancies in any such account statement within said thirty
(30) day period shall conclusively be deemed confirmation of such account
statement in its entirety.

      

      
        
          
          

        

        
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      (c)         The Escrow Agent shall not vote the
Escrow Shares unless and until it receives written notice signed by the
Representatives and Purchaser directing the vote of the Escrow
Shares.

      

      (d)         During the term of this Escrow
Agreement, any moneys in
the Escrow Fund shall be
invested in a JPMorgan Chase Bank, N.A. money market deposit account (“MMDA”) or
a successor or similar investment offered by the Escrow Agent, unless otherwise
instructed in writing by the Parties and as shall be reasonably acceptable to the Escrow Agent. The
Escrow Agent will provide compensation on balances in the Escrow Fund at the then-applicable rate for such
account or investment from
time to time.  Written investment instructions, if any, shall specify
the type and identity of the investments to be purchased and/or
sold.  The Escrow Agent is hereby authorized to execute purchases and
sales of investments through the facilities of its own trading or capital
markets operations or those of any affiliated entity.  The Escrow
Agent or any of its affiliates may receive reasonable compensation with respect to any
investment directed hereunder including without limitation charging a reasonable agency fee in connection with each
transaction.  The Parties recognize and agree that the Escrow Agent
will not provide supervision, recommendations or advice relating to either the
investment of moneys held in the Escrow Fund or the purchase, sale, retention or
other disposition of any investment described herein. The Escrow Agent shall not
have any liability for any loss sustained as a result of any investment in an
investment made pursuant to the terms of this Escrow Agreement or as a result of
any liquidation of any investment prior to its maturity or for the failure of
the Parties to give the Escrow Agent instructions to invest or reinvest the Escrow
Fund.

      

                    
 4.           Disbursement of
Escrow Funds.  The Parties agree that the
Escrow Fund is available to satisfy the Purchaser’s right to indemnification as
set forth in Article VII of the Merger Agreement.  On the Claims
Deadline (as defined below), the Escrow Agent shall release all of the Escrow
Fund to Representatives, less any amounts as to which Purchaser has asserted a
notice seeking indemnification (a “Claim
Notice”) and any other
amounts released in accordance with Section 5 hereof

       

                     
5.          
Claims.

      

      (a)         If
Purchaser wishes to make a claim hereunder for indemnification pursuant to
Article VII of the Merger Agreement, it shall promptly deliver a Claim Notice
(as defined below) to the Representatives and the Escrow Agent.  The
Claim Notice shall state (i) the dollar amount of any indemnification asserted
to be owed under Article VII of the Merger Agreement, (ii) the number of Escrow
Shares that Purchaser asserts are necessary to satisfy the indemnification
amount owed, (iii) a statement of the facts giving rise to such claim for
indemnification, and (iv) that a claim for such indemnification has been made in
accordance with the terms of the Merger Agreement (including, but not limited
to, Section 1.11 and Article VII thereof).

      

      (b)         On
the sixteenth (16th)
business day following receipt by the Escrow Agent of the Claim Notice, the
Escrow Agent shall release the number of Escrow Shares described in the
Claim
Notice to Purchaser from the Escrow Fund, less the amount, if any, described in
a Dispute Notice (as defined below). If the Escrow Fund contains both stock and
cash, any such payment shall be made to Purchaser in stock and cash, such that
the ratio of cash paid to stock paid is equal to the ratio of cash to stock in
the Escrow Fund as of the date of such payment.  For purposes of
distributing the Escrow Fund pursuant to the terms hereof, the Escrow Shares
shall be valued at the “Parent Common Stock Per Share Issue Price” as determined
in Section 1.6(a) of the Merger Agreement.

      

      
        
          
          

        

        
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      (c)         During
the fifteen (15) business days following the Escrow Agent’s receipt of the Claim
Notice, the Representatives shall deliver a written notice, if any, to the
Escrow Agent and the Purchaser disputing a claim made in the Claim Notice (a
“Dispute Notice”), which
such Dispute Notice shall be delivered in accordance with the terms of the
Merger Agreement and shall state with specificity the dispute and the portion of
the claim stated in the Claim Notice that is the subject of such dispute (the
“Disputed
Amount”).   The Escrow Agent shall not distribute the
Disputed Amount until (i) the rights of all the Parties shall have been fully
and finally adjudicated in accordance with the terms of the Merger Agreement, or
(ii) all differences and all doubt shall have been resolved by agreement among
all of the interested persons, and the Escrow Agent shall have been notified
thereof in writing signed by all such persons.  The rights of the
Escrow Agent under this Section 5(c) are cumulative of all other rights it may
have by law or otherwise. Any claim by Purchaser disputed by the Representatives
pursuant to this Section 5(b), or any claim by Purchaser which the Escrow Agent
has refused to comply with or take any action in connection with in accordance
with this Section 5(c), shall be referred to herein as a “Disputed
Claim”.  The Escrow Agent shall not be liable in any way or to
any Person for its failure or refusal to release such Disputed
Amount.

      

      (d)         Promptly
following resolution of a Disputed Claim in favor of the former stockholders (as
detailed in the Merger Agreement), Purchaser shall provide written notice to the
Escrow Agent that such Disputed Claim has been discharged, and any amounts being
withheld by the Escrow Agent in respect of such Disputed Claim shall promptly be
released to the Representatives.

      

      (e)         Any
amounts to be delivered by the Escrow Agent to the Representatives from the
Escrow Fund under Section 4 hereof or this Section 5 shall, at the written
direction of the Representatives, either be delivered to the Representatives or
delivered directly by the Escrow Agent to the Exchange Agent (as defined in the
Merger Agreement) or another Person for delivery to the former holders of shares
of capital stock of XLNT as of the Effective Time (as defined in the Merger
Agreement) in accordance with the Merger Agreement.

      

      (f)          Except as expressly set forth in the
Merger Agreement, Purchaser’s failure to claim, or delay in claiming, any of the
Escrow Fund to satisfy in full any claims arising under Article VII of the
Merger Agreement, shall not be a waiver of Purchaser’s or any of the Parent
Indemnitees’ rights and remedies against Representative to recover any amounts
due Purchaser or any of the Parent Indemnitees pursuant to the Merger
Agreement.

       

      (g)         The Parties agree that Purchaser shall
have the right to make claims against the Escrow Fund on behalf of itself and
any of the other Parent Indemnitees until the earlier of (i) 90 calendar days
following the receipt by Purchasers of the signed report of
Purchasers’ independent
accounting firm with respect to the audit of Purchasers’ consolidated operations for the year
ended December 31, 2007 and (ii) the 18th month anniversary of the Closing Date
(as defined in the Merger Agreement) (the “Claims
Deadline”).

      

      
        
          
          

        

        
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      6.           Disposition and
Termination.  Upon delivery of the Escrow Fund by the Escrow Agent in accordance with Sections 4 and 5
above, this Escrow
Agreement shall terminate, subject to the provisions of Sections 9 and 10.

      

      7.           Escrow
Agent.

      

      (a)         The Escrow Agent shall have only those
duties as are specifically and expressly provided herein, which shall be deemed
purely ministerial in nature, and no other duties shall be
implied.  The Escrow Agent shall neither be responsible for, nor
chargeable with, knowledge of, nor have any requirements to comply with, the
terms and conditions of any other agreement, instrument or document between the
Parties, in connection herewith, if any, including without limitation
the Merger
Agreement, nor
shall the Escrow Agent be required to determine if any person or entity has
complied with any such  agreements, nor shall any additional
obligations of the Escrow Agent be inferred from the terms of such agreements,
even though reference thereto may be made in this Escrow Agreement.  In the event of any conflict
between the terms and provisions of this Escrow Agreement, those of the
Merger
Agreement,
any schedule or exhibit
attached to the Escrow Agreement, or any other agreement among the
Parties, the terms and conditions of this Escrow Agreement shall
control. The Escrow Agent may rely upon and shall
not be liable for acting or refraining from acting upon any written notice,
document, instruction or request furnished to it hereunder and believed by it to
be genuine and to have been signed or presented by the proper Party or Parties
without inquiry and without requiring substantiating evidence of any
kind.  The Escrow Agent shall be under no duty to inquire into or
investigate the validity, accuracy or content of any such document, notice,
instruction or request.  The Escrow Agent shall have no duty to
solicit any payments which may be due it or the Escrow Fund, nor shall the Escrow Agent
have any duty or obligation to
confirm or verify the accuracy or correctness of any amounts deposited with it
hereunder.  The Escrow Agent shall have no duty or obligation to make
any calculations of any kind hereunder.

      

      (b)         The Escrow Agent shall not be liable for
any action taken, suffered or omitted to be taken by it except to the extent
that a final adjudication of a court of competent jurisdiction determines that
the Escrow Agent's gross negligence or willful misconduct was the primary cause
of any loss to either Party.  The Escrow Agent may
execute any of its powers and perform any of its duties hereunder directly or
through agents or attorneys, and shall be liable only for its gross negligence
or willful misconduct (as finally adjudicated in a court of competent
jurisdiction) in the selection of any such agent or attorney.  The
Escrow Agent may consult with counsel, accountants and other skilled persons to
be selected and retained by it.  The Escrow Agent shall not
be liable for any action taken, suffered or omitted to be taken by it in
accordance with, or in reliance upon, the advice or opinion of any such counsel,
accountants or other skilled persons.  In the event that
the Escrow Agent shall be uncertain or believe there is some ambiguity as to its
duties or rights hereunder or shall receive instructions, claims or demands from
any party hereto which, in its opinion, conflict with any of the provisions of
this Escrow Agreement, it shall be entitled to refrain from taking any action
and its sole obligation shall be to keep safely all property held in escrow
until it shall be given a direction in writing by the Parties which eliminates such ambiguity or
uncertainty to the satisfaction of Escrow Agent or by a final and non-appealable
order or judgment of a court of competent jurisdiction.  The Parties
agree to pursue any redress or recourse in connection with any dispute without
making the Escrow Agent a party to the same.  Anything in this Escrow
Agreement to the contrary notwithstanding, in no event shall the Escrow Agent be
liable for special, incidental, punitive, indirect or consequential loss or
damage of any kind whatsoever (including but not limited to lost profits), even
if the Escrow Agent has been advised of the likelihood of such loss or damage
and regardless of the form of action.

