Document:

<PAGE>
                                                                   Exhibit 10.27

                                                                  Execution Copy

THE OBLIGATIONS OF PAYMENT AND PERFORMANCE EVIDENCED HEREBY AND BY THE OTHER
PURCHASE DOCUMENTS AND THE RIGHTS OF THE PURCHASERS AND SERVICER HEREUNDER AND
THEREUNDER (INCLUDING RIGHTS OF PAYMENT AND ENFORCEMENT) ARE SUBORDINATE IN THE
MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN SUBORDINATION AGREEMENT DATED
AS OF DECEMBER 11, 2003 (THE "SUBORDINATION AGREEMENT"), AMONG THE LOAN PARTIES,
FLEET, AS THE SENIOR LENDER, THE SERVICER AND THE PURCHASER, TO THE INDEBTEDNESS
AND OTHER LIABILITIES OWED BY, AND ALL OTHER OBLIGATIONS OF, THE LOAN PARTIES
UNDER AND PURSUANT TO THE SENIOR CREDIT AGREEMENT AND EACH RELATED "LOAN
DOCUMENT" (AS DEFINED THEREIN). THE SERVICER AND EACH HOLDER HEREOF, BY ITS
ACCEPTANCE HEREOF, ACKNOWLEDGES AND AGREES TO BE BOUND BY THE PROVISIONS OF THE
SUBORDINATION AGREEMENT.

                   SENIOR SUBORDINATED NOTE PURCHASE AGREEMENT

                                  BY AND AMONG

                              DOVER SADDLERY, INC.,
                             A DELAWARE CORPORATION,
                                   AS PARENT,

                              DOVER SADDLERY, INC.,
                          A MASSACHUSETTS CORPORATION,
                            AS OPERATING COMPANY #1,

                              SMITH BROTHERS, INC.,
                              A TEXAS CORPORATION,
                            AS OPERATING COMPANY #2,

                                       AND

                         PATRIOT CAPITAL FUNDING, INC.,
                             A DELAWARE CORPORATION,
                                   AS SERVICER

                                       AND

                          THE PURCHASERS IDENTIFIED ON
                                 ANNEX A HERETO

                                DECEMBER 11, 2003
<PAGE>
                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
<S>                                                                         <C>
ARTICLE 1 DEFINITIONS....................................................     1
   1.1     CERTAIN DEFINITIONS...........................................     1
   1.2     ACCOUNTING PRINCIPLES.........................................    11
   1.3     OTHER DEFINITIONAL PROVISIONS; CONSTRUCTION...................    11

ARTICLE 2 ISSUE AND SALE OF SECURITIES...................................    11
   2.1     AUTHORIZATION AND ISSUANCE OF THE NOTES.......................    11
   2.2     SALE AND PURCHASE.............................................    11
   2.3     THE CLOSING...................................................    12

ARTICLE 3 REPAYMENT OF THE NOTES.........................................    12
   3.1     INTEREST RATES AND INTEREST PAYMENTS..........................    12
   3.2     REPAYMENT OF THE NOTES........................................    12
   3.3     OPTIONAL PREPAYMENT OF NOTES..................................    12
   3.4     NOTICE OF OPTIONAL PREPAYMENT.................................    13
   3.5     MANDATORY PREPAYMENT..........................................    13
   3.6     HOME OFFICE PAYMENT...........................................    13
   3.7     TAXES.........................................................    13
   3.8     MAXIMUM LAWFUL RATE...........................................    14
   3.9     CAPITAL ADEQUACY..............................................    14
   3.10    CERTAIN WAIVERS...............................................    15

ARTICLE 4 CONDITIONS.....................................................    15
   4.1     CONDITIONS TO PURCHASE OF SECURITIES..........................    15

ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF THE LOAN PARTIES.............    18
   5.1     REPRESENTATIONS AND WARRANTIES OF THE LOAN PARTIES............    18
   5.2     ABSOLUTE RELIANCE ON THE REPRESENTATIONS AND WARRANTIES.......    25

ARTICLE 6 TRANSFER OF NOTES..............................................    25
   6.1     RESTRICTED SECURITIES.........................................    25
   6.2     LEGENDS; PURCHASER'S REPRESENTATIONS..........................    25
   6.3     TRANSFER OF NOTES.............................................    25
   6.4     REPLACEMENT OF LOST SECURITIES................................    26
   6.5     NO OTHER REPRESENTATIONS AFFECTED.............................    26
   6.6     REGISTER......................................................    26

ARTICLE 7 COVENANTS......................................................    26
   7.1     AFFIRMATIVE COVENANTS.........................................    26
   7.2     NEGATIVE COVENANTS............................................    32
</TABLE>

                                       -i-
<PAGE>
<TABLE>
<S>                                                                          <C>
   7.3     FINANCIAL COVENANTS...........................................    36

ARTICLE 8 EVENTS OF DEFAULT..............................................    38
   8.1     EVENTS OF DEFAULT.............................................    38
   8.2     CONSEQUENCES OF EVENT OF DEFAULT..............................    40
   8.3     SECURITY......................................................    40

ARTICLE 9 THE SERVICER...................................................    40
   9.1     AUTHORIZATION AND ACTION......................................    40
   9.2     DELEGATION OF DUTIES..........................................    41
   9.3     EXCULPATORY PROVISIONS........................................    41
   9.4     RELIANCE......................................................    41
   9.5     NON-RELIANCE ON SERVICER AND OTHER PURCHASERS.................    41
   9.6     SERVICER IN ITS INDIVIDUAL CAPACITY...........................    42
   9.7     SUCCESSOR SERVICER............................................    42
   9.8     COLLECTIONS AND DISBURSEMENTS.................................    42
   9.9     REPORTING.....................................................    43
   9.10    CONSENT OF PURCHASERS.........................................    43
   9.11    THIS ARTICLE NOT APPLICABLE TO LOAN PARTIES...................    44
   9.12    NO LIABILITY OF PURCHASERS....................................    44

ARTICLE 10 MISCELLANEOUS.................................................    44
   10.1    SUCCESSORS AND ASSIGNS........................................    44
   10.2    MODIFICATIONS AND AMENDMENTS..................................    44
   10.3    NO IMPLIED WAIVERS; CUMULATIVE REMEDIES; WRITING REQUIRED.....    44
   10.4    REIMBURSEMENT OF EXPENSES.....................................    45
   10.5    HOLIDAYS......................................................    45
   10.6    NOTICES.......................................................    45
   10.7    SURVIVAL......................................................    46
   10.8    GOVERNING LAW.................................................    46
   10.9    JURISDICTION, CONSENT TO SERVICE OF PROCESS...................    46
   10.10   JURY TRIAL WAIVER.............................................    47
   10.11   SEVERABILITY..................................................    47
   10.12   HEADINGS......................................................    48
   10.13   INDEMNITY.....................................................    48
   10.14   ENVIRONMENTAL INDEMNITY.......................................    48
   10.15   COUNTERPARTS..................................................    49
   10.16   INTEGRATION...................................................    49
   10.17   SUBORDINATION.................................................    49
</TABLE>

ANNEX

SCHEDULES

                                      -ii-
<PAGE>
                   SENIOR SUBORDINATED NOTE PURCHASE AGREEMENT

                    $3,500,000 AGGREGATE PRINCIPAL AMOUNT OF
              SENIOR SECURED SUBORDINATED NOTES OF THE LOAN PARTIES
                               DUE MARCH 11, 2007

     THIS SENIOR SUBORDINATED NOTE PURCHASE AGREEMENT (this "Agreement"), dated
as of December 11, 2003, is by and among DOVER SADDLERY, INC., a Delaware
corporation ("Parent"), DOVER SADDLERY, INC., a Massachusetts corporation and
wholly-owned subsidiary of Parent ("Operating Company #1"), SMITH BROTHERS,
INC., a Texas corporation and wholly-owned subsidiary of Parent ("Operating
Company #2 and, together with Parent and Operating Company #1, the "Loan
Parties"), the securities purchasers that are now and hereafter at any time
parties hereto and are listed in Annex B (or any amendment or supplement
thereto) attached hereto (individually, a "Purchaser" and collectively,
"Purchasers"), and PATRIOT CAPITAL FUNDING, INC., a Delaware corporation
("Patriot"), as administrative agent for Purchasers (in such capacity,
"Servicer"). Capitalized terms used and not defined elsewhere in this Agreement
are defined in Article 1 hereof.

                                    RECITALS

     WHEREAS, the Loan Parties have proposed selling $3,500,000 of Notes (as
defined below) for the purpose of: (i) repaying the Existing Subordinated
Financing; (ii) paying fees and expenses in connection with the transactions
contemplated under the Transaction Documents; and (iii) financing ongoing
working capital and capital expenditure requirements and other general corporate
purposes in the ordinary course of business.

     NOW, THEREFORE, the parties hereto, in consideration of the premises and
their mutual covenants and agreements herein set forth and intending to be
legally bound hereby, covenant and agree as follows:

                                    ARTICLE 1

                                   DEFINITIONS

     1.1 CERTAIN DEFINITIONS. In addition to other words and terms defined
elsewhere in this Agreement, the following words and terms shall have the
meanings set forth below (and such meanings shall be equally applicable to both
the singular and plural form of the terms defined, as the context may require):

     "Affiliate" means with respect to any Person, (i) any director, officer or
employee of that Person, (ii) any other Person that is directly or indirectly
controlling, controlled by or under common control with such Person or entity or
any of its Subsidiaries, (iii) any other Person directly or indirectly holding
ten percent (10%) or more of any class of the capital stock or other equity
interests (including options, warrants, convertible securities and similar
rights) of that Person and (iv) any other Person ten percent (10%) or more of
any class of whose capital stock or other equity interests (including options,
warrants, convertible securities and similar rights) is
<PAGE>
held directly or indirectly by that Person. Notwithstanding the foregoing,
neither Wilton Funding, Servicer nor any Affiliate of Wilton Funding or Servicer
shall be deemed an Affiliate of any of the Loan Parties.

     "Agreement" means this Senior Subordinated Note Purchase Agreement, as the
same may be amended, restated, supplemented or otherwise modified from time to
time and including all exhibits, attachments and appendices hereto.

     "Arrangement Fee" means a fee in an amount equal to $75,000 payable by the
Loan Parties to Servicer in consideration of the structuring of the financing
contemplated hereby.

     "Boards" means, collectively, the board of directors of each of the Loan
Parties.

     "Business" means the principal business of the Loan Parties as set forth in
Section 5.1(b) herein and as such shall continue to be conducted following the
purchase and sale of the Securities.

     "Business Day" means any day other than a Saturday, Sunday or other day on
which banking institutions in New York are authorized or required by law to
close.

     "By-laws" means the by-laws, partnership agreement, operating agreement or
analogous instrument governing the operations of each of the Loan Parties,
including all amendments and supplements thereto.

     "Capital Expenditures" means, with respect to any Person, the amount of any
expenditures for fixed assets, computer software, leasehold improvements,
capital leases under GAAP, installment purchases of machinery and equipment,
acquisitions of real estate, expenditures in any construction in progress
account of such Person and other similar expenditures which are required to be
capitalized on a balance sheet pursuant to GAAP.

     "Capitalized Leases" means, with respect to any Person, leases of (or other
agreements conveying the right to use) any property (whether real, personal or
mixed) by such Person as lessee that, in accordance with GAAP (as defined in
Section 1.2 hereof), either would be required to be classified and accounted for
as capital leases on a balance sheet of such Person or otherwise be disclosed as
such in a note to such balance sheet.

     "CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. Section 9601, et seq.), as amended, and rules,
regulations, standards and guidelines issued thereunder.

     "Change of Control" means the occurrence of any of the following:

          (a) any transaction or series of related transactions resulting in the
     sale or issuance of securities or any rights to securities of Parent by
     Parent, or any transaction or series of related transactions resulting in
     the sale, transfer, assignment or other conveyance or disposition of any
     securities or any rights to securities of Parent by any holder or holders
     thereof and, as a result thereof in either case, Stephen L. Day holds less

                                       -2-
<PAGE>
     than 15% of the voting securities of Parent or less than 15% of the total
     equity securities of Parent, each computed on a fully diluted basis;

          (b) a merger, consolidation, reorganization, recapitalization or share
     exchange in which the equity holders of Parent immediately prior to such
     transaction receive, in exchange for securities of Parent owned by them,
     cash, property, securities or securities of the resulting or surviving
     entity and as a result thereof Persons who were holders of voting
     securities of Parent and hold less than 50% of the capital stock,
     calculated on a Fully Diluted Basis, of the resulting corporation entitled
     to vote in the election of directors;

          (c) the Parent owns beneficially and of record and controls less than
     100% of the capital stock of Operating Company #1 or Operating Company #2;

          (d) a sale, transfer or other disposition of all or substantially all
     of the assets of Operating Company #1 or Operating Company #2;

          (e) the initial public offer of securities by Parent other than an
     offering of securities for an employee benefit plan on SEC Form S-8 or a
     successor form; or

          (f) Stephen L. Day shall cease to be an Executive Officer, or shall
     not devote substantially all of his business time and efforts to the
     business and affairs of the Parent, Operating Company #1 and Operating
     Company #2 for any reason other than his death or Disability.

     "Charter Documents" means the Articles of Incorporation, Certificate of
Incorporation, certificate of limited partnership, certificate of limited
liability company, charter or analogous organic instrument filed with the
appropriate Governmental Authorities of each of the Loan Parties, as applicable,
including all amendments and supplements thereto.

     "Closing" means the closing of the purchase and sale of the Securities
pursuant to this Agreement.

     "Closing Date" means the date and time for delivery and payment of the
Notes as finally determined pursuant to Section 2.4 hereof.

     "Code" means the Internal Revenue Code of 1986, as amended.

     "Common Stock" means the common stock, par value $0.0001 per share, of
Parent.

     "Competitor" means a Person actively engaged the Business.

     "Condition" means any condition that results in or otherwise relates to any
Environmental Liabilities.

     "Controlled Group" means the "controlled group of corporations" as that
term is defined in Section 1563 of the Code, of which the Loan Parties are a
part from time to time.

                                       -3-
<PAGE>
     "Default" means any event or condition that, but for the giving of notice
or the lapse of time, or both, would constitute an Event of Default.

     "Disability" means the physical or mental inability of a natural Person to
render employment services for an aggregate of ninety (90) days during any
twelve-month period.

     "EBITDA" means, during any period of determination, without duplication,
the Net Income of the Loan Parties for such period plus the following, to the
extent deducted in computing such Net Income: (i) depreciation, (ii)
amortization, (iii) other non-cash charges, (iv) Interest Charges, (v) Taxes on
income imposed by any Governmental Authority, and (vi) all extraordinary items.

     "Environmental Laws" means any Laws that address, are related to or are
otherwise concerned with environmental, health or safety issues, including any
Laws or regulations promulgated by the EPA or other Governmental Authorities
relating to any emissions, releases or discharges of Pollutants into ambient
air, surface water, ground water or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, handling, clean-up or control of Pollutants or any exposure or impact
on worker health and safety.

     "Environmental Liabilities" means any obligations or liabilities (including
any claims, suits or other assertions of obligations or liabilities) that are:

          (a) related to environmental, health or safety issues (including
     on-site or off-site contamination by Pollutants of surface or subsurface
     soil or water, and occupational safety and health); and

          (b) based upon or related to (i) any provision of past, present or
     future United States or foreign Environmental Law (including CERCLA and
     RCRA) or common law, or (ii) any judgment, order, writ, decree, permit or
     injunction imposed by any court, administrative agency, tribunal or
     otherwise.

     The term "Environmental Liabilities" includes: (i) fines, penalties,
judgments, awards, settlements, losses, damages (including foreseeable and
unforeseeable consequential damages), costs, fees (including attorneys' and
consultants' fees), expenses and disbursements; (ii) defense and other responses
to any administrative or judicial action (including claims, notice letters,
complaints, and other assertions of liability); and (iii) financial
responsibility for (1) cleanup costs and injunctive relief, including any
Removal, Remedial or other Response actions, and natural resource damages, and
(2) any other compliance or remedial measures.

     "EPA" means the United States Environmental Protection Agency and any
governmental body or agency succeeding to the functions thereof.

     "ERISA" means the Employee Retirement Income Security Act of 1974, as the
same may from time to time be amended, and the rules and regulations of any
governmental agency or authority, as from time to time in effect, promulgated
thereunder.

     "Event of Default" means any of the events of default described in Section
8.1 hereof.

                                       -4-
<PAGE>
     "Executive Officers" means the chief executive officer, chief operating
officer and chief financial officer of the applicable Loan Party.

     "Existing Subordinated Debt Documents" means, collectively (i) the
Securities Purchase Agreement dated as of September 17, 1998, as amended,
between the Existing Subordinated Lender and the Loan Parties, (ii) the 22%
Senior Subordinated Notes dated as of September 17, 1998 issued by the Loan
Parties in favor of the Existing Subordinated Lender and (iii) all other
agreements, instruments, documents or contracts delivered in connection
therewith or contemplated thereby, as amended, modified and supplemented from
time to time.

     "Existing Subordinated Financing" means the Indebtedness to the Existing
Subordinated Lender evidenced by the Existing Subordinated Debt Documents.

     "Existing Subordinated Lender" means, collectively, Citizens Capital, Inc.
and Citizens Ventures, Inc., and their respective permitted successors and
assigns.