       

      
        
          
          

        

        
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      8.           Succession.

      

      (a)         The Escrow Agent may resign and be
discharged from its duties or obligations hereunder by giving thirty (30)
days advance notice in writing of
such resignation to the Parties specifying a date when such resignation shall
take effect.  If the Parties have failed to appoint a successor escrow
agent prior to the expiration of thirty (30) days following receipt of the notice of
resignation, the Escrow Agent may petition any court of competent jurisdiction
for the appointment of a successor escrow agent or for other appropriate relief,
and any such resulting appointment shall be binding upon all of the parties
hereto.  Escrow Agent’s sole responsibility after such thirty (30) day
notice period expires shall be to hold the Escrow Fund (without any obligation to reinvest
the same) and to deliver the same to a designated substitute escrow agent, if
any, or in accordance with the directions of a final order or judgment of a
court of competent jurisdiction, at which time of delivery Escrow Agent’s
obligations hereunder shall cease and terminate, subject to the
provisions of Sections 9 and 10 hereunder.  The Escrow Agent shall have
the right to withhold an amount equal to any amount due and owing to the Escrow
Agent, plus any costs and expenses the Escrow Agent shall reasonably believe may
be incurred by the Escrow Agent in connection with the termination of the Escrow
Agreement.

      

      (b)         Any entity into which the Escrow Agent
may be merged or converted or with which it may be consolidated, or any entity
to which all or substantially all the escrow business may be transferred, shall
be the Escrow Agent under this Escrow Agreement without further
act.

      

                     
9.          Compensation
and Reimbursement.  The Parties agree jointly
and severally to pay the Escrow Agent upon execution of this Escrow Agreement
and from time to time thereafter reasonable compensation for the services to be
rendered hereunder, which unless otherwise agreed in writing shall be as
described in Schedule 2 attached hereto, and (b) pay or reimburse the Escrow
Agent upon request for all expenses, disbursements and advances,
including, without limitation reasonable attorney's fees and
expenses, incurred or made by it in connection with the preparation,
negotiation, execution, performance, delivery, modification and termination of
this Escrow Agreement. The Parties hereby grant the Escrow Agent a lien on,
right of set-off against and security interest in, the Escrow Fund for the payment of any claim for
compensation, expenses and amounts due
hereunder.  In furtherance of the foregoing, the Escrow Agent is
expressly authorized and directed, but shall not be obligated, to charge against
and withdraw from the Escrow Fund for its own account any amounts due
to the Escrow Agent under this Section 9 and is hereby expressly authorized to
sell any or all of the Escrow Shares if necessary to pay any of the foregoing
amounts.  The
obligations contained in this Section 9 shall survive the termination of this
Escrow Agreement and the resignation, replacement or removal of the Escrow
Agent.

      

      
        
          
          

        

        
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      10.          Indemnity. 
The Parties shall jointly and
severally indemnify, defend and save harmless the Escrow Agent and its
affiliates and their respective successors, assigns, directors, officers,
managers, attorneys, accountants, experts, agents and employees (the
“indemnitees”) from and against any and all losses, damages, claims,
liabilities, penalties, judgments, settlements, actions, suits, proceedings,
litigation, investigations, costs or expenses (including, without limitation,
the fees and expenses of in house or outside counsel and experts and their
staffs and all expense of document location, duplication and shipment)
(collectively “Losses”) arising out of or in connection with (a) the Escrow
Agent's execution and performance of this Escrow Agreement, tax reporting or
withholding, the enforcement of any rights or remedies under or in connection
with this Escrow Agreement, or as may arise by reason of any act, omission or
error of the indemnitee, except in the case of any indemnitee to the extent that
such Losses are finally adjudicated by a court of competent jurisdiction to have
been primarily caused by the gross negligence or willful misconduct of such
indemnitee, or (b) its following any instructions or other directions, whether
joint or singular, from the Parties, except to the extent that its following any
such instruction or direction is expressly forbidden by the terms
hereof.  The Parties hereto acknowledge that the foregoing indemnities
shall survive the resignation, replacement or removal of the Escrow Agent or the
termination of this Escrow Agreement.  The Parties hereby grant the
Escrow Agent a lien on, right of set-off against and security interest in, the
Escrow Fund for the payment of any claim for
indemnification, expenses and amounts due hereunder. In furtherance of the foregoing, the
Escrow Agent is expressly authorized and directed, but shall not be obligated,
to charge against and withdraw from the Escrow Fund for its own account or for the
account of an indemnitee any amounts due to the Escrow Agent or to an indemnitee
under this Section 10 and
is hereby expressly authorized to sell any or all of the Escrow Shares if
necessary to pay any of the foregoing amounts.  The obligations contained
in this Section 10 shall survive the termination of this
Escrow Agreement and the resignation, replacement or removal of the Escrow
Agent.

      

                    
 11.         Patriot Act
Disclosure/Interest.

      

      (a)         Patriot Act
Disclosure.  Section 326 of the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001 (“USA PATRIOT Act”) requires the Escrow Agent to implement
reasonable procedures to verify the identity of any person that opens a new
account with it.  Accordingly, the Parties acknowledge that Section
326 of the USA PATRIOT Act and the Escrow Agent’s identity verification
procedures require the Escrow Agent to obtain information which may be used to
confirm the Parties identities including without limitation name, address and
organizational documents (“identifying information”). The Parties agree to provide the Escrow
Agent with and consent to the Escrow Agent obtaining
from third parties any such identifying information required as a condition of
opening an account with or using any service provided by the Escrow
Agent.

       

      
        
          
          

        

        
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      (b)      
Taxpayer Identification Numbers
(“TINs”).  The Parties have provided the Escrow Agent with
their respective fully executed Internal Revenue Service (“IRS”) Form W-8, or
W-9 and/or other required documentation.  The Parties each represent
that its correct TIN assigned by the IRS, or any other taxing authority, is set
forth in the delivered forms, as well as in the Substitute IRS For, W-9 set
forth on the signature page of this Escrow Agreement.

      

      (c)         Interest.  In the
event that any interest or other income is earned on the Escrow Fund, the
Parties hereby agree to negotiate in good faith, and execute and deliver, such
supplemental written instructions to the Escrow Agent as are necessary to
account for such interest or other income, in form satisfactory to the Escrow
Agent, which such instructions shall include (i) a schedule of allocation of
such interest or income, (ii) fully executed Internal Revenue Service Form W-8
or W-9 (including Taxpayer Identification Numbers) and/or other similar
documentation for the applicable parties, (iii) appropriate representations
reasonably required by the Escrow Agent from the Parties and/or other relevant
parties regarding allocation, tax reporting and payment of taxes, and including
reasonable exculpatory language to the benefit of the Escrow Agent relevant to
such allocation and tax reporting.  If the Parties are unable to agree
on any such supplemental instructions contemplated by the preceding sentence
within 30 days after such sentence shall become applicable, then the Escrow
Agent shall refrain from taking any action with respect to such interest or
other income, other than to keep safely such interest or other income until it
shall be directed otherwise in writing jointly by Purchaser and the
Representatives or by final non-appealable order of a court of competent
jurisdiction.   

      

                   
  12.         Notices and Funds Transfer
Information.  All communications hereunder shall be in
writing and shall be deemed to be duly given and received:

      

          
   (a)         upon delivery, if delivered personally,
or upon confirmed transmittal, if by facsimile and if received by 5:00 p.m.,
local time for the
recipient, on a Business Day;

      

            
 (b)       
 on the next Business Day (as
hereinafter defined) if sent by overnight courier;
or

      

      (c)       
 four (4) Business Days after
mailing if mailed by prepaid registered mail, return receipt requested, to the
appropriate notice address
set forth below or at such other address as any party hereto may have furnished
to the other parties in writing by registered mail, return receipt
requested.

      

             
Notices made to either Purchaser or Representative pursuant to this Escrow
Agreement will be made in accordance with the information shown
below:

      

                      If to Purchaser:

      Pet DRx
Corporation f/k/a Echo Healthcare
Acquisition Corp.

      215
Centerview Drive

      Suite
360

      Brentwood,
Tennessee 37027

      Attention:            
 Joel
Kanter

      Gene Burleson

      Fax No: 615-346-5018

      

      
        
          
          

        

        
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                      If
to Representatives:

      Pet DRx Corporation f/k/a XLNT Veterinary
Care, Inc.

      215
Centerview Drive

      Suite
360

      Brentwood,
Tennessee 37027

      Attention:             Zubeen
Shroff

      Robert Wallace

      Richard Johnston

      George Villasana

      Fax No.:
615-346-5018

      

      
                        If
to the Escrow Agent:

      

      
                                                                       
JPMorgan Chase Bank,
N.A.

                                                                       
Escrow Services

      

      
                                                                       
4 New York Plaza, 21st Floor

                                                                       
New York, NY 10004

                                                                       
Attention:  James M.
Foley

                                                                       
Fax No.:
212-623-6168

      

      

                 Notwithstanding the above, in the case
of communications delivered to the Escrow Agent pursuant to (a), (b) and (c) of this Section 12, such communications shall be deemed to
have been given on the date received by an officer of the Escrow Agent or any
employee of the Escrow Agent who reports directly to any such officer at the
above-referenced office. In
the event that the Escrow Agent, in its sole discretion, shall determine that an
emergency exists, the Escrow Agent may use such other means of communication as
the Escrow Agent deems appropriate.  “Business Day” shall mean any day
other than a Saturday, Sunday
or any other day on which the Escrow Agent located at the notice address set
forth above is authorized or required by law or executive order to remain
closed.

      

                     
13.        Security
Procedures.  In the
event transfer instructions are given (other than in writing at the time of execution of
this Escrow Agreement, as indicated in Section 12 above), whether in writing, by
facsimile or otherwise, the Escrow Agent is authorized to seek confirmation of
such instructions by telephone call-back to the person or persons designated on schedule 1 hereto
(“Schedule 1”), and the Escrow Agent may rely upon
the confirmation of anyone purporting to be the person or persons so
designated.  The persons and telephone numbers for call-backs may be
changed only in a writing actually received and acknowledged by
the Escrow Agent. If the Escrow Agent is unable to contact any of the authorized
representatives identified in Schedule 1, the Escrow Agent is hereby authorized
to suspend implementing any
such transfer instructions until an appropriate confirmation has been
obtained.  The
Escrow

      Agent and the beneficiary's bank in any
funds transfer may rely solely upon any account numbers or similar identifying
numbers provided by Purchaser or Representatives to identify (a) the beneficiary, (b) the beneficiary's bank, or
(c) an intermediary bank.  The
Escrow Agent may apply any of the escrowed funds for any payment order it
executes using any such identifying number, even when its use may result in a
person other than the beneficiary being paid, or the transfer of funds to
a bank other than the beneficiary's bank or an intermediary bank designated. The
Parties acknowledge that these security procedures are commercially
reasonable.

      

                     
14.        Compliance with Court
Orders.  In the event
that any of the property comprising the Escrow Fund shall be attached, garnished or levied
upon by any court order, or the delivery thereof shall be stayed or enjoined by
an order of a court, or any order, judgment or decree shall be made or entered
by any court order
affecting the property deposited under this Escrow Agreement, the Escrow Agent
is hereby expressly authorized, in its sole discretion, to obey and comply with
all writs, orders or decrees so entered or issued, which it is advised by legal
counsel of its own choosing is binding upon it,
whether with or without jurisdiction, and in the event that the Escrow Agent
obeys or complies with any such writ, order or decree it shall not be liable to
any of the parties hereto or to any other person, entity, firm or corporation, by reason of such
compliance notwithstanding such writ, order or decree be subsequently reversed,
modified, annulled, set aside or vacated.

      

                     
15.       
Miscellaneous.  The provisions of this Escrow Agreement
may be waived, altered, amended or supplemented, in whole or in part, only
by a writing signed by the Escrow Agent and the Parties.  Neither this
Escrow Agreement nor any right or interest hereunder may be assigned, in whole or in part, by the Escrow Agent or any Party, except
as provided in Section
8, without the prior consent of the
Escrow Agent and the other Parties.  This Escrow Agreement
shall be governed by and construed under the laws of the State of Delaware.  Each Party irrevocably waives any
objection on the grounds of venue, forum non-conveniens or any similar grounds
and irrevocably consents to service of process by mail or in any other manner
permitted by applicable law and consents to the jurisdiction of the courts
located in the State of
Delaware.  The Parties further hereby
waive any right to a trial
by jury with respect to any lawsuit or judicial proceeding arising or relating
to this Escrow Agreement.  No party to this Escrow Agreement is liable
to any other party for losses due to, or if it is unable to perform its
obligations under the terms of this Escrow
Agreement because of, acts of God, fire, war, terrorism, floods, strikes,
electrical outages, equipment or transmission failure, or other causes
reasonably beyond its control.  This Escrow Agreement may be executed
in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument. All signatures of the parties to this Escrow Agreement may
be transmitted by facsimile, and such facsimile will, for all purposes, be deemed to be the original
signature of such party whose signature it reproduces, and will be binding upon
such party. If any provision of this Escrow
Agreement is determined to be prohibited or unenforceable by reason of any
applicable law of a
jurisdiction, then such provision shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions thereof, and any such prohibition or unenforceability in
such jurisdiction shall not invalidate or render
unenforceable such provisions in any other jurisdiction.  The parties
represent, warrant and covenant that each document, notice, instruction or
request provided by such Party to Escrow Agent shall comply with
applicable laws and regulations.  Where,
however, the conflicting provisions of
any such applicable law may be waived, they are hereby irrevocably waived by the
Parties to the fullest extent permitted
by law, to the end that this Escrow Agreement shall be enforced as written.  Except as
expressly provided in Section 8 above, nothing in this Escrow Agreement, whether
express or implied, shall be construed to give to any person or entity other
than the Escrow Agent and the Parties any legal or equitable right,
remedy, interest or claim under or in respect of
this Escrow Agreement or any of the Escrow Shares or funds escrowed
hereunder.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

                 IN WITNESS
WHEREOF, the parties hereto
have executed this Escrow Agreement as of the date set forth
above.

      

      
        

         

        
          	
                   

                  Tax Certification:
      Taxpayer Identification Number (TIN): 56-2517815  Date:
      February ___, 2008.

                   

                  

                  
                    Name &
      Address:             
      Pet DRx Corporation f/k/a Echo Healthcare Acquisition, Corp.

                                                                  215
      Centerview Drive

                                                                 
      Suite
      360

                                                                 
      Brentwood,
      Tennessee 37027

                  

                  
                    

                     

                    Customer
      is a (check one):

                     

                    

                  

                  
                    X
      Corporation               ___
      Partnership

                  

                  
                    ___
      Individual/sole proprietor  ___
      Trust                                ___
      Other _________________

                     

                    Taxpayer
      is (check if applicable):

                     

                    ___
      Exempt from backup withholding

                     

                    Under
      the penalties of perjury, the undersigned certifies that:

                     

                    

                  

                  
                    
                         
      (1) the
      number shown above is its correct Taxpayer Identification Number (or it is
      waiting for a number to be issued to it);

                    

                     

                    
                         
      (2) it
      is not subject to backup withholding because: (a) it is exempt from backup
      withholding or (b) it has not been notified by the Internal Revenue
      Service (IRS) that it is subject 

                                to
      backup withholding as a result of failure to report
      all interest or dividends, or (c) the IRS has notified it that it is no
      longer subject to backup withholding; and

                       

                    

                    
                         
      (3) the
      entity is a U.S. person (including a U.S. resident
      alien).

                    

                     

                     

                       
      Note: The IRS does not require your consent to any provision of this
      document other than the certifications required to avoid backup
      withholding.

                     

                     

                  

                

        

         

      

      
          
 PURCHASER:

      

      

      
           
PET DRX
CORPORATION

      

      

      
           
Signature: /s/ Joel
Kanter                                                  
 

      

      

      
           
Printed Name: Joel Kanter, as a member of the committee referred to in Section
1.11(a) of the Merger Agreement

      

      

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      
           
REPRESENTATIVES:

      

      
         

            Signature: /s/ Zubeen
Shroff                                              

           
Printed
Name: Zubeen Shroff

      

      

      
           
Signature: /s/ Richard
Johnston                                        

      

      
           
Printed
Name: Richard
Johnston

      

      

      
           
Signature: /s/ Robert
Wallace                                            

      

      
          
 Printed Name:
Robert
Wallace

      

      

      

          JPMORGAN CHASE BANK,
NATIONAL
ASSOCIATION

      
         

      

      
           
as Escrow
Agent

      

      

      
         

      

      
          
 By: /s/ James M.
Foley                                                         

            Printed Name: James M. Foley

      

      
           
Title: Assistant Vice President

          
          

        

      

      

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

         

      

      Schedule
1

      

      
         
Telephone Number(s) and authorized
signature(s) for

      

      
         
Person(s)
Designated to give Transfer Instructions

      

      

      
          
 If to
Purchaser:

      

       

      
        	 
      	 
      	
                Name

              	 
      	
                Telephone
      Number

              	
                Signature

              
	 	 	 	 	 	 
	 
      	
                1.

              	
                Gene
    Burleson

              	 
      	
                _______________________

              	
                ___________________

              
	 	 	 	 	 	 
	 
      	
                2.

              	
                Joel Kanter

              	 
      	
                _______________________

              	
                ___________________

              
	 	 	 	 	 	 
	 
      	
                3.

              	
                _______________

              	 
      	
                _______________________

              	
                ___________________

              

      

    

     

     

    
          If to Representative:

      

      
        	 
      	 
      	
                Name

              	 
      	
                Telephone
      Number

              	
                Signature

              
	 	 	 	 	 	 
	 
      	
                1.

              	
                Zubeen
    Shroff

              	 
      	
                _______________________

              	
                ___________________

              
	 	 	 	 	 	 
	 
      	
                2.