     "Financing Statements" has the meaning assigned to such term in Section
4.1(c) hereof.

     "Fiscal Year" or "fiscal year" means each twelve month period ending on
December 31st of each year.

     "Fleet" means Fleet National Bank, a national banking association having
its head office at 100 Federal Street, Boston, MA 02110.

     "Fully Diluted Basis" means the total number of shares of Common Stock that
are issued and outstanding on a particular date, plus the total number of shares
of Common Stock which would be issued and outstanding assuming the exercise of
all outstanding options, warrants or rights to purchase Common Stock and the
conversion of all outstanding securities.

     "Funded Debt" means, as at any date of determination, the sum of (i)
aggregate obligations outstanding under the Senior Credit Agreement on such
date, plus (ii) the stated amount of letters of credit outstanding under the
Senior Credit Agreement on such date, plus (iii) all principal obligations
arising under Capitalized Leases in effect on such date, plus (iv) all other
Guaranties and Indebtedness for borrowed money outstanding on such date
(including, without limitation, all amounts outstanding under this Agreement and
the Notes).

     "Funded Debt Ratio" means, as at the end of any fiscal quarter of the Loan
Parties, the ratio of the Loan Parties': (a) Funded Debt as at the end of such
fiscal quarter to (b) EBITDA for the four consecutive fiscal quarters ending on
the last day of such fiscal quarter.

     "Funded Senior Debt" means, as at any date of determination, the sum of (i)
aggregate obligations outstanding under the Senior Credit Agreement on such
date, plus (ii) the stated amount of letters of credit outstanding under the
Senior Credit Agreement on such date, plus (iii) all principal obligations
arising under Capitalized Leases in effect on such date, plus (iv) all other
Guaranties and Indebtedness for borrowed money outstanding on such date (other
than amounts outstanding under this Agreement and the Notes).

                                       -5-
<PAGE>
     "Funded Senior Debt Ratio" means, as at the end of any fiscal quarter of
the Loan Parties, the ratio of (i) Funded Senior Debt as at the end of such
fiscal quarter to (ii) EBITDA for the four consecutive fiscal quarters ending on
the last day of such fiscal quarter.

     "GAAP" has the meaning assigned to such term in Section 1.2 hereof.

     "Governmental Authorities" means any federal, state or municipal court or
other governmental department, commission, board, bureau, agency,
instrumentality or entity, governmental or quasi-governmental, domestic or
foreign, including, without limitation, the EPA and the IRS.

     "Guaranty" means any guaranty of the payment or performance of any
Indebtedness or other obligation and any other arrangement whereby credit is
extended to one obligor on the basis of any promise of another Person, whether
that promise is expressed in terms of an obligation to pay the Indebtedness of
such obligor, or to purchase an obligation owed by such obligor, or to purchase
goods and services from such obligor pursuant to a take-or-pay contract, or to
maintain the capital, working capital, solvency or general financial condition
of such obligor, whether or not any such arrangement is reflected on the balance
sheet of such other Person, firm or corporation, or referred to in a footnote
thereto, but shall not include endorsements of items for collection in the
ordinary course of business. For the purpose of all computations made under this
Agreement, the amount of a Guaranty in respect of any obligation shall be deemed
to be equal to the maximum aggregate amount of such obligation or, if the
Guaranty is limited to less than the full amount of such obligation, the maximum
aggregate potential liability under the terms of the Guaranty.

     "Indebtedness" with respect to any Person means and includes, without
duplication, (i) all items which, in accordance with GAAP, would be included as
a liability on the balance sheet of such Person, (ii) the face amount of all
banker's acceptances and of all letters of credit issued by any bank for the
account of such Person and all drafts drawn thereunder, (iii) the total amount
of all indebtedness secured by any Lien to which any property or asset of such
Person is subject, whether or not the indebtedness secured thereby shall have
been assumed, and (iv) the total amount of all indebtedness and obligations of
others which such Person has directly or indirectly guaranteed, endorsed
(otherwise than for collection or deposit in the ordinary course of business),
discounted with recourse or agreed (contingently or otherwise) to purchase or
repurchase or otherwise acquire, including, without limitation, any agreement
(a) to advance or supply funds to such other Person to maintain working capital,
equity capital, net worth or solvency, or (b) otherwise to assure or hold
harmless such other Person against loss in respect of its obligations.

     "Interest Charges" means, for any period, without duplication, all interest
and all amortization of debt discount and expense on any particular Indebtedness
for which such calculations are being made, all as determined in accordance with
GAAP. Computations of Interest Charges on a pro forma basis for Indebtedness
having a variable interest rate shall be calculated at the rate in effect on the
date of any determination.

     "Interest Payment Date" has the meaning assigned to such term in Section
3.1(a) hereof.

                                       -6-
<PAGE>
     "Interest Rate Protection Agreement" shall mean any interest rate swap,
interest rate cap, interest rate collar or other interest rate hedging agreement
or arrangement.

     "Investment" as applied to any Person means the amount paid or agreed to be
paid or loaned, advanced or contributed to other Persons, and in any event shall
include, without limitation, (i) any direct or indirect purchase or other
acquisition of any notes, obligations, instruments, stock, securities or
ownership interest (including partnership interests, limited liability company
membership interests and joint venture interests) and (ii) any capital
contribution to any other Person.

     "IRS" means the Internal Revenue Service and any governmental body or
agency succeeding to the functions thereof.

     "Laws" means all U.S. and foreign federal, state or local statutes, laws,
rules, regulations, ordinances, codes, policies, rules of common law, and the
like, now or hereafter in effect, including any judicial or administrative
interpretations thereof, and any judicial or administrative orders, consents,
decrees or judgments.

     "Lien" means any security interest, pledge, bailment, mortgage,
hypothecation, deed of trust, conditional sales and title retention agreement
(including any lease in the nature thereof), charge, encumbrance or other
similar arrangement or interest in real or personal property, now owned or
hereafter acquired, whether such interest is based on common law, statute or
contract.

     "Life Insurance" has the meaning assigned to such term in Section 4.1(i)
hereof.

     "Manage" and "Management" means generation, production, handling,
distribution, processing, use, storage, treatment, operation, transportation,
recycling, reuse and/or disposal, as those terms are defined in CERCLA, RCRA and
other Environmental Laws (including as those terms are further defined,
construed, or otherwise used in rules, regulations, standards and guidelines
issued pursuant to, or otherwise in implementation of, such Environmental Laws).

     "Material Adverse Effect" means a material adverse effect on the business,
properties, assets, liabilities or condition (financial or otherwise) of the
Loan Parties, taken as a whole.

     "Multiemployer Plan" means a multiemployer plan (within the meaning of
Section 3(37) of ERISA) that is maintained for the benefit of the employees of
the Loan Parties or any member of the Controlled Group.

     "Most Recent Statements" has the meaning assigned to such term in Section
5.1(c)(i).

     "Net Income" means the gross revenues of the Loan Parties for the period in
question, less all expenses and other proper charges (including Taxes on
income), all determined in accordance with GAAP but in any event, excluding from
Net Income (without duplication): (i) any gain or loss, amortization or
deduction arising from any write-up of assets, except to the extent inclusion
thereof shall be approved in writing by the Servicer; (ii) earnings of any
Subsidiary accrued prior to the date it became a Subsidiary; (iii) the net
earnings of any business entity (other than a Subsidiary) in which a Loan Party
has an ownership interest, except to the extent such net earnings shall have
actually been received by the Loan Party in the form of cash

                                       -7-
<PAGE>
distributions; (iv) any gains or losses on the sale or other disposition of
investments or fixed or capital assets; (v) the proceeds of any life insurance
policy; (vi) any deferred or other credit representing any excess of the equity
of any Subsidiary at the date of acquisition thereof over the amount invested in
such Subsidiary; and (vii) any reversal of any contingency reserve, except to
the extent that provision for such contingency reserve shall be made from income
arising during such period.

     "Notes" has the meaning assigned to such term in Section 2.1.

     "Operating Cash Flow" means for any period, an amount equal to: (i) EBITDA
for such period, minus (ii) Taxes actually paid by the Loan Parties during such
period, and minus (iii) Capital Expenditures made by the Loan Parties during
such period, but only to the extent that such Capital Expenditures were not
financed by the incurrence of any Indebtedness (excluding for this purpose
Indebtedness incurred under this Agreement).

     "Operating Company #1" has the meaning assigned to such term in the
preamble hereto.

     "Operating Company #2" has the meaning assigned to such term in the
preamble hereto.

     "Parent" has the meaning assigned to such term in the preamble hereto.

     "Patriot" has the meaning assigned to such term in the preamble hereto.

     "PBGC" means the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA, or any other governmental agency, department
or instrumentality succeeding to the functions thereof.

     "Permitted Liens" has the meaning assigned to such term in Section 7.2(b)
hereof.

     "Person" means any individual, partnership, limited partnership,
corporation, limited liability company, association, joint stock company, trust,
joint venture, unincorporated organization (whether or not legally formed) or
Governmental Authority.

     "PIK Interest" has the meaning assigned to such term in Section 3.1(b)
hereof.

     "Plan" means any employee benefit plan (within the meaning of Section 3(3)
of ERISA), other than a Multiemployer Plan, established or maintained by any of
the Loan Parties or any member of the Controlled Group.

     "Pollutant" includes any "hazardous substance" and any "pollutant or
contaminant" as those terms are defined in CERCLA; any "hazardous waste" as that
term is defined in RCRA; and any "hazardous material" as that term is defined in
the Hazardous Materials Transportation Act (49 U.S.C. Section 1801 et seq.), as
amended (including as those terms are further defined, construed, or otherwise
used in rules, regulations, standards, guidelines and publications issued
pursuant to, or otherwise in implementation of, said Environmental Laws); and
including without limitation any petroleum product or byproduct, solvent,
flammable or explosive material, radioactive material, asbestos, polychlorinated
biphenyls (PCBs), dioxins, dibenzofurans, heavy

                                       -8-
<PAGE>
metals, and radon gas; and including any other substance or material that is
reasonably determined to present a threat, hazard or risk to human health or the
environment.

     "Preferred Stock" means the preferred stock, par value $0.0001 per share,
of Parent.

     "Properties and Facilities" has the meaning assigned to such term in
Section 5.1(q).

     "Proprietary Rights" means all patents, trademarks, trade names, service
marks, copyrights, inventions, production methods, licenses, formulas, know-how
and trade secrets, regardless of whether such are registered with any
Governmental Authorities, including applications therefor.

     "Purchase Documents" means this Agreement, the Notes, and the Security
Documents and all other agreements, instruments and documents delivered in
connection therewith as any or all of the foregoing may be supplemented or
amended from time to time.

     "Purchaser" has the meaning assigned to such term in the preamble hereto
and in Section 6.2 hereof.

     "RCRA" means the Resource Conservation and Recovery Act (42 U.S.C. Section
6901 et seq.), as amended, and all rules, regulations, standards, guidelines and
publications issued thereunder.

     "Removal," "Remedial" and "Response" actions includes the types of
activities covered by CERCLA, RCRA, and other comparable Environmental Laws, and
whether the activities are those that might be taken by a government entity or
those that a government entity or any other person might seek to require of
waste generators, handlers, distributors, processors, users, storers, treaters,
owners, operators, transporters, recyclers, reusers, disposers, or other persons
under "removal," "remedial," or other "response" actions.

     "Reportable Event" means any of the events that are reportable under
Section 4043 of ERISA and the regulations promulgated thereunder, other than an
occurrence for which the thirty (30) day notice contained in 29 C.F.R. Section
2615.3(a) is waived.

     "Required Purchasers" means, at any time, Purchasers holding a pro rata
percentage of the outstanding principal amount of the Notes aggregating at least
66-2/3% at such time.

     "Revolving Financing" means a secured revolving line of credit facility
under the Senior Credit Agreement providing for advances in an aggregate amount
outstanding initially not to exceed $14,000,000.

     "SEC" means the Securities and Exchange Commission and any governmental
body or agency succeeding to the functions thereof.

     "Securities" has the meaning assigned to such term in Section 2.3 hereof.

     "Securities Act" means the Securities Act of 1933, as amended.

     "Security Agreement" has the meaning assigned to such term in Section
4.1(c) hereof.

                                       -9-
<PAGE>
     "Security Documents" means the Security Agreement, the Financing
Statements, and all other documents, instruments and other materials necessary
to create, maintain or perfect the security interests created pursuant to the
Security Agreement.

     "Senior Credit Agreement" means that certain Loan and Security Agreement by
and among the Loan Parties and Senior Lender as lender, dated as of the date
hereof, as such may be amended or modified from time to time.

     "Senior Financing" means the Revolving Financing.

     "Senior Lender" means Fleet and each other lender party to the Senior
Credit Agreement.

     "Servicer" has the meaning assigned to such term in the preamble hereto and
any successor Servicer provided for hereunder.

     "Subsidiary" means any corporation, association, joint stock company,
business trust or other similar organization of which 50% or more of the
ordinary voting power for the election of a majority of the members of the board
of directors or other governing body of such entity is held or controlled by a
Loan Party or a Subsidiary of a Loan Party; or any other such organization the
management of which is directly or indirectly controlled by a Loan Party or a
Subsidiary of a Loan Party through the exercise of voting power or otherwise; or
any joint venture, whether incorporated or not, in which a Loan Party has a 50%
ownership interest or any other entity which would be consolidated with the Loan
Parties in presenting its financial statements in accordance with GAAP.

     "Subordination Agreement" means that certain Subordination Agreement by and
among the Senior Lender, the Loan Parties, the Servicer and the Purchaser, dated
as of December 11, 2003, as such may be amended or modified from time to time as
permitted thereby.

     "Taxes" means, any and all taxes (including, without limitation, income,
receipts, franchise, ad valorem or excise taxes, transfer or gains taxes or
fees, use taxes, withholding, payroll or minimum taxes) imposed on, or otherwise
payable by, or for which responsibility for payment, withholding or collection
lies with, any Loan Party by any Governmental Authority, including any taxes
imposed on any of the Subsidiaries or other Affiliates of any Loan Party for
which a Loan Party may be liable under applicable Laws or by agreement to which
a Loan Party is a party of by which it is bound or subject to, and including,
but not limited to, any interest, penalties or additions to tax with respect
thereto.

     "Total Debt Service" means, for any period, the sum of, for all Loan
Parties taken as a whole, (i) Interest Charges on all Indebtedness for such
period, plus (ii) the aggregate amount of all regularly scheduled principal
payments made or coming due during such period in respect of the Senior
Financing or any other Indebtedness for borrowed money or capital lease (to the
extent the Servicer from time to time permits such Indebtedness to be incurred).

     "Transaction Documents" has the meaning assigned to such term in Section
5.1(f) hereof.

                                      -10-
<PAGE>
     "Transactions" means the incurrence of debt and the issuance and sale of
Securities in connection therewith, as contemplated by this Agreement and the
Senior Credit Purchase Agreement, the Notes and all other agreements
contemplated hereby and thereby.

     "UST" means an underground storage tank, including as that term is defined,
construed and otherwise used in RCRA and in rules, regulations, standards,
guidelines and publications issued pursuant to RCRA and comparable state and
local laws.

     "Wilton Funding" means Wilton Funding, LLC, a Delaware limited liability
company.

     1.2 ACCOUNTING PRINCIPLES. The character or amount of any asset, liability,
capital account or reserve and of any item of income or expense to be
determined, and any consolidation or other accounting computation to be made,
and the construction of any definition containing a financial term, pursuant to
this Agreement shall be determined or made in accordance with generally accepted
accounting principles in the United States of America consistently applied
("GAAP"), unless such principles are inconsistent with the express requirements
of this Agreement.

     1.3 OTHER DEFINITIONAL PROVISIONS; CONSTRUCTION. Whenever the context so
requires, neuter gender includes the masculine and feminine, the singular number
includes the plural and vice versa. The words "hereof "herein" and "hereunder"
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not in any particular provision of this agreement, and
references to section, article, annex, schedule, exhibit and like references are
references to this Agreement unless otherwise specified. A Default or Event of
Default shall "continue" or be "continuing" until such Default or Event of
Default has been cured or waived by Servicer and Purchasers. References in this
Agreement to any Persons shall include such Persons, successors and permitted
assigns. Other terms contained in this Agreement (which are not otherwise
specifically defined herein) shall have meanings provided in Article 9 of the
New York Uniform Commercial Code on the date hereof to the extent the same are
used or defined therein.

                                    ARTICLE 2

                          ISSUE AND SALE OF SECURITIES

     2.1 AUTHORIZATION AND ISSUANCE OF THE NOTES. The Loan Parties have duly
authorized the issuance and sale to Purchasers of $3,500,000 in aggregate
principal amount of the Loan Parties' Senior Secured Subordinated Notes Due
March 11, 2007 (including any Notes issued in substitution therefor pursuant to
Sections 6.3 and 6.4 hereof, the "Notes"), to be substantially in the forms
attached hereto as Exhibit A.

     2.2 SALE AND PURCHASE. Subject to the terms and conditions and in reliance
upon the representations, warranties and agreements set forth herein, the Loan
Parties shall sell to Purchasers, and Purchasers shall purchase from the Loan
Parties, in an amount equal to the pro rata portion of the Notes as set forth on
Annex B, the Notes in the aggregate principal amount set forth in Section 2.1
hereof. The Notes are sometimes referred to herein as the "Securities." The
aggregate purchase price for the Securities shall be $3,500,000.