              	
                Robert
    Wallace

              	 
      	
                _______________________

              	
                ___________________

              
	 	 	 	 	 	 
	 
      	
                3.

              	
                Richard
      Johnston

              	 
      	
                _______________________

              	
                ___________________

              

      

      

    

     

    
      

      
         
Telephone Number(s) for Call-Backs
and

      

      
         
Person(s)
Designated to Confirm Transfer Instructions

      

      

      
           
If to
Purchaser:

      

      

      
        	 
      	 
      	
                Name

              	 
      	
                Telephone
      Number

              
	 
      	 
      	 
      	 
      	 
      
	 
      	
                1.

              	
                Shea
Cordell

              	 
      	
                _______________________

              
	 
      	 
      	 
      	 
      	 
      
	 
      	
                2.

              	
                Rick Miller

              	 
      	
                _______________________

              
	 
      	 
      	 
      	 
      	 
      
	 
      	
                3.

              	
                _______________

              	 
      	
                _______________________

              

      

      

          If to Representative:

      

      
        	 
      	 
      	
                Name

              	 
      	
                Telephone
      Number

              
	 
      	
                1.

              	
                George
      Villasana

              	 
      	
                _______________________

              
	 
      	 
      	 
      	 
      	 
      
	 
      	
                2.

              	
                _______________

              	 
      	
                _______________________

              

      

      
        	 	 
      	 
      	 
      	 
      
	 
      	
                3.

              	
                _______________

              	 
      	
                _______________________

              

         

      

    

    
         Telephone call backs shall
be made to both Parties if
joint instructions are required pursuant to the agreement. All funds transfer
instructions must include the signature of the 

          person(s) authorizing said funds
transfer and must not be the same person confirming said
transfer.

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

         

      

      SCHEDULE 2

       

      

      Escrow Agent’s Compensation:

      

      

      $2,500.00
per annum with no right of proration

       

       

       

       

      14ex10-2.htm

    
      

    

    Exhibit 10.2

     

    
      AMENDED
AND RESTATED REGISTRATION RIGHTS AGREEMENT

       

      

      THIS
REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is entered into as of the _____
day of February, 2008, by and among Pet DRx Corporation (f/k/a Echo Healthcare
Acquisition Corp.), a Delaware corporation (the “Company”), and the undersigned
parties listed under Investors on the signature page hereto
(each, an “Investor” and collectively, the “Investors”).

       

      WHEREAS,
the holders of all the issued and outstanding securities of the Company
immediately prior to its initial public offering (the “Echo Holders”) entered
into a Registration Rights Agreement dated as of March 22, 2006 (the “Prior
Agreement”);

       

      WHEREAS,
the Company entered into a Second Amended and Restated Merger Agreement, dated
as of October 23, 2007 (the “Merger Agreement”), providing for the merger
(the “Merger”) of a wholly owned subsidiary of the Company with and into XLNT
Veterinary Care, Inc. (“XLNT”), with XLNT continuing as the surviving
corporation and a wholly owned subsidiary of the Company;

       

      WHEREAS,
the Merger was consummated on January 4, 2008;

       

      WHEREAS,
the Merger Agreement contemplates that the Company and each “affiliate” of XLNT
within the meaning of Rule 145 promulgated under the Securities Act (as defined
below) will execute and deliver this registration rights agreement;
and

       

      WHEREAS,
the Investors desire to amend and restate the Prior Agreement as set forth
herein and add the XLNT Holders (as defined below) as parties to this
Agreement.

       

      NOW,
THEREFORE, in consideration of the mutual covenants and agreements set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

       

      
        	
                 
      

              	
                1.

              	
                DEFINITIONS.

              

      

       

      The
following capitalized terms used herein have the following
meanings:

       

      “Agreement” means this
Agreement, as amended, restated, supplemented, or otherwise modified from time
to time.

       

      “Commission” means the
Securities and Exchange Commission, or any other federal agency then
administering the Securities Act or the Exchange Act.

       

      “Common Stock” means
the common stock, par value $0.0001 per share, of the Company.

       

      “Company” is defined
in the preamble to this Agreement.

       

      “Demand Registration”
is defined in Section 2.1.1.

       

      “Demanding Holder” is
defined in Section 2.1.1.

       

      “Echo Holder” is
defined in the preamble to this agreement.

       

      “Exchange Act” means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
of the Commission promulgated thereunder, all as the same shall be in effect at
the time.

       

      “Form S-3” is defined
in Section 2.3.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      “Founding Director
Warrants” means the 458,333 warrants issued to certain of the Investors
identified as purchasers of such warrants in the Founding Director Warrant
Purchase Agreement dated of even date herewith.

       

      “Indemnified Party” is
defined in Section 4.3.

       

      “Indemnifying Party”
is defined in Section 4.3.

       

      “Investor” is defined
in the preamble to this Agreement.

       

      “Investor Indemnified
Party” is defined in Section 4.1.

       

      “Maximum Number of
Shares” is defined in Section 2.1.4.

       

      “Notices” is defined
in Section 6.3.

       

      “Piggy-Back
Registration” is defined in Section 2.2.1.

       

      “Register,” “registered” and
“registration”
mean a registration effected by preparing and filing a registration statement or
similar document in compliance with the requirements of the Securities Act, and
the applicable rules and regulations promulgated thereunder, and such
registration statement becoming effective.

       

      “Registrable
Securities” mean (i) all of the shares of Common Stock owned or held by
Investors, (ii) the Founding Director Warrants owned by certain Investors, (iii)
the shares of Common Stock underlying the Founding Director Warrants, and (iv)
all shares of Common Stock issuable to an XLNT Holder pursuant to the Merger
Agreement.  Registrable Securities also include any warrants, shares
of capital stock or other securities of the Company issued as a dividend or
other distribution with respect to or in exchange for or in replacement of such
shares of Common Stock. As to any particular Registrable Securities, such
securities shall cease to be Registrable Securities when: (a) a Registration
Statement with respect to the sale of such securities shall have become
effective under the Securities Act and such securities shall have been sold,
transferred, disposed of or exchanged in accordance with such Registration
Statement; (b) such securities shall have been otherwise transferred, new
certificates for them not bearing a legend restricting further transfer shall
have been delivered by the Company and subsequent public distribution of them
shall not require registration under the Securities Act; (c) such securities
shall have ceased to be outstanding, or (d) all of the Registrable Securities
held by the Holder of such Registrable Securities are eligible for sale under
Rule 144(k) within a single three-month period.

       

      “Registration
Statement” means a registration statement filed by the Company with the
Commission in compliance with the Securities Act and the rules and regulations
promulgated thereunder for a public offering and sale of Common Stock (other
than a registration statement on Form S-4 or Form S-8, or their successors, or
any registration statement covering only securities proposed to be issued in
exchange for securities or assets of another entity).

       

      “Release Date” means
the date on which shares of Common Stock are disbursed from escrow pursuant to
Section 3 of that certain Stock Escrow Agreement dated as of March 22, 2006 by
and among the Company, the Echo Holders and Corporate Stock Transfer, Inc.; with
respect to the Founding Director Warrants, the date on which such warrants
become exercisable by their terms; and with respect to the Common Stock
underlying the Founding Director Warrants, all such underlying shares of Common
Stock issued on exercise of the Founding Director Warrants.

       

      “Securities Act” means
the Securities Act of 1933, as amended, and the rules and regulations of the
Commission promulgated thereunder, all as the same shall be in effect at the
time.

       

      “Underwriter” means a
securities dealer who purchases any Registrable Securities as principal in an
underwritten offering and not as part of such dealer’s market-making
activities.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      “XLNT Holder” means
the former holders of securities of XLNT listed under “XLNT Holders” on the
signature pages hereto.

       

      
        	
                 
      

              	
                2.

              	
                REGISTRATION
      RIGHTS.

              

      

       

      2.1.          Demand
Registration.

       

      2.1.1.        Request for
Registration. At any time and from time to time on or after the Release
Date, the holders of a majority-in-interest of the Registrable Securities held
by the Echo Holders or the transferees of the Echo Holders, may make a written
demand for registration under the Securities Act of all or part of their
Registrable Securities (a “Demand
Registration”).  At any time and from time to time on or after
the later of March 31, 2008 and the filing of the Company’s Form 10-K for
the year ended December 31, 2007, the holders of a majority-in-interest of
the Registrable Securities held by the XLNT Holders or the transferees of the
XLNT Holders may make a written demand for a Demand Registration of all or part
of their Registrable Securities.  Any demand for a Demand Registration
shall specify the number of shares of Registrable Securities proposed to be sold
and the intended method(s) of distribution thereof. The Company will notify all
holders of Registrable Securities of the demand, and each holder of Registrable
Securities who wishes to include all or a portion of such holder’s Registrable
Securities in the Demand Registration (each such holder including shares of
Registrable Securities in such registration, a “Demanding Holder”)
shall so notify the Company within fifteen (15) days after the receipt by the
holder of the notice from the Company. Upon any such request, the Demanding
Holders shall be entitled to have their Registrable Securities included in the
Demand Registration, subject to Section 2.1.4 and the provisos set forth in
Section 3.1.1. The Company shall not be obligated to effect more than an
aggregate of two (2) Demand Registrations initiated by Echo Holders under this
Section 2.1.1 and not more than an aggregate of two (2) Demand Registrations
initiated by XLNT Holders under this Section 2.1.1.