                                      -11-
<PAGE>
     2.3 THE CLOSING. Delivery of and payment for the Securities (the "Closing")
shall be made at the offices of Edwards & Angell, LLP, Three Stamford Plaza, 301
Tresser Boulevard, Stamford, Connecticut, commencing at 10:00 a.m., local time,
on December 11, 2003 or at such place or on such other date on or before
December 31, 2003 as may be mutually agreeable to the Loan Parties and
Purchasers. The date and time of the Closing as finally determined pursuant to
this Section 2.3 are referred to herein as the "Closing Date." Delivery of the
Securities shall be made to Purchasers against payment of the purchase price
therefor, less the Arrangement Fee and any other amounts payable pursuant to
Section 4.1(j) hereof, by wire transfer of immediately available funds in the
manner agreed to by the Loan Parties and Purchasers. The Notes shall be issued
in such name or names and in such permitted denomination or denominations as set
forth in Annex B or as Purchasers may request in writing not less than two (2)
Business Days before the Closing Date. The Closing shall occur simultaneously
with the closing of the transactions contemplated by the Senior Credit
Agreement.

                                    ARTICLE 3

                             REPAYMENT OF THE NOTES

     3.1 INTEREST RATES AND INTEREST PAYMENTS.

          (a) INTEREST RATES; CASH PAYMENTS. The Notes will bear interest on the
outstanding principal amount thereof at a rate equal to 17.25% per annum.
Interest on the Notes will be computed on the basis of a year of 360 days,
composed of twelve 30-day months, and the actual number of days elapsed. The
Loan Parties, jointly and severally, covenant and agree to make payments to
Servicer for the ratable benefit of Purchasers, of accrued interest on the Notes
on the fifth (5th) Business Day of each month (each an "Interest Payment Date")
commencing on January 1, 2004. Not less than 50/69th of accrued interest on the
Notes shall be due and payable in cash on each Interest Payment Date.

          (b) PIK INTEREST. On each Interest Payment Date and as further
provided in the Notes, the Loan Parties shall, in lieu of paying cash, pay
19/69th of the amount of accrued interest on the Notes that is due on such
Interest Payment Date in kind ("PIK Interest"). On every sixth (6th) Interest
Payment Date other than the maturity date of the Notes including any maturity
date as a result of acceleration of the Notes, all accrued PIK Interest shall be
capitalized and added proportionately to the principal amount of all of the
Notes then outstanding.

     3.2 REPAYMENT OF THE NOTES. The Loan Parties, jointly and severally,
covenant and agree to repay to Servicer, for the ratable benefit of Purchasers,
the unpaid principal balance of the Notes in full, together with all accrued and
unpaid interest, fees and other amounts due hereunder, on March 11, 2007.

     3.3 OPTIONAL PREPAYMENT OF NOTES. Subject to the terms of this Section 3.3,
the Loan Parties may prepay to Servicer, for the ratable benefit of Purchasers,
the outstanding principal amount of the Notes in whole or in part in multiples
of $100,000, or such lesser amount as is then outstanding, at any time at a
price equal to (i) the accrued interest, if any, to the date set for prepayment,
plus (ii) a prepayment fee representing the amortization of certain of
Purchasers'

                                      -12-
<PAGE>
costs incurred in connection with the purchase of the Notes equal to the
principal amount prepaid multiplied by the following percentage:

<TABLE>
<CAPTION>
   If Prepaid During
  the 12-Month Period
 Ending on December 11
of the Following Years:   Percentage
-----------------------   ----------
<S>                       <C>
2004                          5%
2005                          4%
2006 and thereafter           0%
</TABLE>

Servicer shall apply all such prepayments to the outstanding principal of the
Notes in the inverse order of maturity after application of such prepayment to
any accrued interest and prepayment premium payable in connection therewith.

     3.4 NOTICE OF OPTIONAL PREPAYMENT. If the Loan Parties shall elect to
prepay any Notes pursuant to Section 3.3 hereof, the Loan Parties shall give
notice of such prepayment to Servicer and each holder of the Notes to be prepaid
not less than thirty (30) days or more than ninety (90) days prior to the date
fixed for prepayment, specifying (i) the date on which such prepayment is to be
made, (ii) the principal amount of such Notes to be prepaid on such date, and
(iii) the premium, if any, and accrued interest applicable to the prepayment.
Such notice shall be accompanied by a certificate of the chief executive officer
or chief financial officer of Parent that such prepayment is being made in
compliance with Section 3.3. Notice of prepayment having been so given, the
aggregate principal amount of the Notes specified in such notice, together with
accrued interest thereon and the premium, if any, shall become due and payable
on the prepayment date set forth in such notice.

     3.5 MANDATORY PREPAYMENT. The Notes shall be prepaid in full, together with
all interest, fees and expenses plus a prepayment premium computed in accordance
with Section 3.3, as if such prepayment were a voluntary prepayment, in the
event of a Change of Control.

     3.6 HOME OFFICE PAYMENT. The Loan Parties will pay all sums becoming due on
each Note for principal, premium, if any, and interest to Servicer by the method
and at the address specified for such purpose in Annex A, or by such other
method or at such other address as Purchasers shall have from time to time
specified to the Loan Parties in writing for such purpose, without the
presentation or surrender of such Note or the making of any notation thereon,
except that upon written request of the Loan Parties made concurrently with or
reasonably promptly after payment or prepayment in full of any Note, each holder
of a Note shall surrender such Note for cancellation, reasonably promptly after
such request, to the Loan Parties at their principal executive office.

     3.7 TAXES. Any and all payments by the Loan Parties hereunder or under the
Notes or other Purchase Documents that are made to or for the benefit of
Purchasers shall be made free and clear of and without deduction for any and all
present or future Taxes, excluding taxes imposed on Servicer's or Purchasers'
net income or capital and franchise taxes imposed on any of them by the
jurisdiction under the laws of which any of them is organized or any political

                                      -13-
<PAGE>
subdivision thereof (all such nonexcluded Taxes being hereinafter referred to as
"Covered Taxes"). If any of the Loan Parties shall be required by law to deduct
any Covered Taxes from or in respect of any sum payable hereunder or under any
Notes or other Purchase Documents to Servicer for the benefit of Purchasers, or
to Purchasers, the sum payable shall be increased as may be necessary so that
after making all required deductions of Covered Taxes (including deductions of
Covered Taxes applicable to additional sums payable under this paragraph), each
Purchaser receives an amount equal to the sum it would have received had no such
deductions been made. The Loan Parties shall make such deductions and the Loan
Parties shall pay the full amount so deducted to the relevant taxation authority
or other authority in accordance with applicable law. In addition, the Loan
Parties agree to pay any present or future stamp, documentary, excise,
privilege, intangible or similar levies that arise at any time or from time to
time from any payment made under any and all Purchase Documents or from the
execution or delivery by the Loan Parties or from the filing or recording or
maintenance of, or otherwise with respect to the exercise by Servicer or
Purchasers of their respective rights under any and all Purchase Documents
(collectively, "Other Taxes"). The Loan Parties will indemnify Servicer and
Purchasers for the full amount of Covered Taxes imposed on or with respect to
amounts payable hereunder and Other Taxes, and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto.
Payment of this indemnification shall be made within thirty (30) days from the
date Servicer or Purchasers provide the Loan Parties with a certificate
certifying and setting forth in reasonable detail the calculation thereof as to
the amount and type of such Taxes. Any such certificates submitted by Servicer
or Purchasers in good faith to the Loan Parties shall, absent manifest error, be
final, conclusive and binding on all parties. The obligation of the Loan Parties
under this Section 3.7 shall survive the payment of the Notes and the
termination of this Agreement. Within thirty (30) days after the Loan Parties
having received a receipt for payment of Covered Taxes and/or Other Taxes, the
Loan Parties shall furnish to Servicer, the original or certified copy of a
receipt evidencing payment thereof.

     3.8 MAXIMUM LAWFUL RATE. This Agreement, the Notes and the other Purchase
Documents are hereby limited by this Section 3.8. In no event, whether by reason
of acceleration of the maturity of the amounts due hereunder or otherwise, shall
interest and fees contracted for, charged, received, paid or agreed to be paid
to Purchasers exceed the maximum amount permissible under such applicable law.
If, from any circumstance whatsoever, interest and fees would otherwise be
payable to Servicer or Purchasers in excess of the maximum amount permissible
under applicable law, the interest and fees shall be reduced to the maximum
amount permitted under applicable law. If from any circumstance, Servicer or
Purchasers shall have received anything of value deemed interest by applicable
law in excess of the maximum lawful amount, an amount equal to any excess of
interest shall be applied to the reduction of the principal amount of the Notes,
in such manner as may be determined by Purchasers, and not to the payment of
fees or interest, or if such excessive interest exceeds the unpaid balance of
the principal amount of the Notes, such excess shall be refunded to the Loan
Parties.

     3.9 CAPITAL ADEQUACY. If, after the date hereof, either the introduction of
or any change of the interpretation of any law or the compliance by Purchasers
with any guideline or request from any Governmental Authority (whether or not
having the force of law) has or would have the effect of reducing the rate of
return on the capital or assets of Purchasers as a consequence of, as determined
by Servicer or Purchasers in their sole discretion, the existence of any
Purchaser's obligations under this Agreement or any other Purchase Documents,
then, upon

                                      -14-
<PAGE>
demand by Purchasers, the Loan Parties immediately shall pay to Purchasers, from
the time as specified by Purchasers, additional amounts sufficient to compensate
Purchaser in light of such circumstances. The obligations of the Loan Parties
under this Section 3.9 shall survive the payments of the Notes and the
termination of this Agreement.

     3.10 CERTAIN WAIVERS. The Loan Parties unconditionally waive (i) any rights
to presentment, demand, protest or (except as expressly required hereby) notice
of any kind, and (ii) any rights of rescission, setoff, counterclaim or defense
to payment under the Notes or otherwise that the Loan Parties may have or claim
against any Purchaser, the Servicer or any prior Purchaser or Servicer.

                                    ARTICLE 4

                                   CONDITIONS

     4.1 CONDITIONS TO PURCHASE OF SECURITIES. The obligation of Purchasers to
purchase and pay for the Securities is subject to the satisfaction, prior to or
at the Closing, of the following conditions:

          (A) REPRESENTATIONS AND WARRANTIES TRUE; NO DEFAULTS. The
representations and warranties contained in Article 5 hereof shall be true and
correct in all material respects at and as of the Closing Date as though then
made, except to the extent of changes caused by the transactions expressly
contemplated herein and there shall exist no Default or Event of Default.

          (B) MATERIAL ADVERSE EFFECT. There shall be no event or occurrence
constituting a Material Adverse Effect.

          (C) SECURITY AGREEMENT. The Loan Parties and Servicer, for the benefit
of the Purchasers, shall have entered into a security agreement or security
agreements, with Servicer subordinated in lien priority only to the Liens in
favor of the Senior Lender as contemplated therein, in form and substance as set
forth in Exhibit B attached hereto (as the same may be amended, modified or
supplemented from time to time in accordance with the terms thereof, the
"Security Agreement"). The Loan Parties shall have executed and delivered to
Servicer, for the benefit of the Purchasers, such financing statements and other
instruments (collectively, "Financing Statements") as Servicer shall require in
order to perfect and maintain the continued perfection of the security interest
created by the Security Agreement. Servicer shall have received reports of
filings with appropriate Government Authority showing that there are no Liens on
the assets of the Loan Parties other than Permitted Liens.

          (D) ENVIRONMENTAL REPORTS. Servicer shall have received reports, if
any, covering the Loan Parties' properties in form and substance satisfactory to
Servicer regarding the Loan Parties' compliance with Environmental Laws.

          (E) INTERCREDITOR AGREEMENTS. The Loan Parties, Purchaser, Servicer
and the Senior Lender shall have executed and delivered the Subordination
Agreement.

                                      -15-
<PAGE>
          (F) LIFE INSURANCE. The Loan Parties shall have delivered to Servicer
a paid life insurance policy issued by a carrier reasonably acceptable to
Servicer insuring the life of Stephen L. Day in the amount of $2,000,000 and
naming Servicer as the beneficiary (the "Life Insurance").

          (G) CLOSING DOCUMENTS. The Loan Parties will have delivered or caused
to be delivered to Servicer all of the following documents in form and substance
satisfactory to Servicer:

               (i) one or more Notes in the form of Exhibit A hereto (as
designated by Servicer and Purchasers pursuant to Section 2.1 and Annex B
hereof) in aggregate original principal amounts as set forth herein, duly
completed and executed by the Loan Parties;

               (ii) certificates of good standing dated not more than ten (10)
days prior to the Closing Date for each of the Loan Parties issued by their
respective jurisdictions of organization and each jurisdiction where they are
qualified to operate as a foreign corporation or limited liability company, as
applicable, or its equivalent;

               (iii) a copy of the Charter Documents of each of the Loan
Parties, certified by the appropriate governmental official of the jurisdiction
of its organization as of a date not more than ten (10) days prior to the
Closing Date;

               (iv) a copy of the By-laws of each of the Loan Parties, certified
as of the Closing Date by the secretary, assistant secretary, manager or general
partner, as applicable, of each respective Loan Party;

               (v) a certificate of the secretary, assistant secretary, manager
or general partner, as applicable, of each of the Loan Parties, certifying as to
the names and true signatures of the officers or other authorized person of the
respective Loan Party authorized to sign this Agreement and the other documents
to be delivered by the respective Loan Party hereunder;

               (vi) copies of the resolutions duly adopted by the each of the
Loan Party's board of directors, general partners, board of managers or other
governing body, authorizing the execution, delivery and performance by the
respective Loan Party of this Agreement and each of the other agreements,
instruments and documents contemplated hereby to which the respective Loan Party
is a party, and the consummation of all of the other Transactions, certified as
of the Closing Date by the secretary, assistant secretary, manager or general
partner, as applicable, of the respective Loan Party;

               (vii) a certificate dated as of the Closing Date from an officer,
general partner or manager, as applicable, of each of the Loan Parties stating
that the conditions specified in this Section 4.1 have been fully satisfied or
waived by Servicer;

               (viii) certificates of insurance evidencing the existence of all
insurance required to be maintained by the Loan Parties pursuant to Section
7.1(c), and Servicer shall be satisfied with the type and extent of such
coverage;

                                      -16-
<PAGE>
               (ix) an opinion of PretiFlaherty PLLC, counsel to the Loan
Parties in form the form of Exhibit C;

               (x) copies of all material leases to which any of the Loan
Parties is a party;

               (xi) copies of the Senior Credit Agreement and any supplements or
amendments or waivers thereto, certified by the Loan Parties as of the Closing
Date as being true, complete and correct;

               (xii) copies of all documents related to the termination and
cancellation of the Existing Subordinated Financing, including, without
limitation, all issued and outstanding Existing Subordinated Notes and UCC-3
termination statements and documents necessary for the release of the security
interest of the Existing Subordinated Lenders.

               (xiii) the financial statements and projections described in
Section 5.1(c) and a pro-forma opening balance sheet of each of the Loan Parties
as of the Closing Date, giving effect to the Senior Financing and the sale and
issuance of the Notes, which balance sheet shall be satisfactory to Servicer;
and

               (xiv) such other documents relating to the Transactions
contemplated by this Agreement as Servicer or its special counsel may reasonably
request.

          (J) PURCHASERS' FEES AND EXPENSES.

               (I) ARRANGEMENT FEE. On the Closing Date, the Loan Parties shall
pay the Arrangement Fee to Servicer less any amount thereof paid prior to the
Closing Date, and the Loan Parties hereby authorize Servicer to deduct from the
aggregate proceeds from the sales of the Notes by the Loan Parties, the unpaid
amount of such Arrangement Fee; and

               (II) OTHER FEES AND EXPENSES. On the Closing Date, the Loan
Parties shall have paid the fees and expenses of Servicer and Purchasers,
payable by the Loan Parties pursuant to Section 10.4 hereof (and the Loan
Parties hereby authorize Servicer to deduct from the aggregate proceeds of the
sale of the Notes by the Loan Parties, all such amounts).

          (K) LEGAL INVESTMENT. On the Closing Date, Purchasers' purchases of
the Securities shall not be prohibited by any applicable Law of any Governmental
Authority (including, without limitation, Regulations T, U or X of the Board of
Governors of the Federal Reserve System) as a result of the promulgation or
enactment thereof or any changes therein, or change in the interpretation
thereof by any Governmental Authority, subsequent to the date of this Agreement.

          (L) PROCEEDINGS. All proceedings taken or required to be taken in
connection with the transactions contemplated hereby to be consummated at or
prior to the Closing and all documents incident thereto will be satisfactory in
form and substance to Servicer and its special counsel and to Purchasers and
their special counsel.

                                      -17-
<PAGE>
          (M) BACKGROUND INVESTIGATIONS; EMPLOYMENT AGREEMENTS. Servicer shall
be satisfied with the results of background investigations of each of Stephen L.
Day and Michael Bruns.

          (N) CONSUMMATION OF SENIOR FINANCING. The Senior Financing shall have
closed concurrently with the Closing.

          (O) WAIVER. Servicer on behalf of the Purchasers may waive any
condition specified in this Section 4.1; provided that no such waiver will be
effective against Servicer unless it is set forth in a writing executed by
Servicer.

          (P) MINIMUM EBITDA; FUNDED DEBT RATIO; FUNDED SENIOR DEBT RATIO. On
the Closing Date, the Loan Parties shall have provided evidence to the
reasonable satisfaction of the Servicer of (i) pro forma EBITDA for the twelve
month period preceding the Closing of not less than $3,750,000; (ii) a Funded
Debt Ratio at Closing of more than 3.75 to 1.0; and (iii) a Funded Senior Debt
Ratio at Closing of more than 3.00 to 1.0.

          (Q) INTEREST RATE PROTECTION AGREEMENT. Not later than ninety (90)
days following the Closing Date, the Loan Parties shall have entered into an
Interest Rate Protection Agreement covering a minimum of $5,000,000 of Funded
Debt under the Senior Financing, satisfactory in form and substance to Servicer
and its special counsel and to Purchasers and their special counsel.

                                    ARTICLE 5

               REPRESENTATIONS AND WARRANTIES OF THE LOAN PARTIES

     5.1 REPRESENTATIONS AND WARRANTIES OF THE LOAN PARTIES. As a material
inducement to Servicer and Purchasers to enter into this Agreement and purchase
the Notes, the Loan Parties, jointly and severally, hereby represent and warrant
to Servicer and Purchasers as follows:

          (A) ORGANIZATION AND POWER. Each of the Loan Parties is a corporation
or limited liability company duly organized, validly existing and in good
standing under the Laws of its state of formation. Each of the Loan Parties has
all requisite corporate or other organizational power and authority and all
material licenses, permits, approvals and authorizations necessary to own and
operate its properties, to carry on its businesses as now conducted and
presently proposed to be conducted and to carry out the Transactions, and is
qualified to do business in the jurisdictions listed on the "Organization
Schedule" attached hereto as Schedule 5.1(a), which includes every jurisdiction
where the failure to so qualify might reasonably be expected to have a Material
Adverse Effect. Each of the Loan Parties has its principal place of business as
set forth on the "Organization Schedule". The copies of the Charter Documents
and By-Laws of the Loan Parties that have been furnished to Servicer reflect all
amendments made thereto at any time prior to the date of this Agreement and are
correct and complete.

          (B) PRINCIPAL BUSINESS. Each of Operating Company #1 and Operating
Company #2 is engaged in the business of the offer and sale of tack and equine
products for mail

                                      -18-
<PAGE>
order, retail and online purchase, and Parent's only activity is ownership of
Operating Company #1 and Operating Company #2 (collectively, the "Business").
Purchasers' investment in the Securities will not be characterized as a "United
States real property interest" within the meaning of Section 897(c) of the Code.

          (C) FINANCIAL STATEMENTS AND FINANCIAL PROJECTIONS.

               (I) FINANCIAL STATEMENTS; HISTORICAL STATEMENTS. The Loan Parties
have delivered to Servicer copies of their audited consolidated year-end
financial statements (including a balance sheet and statement of operations,
stockholders' equity and cash flows of each of the Loan Parties) for and as of
the end of the three fiscal years ended December 31, 2002 for each of December
31, 2000 and December 31, 2001 (the "Annual Statements") and the nine (9) months
ended September 30, 2003) for each of the Parent, Operating Company #1 and
Operating Company #2 (the "Most Recent Statements"). The Annual Statements and
the Most Recent Statements were compiled from the books and records maintained
by the management of the companies referred to above, are correct and complete
and fairly represent the consolidated financial condition of such companies as
of their dates and the results of operations for the fiscal periods then ended
and have been prepared in accordance with GAAP consistently applied (except,
with respect to the Most Recent Statements, for the absence of notes thereto and
the making of certain normal year-end accruals and adjustments, none of which
will be individually or in the aggregate material).

               (II) FINANCIAL PROJECTIONS. The Loan Parties have delivered to
Servicer financial projections of the Loan Parties for the period from October
1, 2003 through December 31, 2004 derived from various assumptions of the Loan
Parties' management (the "Financial Projections"). The Financial Projections
represent a reasonable range of possible results in light of the history of the
Business and the Loan Parties and the present and foreseeable conditions and the
intentions of the Loan Parties' management. The Financial Projections accurately
reflect the liabilities of the Loan Parties upon consummation of the
transactions contemplated hereby as of the Closing Date.

               (III) ACCURACY OF FINANCIAL STATEMENTS. The Loan Parties do not
have any liabilities, contingent or otherwise, or forward or long-term
commitments that are not disclosed in the Annual Statements or in the notes
thereto, and except as disclosed therein there are no unrealized or anticipated
losses from any commitments of the Loan Parties that may cause a Material
Adverse Effect.

          (D) CAPITALIZATION AND RELATED MATTERS. (i) As of the Closing Date and
immediately thereafter, the authorized capital stock of Parent will consist of:
(A) 5,400,000 shares of Common Stock, of which (x) 4,300,000 shares are
designated as "Class A Common", of which 2,370,782 shares are issued and
outstanding and (y) 1,100,000 are designated "Class B Common", of which no
shares are issued and outstanding and of which 1,015,000 shares of "Class B
Common Stock" have been reserved for issuance upon conversion of the Preferred
Stock; and (B) 1,100,000 shares of Preferred Stock, of which 1,015,000 are
issued and outstanding. As of the Closing Date and immediately thereafter,
390,000 shares of common stock of the Parent have been reserved for issuance
upon exercise of the options issuable under the 1999 Option Plan of the Parent.
As of the Closing, each outstanding share of Common Stock

                                      -19-
<PAGE>
and capital stock of each Loan Party will be duly authorized, validly issued,
fully paid and non-assessable and not issued in violation of any preemptive or
similar rights created by applicable Law, any Loan Party's Charter Documents,
By-laws or by any agreement to which any Loan Party is a party or by which it is
bound, and will have been issued in compliance with applicable federal and state
securities or "blue sky" Laws. As of the Closing Date, no Loan Party will have
outstanding any stock or securities convertible or exchangeable for any shares
of its capital stock other than the Preferred Stock and options issuable under
the 1999 Option Plan of the Parent or any rights or options to subscribe for or
to purchase its capital stock or any stock or securities convertible into or
exchangeable for its capital stock, other than the Preferred Stock and options
issuable under the 1999 Option Plan of the Parent. As of the Closing Date, no
Loan Party will be subject to any obligation (contingent or otherwise) to
repurchase or acquire or retire any shares of its capital stock. None of the
Loan Parties have violated any applicable federal or state securities laws in
connection with the offer, sale or issuance of any of its capital stock, and the
offer, sale and issuance of the Securities hereunder do not require registration
under the Securities Act or any applicable state securities laws. There are no
agreements among Parent's stockholders with respect to the voting or transfer of
Parent's capital stock other than (i) as set forth in that certain Stockholders
Agreement, dated September 17, 1998 by and among Parent, Stephen L. Day,
Jonathan A.R. Grylls, David Post, Donald Motsenbocker, Thomas Gaines, James F.
Powers, David J. Powers and Michele R. Powers, (ii) as set forth in that certain
Stockholders and Registration Rights Agreement, dated September 17, 1998, by and
among Parent, Stephen L. Day and Citizens Ventures, Inc., or (iii) as
contemplated herein.

               (ii) As of the Closing Date and immediately thereafter, (A)
Parent owns one hundred percent (100%) of the outstanding shares of capital
stock of each of Operating Company #1 and Operating Company #2 and (B) the
ownership of the outstanding shares of capital stock of Parent is as set forth
on the Organization Schedule.

          (E) SUBSIDIARIES. None of the Loan Parties owns, or holds any rights
to acquire, any shares of stock or any other security or interest in any other
Person, and the Loan Parties have no Subsidiaries, except in each case as set
forth on the Organization Schedule.

          (F) AUTHORIZATION; NO BREACH. The execution, delivery and performance
of this Agreement, the other Purchase Documents and all other agreements
contemplated hereby and thereby to which each of the Loan Parties is a party
(collectively, the "Transaction Documents"), and the consummation of the
Transactions have been duly authorized by each of the Loan Parties. The
execution and delivery by each of the Loan Parties of the Transaction Documents
and the consummation of the Transactions do not and will not (i) conflict with
or result in a breach of the terms, conditions or provisions of, (ii) constitute
a default under, (iii) except as created pursuant to the Security Documents,
result in the creation of any Lien upon any of the Loan Parties' capital stock
or assets pursuant to, (iv) give any third party the right to accelerate any
obligation under, (v) result in a violation of, or (vi) require any
authorization, consent, approval, exemption or other action by or notice to any
Governmental Authority pursuant to, the Charter Documents of any of the Loan
Parties, or any Law to which any of the Loan Parties is subject, or any
agreement, instrument, order, judgment or decree to which any of the Loan
Parties is a party or to which they or their assets are subject.

                                      -20-
<PAGE>
          (G) GOVERNMENTAL APPROVALS. Except as specifically provided by the
Transaction Documents, no registration with or consent or approval of, or other
action by, any Governmental Authority is or will be required in connection with
the consummation of the Transactions by the Loan Parties.

          (H) ENFORCEABILITY. This Agreement constitutes, and each of the other
Transaction Documents when duly executed and delivered by each of the Loan
Parties who are parties thereto will constitute, legal, valid and binding
obligations of each of the Loan Parties enforceable in accordance with their
respective terms.

          (I) NO MATERIAL ADVERSE CHANGE. Since December 31, 2002, there has
been no event or occurrence that is likely to have a Material Adverse Effect.

          (J) LITIGATION. Except as described in the "Litigation Schedule"
attached hereto as Schedule 5.1(j), there are no actions, suits or proceedings
at law or in equity or by or before any arbitrator or any Governmental Authority
now pending or, to the best knowledge of the Loan Parties' management after due
inquiry, threatened against or filed by or affecting any of the Loan Parties or
any of their directors or officers or the businesses, assets or rights of any of
the Loan Parties that, if determined adversely to the Loan Parties, could have a
Material Adverse Effect. The Loan Parties and their directors or officers shall
promptly provide Servicer with a copy of all pleadings of all lawsuits filed
against others and, in the case of other actions, a letter stating the nature of
such suits and a copy of all pleadings.

          (K) COMPLIANCE WITH LAWS. The Loan Parties are not in violation in any
material respect of any applicable Law. The Loan Parties are not in default with
respect to, or in violation of, any judgment, order, writ, injunction, decree,
rule or regulation of any Governmental Authority, except for any such
violations, defaults or failures which, individually or in the aggregate, would
not have a Material Adverse Effect. The consummation of the Transactions will
not cause any violation of any applicable judgment, order, writ, injunction or
decree of any Governmental Authority, and there is no investigation, enforcement
action or regulatory action pending or, to the Loan Parties' knowledge,
threatened against or affecting any of the Loan Parties by any Governmental
Authority, except as set forth on the Litigation Schedule. Except as set forth
in the Litigation Schedule, to the Loan Parties knowledge, there is no remedial
or other corrective action that any of the Loan Parties is required to take to
remain in compliance with any judgment, order, writ, injunction or decree of any
Governmental Authority or to maintain any material permits, approvals or
licenses granted by any Governmental Authority in full force and effect. During
the past eight (8) years, none of the officers, directors or management of any
of the Loan Parties have been arrested or convicted of any material crime nor
have any of them been bankrupt or an officer or director of a bankrupt company.

          (L) ENVIRONMENTAL PROTECTION. Except as specified in "Environmental
Schedule" attached hereto as Schedule 5.1(1) and after giving effect to the
Transactions: (a) the business of the Loan Parties, the methods and means
employed by the Loan Parties in the operation thereof (including all operations
and conditions at or in the properties of the Loan Parties), and the assets
owned, leased, managed, used, controlled, held or operated by the Loan Parties,
comply in all material respects with all applicable Environmental Laws; (b) with
respect to the Properties and Facilities, and except as disclosed in the
Environmental Schedule, the Loan

                                      -21-
<PAGE>
Parties have obtained, possess and are in material compliance with all permits,
licenses, reviews, certifications, approvals, registrations, consents and any
other authorizations required under any Environmental Laws; (c) the Loan Parties
have not received (i) any claim or notice of violation, lien, complaint, suit,
order or other claim or notice to the effect that the Loan Parties are or may be
liable to any Person as a result of (A) the environmental condition of any of
their Properties or any other property, or (B) the release or threatened release
of any Pollutant, or (ii) any letter or request for information under Section
104 of the CERCLA, or comparable state laws, and to the best of any of the Loan
Parties' knowledge, none of the operations of the Loan Parties is the subject of
any investigation by a Governmental Authority evaluating whether any remedial
action is needed to respond to a release or threatened release of any Pollutant
at the Properties and Facilities or at any other location, including any
location to which the Loan Parties have transported, or arranged for the
transportation of, any Pollutants with respect to the Properties and Facilities;
(d) except as disclosed in the Environmental Schedule, neither the Loan Parties
nor, to the Loan Parties' knowledge, any prior owner or operator has incurred in
the past, or is now subject to, any Environmental Liabilities; (e) except as
disclosed in the Environmental Schedule, there are no Liens, covenants, deed
restrictions, notice or registration requirements, or other limitations
applicable to the Properties and Facilities, based upon any Environmental Laws
or other legal obligations; (f) there are no USTs located in, at, on or under
the Properties and Facilities, other than the USTs identified in the
Environmental Schedule as USTs, that singly or in the aggregate could have a
Material Adverse Effect; and, except as disclosed in the Environmental Schedule,
each of those USTs is in material compliance with all Environmental Laws and
other legal obligations; and (g) except as disclosed in the Environmental
Schedule, there are no PCBs, lead paint, asbestos (of any type or form), or
materials, articles or products containing PCBs, lead paint or asbestos, located
in, at, on, under, a part of, or otherwise related to the Properties and
Facilities (including, without limitation, any building, structure, or other
improvement that is a part of the Properties and Facilities) that singly or in
the aggregate could have a Material Adverse Effect, and, except as disclosed in
the Environmental Schedule, all of the PCBs, lead paint, asbestos, and
materials, articles and products containing PCBs, lead paint or asbestos
identified in the Environmental Schedule are in compliance with all
Environmental Laws and other legal obligations.

          (M) LEGAL INVESTMENTS; USE OF PROCEEDS. The Loan Parties will use the
proceeds from the sale of the Notes and the Senior Notes, together with the
proceeds from the Senior Financing and the equity investment to be made in
connection herewith, to: (i) repay the Existing Subordinated Financing; (ii) pay
fees and expenses in connection with the transactions contemplated under the
Transaction Documents; and (iii) finance ongoing working capital and capital
expenditure requirements and other general corporate purposes in the ordinary
course of business. The Loan Parties are not engaged in the business of
extending credit for the purpose of purchasing or carrying any "margin stock" or
"margin security" (within the meaning of Regulations T, U or X issued by the
Board of Governors of the Federal Reserve System), and no proceeds of the sale
of the Notes will be used to purchase or carry any margin stock or margin
security or to extend credit to others for the purpose of purchasing or carrying
any margin stock or margin security.

          (N) TAXES. Each of the Loan Parties has filed or caused to be filed
all Federal, state and local tax returns that are required to be filed by it,
and has paid or caused to be paid all

                                      -22-
<PAGE>
Taxes shown to be due and payable on such returns or on any assessments received
by it, including payroll taxes.

          (O) LABOR AND EMPLOYMENT. The Loan Parties are and each of their Plans
are in compliance in all material respects with those provisions of ERISA, the
Code, the Age Discrimination in Employment Act, and the regulations and
published interpretations thereunder that are applicable to the Loan Parties or
any such Plan. As of the date hereof, no Reportable Event has occurred with
respect to any Plan as to which any of the Loan Parties are or were required to
file a report with the PBGC. No Plan has any material amount of unfunded benefit
liabilities (within the meaning of Section 4001(a)(18) of ERISA) or any
accumulated funding deficiency (within the meaning of Section 302(a)(2) of
ERISA), whether or not waived, and neither the Loan Parties nor any member of
the Controlled Group has incurred or expects to incur any material withdrawal
liability under Subtitle E of Title IV of ERISA to a Multiemployer Plan. The
Loan Parties are in compliance in all material respects with all labor and
employment laws, rules, regulations and requirements of all applicable domestic
and foreign jurisdictions. There are no pending or, to the Loan Parties'
knowledge, threatened labor disputes, work stoppages or strikes.

          (P) INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY ACT. None
of the Loan Parties is (a) an "investment company" or "controlled" by an
investment company within the meaning of the Investment Company Act of 1940, as
amended, or (b) a "holding company" or a "subsidiary company" of a "holding
company" or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company," within the meaning of the Public Utility Holding Company
Act of 1935, as amended.

          (Q) PROPERTIES; SECURITY INTERESTS. The Loan Parties have good and
marketable title to, or valid leasehold interests in, all of the assets and
properties used or useful by the Loan Parties in the Business (collectively, the
"Properties and Facilities"), subject to no Liens except for Permitted Liens.
All of the Properties and Facilities are in good repair, working order and
condition and all such assets and properties are owned by the Loan Parties free
and clear of all Liens except for Permitted Liens. The Properties and Facilities
constitute all of the assets, properties and rights of any type used in or
necessary for the conduct of the Business. The Security Agreement creates and
grants to Servicer a valid and perfected security interest in all the collateral
thereunder, subject only to Permitted Liens. All real estate owned or leased by
any of the Loan Parties is listed on the "Properties Schedule," attached hereto
as Schedule 5.1(q).