       

      2.1.2.        Effective
Registration. A registration will not count as a Demand Registration
until the Registration Statement filed with the Commission with respect to such
Demand Registration has been declared effective and the Company has complied
with all of its obligations under this Agreement with respect thereto; provided, however, that if,
after such Registration Statement has been declared effective, the offering of
Registrable Securities pursuant to a Demand Registration is interfered with by
any stop order or injunction of the Commission or any other governmental agency
or court, the Registration Statement with respect to such Demand Registration
will be deemed not to have been declared effective, unless and until, (i) such
stop order or injunction is removed, rescinded or otherwise terminated, and (ii)
a majority-in-interest of the Demanding Holders thereafter elect to continue the
offering; provided, further, that the
Company shall not be obligated to file a second Registration Statement until a
Registration Statement that has been filed is counted as a Demand Registration
or is terminated.

       

      2.1.3.        Underwritten
Offering. If a majority-in-interest of the Demanding Holders so elect and
such holders so advise the Company as part of their written demand for a Demand
Registration, the offering of such Registrable Securities pursuant to such
Demand Registration shall be in the form of an underwritten offering. In such
event, the right of any holder to include its Registrable Securities in such
registration shall be conditioned upon such holder’s participation in such
underwriting and the inclusion of such holder’s Registrable Securities in the
underwriting to the extent provided herein. All Demanding Holders proposing to
distribute their securities through such underwriting shall enter into an
underwriting agreement in customary form with the Underwriter or Underwriters
selected for such underwriting by a majority-in-interest of the Demanding
Holders.

       

      2.1.4.        Reduction of
Offering. If the managing Underwriter or Underwriters for a Demand
Registration that is to be an underwritten offering advises the Company and the
Demanding Holders in writing that the dollar amount or number of shares of
Registrable Securities which the Demanding Holders desire to sell, taken
together with all other shares of Common Stock or other securities which the
Company desires to sell and the shares of Common Stock, if any, as to which
registration has been requested pursuant to written contractual piggy-back
registration rights held by other shareholders of the Company who desire to
sell, exceeds the maximum dollar amount or maximum number of shares that can be
sold in such offering without adversely affecting the proposed offering price,
the timing, the distribution method, or the probability of success of such
offering (such maximum dollar amount or maximum number of shares, as applicable,
the “Maximum Number of
Shares”), then the Company shall include in such registration: (i) first,
the Registrable Securities as to which Demand Registration has been requested by
the Demanding Holders (pro rata in
accordance with the number of shares of Registrable Securities which such
Demanding Holder has requested be included in such registration, regardless of
the number of shares of Registrable Securities held by each Demanding Holder)
that can be sold without exceeding the Maximum Number of Shares; (ii) second, to
the extent that the Maximum Number of Shares has not been reached under the
foregoing clause (i), the shares of Common Stock or other securities that the
Company desires to sell that can be sold without exceeding the Maximum Number of
Shares; (iii) third, to the extent that the Maximum Number of Shares has not
been reached under the foregoing clauses (i) and (ii), the shares of Common
Stock or other securities registrable pursuant to the terms of the Unit Purchase
Option issued to Morgan Joseph & Co. Inc. or its designees in connection
with the Company’s initial public offering (the “Unit Purchase Option”
and such registrable securities, the "Option Securities")
as to which "piggy-back" registration has been requested by the holders thereof,
pro rata, that can be sold without exceeding the Maximum Number of Shares; and
(iv) fourth, to the extent that the Maximum Number of Shares have not been
reached under the foregoing clauses (i), (ii), and (iii), the shares of Common
Stock or other securities for the account of other persons that the Company is
obligated to register pursuant to written contractual arrangements with such
persons and that can be sold without exceeding the Maximum Number of
Shares.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      2.1.5.        Withdrawal. If a
majority-in-interest of the Demanding Holders disapprove of the terms of any
underwriting or are not entitled to include all of their Registrable Securities
in any offering, such majority-in-interest of the Demanding Holders may elect to
withdraw from such offering by giving written notice to the Company and the
Underwriter or Underwriters of their request to withdraw prior to the
effectiveness of the Registration Statement filed with the Commission with
respect to such Demand Registration. If the majority-in-interest of the
Demanding Holders withdraws from a proposed offering relating to a Demand
Registration, then such registration shall not count as a Demand Registration
provided for in Section 2.1.

       

      2.2.          Piggy-Back
Registration.

       

      2.2.1.        Piggy-Back Rights. If
at any time on or after the date hereof (or, in the case of the Echo Holders,
the Release Date) the Company proposes to file a Registration Statement under
the Securities Act with respect to an offering of equity securities, or
securities or other obligations exercisable or exchangeable for, or convertible
into, equity securities, by the Company for its own account or for shareholders
of the Company for their account (or by the Company and by shareholders of the
Company including, without limitation, pursuant to Section 2.1), other than a
Registration Statement (i) filed in connection with any employee stock option or
other benefit plan, (ii) for an exchange offer or offering of securities solely
to the Company’s existing security holders, or for the conversion, exercise, or
exchange of outstanding securities, (iii) for an offering of debt that is
convertible into equity securities of the Company or (iv) for a dividend
reinvestment plan, then the Company shall (x) give written notice of such
proposed filing to the holders of Registrable Securities as soon as practicable
but in no event less than ten (10) days before the anticipated filing date,
which notice shall describe the amount and type of securities to be included in
such offering, the intended method(s) of distribution, and the name of the
proposed managing Underwriter or Underwriters, if any, of the offering, and (y)
offer to the holders of Registrable Securities in such notice the opportunity to
register the sale of such number of shares of Registrable Securities as such
holders may request in writing within fifteen (15) days following receipt of
such notice (a “Piggy-Back
Registration”). The Company shall cause such Registrable Securities to be
included in such registration and shall use its best efforts to cause the
managing Underwriter or Underwriters of a proposed underwritten offering to
permit the Registrable Securities requested to be included in a Piggy-Back
Registration to be included on the same terms and conditions as any similar
securities of the Company and to permit the sale or other disposition of such
Registrable Securities in accordance with the intended method(s) of distribution
thereof. All holders of Registrable Securities proposing to distribute their
securities through a Piggy-Back Registration that involves an Underwriter or
Underwriters shall enter into an underwriting agreement in customary form with
the Underwriter or Underwriters selected for such Piggy-Back
Registration.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      2.2.2.       Reduction of
Offering. If the managing Underwriter or Underwriters for a Piggy-Back
Registration that is to be an underwritten offering advises the Company and the
holders of Registrable Securities in writing that the dollar amount or number of
shares of Common Stock which the Company desires to sell, taken together with
shares of Common Stock, if any, as to which registration has been demanded
pursuant to written contractual arrangements with persons other than the holders
of Registrable Securities hereunder, the Registrable Securities as to which
registration has been requested under this Section 2.2, and the shares of Common
Stock, if any, as to which registration has been requested pursuant to the
written contractual piggy-back registration rights of other shareholders of the
Company, exceeds the Maximum Number of Shares, then the Company shall include in
any such registration:

       

      (i)           If
the registration is undertaken for the Company’s account: (A) first, the shares
of Common Stock or other securities that the Company desires to sell that can be
sold without exceeding the Maximum Number of Shares; (B) second, to the extent
that the Maximum Number of Shares has not been reached under the foregoing
clause (A), the shares of Common Stock, if any, including the Registrable
Securities, as to which registration has been requested pursuant to written
contractual piggy-back registration rights of security holders (pro rata in
accordance with the number of shares of Common Stock which each such person has
actually requested to be included in such registration, regardless of the number
of shares of Common Stock with respect to which such persons have the right to
request such inclusion) that can be sold without exceeding the Maximum Number of
Shares, and (C) third, to the extent that the Maximum Number of shares has not
been reached under the foregoing clauses (A) and (B), the shares of Common Stock
or other securities for the account of other persons that the Company is
obligated to register pursuant to written contractual piggy-back registration
rights with such persons and that can be sold without exceeding the Maximum
Number of Shares; and

       

      (ii)           If
the registration is a “demand” registration undertaken at the demand of persons
other than the holders of Registrable Securities pursuant to written contractual
arrangements with such persons, (A) first, the shares of Common Stock for the
account of the demanding persons that can be sold without exceeding the Maximum
Number of Shares; (B) second, to the extent that the Maximum Number of Shares
has not been reached under the foregoing clause (A), the shares of Common Stock
or other securities that the Company desires to sell that can be sold without
exceeding the Maximum Number of Shares; and (C) third, to the extent that the
Maximum Number of Shares has not been reached under the foregoing clauses (A)
and (B), the Registrable Securities as to which registration has been requested
under this Section 2.2 (pro rata in
accordance with the number of shares of Registrable Securities held by each such
holder); and (D) fourth, to the extent that the Maximum Number of Shares has not
been reached under the foregoing clauses (A), (B) and (C), the shares of Common
Stock, if any, as to which registration has been requested pursuant to written
contractual piggy-back registration rights which other shareholders desire to
sell that can be sold without exceeding the Maximum Number of
Shares.

       

      2.2.3.        Withdrawal. Any
holder of Registrable Securities may elect to withdraw such holder’s request for
inclusion of Registrable Securities in any Piggy-Back Registration by giving
written notice to the Company of such request to withdraw prior to the
effectiveness of the Registration Statement. The Company may also elect to
withdraw a registration statement at any time prior to the effectiveness of the
Registration Statement. Notwithstanding any such withdrawal, the Company shall
pay all expenses incurred by the holders of Registrable Securities in connection
with such Piggy-Back Registration as provided in Section 3.3.