          (R) INTELLECTUAL PROPERTY; LICENSES. Each of the Loan Parties
possesses all Proprietary Rights necessary to conduct the Business as heretofore
conducted or as proposed to be conducted by it. All Proprietary Rights
registered in the name of any of the Loan Parties and applications therefor
filed by any of the Loan Parties are listed on the "Intellectual Property
Schedule," attached hereto as Schedule 5.1(r). No event has occurred that
permits, or after notice or lapse of time or both would permit, the revocation
or termination of any of the foregoing, which taken in isolation or when
considered with all other such revocations or terminations could have a Material
Adverse Effect. None of the Loan Parties has notice or knowledge of any facts or
any past, present or threatened occurrence that could preclude or impair the
Loan Parties' ability to retain or obtain any authorization necessary for the
operation of the Business.

                                      -23-
<PAGE>
          (S) SOLVENCY. After giving effect to the Transactions, (i) the fair
value of the assets of the Loan Parties, at a fair valuation, will exceed their
debts and liabilities, subordinated, contingent or otherwise, (ii) the present
fair saleable value of the property of the Loan Parties will be greater than the
amount that will be required to pay the probable liability of their debts and
other liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured, (iii) the Loan Parties will be
able to pay their debts and liabilities, subordinated, contingent or otherwise,
as such debts and liabilities become absolute and matured, and (iv) the Loan
Parties will not have unreasonably small capital with which to conduct the
business in which they are engaged as such business is now conducted and is
proposed to be conducted following the Closing Date.

          (T) COMPLETE DISCLOSURE. All factual information furnished by or on
behalf of the Loan Parties to Servicer for purposes of or in connection with
this Agreement or the Transactions is, and all other such factual information
hereafter furnished by or on behalf of the Loan Parties will be, true and
accurate in all material respects on the date as of which such information is
furnished and not incomplete by omitting to state any fact necessary to make
such information not misleading at such time in light of the circumstances under
which such information was provided.

          (U) BROKER'S OR FINDER'S COMMISSIONS. Except for amounts payable by
the Loan Parties to Bay Capital Advisors pursuant to that certain letter
agreement dated as of March 7, 2003 not to exceed $70,000, no broker's or
finder's or placement fee or commission will be payable to any broker or agent
engaged by the Loan Parties or any of its officers, directors or agents with
respect to the issuance and sale of the Notes or the transactions contemplated
by this Agreement, including without limitation the Transactions, except for
fees payable to Purchasers and Servicer. The Loan Parties agree to indemnify
Servicer and Purchasers and hold them harmless from against any claim, demand or
liability for broker's or finder's or placement fees or similar commissions,
whether or not payable by the Loan Parties, alleged to have been incurred in
connection with such transactions, other than any broker's or finder's fees
payable to Persons engaged by Servicer or Purchasers.

          (V) ABSENCE OF UNDISCLOSED LIABILITIES. None of the Loan Parties has
any liabilities or obligations, either accrued, absolute, contingent or
otherwise, except:

               (i) those liabilities or obligations set forth on the Financial
     Statements and not heretofore paid or discharged,

               (ii) liabilities arising in the ordinary course of business under
     any agreement, contract, commitment, lease or plan specifically disclosed
     on the schedules or not required to be disclosed because of the term or
     amount involved or otherwise, and

               (iii) those liabilities or obligations incurred, consistently
     with past business practice, in or as a result of the normal and ordinary
     course of business.

          (W) ACCURACY OF INFORMATION. None of the Purchase Documents nor any
other information furnished to any of Purchasers by any of the Loan Parties and
any of their Affiliates in connection with the Transactions contains any untrue
statement of material fact or

                                      -24-
<PAGE>
omits to state any material fact necessary to make the statements contained
therein not misleading.

          (X) MATERIAL CONTRACTS. All material contracts of each of the Loan
Parties have been fully disclosed to Purchasers.

     5.2 ABSOLUTE RELIANCE ON THE REPRESENTATIONS AND WARRANTIES. All
representations and warranties contained in this Agreement and any financial
statements, instruments, certificates, schedules or other documents delivered in
connection herewith, shall survive the execution and delivery of this Agreement,
regardless of any investigation made by Servicer or Purchasers or on Servicer's
or Purchasers' behalf.

                                    ARTICLE 6

                                TRANSFER OF NOTES

     6.1 RESTRICTED SECURITIES. Purchasers acknowledge that the Notes have not
been registered under the Securities Act and may be resold only if registered
pursuant to the provisions of the Securities Act or if an exemption from
registration is available, and that the Loan Parties are not required to
register the Notes.

     6.2 LEGENDS; PURCHASER'S REPRESENTATIONS. Each of the Purchasers hereby
represents and warrants to the Loan Parties that it is an "accredited investor"
within the meaning of Rule 501(a) under the Securities Act and is acquiring the
Securities for investment for its own account, with no present intention of
dividing its participation with others (except for a potential transfer or
transfers of the Securities to an affiliate or affiliates of Purchasers) or
reselling or otherwise distributing the same in violation of the Securities Act
or any applicable state securities laws. The Loan Parties may place an
appropriate legend on the Securities owned by Purchasers concerning the
restrictions set forth in this Article 6. Upon the assignment or transfer by
Purchasers or any of its successors or assignees of all or any part of the
Securities, the term "Purchaser" as used herein shall thereafter mean, to the
extent thereof, the then holder or holders of such Securities, or portion
thereof.

     6.3 TRANSFER OF NOTES. Subject to Section 6.2 hereof and the Subordination
Agreement, a holder of a Note may (i) transfer such Note to a new holder, other
than a Person who is, at the time of proposed transfer, a Competitor, or (ii)
exchange such Note for Notes of different denominations (but in no event of
denominations of less than $500,000 in original principal amount), by
surrendering such Note to the Loan Parties duly endorsed for transfer or
accompanied by a duly executed instrument of transfer naming the new holder (or
the current holder if submitted for exchange only), together with written
instructions for the issuance of one or more new Notes specifying the respective
principal amounts of each new Note and the name of each new holder and each
address therefor. Notwithstanding the foregoing, the limitations on transfer
under Section 6.3(i) above shall not apply in the event a Default or Event of
Default under this Agreement. The Loan Parties shall simultaneously deliver to
such holder or its designee such new Notes, shall mark the surrendered Notes as
canceled and shall provide notice of such transfer to Servicer. In lieu of the
foregoing procedures, a holder may assign a Note (in whole but not in part) to a
new holder by sending written notice to the Loan Parties and Servicer

                                      -25-
<PAGE>
of such assignment specifying the new holder's name and address; in such case,
the Loan Parties shall promptly acknowledge such assignment in writing to both
the old and new holder. The Loan Parties shall not be required to recognize any
subsequent holder of a Note unless and until the Loan Parties have received
reasonable assurance that all applicable transfer taxes have been paid and, if
the subsequent holder is organized outside the United States, it has provided
the forms required under Section 3.7(b) certifying that it is exempt from United
States withholding tax.

     6.4 REPLACEMENT OF LOST SECURITIES. Upon receipt of evidence reasonably
satisfactory to the Loan Parties of the mutilation, destruction, loss or theft
of any Securities and the ownership thereof, the Loan Parties shall, upon the
written request of the holder of such Securities, execute and deliver in
replacement thereof new Securities in the same form, in the same original
principal amount and dated the same date as the Securities so mutilated,
destroyed, lost or stolen; and such Securities so mutilated, destroyed, lost or
stolen shall then be deemed no longer outstanding hereunder. If the Securities
being replaced have been mutilated, they shall be surrendered to the Loan
Parties; and if such replaced Securities have been destroyed, lost or stolen,
such holder shall furnish the Loan Parties with an indemnity in writing to save
it harmless in respect of such replaced Security.

     6.5 NO OTHER REPRESENTATIONS AFFECTED. Nothing contained in this Article 6
shall limit the full force or effect of any representation, agreement or
warranty made herein or in connection herewith to Purchasers.

     6.6 REGISTER. The Parent shall keep at its principal office a register in
which the Parent shall provide for the registration of the Notes and for the
transfer of the same.

                                    ARTICLE 7

                                   COVENANTS

     7.1 AFFIRMATIVE COVENANTS. The Loan Parties, jointly and severally,
covenant that, so long as all or any of the principal amount of the Notes or any
interest thereon shall remain outstanding, the Loan Parties shall:

          (A) EXISTENCE. Do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its legal existence.

          (B) BUSINESSES AND PROPERTIES; COMPLIANCE WITH LAWS. At all times (i)
do or cause to be done all things necessary to preserve, renew and keep in full
force and effect the rights, licenses, registrations, permits, certifications,
approvals, consents, franchises, patents, copyrights, trademarks and trade
names, and any other trade names that may be material to the conduct of their
businesses; (ii) comply in all material respects with all laws and regulations
applicable to the operation of such business, including but not limited to, all
Environmental Laws, whether now in effect or hereafter enacted and with all
other applicable Laws, (iii) take all action that may be required to obtain,
preserve, renew and extend all rights, patents, copyrights, trademarks, trade
names, franchises, registrations, certifications, approvals, consents, licenses,
permits and any other authorizations that may be material to the operation of
such business,

                                      -26-
<PAGE>
(iv) maintain, preserve and protect all property material to the conduct of such
business, and (v) except for obsolete or worn out equipment, keep their property
in good repair, working order and condition and from time to time make, or cause
to be made, all needful and proper repairs, renewals, additions, improvements
and replacements thereto necessary in order that the business carried on in
connection therewith may be properly conducted at all times. Without limiting
the generality of the foregoing, the Loan Parties shall comply with the specific
environmental covenants set forth in Schedule 5.1(1).

          (C) INSURANCE. Maintain insurance required by the Purchase Documents
and any and all contracts entered into by the Loan Parties, including but not
limited to: (i) the Life Insurance until the Notes have been repaid in full (for
avoidance of doubt, if the Life Insurance issued at the Closing is issued on an
interim basis, such Life Insurance shall be reissued on a non-interim basis
prior to its expiration); (ii) coverage on their insurable properties (including
all inventory, equipment and real property) against the perils of fire, theft
and burglary; (iii) public liability; (iv) workers' compensation; (v) business
interruption; (vi) product liability; and (vii) such other risks as are
customary with companies similarly situated and in the same or similar business
as that of the Loan Parties under policies issued by financially sound and
reputable insurers in such amounts as are customary with companies similarly
situated and in the same or similar business. Each of the Loan Parties shall pay
all insurance premiums payable by it and shall deliver the policy or policies of
such insurance (or certificates of insurance with copies of such policies) to
Servicer. All insurance policies of the Loan Parties shall contain endorsements,
in form and substance reasonably satisfactory to Servicer, providing that the
insurance shall not be cancelable except upon thirty (30) days' prior written
notice to Servicer. Servicer, on behalf of Purchasers, shall be shown as an
additional named insured party under all such insurance policies (and as
beneficiary of the Life Insurance).

          (D) OBLIGATIONS AND TAXES. Pay and discharge promptly when due all
Taxes, assessments and governmental charges or levies imposed upon them or upon
their income or profits or in respect of their properties before the same shall
become delinquent or in default, as well as all lawful claims for labor,
materials and supplies or otherwise, which, if unpaid, might give rise to Liens
or charges upon such properties or any part thereof; provided, however, that the
Loan Parties shall not be required to pay and discharge or to cause to be paid
and discharged any such Tax, assessment, charge, levy or claim so long as the
validity or amount thereof shall be contested in good faith by appropriate
proceedings and the Loan Parties shall have set aside on their books adequate
reserves with respect thereto.

          (E) FINANCIAL STATEMENTS; REPORTS. Furnish to Servicer:

               (I) ANNUAL STATEMENTS. Within one hundred twenty (120) days after
the end of each fiscal year, a balance sheet and statements of operations,
stockholders' equity and cash flows of the Loan Parties showing the financial
condition of the Loan Parties as of the close of such year and the results of
operations during such year, all of the foregoing financial statements to be
audited by a firm of independent certified public accountants of recognized
national standing acceptable to Servicer and accompanied by an opinion of such
accountants without material exceptions or qualifications. Additionally, such
financial statements shall be accompanied by a certificate of such accountants
(which shall not contain any qualification exception or scope limitation not
acceptable to Servicer) stating that in the course of its regular

                                      -27-
<PAGE>
audit of the Business of the Loan Parties, which audit was conducted in
accordance with GAAP, no Default or Event of Default relating to financial and
accounting matters has come to their attention, or if any Default or Event of
Default exists, a statement as to the nature thereof.

               (II) QUARTERLY STATEMENTS. Within forty-five (45) calendar days
after the end of each calendar quarter, financial statements (including a
balance sheet and cash flow and income statements) showing the financial
condition and results of operations of the Loan Parties as of the end of each
such quarter and for the then elapsed portion of the current fiscal year,
together with comparisons to the corresponding periods in the preceding year and
the budget for such periods, accompanied by a certificate of an officer that
such financial statements have been prepared in accordance with GAAP,
consistently applied, and setting forth in comparative form the respective
financial statements for the corresponding date and period in the previous
fiscal year.

               (III) FORMAT: MANAGEMENT REPORT; CERTIFICATE OF COMPLIANCE. Each
balance sheet, operations statement, stockholders equity statement and cash flow
statement furnished to Servicer or Purchasers pursuant to subsections (i) and
(ii) of this 7.1(e) will be furnished by an electronic means in Excel
spreadsheet format containing such line items and other formatting requirements
as maybe specified by Servicer. Each financial statement furnished to Servicer
pursuant to subsections (i) and (ii) of this Section 7.1(e) shall be accompanied
by (A) a written narrative report by the management of the Loan Parties in the
form of Exhibit D explaining material developments and trends in the Business
and such financial statements and (B) a written certificate in the form of
Exhibit D signed by the Loan Parties' chief financial officer to the effect that
no Default or Event of Default has occurred during the period covered by such
statements or, if any such Default or Event of Default has occurred during such
period, setting forth a description of such Default or Event of Default and
specifying the action, if any, taken by the Loan Parties to remedy the same, and
(C) a compliance certificate in the form of Exhibit D showing the Loan Parties'
compliance with the covenants set forth in Section 7.3.

               (IV) ACCOUNTANT REPORTS. Promptly upon the receipt thereof,
copies of all reports, if any, submitted to the Loan Parties by independent
certified public accountants in connection with each annual, interim or special
audit or review of the financial statements of the Loan Parties made by such
accountants, including but not limited to, each final report (including, in any
event, any so-called management letters) and any comment letter submitted by
such accountants to management in connection with any annual review or in
connection with any interim audit thereof pertaining to any phase of the
business of the Loan Parties.

               (V) PROJECTIONS. As soon as available, but in no event later than
thirty days after the end of each Fiscal Year, a preliminary projection and, as
soon as available, but in no event later than sixty days after the end of each
Fiscal Year, a final projection, of the Loan Parties' balance sheet, and income,
retained earnings and cash flow statements, respectively, for the following five
fiscal years and comparable actual and budgeted figures for the current year;
and within ten (10) days after any material update or amendment of any such plan
or forecast, a copy of such update or amendment, including a description of and
reasons for such update or amendment. Each such projection, update or amendment
shall be accompanied by a written certificate signed by the Loan Parties' chief
financial officer to the effect that it has been

                                      -28-
<PAGE>
prepared on the basis of the Loan Parties' historical financial statements and
records, together with the assumptions set forth in such projection and that it
reflects expectations, after reasonable analysis, of the Loan Parties'
management as to the matters set forth therein.

               (VI) AGENCY FILINGS. Promptly after the sending or filing
thereof, copies of any material filings with, or notices from, any Governmental
Authority, other than routine or ordinary course filings, notices and
correspondence.

               (VII) ADDITIONAL INFORMATION. Promptly, from time to time, such
other information regarding the compliance by the Loan Parties with the terms of
this Agreement and the other Purchase Documents or the affairs, operations or
condition (financial or otherwise) of the Loan Parties as Servicer or Required
Purchasers may reasonably request and that is capable of being obtained,
produced or generated by the Loan Parties or of which the Loan Parties have
knowledge.

          (F) LITIGATION AND OTHER NOTICES. Give Servicer prompt written notice
of the following:

               (I) ORDERS; INJUNCTIONS. The issuance by any court or
Governmental Authority of any injunction, order, decision or other restraint
prohibiting, or having the effect of prohibiting, the making of any loan or the
initiation of any litigation or similar proceeding seeking any such injunction,
order or other restraint.

               (II) LITIGATION. The notice, filing or commencement of any
action, suit or proceeding against any of the Loan Parties whether at law or in
equity or by or before any court or any Governmental Authority and that, if
adversely determined against any of the Loan Parties, could result in uninsured
liability in excess of $100,000 in the aggregate.

               (III) ENVIRONMENTAL MATTERS. (A) Any release or threatened
release of any Pollutant required to be reported to any Governmental Authority
under any applicable Environmental Laws, (B) any Removal, Remedial or Response
action taken by any of the Loan Parties or any other person in response to any
Pollutant in, at, on or under, a part of or about any of the Loan Parties'
properties or any other property, (C) any violation by any of the Loan Parties
of any Environmental Law, in each case, that could result in a Material Adverse
Effect, or (D) any notice, claim or other information that any of the Loan
Parties might be subject to an Environmental Liability.