       

      2.3.           Registrations on Form
S-3. The holders of Registrable Securities may at any time and from time
to time, request in writing that the Company register the resale of any or all
of such Registrable Securities on Form S-3 or any similar short-form
registration which may be available at such time (“Form S-3”); provided, however, that the
Company shall not be obligated to effect such request through an underwritten
offering. Upon receipt of such written request, the Company will promptly give
written notice of the proposed registration to all other holders of Registrable
Securities, and, as soon as practicable thereafter, effect the registration of
all or such portion of such holder’s or holders’ Registrable Securities as are
specified in such request, together with all or such portion of the Registrable
Securities of any other holder or holders joining in such request as are
specified in a written request given within fifteen (15) days after receipt of
such written notice from the Company; provided, however, that the
Company shall not be obligated to effect any such registration pursuant to this
Section 2.3: (i) if Form S-3 is not available for such offering; or (ii) if the
holders of the Registrable Securities, together with the holders of any other
securities of the Company entitled to inclusion in such registration, propose to
sell Registrable Securities and such other securities (if any) at any aggregate
price to the public of less than $500,000. Registrations effected pursuant to
this Section 2.3 shall not be counted as Demand Registrations effected pursuant
to Section 2.1.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                3.

              	
                REGISTRATION
      PROCEDURES.

              

      

       

      3.1.           Filings; Information.
Whenever the Company is required to effect the registration of any Registrable
Securities pursuant to Section 2, the Company shall use its best efforts to
effect the registration and sale of such Registrable Securities in accordance
with the intended method(s) of distribution thereof as expeditiously as
practicable, and in connection with any such request:

       

      3.1.1.        Filing Registration
Statement. The Company shall, as expeditiously as possible and in any
event within sixty (60) days after receipt of a request for a Demand
Registration pursuant to Section 2.1, prepare and file with the Commission a
Registration Statement on any form for which the Company then qualifies or which
counsel for the Company shall deem appropriate and which form shall be available
for the sale of all Registrable Securities to be registered thereunder in
accordance with the intended method(s) of distribution thereof, and shall use
its best efforts to cause such Registration Statement to become and remain
effective for the period required by Section 3.1.3; provided, however, that the
Company shall have the right to defer any Demand Registration for up to thirty
(30) days, and any Piggy-Back Registration for such period as may be applicable
to deferment of any demand registration to which such Piggy-Back Registration
relates, in each case if the Company shall furnish to the holders a certificate
signed by the Chief Executive Officer of the Company stating that, in the good
faith judgment of the Board of Directors of the Company, it would be materially
detrimental to the Company and its shareholders for such Registration Statement
to be effected at such time; provided further,
however, that
the Company shall not have the right to exercise the right set forth in the
immediately preceding proviso more than once in any 365-day period in respect of
a Demand Registration hereunder.

       

      3.1.2.        Copies. The Company
shall, prior to filing a Registration Statement or prospectus, or any amendment
or supplement thereto, furnish without charge to the holders of Registrable
Securities included in such registration, and such holders’ legal counsel,
copies of such Registration Statement as proposed to be filed, each amendment
and supplement to such Registration Statement (in each case including all
exhibits thereto and documents incorporated by reference therein), the
prospectus included in such Registration Statement (including each preliminary
prospectus), and such other documents as the holders of Registrable Securities
included in such registration or legal counsel for any such holders may request
in order to facilitate the disposition of the Registrable Securities owned by
such holders.

       

      3.1.3.        Amendments and
Supplements. The Company shall prepare and file with the Commission such
amendments, including post-effective amendments, and supplements to such
Registration Statement and the prospectus used in connection therewith as may be
necessary to keep such Registration Statement effective and in compliance with
the provisions of the Securities Act until all Registrable Securities and other
securities covered by such Registration Statement have been disposed of in
accordance with the intended method(s) of distribution set forth in such
Registration Statement (which period shall not exceed the sum of one hundred
eighty (180) days plus any period during which any such disposition is
interfered with by any stop order or injunction of the Commission or any
governmental agency or court) or such securities have been
withdrawn.

       

      3.1.4.        Notification. After
the filing of a Registration Statement, the Company shall promptly, and in no
event more than two (2) business days after such filing, notify the holders of
Registrable Securities included in such Registration Statement of such filing,
and shall further notify such holders promptly and confirm such advice in
writing in all events within two (2) business days of the occurrence of any of
the following: (i) when such Registration Statement becomes effective; (ii) when
any post-effective amendment to such Registration Statement becomes effective;
(iii) the issuance or threatened issuance by the Commission of any stop order
(and the Company shall take all actions required to prevent the entry of such
stop order or to remove it if entered); and (iv) any request by the Commission
for any amendment or supplement to such Registration Statement or any prospectus
relating thereto or for additional information or of the occurrence of an event
requiring the preparation of a supplement or amendment to such prospectus so
that, as thereafter delivered to the purchasers of the securities covered by
such Registration Statement, such prospectus will not contain an untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and
promptly make available to the holders of Registrable Securities included in
such Registration Statement any such supplement or amendment; except that before
filing with the Commission a Registration Statement or prospectus or any
amendment or supplement thereto, including documents incorporated by reference,
the Company shall furnish to the holders of Registrable Securities included in
such Registration Statement and to the legal counsel for any such holders,
copies of all such documents proposed to be filed sufficiently in advance of
filing to provide such holders and legal counsel with a reasonable opportunity
to review such documents and comment thereon, and the Company shall not file any
Registration Statement or prospectus or amendment or supplement thereto,
including documents incorporated by reference, to which such holders or their
legal counsel shall object.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      3.1.5.        State Securities Laws
Compliance. The Company shall use its best efforts to (i) register or
qualify the Registrable Securities covered by the Registration Statement under
such securities or “blue sky” laws of such jurisdictions in the United States as
the holders of Registrable Securities included in such Registration Statement
(in light of their intended plan of distribution) may request and (ii) take such
action necessary to cause such Registrable Securities covered by the
Registration Statement to be registered with or approved by such other
Governmental Authorities as may be necessary by virtue of the business and
operations of the Company and do any and all other acts and things that may be
necessary or advisable to enable the holders of Registrable Securities included
in such Registration Statement to consummate the disposition of such Registrable
Securities in such jurisdictions; provided, however, that the
Company shall not be required to qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
paragraph (e) or subject itself to taxation in any such
jurisdiction.

       

      3.1.6.        Agreements for
Disposition. The Company shall enter into customary agreements
(including, if applicable, an underwriting agreement in customary form) and take
such other actions as are reasonably required in order to expedite or facilitate
the disposition of such Registrable Securities. The representations, warranties
and covenants of the Company in any underwriting agreement which are made to or
for the benefit of any Underwriters, to the extent applicable, shall also be
made to and for the benefit of the holders of Registrable Securities included in
such registration statement. No holder of Registrable Securities included in
such registration statement shall be required to make any representations or
warranties in the underwriting agreement except, if applicable, with respect to
such holder’s organization, good standing, authority, title to Registrable
Securities, lack of conflict of such sale with such holder’s material agreements
and organizational documents, and with respect to written information relating
to such holder that such holder has furnished in writing expressly for inclusion
in such Registration Statement.

       

      3.1.7.        Cooperation. The
principal executive officer of the Company, the principal financial officer of
the Company, the principal accounting officer of the Company and all other
officers and members of the management of the Company shall cooperate fully in
any offering of Registrable Securities hereunder, which cooperation shall
include, without limitation, the preparation of the Registration Statement with
respect to such offering and all other offering materials and related documents,
and participation in meetings with Underwriters, attorneys, accountants and
potential investors.

       

      3.1.8.        Records. The Company
shall make available for inspection by the holders of Registrable Securities
included in such Registration Statement, any Underwriter participating in any
disposition pursuant to such registration statement and any attorney, accountant
or other professional retained by any holder of Registrable Securities included
in such Registration Statement or any Underwriter, all financial and other
records, pertinent corporate documents and properties of the Company, as shall
be necessary to enable them to exercise their due diligence responsibility, and
cause the Company’s officers, directors and employees to supply all information
requested by any of them in connection with such Registration
Statement.

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      3.1.9.        Opinions and Comfort
Letters. The Company shall furnish to each holder of Registrable
Securities included in any Registration Statement a signed counterpart,
addressed to such holder, of (i) any opinion of counsel to the Company delivered
to any Underwriter and (ii) any comfort letter from the Company’s independent
public accountants delivered to any Underwriter. In the event no legal opinion
is delivered to any Underwriter, the Company shall furnish to each holder of
Registrable Securities included in such Registration Statement, at any time that
such holder elects to use a prospectus, an opinion of counsel to the Company to
the effect that the Registration Statement containing such prospectus has been
declared effective and that no stop order is in effect.

       

      3.1.10.      Earnings Statement.
The Company shall comply with all applicable rules and regulations of the
Commission and the Securities Act, and make available to its shareholders, as
soon as practicable, an earnings statement covering a period of twelve (12)
months, beginning within three (3) months after the effective date of the
registration statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder.

       

      3.1.11.      Listing. The Company
shall use its best efforts to cause all Registrable Securities included in any
registration to be listed on such exchanges or otherwise designated for trading
in the same manner as similar securities issued by the Company are then listed
or designated or, if no such similar securities are then listed or designated,
in a manner satisfactory to the holders of a majority of the Registrable
Securities included in such registration.

       

      3.2.           Obligation to Suspend
Distribution. Upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 3.1.4(iv), or, in the
case of a resale registration on Form S-3 pursuant to Section 2.3 hereof, upon
any suspension by the Company, pursuant to a written insider trading compliance
program adopted by the Company’s Board of Directors, of the ability of all
“insiders” covered by such program to transact in the Company’s securities
because of the existence of material non-public information, each holder of
Registrable Securities included in any registration shall immediately
discontinue disposition of such Registrable Securities pursuant to the
Registration Statement covering such Registrable Securities until such holder
receives the supplemented or amended prospectus contemplated by Section
3.1.4(iv) or the restriction on the ability of “insiders” to transact in the
Company’s securities is removed, as applicable, and, if so directed by the
Company, each such holder will deliver to the Company all copies, other than
permanent file copies then in such holder’s possession, of the most recent
prospectus covering such Registrable Securities at the time of receipt of such
notice.

       

      3.3.           Registration
Expenses. The Company shall bear all costs and expenses incurred in
connection with any Demand Registration pursuant to Section 2.1, any Piggy-Back
Registration pursuant to Section 2.2, and any registration on Form S-3 effected
pursuant to Section 2.3, and all expenses incurred in performing or complying
with its other obligations under this Agreement, whether or not the Registration
Statement becomes effective, including, without limitation: (i) all registration
and filing fees; (ii) fees and expenses of compliance with securities or “blue
sky” laws (including fees and disbursements of counsel in connection with blue
sky qualifications of the Registrable Securities); (iii) printing expenses; (iv)
the Company’s internal expenses (including, without limitation, all salaries and
expenses of its officers and employees); (v) the fees and expenses incurred in
connection with the listing of the Registrable Securities as required by Section
3.1.11; (vi) Financial Industry Regulatory Authority fees; (vii) fees and
disbursements of counsel for the Company and fees and expenses for independent
certified public accountants retained by the Company (including the expenses or
costs associated with the delivery of any opinions or comfort letters requested
pursuant to Section 3.1.9); (viii) the fees and expenses of any special experts
retained by the Company in connection with such registration and (ix) the fees
and expenses of one legal counsel selected by the holders of a
majority-in-interest of the Registrable Securities included in such
registration. The Company shall have no obligation to pay any underwriting
discounts or selling commissions attributable to the Registrable Securities
being sold by the holders thereof, which underwriting discounts or selling
commissions shall be borne by such holders. Additionally, in an underwritten
offering, all selling shareholders and the Company shall bear the expenses of
the underwriter pro rata in proportion to the respective amount of shares each
is selling in such offering.

       

      3.4.           Information. The
holders of Registrable Securities shall provide such information as may
reasonably be requested by the Company, or the managing Underwriter, if any, in
connection with the preparation of any Registration Statement, including
amendments and supplements thereto, in order to effect the registration of any
Registrable Securities under the Securities Act pursuant to Section 2 and in
connection with the Company’s obligation to comply with federal and applicable
state securities laws.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                4.

              	
                INDEMNIFICATION
      AND CONTRIBUTION.

              

      

       

      4.1.           Indemnification by the
Company. The Company agrees to indemnify and hold harmless each Investor
and each other holder of Registrable Securities, and each of their respective
officers, employees, affiliates, directors, partners, members, attorneys and
agents, and each person, if any, who controls an Investor and each other holder
of Registrable Securities (within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act) (each, an “Investor Indemnified
Party”), from and against any expenses, losses, judgments, claims,
damages or liabilities, whether joint or several, arising out of or based upon
any untrue statement (or allegedly untrue statement) of a material fact
contained in any Registration Statement under which the sale of such Registrable
Securities was registered under the Securities Act, any preliminary prospectus,
final prospectus or summary prospectus contained in the Registration Statement,
or any amendment or supplement to such Registration Statement, or arising out of
or based upon any omission (or alleged omission) to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or any violation by the Company of the Securities Act or any rule or
regulation promulgated thereunder applicable to the Company and relating to
action or inaction required of the Company in connection with any such
registration; and the Company shall promptly reimburse the Investor Indemnified
Party for any legal and any other expenses reasonably incurred by such Investor
Indemnified Party in connection with investigating and defending any such
expense, loss, judgment, claim, damage, liability or action; provided, however, that the
Company will not be liable in any such case to the extent that any such expense,
loss, claim, damage or liability arises out of or is based upon any untrue
statement or allegedly untrue statement or omission or alleged omission made in
such Registration Statement, preliminary prospectus, final prospectus, or
summary prospectus, or any such amendment or supplement, in reliance upon and in
conformity with information furnished to the Company, in writing, by such
selling holder expressly for use therein. The Company also shall indemnify any
Underwriter of the Registrable Securities, their officers, affiliates,
directors, partners, members and agents and each person who controls such
Underwriter on substantially the same basis as that of the indemnification
provided above in this Section 4.1.

       

      4.2.           Indemnification by Holders
of Registrable Securities. Each selling holder of Registrable Securities
will, in the event that any registration is being effected under the Securities
Act pursuant to this Agreement of any Registrable Securities held by such
selling holder, indemnify and hold harmless the Company, each of its directors
and officers and each underwriter (if any), and each other person, if any, who
controls such selling holder or such underwriter within the meaning of the
Securities Act, against any losses, claims, judgments, damages or liabilities,
whether joint or several, insofar as such losses, claims, judgments, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or allegedly untrue statement of a material fact contained in
any Registration Statement under which the sale of such Registrable Securities
was registered under the Securities Act, any preliminary prospectus, final
prospectus or summary prospectus contained in the Registration Statement, or any
amendment or supplement to the Registration Statement, or arise out of or are
based upon any omission or the alleged omission to state a material fact
required to be stated therein or necessary to make the statement therein not
misleading, if the statement or omission was made in reliance upon and in
conformity with information furnished in writing to the Company by such selling
holder expressly for use therein, and shall reimburse the Company, its directors
and officers, and each such controlling person for any legal or other expenses
reasonably incurred by any of them in connection with investigation or defending
any such loss, claim, damage, liability or action. Each selling holder’s
indemnification obligations hereunder shall be several and not joint and shall
be limited to the amount of any net proceeds actually received by such selling
holder.

       

      4.3.           Conduct of Indemnification
Proceedings. Promptly after receipt by any person of any notice of any
loss, claim, damage or liability or any action in respect of which indemnity may
be sought pursuant to Section 4.1 or 4.2, such person (the “Indemnified Party”)
shall, if a claim in respect thereof is to be made against any other person for
indemnification hereunder, notify such other person (the “Indemnifying Party”)
in writing of the loss, claim, judgment, damage, liability or action; provided, however, that the
failure by the Indemnified Party to notify the Indemnifying Party shall not
relieve the Indemnifying Party from any liability which the Indemnifying Party
may have to such Indemnified Party hereunder, except and solely to the extent
the Indemnifying Party is actually prejudiced by such failure. If the
Indemnified Party is seeking indemnification with respect to any claim or action
brought against the Indemnified Party, then the Indemnifying Party shall be
entitled to participate in such claim or action, and, to the extent that it
wishes, jointly with all other Indemnifying Parties, to assume control of the
defense thereof with counsel satisfactory to the Indemnified Party. After notice
from the Indemnifying Party to the Indemnified Party of its election to assume
control of the defense of such claim or action, the Indemnifying Party shall not
be liable to the Indemnified Party for any legal or other expenses subsequently
incurred by the Indemnified Party in connection with the defense thereof other
than reasonable costs of investigation; provided, however, that in any
action in which both the Indemnified Party and the Indemnifying Party are named
as defendants, the Indemnified Party shall have the right to employ separate
counsel (but no more than one such separate counsel) to represent the
Indemnified Party and its controlling persons who may be subject to liability
arising out of any claim in respect of which indemnity may be sought by the
Indemnified Party against the Indemnifying Party, with the fees and expenses of
such counsel to be paid by such Indemnifying Party if, based upon the written
opinion of counsel of such Indemnified Party, representation of both parties by
the same counsel would be inappropriate due to actual or potential differing
interests between them. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, consent to entry of judgment or effect any
settlement of any claim or pending or threatened proceeding in respect of which
the Indemnified Party is or could have been a party and indemnity could have
been sought hereunder by such Indemnified Party, unless such judgment or
settlement includes an unconditional release of such Indemnified Party from all
liability arising out of such claim or proceeding.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      4.4.           Contribution.

       

      4.4.1.        If
the indemnification provided for in the foregoing Sections 4.1, 4.2 and 4.3 is
unavailable to any Indemnified Party in respect of any loss, claim, damage,
liability or action referred to herein, then each such Indemnifying Party, in
lieu of indemnifying such Indemnified Party, shall contribute to the amount paid
or payable by such Indemnified Party as a result of such loss, claim, damage,
liability or action in such proportion as is appropriate to reflect the relative
fault of the Indemnified Parties and the Indemnifying Parties in connection with
the actions or omissions which resulted in such loss, claim, damage, liability
or action, as well as any other relevant equitable considerations. The relative
fault of any Indemnified Party and any Indemnifying Party shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by such Indemnified Party or such Indemnifying
Party and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.

       

      4.4.2.        The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 4.4 were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding Section 4.4.1.
The amount paid or payable by an Indemnified Party as a result of any loss,
claim, damage, liability or action referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses incurred by such Indemnified Party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 4.4, no holder of Registrable
Securities shall be required to contribute any amount in excess of the dollar
amount of the net proceeds (after payment of any underwriting fees, discounts,
commissions or taxes) actually received by such holder from the sale of
Registrable Securities which gave rise to such contribution obligation. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.