               (IV) DEFAULT. Any Default or Event of Default, specifying the
nature and extent thereof and the action (if any) that is proposed to be taken
with respect thereto.

               (V) MATERIAL ADVERSE EFFECT. Any development, occurrence or event
in any way relating to the business or affairs of any of the Loan Parties that
could have a Material Adverse Effect.

               (VI) BOARD MEETINGS. Written notice of each regular meeting of
each of the Loan Parties' board of directors at least 30 days in advance of such
meeting and prior written notice of each special meeting of each of the Loan
Parties' board of directors at least seven (7) days in advance of such meeting,
but in any case such notice shall be delivered no later

                                      -29-
<PAGE>
than the date on which the members of the board of directors are notified of
such meeting. In addition, the Loan Parties will send Servicer copies of all
reports and materials provided to members of the board of directors at meetings
or otherwise.

               (VII) SENIOR CREDIT AGREEMENT. Any amendments to, waivers of, or
notices of default under, the Senior Credit Agreement.

          (G) ERISA. Comply in all material respects with the applicable
provisions of ERISA and the provisions of the Code relating thereto and furnish
to Servicer and if so requested by them in writing, Purchasers (i) as soon as
possible, and in any event within thirty (30) days after the Loan Parties know
or have reason to know thereof, notice of (A) the establishment by the Loan
Parties of any Plan that is subject to Title IV of ERISA or the funding
requirements of Section 302 of ERISA, (B) the commencement by the Loan Parties
of contributions to a Multiemployer Plan, (C) any failure by the Loan Parties or
any of their ERISA Affiliates to make contributions required by Section 302 of
ERISA (whether or not such requirement is waived pursuant to Section 303 of
ERISA), or (D) the occurrence of any Reportable Event with respect to any Plan
or Multiemployer Plan for which the reporting requirement is not waived,
together with a statement of an officer setting forth details as to such
Reportable Event and the action that the Loan Parties propose to take with
respect thereto, together with a copy of the notice of such Reportable Event
given to the PBGC if any such notice was provided by the Loan Parties, and (ii)
promptly after receipt thereof, a copy of any notice the Loan Parties may
receive from the PBGC relating to the intention of the PBGC to terminate any
Plan or Multiemployer Plan, or to appoint a trustee to administer any Plan or
Multiemployer Plan, and (iii) promptly after receipt thereof, a copy of any
notice of withdrawal liability from any Multiemployer Plan.

          (H) MAINTAINING RECORDS; ACCESS TO PREMISES AND INSPECTIONS. Maintain
financial records in accordance with generally accepted practices and, upon
reasonable notice, at all reasonable times and as often as Servicer or any
Purchasers may reasonably request (and at any time after the occurrence and
during the continuation of a Default or Event of Default), permit any authorized
representative designated by Servicer to visit and inspect the properties and
financial records of the Loan Parties and to make extracts from such financial
records, all at the Loan Parties' reasonable expense, and permit any authorized
representative designated by Servicer or any Purchasers to discuss the affairs,
finances and conditions of the Loan Parties with the Loan Parties' chief
financial officer and such other officers as the Loan Parties shall deem
appropriate, and the Loan Parties' independent public accountants.

          (I) BOARD OF DIRECTORS.

               (i) Cause each of the Boards to meet at least quarterly in person
or by teleconference as permitted by applicable Law. For so long as any Notes
are outstanding, Servicer may designate an observer, without voting rights, who
will be entitled to attend and participate in all meetings of the Boards, and
any committees thereof. Any observer designated by Servicer shall be entitled to
notice of all meetings of the Boards and committees thereof and to information
provided to any director (including, without limitation, monthly financial
statements) in his capacity as such. Such observer shall receive reimbursement
for reasonable out-of-pocket expenses from the Loan Parties incurred in
connection with attendance at meetings of the Boards and committees thereof.

                                      -30-
<PAGE>
               (ii) Each of the Boards shall maintain a compensation committee,
which shall be comprised of at least a majority of directors who are not
otherwise employed by any of the Loan Parties or their Subsidiaries.

               (iii) All rights of Purchasers under this Section 7.1(i) shall be
exercised by Required Purchasers.

               (iv) Each of the Loan Parties agrees that any observer described
in this Section 7.1(i) may share with Servicer or any of Purchasers with which
he is affiliated and such of Servicer's or such Purchasers' legal and financial
advisors any confidential information related to the business and operations of
any of the Loan Parties disclosed to him during the exercise of his duties as an
observer hereunder, unless the applicable Board expressly directs that specific
confidential information not be so disclosed.

               (v) Servicer and each of the Purchasers agrees and agrees to
cause its legal and financial advisors to keep confidential all information
described in Section 7.1(i)(v), which is disclosed to them by an observer
affiliated therewith, provided, that, such information may be disclosed if
required by Law. Servicer and Purchasers shall have no obligation to keep
information received pursuant to Section 7.1(i)(v) confidential if such
information: (A) is or becomes public from a source other than such observer or
one of Servicer's or of Purchasers' legal or financial advisors or (B) is known
to or discovered by Servicer, Purchasers or any of their legal or financial
advisors independently of such observer, provided, that, the source of such
information was not known, after due inquiry, to be bound by a confidentiality
agreement with (or subject to any other contractual, legal or fiduciary
obligation of confidentiality to) the relevant Loan Party.

               (vi) Notwithstanding anything herein to the contrary, each party
to the transactions contemplated by this Agreement (and each Affiliate and
officer, director, manager, stockholder, members, employee and agent, in their
capacities as such) agree that each party (and each Affiliate and officer,
director, manager, stockholder, members, employee and agent, in their capacities
as such) may disclose to any and all persons or entities, without limitation of
any kind, the tax treatment and tax structure of the transactions and all
materials of any kind (including opinions or other tax analyses) that are
provided to such party or such person or entity relating to such tax treatment
and tax structure, except to the extent necessary to comply with any applicable
federal or state securities laws. This authorization is not intended to permit
disclosure of any other information including (without limitation) (A) any
portion of any materials to the extent not related to the tax treatment or tax
structure of the transactions contemplated by this Agreement, (B) the identities
of the parties participating or potentially participating in the transactions
contemplated by this Agreement, (C) the existence or status of any negotiations,
(D) any pricing or financial information (except to the extent such pricing or
financial information is related to the tax treatment or tax structure of the
transactions contemplated by this Agreement), or (E) any other term or detail
not relevant to the tax treatment or the tax structure of the transactions
contemplated by this Agreement.

          (J) FUTURE FINANCINGS. Give to Servicer and Purchasers an opportunity
to participate in any future financings of the Loan Parties.

                                      -31-
<PAGE>
     7.2 NEGATIVE COVENANTS. The Loan Parties, jointly and severally, covenant
that, so long as all or any part of the principal amount of the Notes or any
interest thereon shall remain outstanding:

          (A) INDEBTEDNESS. None of the Loan Parties shall create, incur, assume
guarantee or be or remain liable for, contingently or otherwise, or suffer to
exist any Indebtedness, except:

               (i) Indebtedness incurred under this Agreement;

               (ii) Indebtedness incurred under the Senior Financing, to which
payment under the Notes will be subordinated on terms acceptable to Servicer,

               (iii) Indebtedness incurred in the ordinary course of business
with respect to customer deposits, trade payables and other unsecured current
liabilities not the result of borrowing and not evidenced by any note or other
evidence of indebtedness;

               (iv) Indebtedness (whether secured (pursuant to Section
7.2(b)(vi)) or unsecured) incurred to purchase or lease on a Capitalized Lease
basis equipment or other capital assets incurred in the ordinary course of
business in an amount at any time outstanding not to exceed $1,380,000 (provided
that recourse under such Indebtedness is limited to the equipment or other
capital asset), or for Taxes, in each case, subject to the limitations set forth
in Section 7.2(b); and

               (v) Indebtedness in the form of Guaranties permitted by Section
7.2(c).

          (B) NEGATIVE PLEDGE; LIENS. The Loan Parties shall not create, incur,
assume or suffer to exist any Lien of any kind on any of their properties or
assets of any kind, except the following (collectively, "Permitted Liens"):

               (i) Liens created in connection with the Senior Financing, which
Liens Purchasers will subordinate to on terms that are reasonably acceptable to
Purchasers;

               (ii) Liens for or priority claims imposed by Law that are
incidental to the conduct of business or the ownership of properties and assets
(including mechanic's, warehousemen's, attorneys' and statutory landlords'
liens) and deposits, pledges or liens to secure statutory or contractual
obligations, surety or appeal bonds or other liens of like general nature
incurred in the ordinary course of business and not in connection with the
borrowing of money; provided, however, that in each case, the obligation secured
thereby shall not be overdue, or, if overdue, is being contested in good faith
and adequate reserves have been set up by the Loan Parties as the case may be;

               (iii) Liens securing the payments of Taxes, assessments and
governmental charges or levies incurred in the ordinary course of business that
either (a) are not delinquent, or (b) are being contested in good faith by
appropriate legal or administrative proceedings and as to which adequate
reserves have been set aside on their books;

                                      -32-
<PAGE>
               (iv) Liens listed on the Permitted Encumbrances Schedule attached
hereto as Schedule 7.2(b);

               (v) Liens securing the interest of a broker in any Commodity
Accounts and any Commodity Contracts (as such terms are defined in the Uniform
Commercial Code) to the extent permitted by the Senior Credit Agreement as in
effect on the Closing Date;

               (vi) purchase money Liens securing Indebtedness permitted to be
incurred under Section 7.2(a)(v) (provided that no such purchase money Liens
shall extend to or cover other property of the Loan Parties other than the items
of equipment or other capital assets so acquired);

               (vii) Liens consisting of zoning restrictions, easements,
licenses, covenants and other restrictions affecting the use of the Loan
Parties' real property, which do not, in the Servicer's sole determination: (i)
materially impair the use of such property, or (ii) materially lessen the value
of such property for the purposes for which the same is held by the Loan
Parties; and

               (viii) extensions, renewals and replacements of Liens referred to
in clauses (i) through (vii) of this Section 7.2(b); provided, however, that
with respect to Liens referred to in clauses (ii) through (vii), any such
extension, renewal or replacement Lien shall be limited to the property or
assets covered by the Lien extended, renewed or replaced and that the
obligations secured by any such extension, renewal or replacement Lien shall be
in an amount not greater than the amount of the obligations secured by the Lien
extended, renewed or replaced.

          (C) CONTINGENT LIABILITIES. The Loan Parties shall not become liable
for any Guaranties, except for the endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary course of
business.

          (D) LEASES. At no point shall the sum of the aggregate amount of
annualized payments on operating leases of real estate during any Fiscal Year
exceed the amount identified below as applicable to such period:

<TABLE>
<CAPTION>
      Fiscal Year          Maximum Amount
      -----------          --------------
<S>                        <C>
Ending December 31, 2004     $1,380,000
Ending December 31, 2005     $1,610,000
Ending December 31, 2006     $1,840,000
</TABLE>

          (E) CAPITAL EXPENDITURES. The Loan Parties shall not make or commit to
make any payments in any Fiscal Years on account of the purchase or lease of any
fixed assets (whether through purchase, Capitalized Lease or operating lease),
that in the aggregate would cost more than (i) $850,000 during the period
commencing on January 1, 2003 and ending on December 31, 2003, (ii) $1,186,500
during the period commencing on January 1, 2004 and

                                      -33-
<PAGE>
ending on December 31, 2004, and (iii) $850,000 during each Fiscal Year
thereafter, in each case, without the prior written consent of Servicer.

          (F) MERGERS, ETC. The Loan Parties shall not merge into or consolidate
or combine with any other Person, or purchase, lease or, otherwise acquire (in
one transaction or a series of related transactions) all or any part of the
property or assets of any Person, other than purchases or other acquisitions of
inventory, materials, leases, property and equipment in the ordinary course of
business. Except (i) for sales of inventory in the ordinary course of business,
(ii) the sale of assets that are obsolete or no longer used or useful in the
Loan Parties' business, (iii) "Permitted Acquisitions" as described in Section
5.7 of the Senior Credit Agreement, or (iv) as expressly permitted by the
Security Documents, the Loan Parties shall not sell, transfer or otherwise
dispose of any of its assets, including the collateral under the respective
Security Documents. Parent shall at all times own one hundred percent (100%) of
the capital stock of each of Operating Company #1 and Operating Company #2.

          (G) AFFILIATE TRANSACTIONS. The Loan Parties shall not enter into or
be a party to any transaction or arrangement with any Affiliate of the Loan
Parties or any director, officer, manager or employee of the Loan Parties or any
Affiliate thereof, including, without limitation, the purchase from, sale to or
exchange of property with, any merger or consolidation with or into, or the
rendering of any service by or for, any such party, except pursuant to the
reasonable requirements of the Loan Parties' business and upon fair and
reasonable terms no less favorable to the Loan Parties than would be obtained in
a comparable arm's-length transaction with a Person other than any such
director, officer, manager, employee or Affiliate.

          (H) DIVIDENDS AND STOCK PURCHASES. Other than dividends declared (but
not paid) on the issued and outstanding shares of Preferred Stock, none of the
Loan Parties shall directly or indirectly declare or pay any dividends or make
any distribution of any kind on their outstanding capital stock or any other
payment of any kind to any of their stockholders or its Affiliates (including
any redemption, purchase or acquisition of, whether in cash or in property,
securities or a combination thereof, any partnership interests or capital
accounts or warrants, options or any of their other securities), or set aside
any sum for any such purpose other than for (i) such dividends, distributions or
payments paid solely to other Loan Parties and (ii) payments of regular
compensation to employees of the Loan Parties in the ordinary course of business
and consistent with past practices.

          (I) ADVANCES, INVESTMENTS AND LOANS. The Loan Parties shall not
purchase, or hold beneficially any stock, other securities or evidences of
Indebtedness of, or make or permit to exist any loan, Guaranty or advance to, or
make any investment or acquire any interest whatsoever in, any other Person
(including, but not limited to, the formation or acquisition of any
Subsidiaries), except:

               (i) securities issued or directly and fully guaranteed or insured
by the United States of America or any agency or instrumentality thereof having
maturities of not more than one (1) year from the date of acquisition;

                                      -34-
<PAGE>
               (ii) time certificates of deposit or repurchase agreements,
maturing within one year of their issuance, from banks in the United States
having capital, surplus and undivided profits in excess of $200,000,000;

               (iii) short-term commercial paper carrying the investment grade
rating by Moody's or Standard and Poor's rating services and issued by
corporations headquartered in the United States, in currency of the United
States;

               (iv) shares of money-market mutual funds having assets in excess
of $100,000,000 and substantially all of the assets of which consist of
investments referred to in clauses (i) through (iii), inclusive, above

               (v) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof maturing within six months from the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from either S&P or Moody's;

               (vi) deposit accounts maintained in accordance with any loan
agreement evidencing the Senior Financing;

               (vii) Investments (including debt obligations) received in
connection with the bankruptcy or reorganization of suppliers and customers and
in settlement of delinquent obligations of, and other disputes with, customers
and suppliers arising in the ordinary course of business;

               (viii) receivables owing to the Loan Parties created or acquired
in the ordinary course of business and payable on customary trade terms of the
Loan Parties;

               (ix) deposits made in the ordinary course of business consistent
with past practices to secure the performance of leases or in connection with
bidding on government contracts;

               (x) advances to employees, officers, directors and managers in
the ordinary course of business for business expenses; provided, however, that
the aggregate amount of such advances at any time outstanding shall not exceed
$57,500;

               (xi) shares of capital stock in Operating Company #1 and
Operating Company #2 held by Parent; and

               (xii) hedging transactions to the extent permitted under the
Senior Credit Agreement.

          (J) USE OF PROCEEDS. The Loan Parties shall not use any proceeds from
the sale of the Notes hereunder, directly or indirectly, for the purposes of
purchasing or carrying any "margin securities" within the meaning of Regulations
T, U or X promulgated by the Board of Governors of the Federal Reserve Board or
for the purpose of arranging for the extension of credit secured, directly or
indirectly, in whole or in part by collateral that includes any "margin
securities."

                                      -35-
<PAGE>
          (K) AMENDMENT OF CHARTER DOCUMENTS OR CHANGE IN LEGAL STRUCTURE. The
Loan Parties shall not (i) amend, terminate, modify or waive or agree to the
amendment, modification or waiver of any material term or provision of their
respective Charter Documents or Bylaws in any material respect or (ii) without
providing Servicer with at least thirty (30) days' prior written notice, change
their jurisdiction of formation or cease to be corporations or limited liability
companies, as applicable.

          (L) SUBSIDIARIES. None of the Loan Parties shall establish or acquire
any Subsidiary.

          (M) BUSINESS. None of the Loan Parties shall engage, directly or
indirectly, in any business other than the Business.

          (N) FISCAL YEAR; ACCOUNTING. None of the Loan Parties shall change its
Fiscal Year from ending on December 31st or method of accounting (other than
immaterial changes in methods), except as required by GAAP.

          (O) ESTABLISHMENT OF NEW OR CHANGED BUSINESS LOCATIONS. None of the
Loan Parties shall relocate its principal executive offices or other facilities
or establish new business locations or store any inventory or other assets at a
location not identified to Servicer on or before the date hereof, without
providing at least thirty (30) days advance written notice to Servicer.