       

      
        	
                 
      

              	
                5.

              	
                UNDERWRITING
      AND DISTRIBUTION.

              

      

       

      5.1.           Rule 144. The Company
covenants that it shall file any reports required to be filed by it under the
Securities Act and the Exchange Act and shall take such further action as the
holders of Registrable Securities may reasonably request, all to the extent
required from time to time to enable such holders to sell Registrable Securities
without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144 under the Securities Act, as such Rules may be
amended from time to time, or any similar Rule or regulation hereafter adopted
by the Commission.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                6.

              	
                MISCELLANEOUS.

              

      

       

      6.1.           [INTENTIONALLY
OMITTED]

       

      6.2.           Assignment; No Third Party
Beneficiaries. This Agreement and the rights, duties and obligations of
the Company hereunder may not be assigned or delegated by the Company in whole
or in part. This Agreement and the rights, duties and obligations of the holders
of Registrable Securities hereunder may be freely assigned or delegated by such
holder of Registrable Securities in conjunction with and to the extent of any
transfer of Registrable Securities by any such holder. This Agreement and the
provisions hereof shall be binding upon and shall inure to the benefit of each
of the parties and their respective successors and the permitted assigns of the
Investor or holder of Registrable Securities or of any assignee of the Investor
or holder of Registrable Securities. This Agreement is not intended to confer
any rights or benefits on any persons that are not party hereto other than as
expressly set forth in Article 4 and this Section 6.2.

       

      6.3.           Notices. All notices,
demands, requests, consents, approvals or other communications (collectively,
“Notices”)
required or permitted to be given hereunder or which are given with respect to
this Agreement shall be in writing and shall be personally served, delivered by
reputable air courier service with charges prepaid, or transmitted by hand
delivery, telegram, telex or facsimile, addressed as set forth below, or to such
other address as such party shall have specified most recently by written
notice. Notice shall be deemed given on the date of service or transmission if
personally served or transmitted by telegram, telex or facsimile; provided, that if
such service or transmission is not on a business day or is after normal
business hours, then such notice shall be deemed given on the next business day.
Notice otherwise sent as provided herein shall be deemed given on the next
business day following timely delivery of such notice to a reputable air courier
service with an order for next-day delivery.

       

      To the
Company:

       

      Pet DRx Corporation

      Suite
500

      215
Centerview Drive

      Suite
360

      Brentwood,
Tennessee  37027

      Attention:
General Counsel

      Facsimile:
(615) 346-5018

      

      with a
copy to:

      

      Windy
City, Inc..

      8000
Towers Crescent Drive, Suite 1300

      Vienna,
Virginia  22182

      Attention: Joel
Kanter, President

      Facsimile:  (703)
991-0062

      

      and
to:

       

      Powell
Goldstein LLP

      One
Atlantic Center, Fourteenth Floor

      1201 West
Peachtree Street, NW

      Atlanta,
Georgia  30309-3488

      Attention: Richard
H. Miller, Esq.

      Facsimile:  (404)
572-6999

      

      To an
Investor: to the address of such Investor(s) as are then reflected on the
records of the Company.

       

      6.4.           Severability. This
Agreement shall be deemed severable, and the invalidity or unenforceability of
any term or provision hereof shall not affect the validity or enforceability of
this Agreement or of any other term or provision hereof. Furthermore, in lieu of
any such invalid or unenforceable term or provision, the parties hereto intend
that there shall be added as a part of this Agreement a provision as similar in
terms to such invalid or unenforceable provision as may be possible and be valid
and enforceable.

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      6.5.           Counterparts. This
Agreement may be executed in multiple counterparts, each of which shall be
deemed an original, and all of which taken together shall constitute one and the
same instrument.

       

      6.6.           Entire Agreement.
This Agreement (including all agreements entered into pursuant hereto and all
certificates and instruments delivered pursuant hereto and thereto) constitute
the entire agreement of the parties with respect to the subject matter hereof
and supersede all prior and contemporaneous agreements, representations,
understandings, negotiations and discussions between the parties, whether oral
or written.

       

      6.7.           Modifications and
Amendments. No amendment, modification or termination of this Agreement
shall be binding upon any party unless executed in writing by such
party.  Notwithstanding the foregoing, any and all parties must obtain
the written consent of Morgan Joseph & Co. Inc. to amend or modify this
Agreement

       

      6.8.           Titles and Headings.
Titles and headings of sections of this Agreement are for convenience only and
shall not affect the construction of any provision of this
Agreement.

       

      6.9.           Waivers and
Extensions. Any party to this Agreement may waive any right, breach or
default which such party has the right to waive, provided that such
waiver will not be effective against the waiving party unless it is in writing,
is signed by such party, and specifically refers to this Agreement. Waivers may
be made in advance or after the right waived has arisen or the breach or default
waived has occurred. Any waiver may be conditional. No waiver of any breach of
any agreement or provision herein contained shall be deemed a waiver of any
preceding or succeeding breach thereof nor of any other agreement or provision
herein contained. No waiver or extension of time for performance of any
obligations or acts shall be deemed a waiver or extension of the time for
performance of any other obligations or acts.

       

      6.10.         Remedies Cumulative.
In the event that the Company fails to observe or perform any covenant or
agreement to be observed or performed under this Agreement, the Investor or any
other holder of Registrable Securities may proceed to protect and enforce its
rights by suit in equity or action at law, whether for specific performance of
any term contained in this Agreement or for an injunction against the breach of
any such term or in aid of the exercise of any power granted in this Agreement
or to enforce any other legal or equitable right, or to take any one or more of
such actions, without being required to post a bond. None of the rights, powers
or remedies conferred under this Agreement shall be mutually exclusive, and each
such right, power or remedy shall be cumulative and in addition to any other
right, power or remedy, whether conferred by this Agreement or now or hereafter
available at law, in equity, by statute or otherwise.

       

      6.11.         Governing Law. This
Agreement shall be governed by, interpreted under, and construed in accordance
with the internal laws of the State of New York applicable to agreements made
and to be performed within the State of New York, without giving effect to any
choice-of-law provisions thereof that would compel the application of the
substantive laws of any other jurisdiction.

       

      6.12.         Waiver of Trial by
Jury. Each party hereby irrevocably and unconditionally waives the right
to a trial by jury in any action, suit, counterclaim or other proceeding
(whether based on contract, tort or otherwise) arising out of, connected with or
relating to this Agreement, the transactions contemplated hereby, or the actions
of the Investor in the negotiation, administration, performance or enforcement
hereof.

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      IN WITNESS WHEREOF, the parties have
caused this Registration Rights Agreement to be executed and delivered by their
duly authorized representatives as of the date first written above.

       

      

       

      
        	 	 	PET
      DRX CORPORATION	 
	 	 	a
      Delaware corporation	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	
                 

              	 
	 	 	
                By:

              	
                /s/
      George Villasana

              	 
	 	 	
                Name:

              	George
      Villasana	 
	 	 	
                Title:

              	Secretary	 

      

       

      INVESTORS:

      ECHO
HOLDERS:

      

      /s/ Gene E.
Burleson

      Gene E.
Burleson

      

      /s/ Joel
Kanter

      Joel
Kanter

      

      /s/ Kevin
Pendergest

      Kevin
Pendergest

      

      /s/ Eugene A.
Bauer

      Eugene A.
Bauer

      

      /s/ Gary A.
Brukardt

      Gary A.
Brukardt

      

      /s/ Alastair
Clemow

      Alastair
Clemow

      

      /s/ Richard
Martin

      Richard
Martin

      

      Windy
City, Inc.

      

      By :/s/ Joel
Kanter

      Joel
Kanter, President

      

      Chicago
Investments, Inc.

      

      By: Josh
Kanter

      Josh
Kanter, President

      

      

      

      [signatures
continued on following page]

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      
        [signatures
continued on following page]

      

      

      XLNT
HOLDERS:

      
 

      /s/
Zubeen
Shroff                                 
           

      Galen
Partners IV, L.P

      By:
Zubeen Shroff

      

      /s/
Zubeen
Shroff                                    
        

      Galen
Partners International IV, L.P

      By:
Zubeen Shroff

      

      /s/
Bruce F.
Wesson                     
           
      

      Galen
Employee Fund IV, L.P

      By: Bruce
F. Wesson

      

      /s/
Richard
Johnston                                
      

      Camden
Partners Strategic Fund III, L.P.

      By:
Richard Johnston

      

      /s/
Richard
Johnston                               
       

      Camden
Partners Strategic Fund III-A, L.P.

      By:
Richard Johnston

      
 

      ________________________________

      Edwards
Affiliated Holdings, LLC

      By:

      

      /s/
Robert
Wallace                                          

      Gateway
Advisors

      By:
Robert Wallace

      

      ________________________________

      J. David
Reed

      

      /s/
Keith
Rosenbloom                                     

      Keith
Rosenbloom

      

      /s/
Robert
Wallace                                          

      Robert
Wallace

      

      

      

      

      

      

      [signatures
continued on following page]

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      
        [signatures
continued on following page]

      

      

      
      

       

      
        	 	Consented
      to pursuant to Section 6.7:	 
	 	MORGAN
      JOSEPH & CO. INC.	 
	 	 	 	 
	 	 	 	 
	 	
                By:

              	/s/ David B.
      Driscoll	 
	 	 	 	 

      

       

      
        	Name:	David B.
      Driscoll	 	 
	
                Title:

              	Managing
      Director

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