          (P) CHANGED OR ADDITIONAL BUSINESS NAMES. None of the Loan Parties
shall change its legal name or establish new or additional trade names without
providing at least thirty (30) days advance written notice to Servicer.

     7.3 FINANCIAL COVENANTS. The Loan Parties shall maintain at the end of each
fiscal quarter:

          (A) FUNDED DEBT RATIO. A Funded Debt Ratio as at any fiscal
quarter-end during any period specified below of more than the ratio identified
below as applicable to such period:

<TABLE>
<CAPTION>
                      Period                          Maximum Ratio
                      ------                          -------------
<S>                                                   <C>
For the fiscal quarter ending on December 31, 2003     3.85 to 1.0
For the fiscal quarter ending on March 31, 2004        4.15 to 1.0
For the fiscal quarter ending on June 30, 2004         3.85 to 1.0
For the fiscal quarter ending on September 30, 2004    3.85 to 1.0
For the fiscal quarter ending on December 31, 2004     3.40 to 1.0
For the fiscal quarter ending on March 31, 2005        3.60 to 1.0
</TABLE>

                                      -36-
<PAGE>
<TABLE>
<CAPTION>
                         Period                                Maximum Ratio
                         ------                                -------------
<S>                                                            <C>
For the fiscal quarter ending on June 30, 2005                  3.40 to 1.0
For the fiscal quarter ending on September 30, 2005             3.40 to 1.0
For the fiscal quarter ending on December 31, 2005              3.15 to 1.0
For the fiscal quarter ending on March 31, 2006                 3.40 to 1.0
For the fiscal quarter ending on June 30, 2006                  3.15 to 1.0
For any fiscal quarter ending on or after September 30, 2006    3.15 to 1.0
</TABLE>

          (B) FUNDED SENIOR DEBT RATIO. A Funded Senior Debt Ratio as at any
fiscal quarter-end during any period specified below of more than the ratio
identified below as applicable to such period:

<TABLE>
<CAPTION>
                         Period                                Maximum Ratio
                         ------                                -------------
<S>                                                            <C>
For the fiscal quarter ending on December 31, 2003              2.75 to 1.0
For the fiscal quarter ending on March 31, 2004                 3.30 to 1.0
For the fiscal quarter ending on June 30, 2004                  2.75 to 1.0
For the fiscal quarter ending on September 30, 2004             2.75 to 1.0
For the fiscal quarter ending on December 31, 2004              2.25 to 1.0
For the fiscal quarter ending on March 31, 2005                 2.50 to 1.0
For the fiscal quarter ending on June 30, 2005                  2.25 to 1.0
For the fiscal quarter ending on September 30, 2005             2.25 to 1.0
For the fiscal quarter ending on December 31, 2005              2.00 to 1.0
For the fiscal quarter ending on March 31, 2006                 2.25 to 1.0
For the fiscal quarter ending on June 30, 2006                  2.00 to 1.0
For any fiscal quarter ending on or after September 30, 2006    2.00 to 1.0
</TABLE>

          (C) OPERATING CASH FLOW TO TOTAL DEBT SERVICE. The ratio of (i)
Operating Cash Flow to (ii) Total Debt Service of less than 1.35 to 1.0, in each
case as determined at the end of each fiscal quarter for the four consecutive
fiscal quarters then ending.

                                      -37-
<PAGE>
          (D) MINIMUM EBITDA AMOUNT. EBITDA for the then preceding four quarters
of not less than:

<TABLE>
<CAPTION>
                        Period                            Minimum Amount
                        ------                            --------------
<S>                                                       <C>
For each of the two fiscal quarters ending on December      $ 3,375,000
31, 2003 and March 31, 2004, respectively

For each of the two fiscal quarters ending on June 30,      $3,8250,000
2004 and September 30, 2004, respectively

For each of the two fiscal quarters ending on December      $ 4,275,000
31, 2004, March 31, 2005, respectively

For any fiscal quarter ending on or after June 30, 2005     $ 4,500,000
</TABLE>

                                    ARTICLE 8

                               EVENTS OF DEFAULT

     8.1 EVENTS OF DEFAULT. An Event of Default shall mean the occurrence of one
or more of the following described events:

          (a) any Loan Party shall default in the payment of (i) interest on the
Notes within five (5) days after its due date or (ii) principal of the Notes
when due, whether at maturity, upon notice of prepayment in accordance with
Sections 3.3 or 3.4, upon any scheduled payment date or by acceleration or
otherwise (including mandatory prepayment pursuant to Section 3.5);

          (b) any Loan Party shall default under any agreement under which any
Indebtedness in an aggregate principal amount of $115,000 or more is created in
a manner entitling the holder of such Indebtedness to accelerate the maturity of
such Indebtedness.

          (c) any representation or warranty herein made by any Loan Party, or
any certificate or financial statement furnished pursuant to the provisions
hereof, shall prove to have been false or misleading in any material respect as
of the time made or furnished or deemed made or furnished;

          (d) any Loan Party shall default in the performance of any covenant,
condition or provision of Section 7.1(h), 7.2 or 7.3;

          (e) a default or event of default shall occur under any of the other
Purchase Documents, beyond any applicable notice or cure periods;

          (f) any Loan Party shall default in the performance of any other
covenant, condition or provision of this Agreement, the Notes or the other
Purchase Documents, and such default shall not be remedied to Servicer's or
Required Purchasers' satisfaction for a period of thirty (30) days of the
earlier of (i) written notice from a Servicer of such default or (ii) actual
knowledge by any Loan Party of such default;

                                      -38-
<PAGE>
          (g) a proceeding shall have been instituted in a court having
jurisdiction in the premises seeking a decree or order for relief in respect of
any Loan Party in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or for the
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of any Loan Party or for any substantial part
of its property, or for the winding-up or liquidation of their affairs, and such
proceeding shall remain undismissed or unstayed and in effect for a period of
sixty (60) days;

          (h) any Loan Party shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, shall consent to the entry of an order for relief in an involuntary case
under any such law, or shall consent to the appointment of or taking possession
by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of any Loan Party or for any substantial part of their
property, or shall make a general assignment for the benefit of creditors, or
shall fail generally to pay their debts as they become due, or shall take any
action in furtherance of any of the foregoing;

          (i) both the following events shall occur; (i)a Reportable Event, the
occurrence of which would have a Material Adverse Effect that could cause the
imposition of a Lien under Section 4068 of ERISA, shall have occurred with
respect to any Plan or Plans; and (ii)the aggregate amount of the then "current
liability" (as defined in Section 412(1)(7) of the Code) of all accrued benefits
under such Plan or Plans exceeds the then current value of the assets allocable
to such benefits by more than $115,000 at such time;

          (j) a final judgment that, together with any other undischarged final
judgments against any Loan Party, exceeds in an aggregate of $115,000 (except to
the extent fully covered by insurance and the insurance carrier has not reserved
the right to disallow such claim), shall have been entered against any Loan
Party if, within thirty (30) days after the entry thereof, such judgment shall
not have been discharged or execution thereof stayed pending appeal (provided,
that the total cost of any bond applied in order to procure a stay of execution
in any such litigation shall not exceed $11,500), or if, within thirty (30) days
after the expiration of any such stay, such judgment shall not have been
discharged;

          (k) any Purchase Document or Security Document shall at any time after
the Closing Date cease for any reason to be in full force and effect or shall
cease to create perfected security interests in favor of Servicer in the
collateral subject or purported to be subject thereto, subject to no other Liens
other than Permitted Liens, or such collateral shall have been transferred to
any Person without the prior written consent of the holders of a majority in
principal amount of the outstanding Notes;

          (l) Acceleration of the Indebtedness under the Senior Financing in
accordance with the provisions of the Senior Credit Agreement; and

          (m) a Change of Control shall have occurred.

                                      -39-
<PAGE>
     8.2 CONSEQUENCES OF EVENT OF DEFAULT.

          (A) BANKRUPTCY. If an Event of Default specified in paragraphs (g) or
(h) of Section 8.1 hereof shall occur, the unpaid balance of the Notes and
interest accrued thereon and all other liabilities of the Loan Parties to the
holders thereof hereunder and thereunder shall be immediately due and payable,
without presentment, demand, protest or (except as expressly required hereby)
notice of any kind, all of which are hereby expressly waived.

          (B) OTHER DEFAULTS. If any other Event of Default shall occur,
Required Purchasers may at their option, by written notice to the Loan Parties,
declare the entire unpaid balance of the Notes, and interest accrued thereon and
all other liabilities of the Loan Parties hereunder and thereunder to be
forthwith due and payable, and the same shall thereupon become immediately due
and payable, without presentment, demand, protest or (except as expressly
required hereby) notice of any kind, all of which are hereby expressly waived;
provided, that in the case of a default specified in clause (ii) of paragraph
(a) of Section 8.1 hereof shall occur, any holder of a Note may declare the
entire unpaid balance of such Note (but only such Note) and other amounts due
hereunder and thereunder with regard to such Note to become immediately due and
payable.

          (C) POST-DEFAULT INTEREST. Following the occurrence and during the
continuance of any Event of Default, the holders of the Notes shall be entitled
to receive, to the extent permitted by applicable Law, interest on the
outstanding principal of, and premium and overdue interest, if any, on, the
Notes at a rate per annum equal to the interest rate thereon (determined as
provided in Section 3.1) plus two hundred (200) basis points.

          (D) PREMIUM. In the event of any acceleration of Notes pursuant to
Section 8.2(b) hereof, the Loan Parties shall also pay to Servicer, for the
ratable benefit of Purchasers the prepayment premium that would otherwise be
payable upon any voluntary prepayment of such Notes pursuant to Section 3.3.

     8.3 SECURITY. Payments of principal of, and premium, if any, and interest
on, the Notes and all other obligations of the Loan Parties under this Agreement
or the Notes are secured pursuant to the terms of the Security Documents.

                                    ARTICLE 9

                                  THE SERVICER

     9.1 AUTHORIZATION AND ACTION. Each Purchaser and each subsequent holder of
any Note by its acceptance thereof, hereby designates and appoints Patriot as
Servicer hereunder and authorizes Patriot to take such actions as agent on its
behalf and to exercise such powers as are delegated to Servicer by the terms of
this Agreement and the other Purchase Documents, together with such powers as
are reasonably incidental thereto. Servicer shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Purchaser, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities on the part of Servicer
shall be read into this Agreement or otherwise exist for Servicer. In performing
its functions and duties hereunder, Servicer shall act solely as agent for

                                      -40-
<PAGE>
Purchasers and does not assume, nor shall be deemed to have assumed, any
obligation or relationship of trust or agency with or for the Loan Parties or
any of their respective successors or assigns. Servicer shall not be required to
take any action that exposes Servicer to personal liability or that is contrary
to this Agreement or applicable Laws. The appointment and authority of Servicer
hereunder shall terminate at the indefeasible payment in full of the Notes and
related obligations.

     9.2 DELEGATION OF DUTIES. Servicer may execute any of its duties under this
Agreement by or through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. Servicer
shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.

     9.3 EXCULPATORY PROVISIONS. Neither Servicer nor any of its directors,
officers, agents or employees shall be (i) liable for any action lawfully taken
or omitted to be taken by it or them under or in connection with this Agreement
(except for its, their or such Person's own gross negligence or willful
misconduct or, in the case of Servicer, the breach of its obligations expressly
set forth in this Agreement, unless such action was taken or omitted to be taken
by Servicer at the direction of the Required Purchasers), or (ii) responsible in
any manner to any of Purchasers for any recitals, statements, representations or
warranties made by the Loan Parties contained in this Agreement or in any
certificate, report, statement or other document referred to or provided for in,
or received under or in connection with, this Agreement for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other document furnished in connection herewith, or for any failure of any
of the Loan Parties to perform their respective obligations hereunder, or for
the satisfaction of any condition specified in Article 4. Servicer shall not be
under any obligation to any Purchaser to ascertain or to inquire as to the
observance or performance of any of the agreements or covenants contained in, or
conditions of, this Agreement, or to inspect the properties, books or records of
any of the Loan Parties.

     9.4 RELIANCE. Servicer shall in all cases be entitled to rely, and shall be
fully protected in relying, upon any document or conversation believed by it to
be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Loan Parties), independent accountants and
other experts selected by Servicer. Servicer shall in all cases be fully
justified in failing or refusing to take any action under this Agreement or any
other document furnished in connection herewith unless it shall first receive
such advice or concurrence of the Required Purchasers or all of the Purchasers,
as applicable, as it deems appropriate or it shall first be indemnified to its
satisfaction by the Purchasers; provided, that, unless and until Servicer shall
have received such advice, Servicer may take or refrain from taking any action,
as Servicer shall deem advisable and in the best interests of the Purchasers.
Servicer shall in all cases be fully protected in acting, or in refraining from
acting, in accordance with a request of the Required Purchasers or all of the
Purchasers, as applicable, and such request and any action taken or failure to
act pursuant thereto shall be binding upon all of the Purchasers.

     9.5 NON-RELIANCE ON SERVICER AND OTHER PURCHASERS. Each Purchaser expressly
acknowledges that neither Servicer, nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates has made any representations
or warranties to it and that no act by

                                      -41-
<PAGE>
Servicer or hereafter taken, including, without limitation, any review of the
affairs of the Loan Parties, shall be deemed to constitute any representation or
warranty by Servicer. Each Purchaser represents and warrants to Servicer that it
has and will, independently and without reliance upon Servicer or any other
Purchaser and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, prospects, financial and other conditions and
creditworthiness of the Loan Parties and made its own decision to enter into
this Agreement.

     9.6 SERVICER IN ITS INDIVIDUAL CAPACITY. Servicer, and each of its
Affiliates may make loans to, purchase securities from, provide services to,
accept deposits from and generally engage in any kind of business with the Loan
Parties or any Affiliate of the Loan Parties as though Servicer were not
Servicer hereunder.

     9.7 SUCCESSOR SERVICER. Servicer may, upon forty-five (45) days' notice to
the Loan Parties and Purchaser, and Servicer will, upon the direction of the
Required Purchasers (other than Servicer, in its individual capacity), resign as
Servicer. If Servicer shall resign, then the Required Purchasers during such
fifteen-day period shall appoint a successor Servicer and if the Required
Purchasers direct Servicer to resign, such direction shall include an
appointment of a successor Servicer. If for any reason no successor Servicer is
appointed by the Required Purchasers during such fifteen-day period, then
effective upon the expiration of such fifteen-day period, Purchasers shall
perform all of the duties of Servicer hereunder and the Loan Parties shall make
all payments in respect of the Notes directly to the applicable Purchaser and
for all purposes shall deal directly with Purchasers. After any retiring
Servicer's resignation hereunder as Servicer, the provisions of Article 9 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Servicer under this Agreement.

     9.8 COLLECTIONS AND DISBURSEMENTS.

          (a) Servicer will have the right to collect and receive all payments
of the Notes, and to collect and receive all reimbursements due hereunder,
together with all fees, charges or other amounts due under this Agreement and
the other Purchase Documents with regard to the Notes, and Servicer will remit
to each Purchaser, according to its pro rata percentage, all such payments
actually received by Servicer (other than expense reimbursements of Servicer or
of a particular Purchaser) in accordance with the settlement procedures
established from time to time. Settlements shall occur on such dates as Servicer
may elect in its sole discretion, but which shall be no later than two (2)
Business Days following receipt thereof.

          (b) If any such payment received by Servicer is rescinded or otherwise
required to be returned for any reason at any time, whether before or after
termination of this Agreement or the other Purchase Documents, each Purchaser
will, upon written notice from Servicer, promptly pay over to Servicer its pro
rata percentage of the amounts so rescinded or returned, together with interest
and other fees thereon so rescinded or returned.

          (c) All payments by Servicer and Purchasers to each other hereunder
shall be in immediately available funds. Servicer will at all times maintain
proper books of accounts and records reflecting the interest of each Purchaser
in the Notes, in a manner customary to Servicer's keeping of such records, which
books and records shall be available for inspection by

                                      -42-
<PAGE>
each Purchaser at reasonable times during normal business hours, at such
Purchaser's sole expense. Servicer may treat the payees of any Note as the
holder thereof until written notice of the transfer thereof shall have been
received by Servicer in accordance with Section 6.3. In the event that any
Purchaser shall receive any payment in reduction of the Notes in an amount
greater than its applicable pro rata percentage in respect of obligations to
such Purchaser evidenced hereby (including, without limitation amounts obtained
by reason of setoffs) such Purchaser shall hold such excess in trust for
Servicer (on behalf of all other Purchasers) and shall promptly remit to
Servicer such excess amount so that the amounts received by each Purchaser
hereunder shall at all times be in accordance with its applicable pro rata
percentage. If, however, any Purchaser that has received any such excess amount
fails to remit such amount to the Servicer, the Servicer shall reallocate the
amounts paid on the next payment date to each Purchaser so that, after giving
effect to such payments, the pro rata obligations owed by the Loan Parties to
each Purchaser shall be in an amount equal to the pro rata amount owed by the
Loan Parties before the date of the payment of such excess amount. In no event
shall any Purchaser be deemed to have a participation or other right in, to or
against any other Purchaser's Note as a result of the payment of any excess
amount.

     9.9 REPORTING. During the term of this Agreement, Servicer will promptly
furnish each Purchaser with copies of all notices and financial statements of
the Loan Parties required to be delivered or obtained hereunder and such other
financial statements and reports and other information in Servicer's possession
as any Purchaser may reasonably request. Servicer will immediately notify
Purchasers when it receives actual knowledge of any Event of Default under the
Purchaser Documents.

     9.10 CONSENT OF PURCHASERS.

          (a) Except as expressly provided herein, Servicer shall have the sole
and exclusive right to service, administer and monitor the Notes and the
Purchase Documents related thereto, including, without limitation, the right to
exercise all rights, remedies, privileges and options under this Agreement and
under the other Purchase Documents, including, without limitation, the credit
judgment with respect to the purchasing of the Notes and the determination as to
the basis on which and extent to which purchases of Notes may be made.

          (b) Notwithstanding anything to the contrary contained in Section
9.10(a) above, Servicer shall not without the prior written consent of all
Purchasers then holding Notes: (i) extend any payment date under the Notes, (ii)
reduce any interest rate applicable to any of the Notes or any fee payable to
Purchasers hereunder, (iii) waive any Event of Default under Section 8.1 (a),
(iv) compromise or settle all or a portion of the Indebtedness under the Notes,
(v) release any obligor from the Indebtedness under the Notes except in
connection with full payment and satisfaction of all Indebtedness under the
Notes, (vi) amend the definition of Required Purchasers, or (vii) amend this
Section 9.10(b).

          (c) Notwithstanding anything to the contrary contained in Section
9.10(a) above, and subject to any applicable limitation set forth in Section
9.10(b) above, Servicer shall not, without the prior written consent of Required
Purchasers: (i) waive any Event of Default; (ii) consent to any Loan Parties'
taking any action that, if taken, would constitute an Event of Default under
this Agreement or under any of the other Purchase Documents; or (iii) amend or

                                      -43-
<PAGE>
modify or agree to an amendment or modification of this Agreement or other
Purchase Documents.

          (d) After an acceleration of the Indebtedness, Servicer shall have the
sole and exclusive right, after consultation (to the extent reasonably
practicable under the circumstances) with all Purchasers and, unless otherwise
directed in writing by Required Purchasers, to exercise or refrain from
exercising any and all rights, remedies, privileges and options under this
Agreement or the other Purchase Documents and available at law or in equity to
protect the rights of Servicer and Purchasers and collect the Indebtedness under
the Notes, including, without limitation, instituting and pursuing all legal
actions brought against any Loan Party or to collect the Indebtedness under the
Notes, or defending any and all actions brought by any Loan Party or other
Person; or incurring expenses or otherwise making expenditures to protect the
collateral, the Notes or Servicer's or any Purchaser's rights or remedies.

     9.11 THIS ARTICLE NOT APPLICABLE TO LOAN PARTIES. Except for Section 9.12,
this Article 9 is included in this Agreement solely for the purpose of
determining certain rights as between Servicer and Purchasers and does not
create, nor shall it give rise to, any rights in or obligations on the part of
the Loan Parties and all rights and obligations of the Loan Parties (other than
as specifically set forth herein) under this Agreement shall be determined by
reference to the provisions of this Agreement other than this Article 9.

     9.12 NO LIABILITY OF PURCHASERS. Purchasers shall have no liability to any
of the Loan Parties or any other entity as a result of any actions or failures
to act by Servicer hereunder or otherwise.

                                   ARTICLE 10

                                  MISCELLANEOUS

     10.1 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns, except that (i) the Loan Parties may not assign or transfer their
rights hereunder or any interest herein or delegate their duties hereunder and
(ii) Purchasers shall have the right to assign their rights hereunder and under
the Securities in accordance with Article 6.

     10.2 MODIFICATIONS AND AMENDMENTS. The provisions of this Agreement may be
modified, waived or amended, but only by a written instrument signed by each of
the Loan Parties to be bound thereby, and to the extent such modification,
amendment or waiver relates to the Notes, such instrument must be executed by
Servicer on behalf of Purchasers upon satisfaction of the conditions set forth
in Section 9.10.

     10.3 NO IMPLIED WAIVERS; CUMULATIVE REMEDIES; WRITING REQUIRED. No delay or
failure in exercising any right, power or remedy hereunder shall affect or
operate as a waiver thereof; nor shall any single or partial exercise thereof or
any abandonment or discontinuance of steps to enforce such a right, power or
remedy preclude any further exercise thereof or of any other right, power or
remedy. The rights and remedies hereunder are cumulative and not exclusive of
any rights or remedies that Servicer or Purchasers or any holder of Notes would

                                      -44-
<PAGE>
otherwise have. Any waiver, permit, consent or approval of any kind or character
of any breach or default under this Agreement or any such waiver of any
provision or condition of this Agreement must be in writing, satisfy the
conditions set forth in Section 9.10 and shall be effective only to the extent
in such writing specifically set forth.

     10.4 REIMBURSEMENT OF EXPENSES. The Loan Parties upon demand shall pay or
reimburse Servicer and Purchasers for all fees and expenses incurred or payable
by Servicer or Purchasers (including, without limitation, reasonable fees and
expenses of special counsel for Servicer and Purchasers), from time to time (i)
arising in connection with the negotiation, preparation and execution of this
Agreement, the Notes, the other Purchase Documents and all other instruments and
documents to be delivered hereunder or thereunder or arising in connection with
the transactions contemplated hereunder or thereunder, (ii) relating to any
amendments, waivers or consents pursuant to the provisions hereof or thereof,
and (iii) arising in connection with the enforcement of this Agreement or
collection of the Notes.

     10.5 HOLIDAYS. Whenever any payment or action to be made or taken hereunder
or under the Notes shall be stated to be due on a day that is not a Business
Day, such payment or action shall be made or taken on the next following
Business Day, and such extension of time shall be included in computing interest
or fees, if any, in connection with such payment or action.

     10.6 NOTICES. All notices and other communications given to or made upon
any party hereto in connection with this Agreement shall, except as otherwise
expressly herein provided, be in writing (including telecopy, but in such case,
a confirming copy will be sent by another permitted means) and mailed via
certified mail, telecopied or delivered by guaranteed overnight parcel express
service or courier to the respective parties, as follows:

     to the Loan Parties:

          Dover Saddlery, Inc
          525 Great Road
          Littleton, Massachusetts 01460
          Attn: Stephen L. Day
          Telecopier: (978) 952-8063

          with a copy to:

          PretiFlaherty PLLC
          P.O. Box 1318
          Concord, New Hampshire 07302
          Attn: John M. Sullivan, Esq.
          Telecopier: (603) 410-1501

                                      -45-
<PAGE>
     to Servicer:

          Patriot Capital Funding, Inc.
          Sixty One Wilton Road - Second Floor
          Westport, Connecticut 06880
          Attn: Timothy W. Hassler
          Telecopier: (203) 221-8253

          with a copy to:

          Edwards & Angell, LLP
          Three Stamford Plaza
          301 Tresser Boulevard
          Stamford, Connecticut 06901
          Attn: Thomas J. Freed, Esq.
          Telecopier: (203) 975-7180

     to Purchasers:

          As set forth on Annex A

or in accordance with any subsequent written direction from the recipient party
to the sending party. All such notices and other communications shall, except as
otherwise expressly herein provided, be effective upon delivery if delivered by
courier or overnight parcel express service; in the case of certified mail,
three (3) Business Days after the date sent; or in the case of telecopy, when
received.

     10.7 SURVIVAL. All representations, warranties, covenants and agreements of
the Loan Parties contained herein or made in writing in connection herewith
shall survive the execution and delivery of this Agreement and the purchase of
the Notes and shall continue in full force and effect so long as any Note is
outstanding and until payment in full of all of the Loan Parties' obligations
hereunder or thereunder. All obligations relating to indemnification hereunder
shall survive any termination of this Agreement and shall continue for the
length of any applicable statute of limitations.

     10.8 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT
OF LAWS PRINCIPLES.

     10.9 JURISDICTION, CONSENT TO SERVICE OF PROCESS.

          (a) THE LOAN PARTIES HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMIT,
FOR THEMSELVES AND THEIR PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY NEW
YORK STATE COURT OR FEDERAL COURT OF THE UNITED STATES OF AMERICA SITTING IN THE
STATE OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NOTES

                                      -46-
<PAGE>
OR ANY OTHER PURCHASE DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY
JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
AGREES THAT, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ALL CLAIMS IN RESPECT OF
ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH STATE OR, TO
THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO
AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR
IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT SHALL AFFECT ANY
RIGHT THAT SERVICER AND PURCHASERS MAY OTHERWISE HAVE TO BRING ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT, THE NOTES OR ANY OTHER PURCHASE DOCUMENT
AGAINST THE LOAN PARTIES OR THEIR PROPERTIES IN THE COURTS OF ANY JURISDICTION.

          (b) THE LOAN PARTIES HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO
THE FULLEST EXTENT THEY MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION THAT
THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NOTES OR ANY OTHER
PURCHASE DOCUMENT IN ANY STATE OR FEDERAL COURT. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE
OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT.

          (c) EACH PARTY TO THIS AGREEMENT IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.6 HEREOF. NOTHING IN
THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

     10.10 JURY TRIAL WAIVER. THE LOAN PARTIES HEREBY IRREVOCABLY WAIVE ANY
RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING (I) TO ENFORCE OR DEFEND ANY
RIGHTS UNDER OR IN CONNECTION WITH THIS AGREEMENT, OR (II) ARISING FROM ANY
DISPUTE OR CONTROVERSY IN CONNECTION WITH OR RELATED TO THIS AGREEMENT AND
AGREES THAT ANY SUCH ACTION OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND
NOT BEFORE A JURY.

     10.11 SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law in any jurisdiction, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating any other provision of this Agreement.

                                      -47-
<PAGE>
     10.12 HEADINGS. Article, section and subsection headings in this Agreement
are included for convenience of reference only and shall not constitute a part
of this Agreement for any other purpose.

     10.13 INDEMNITY. The Loan Parties hereby agree to indemnify, defend and
hold harmless Servicer and Purchasers and their Affiliates, officers, directors,
employees, agents and representatives, and their respective successors and
assigns in connection with any losses, claims, damages, liabilities and
expenses, including reasonable attorneys' fees, to which any such Person may
become subject (other than as a result of the gross negligence or willful
misconduct of any such Person), insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or by reason of any
investigation, litigation or other proceedings related to or resulting from any
act of, or omission by, the Loan Parties or their Affiliates or any officer,
director, employee, agent or representative of the Loan Parties or their
Affiliates with respect to the Transactions, the Notes, Charter Documents, the
Bylaws or any agreements entered into in connection with any such agreements,
instruments or documents and to reimburse Servicer and Purchasers and each such
Person, upon demand, for any legal or other expenses incurred in connection with
investigating or defending any such loss, claim, damage, liability, expense or
action. To the extent that the foregoing undertakings may be unenforceable for
any reason, the Loan Parties agree to make the maximum contribution to the
payment and satisfaction of indemnified liabilities set forth in this Section
10.13 that is permissible under applicable law.

     10.14 ENVIRONMENTAL INDEMNITY. The Loan Parties, and their successors and
assigns, hereby release and discharge, and agree to defend, indemnify and hold
harmless, Servicer, Purchasers and their Affiliates (including their partners,
subsidiaries, customers, guests, and invitees, and the successors and assigns of
all of the foregoing, and their respective directors, officers, employees and
agents) (collectively, the "Indemnified Parties") from and against any and all
Environmental Liabilities, whenever and by whomever asserted, to the extent that
such Environmental Liabilities are based upon, or otherwise relate to: (i) any
Condition at any time in, at, on, under, a part of, involving or otherwise
related to the Properties and Facilities (including any of the properties,
materials, articles, products, or other things included in or otherwise a part
of the Properties and Facilities); (ii) any action or failure to act of any
Person, including any prior owner or operator of the Properties and Facilities
(including any of the properties, materials, articles, products, or other things
included in or otherwise a part of the Properties and Facilities), involving or
otherwise related to the Properties and Facilities or operations of the Loan
Parties; (iii) the Management of any Pollutant, material, article or product
(including Management of any material, article or product containing a
Pollutant) in any physical state and at any time, involving or otherwise related
to the Properties and Facilities; (iv) any violation of or noncompliance with or
the assertion of any Lien under the Environmental Laws, unless such violation,
noncompliance or assertion is caused by the gross negligence or willful
misconduct of an Indemnified Party; (v) the presence of any toxic or hazardous
substances, wastes or contaminants on, at or from the Properties and Facilities,
including, without limitation, human exposure thereto; (vi) any spill, release,
discharge or emission affecting the Properties and Facilities, whether or not
the same originates or emanates from such Properties and Facilities or any
contiguous real estate, including, without limitation, any loss of value of such
Properties and Facilities as a result thereof; or (vii) a misrepresentation in
any representation or warranty or breach of or failure to perform any covenant
made by the Loan

                                      -48-
<PAGE>
Parties in this Agreement. This indemnity and agreement to defend and hold
harmless shall survive any termination or satisfaction of the Notes or the sale,
assignment or foreclosure thereof or the sale, transfer or conveyance of all or
part of the past and present properties and facilities or any other
circumstances that might otherwise constitute a legal or equitable release or
discharge, in whole or in part, of the Loan Parties under the Notes.

     10.15 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by either party hereto on separate counterparts, each of which,
when so executed and delivered, shall be an original, but all such counterparts
shall together constitute one and the same instrument.

     10.16 INTEGRATION. This Agreement and the other Purchase Documents set
forth the entire understanding of the parties hereto with respect to all matters
contemplated hereby and supersede all previous agreements and understandings
among them concerning such matters. No statements or agreements, oral or
written, made prior to or at the signing hereof, shall vary, waive or modify the
written terms hereof.

     10.17 SUBORDINATION. THE OBLIGATIONS OF PAYMENT AND PERFORMANCE EVIDENCED
HEREBY AND BY THE OTHER PURCHASE DOCUMENTS AND THE RIGHTS OF THE PURCHASERS AND
SERVICER HEREUNDER AND THEREUNDER (INCLUDING RIGHTS OF PAYMENT AND ENFORCEMENT)
ARE SUBORDINATE IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN
SUBORDINATION AGREEMENT DATED AS OF DECEMBER 11, 2003 (THE "SUBORDINATION
AGREEMENT"), AMONG THE LOAN PARTIES, FLEET, AS THE SENIOR LENDER, THE SERVICER
AND THE PURCHASER, TO THE INDEBTEDNESS AND OTHER LIABILITIES OWED BY, AND ALL
OTHER OBLIGATIONS OF, THE LOAN PARTIES UNDER AND PURSUANT TO THE SENIOR CREDIT
AGREEMENT AND EACH RELATED "LOAN DOCUMENT" (AS DEFINED THEREIN). THE SERVICER
AND EACH HOLDER HEREOF, BY ITS ACCEPTANCE HEREOF, ACKNOWLEDGES AND AGREES TO BE
BOUND BY THE PROVISIONS OF THE SUBORDINATION AGREEMENT.

                                      * * *

                                      -49-
<PAGE>
                               SIGNATURE PAGES TO
                   SENIOR SUBORDINATED NOTE PURCHASE AGREEMENT

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

                                        LOAN PARTIES:

                                        DOVER SADDLERY, INC. ("PARENT")

                                        By: /s/ Stephen L. Day
                                            ------------------------------------
                                        Name: Stephen L. Day
                                        Title: President

                                        DOVER SADDLERY, INC. ("OPERATING
                                        COMPANY #1")

                                        By: /s/ Stephen L. Day
                                            ------------------------------------
                                        Name: Stephen L. Day
                                        Title: President

                                        SMITH BROTHERS, INC. ("OPERATING
                                        COMPANY 2")

                                        By: /s/ Stephen L. Day
                                            ------------------------------------
                                        Name: Stephen L. Day
                                        Title: President
<PAGE>
                               SIGNATURE PAGES TO
                   SENIOR SUBORDINATED NOTE PURCHASE AGREEMENT

                                        SERVICER:

                                        PATRIOT CAPITAL FUNDING, INC.,
                                        a Delaware corporation

                                        By: /s/ Timothy Hassler
                                            ------------------------------------
                                        Name: Timothy Hassler
                                        Title: Managing Director

                                        PURCHASERS:

                                        WILTON FUNDING, LLC,
                                        a Delaware limited liability company

                                        By: /s/ Lindsey Cancino
                                            ------------------------------------
                                        Name: Lindsey Cancino
                                        Title: Manager<PAGE>

                                                                   EXHIBIT 10.28

                                LICENSE AGREEMENT

      This LICENSE AGREEMENT (this "Agreement") is made and entered into as of
February 10, 2003 by and between Weatherbeeta PTY LTD ("Licensor"), an
Australian corporation and Dover Saddlery, Inc. ("Licensee"), a Delaware
corporation.

                                    RECITALS

      I. As described in a letter agreement dated February__, 2003, between
Licensee and Licensor (the "Letter Agreement"), Licensor has acquired certain
rights to the Marks and the goodwill appurtenant thereto pursuant to a secured
party sale by The Bank of New York to Licensor's nominee Weatherbeeta USA, Inc.,
which has assigned all of said rights to Licensor.

      II. Licensee desires to license from Licensor certain of those rights.

      NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by Licensor the parties agree that:

      1. As used in this Agreement the following terms shall have the following
meanings:

            "Domain Name" means the URL address and domain name
www.millerharness.com.

            "Marks" means the trademarks and tradenames "Millers" and "Miller's
Harness", whether registered or common law marks, and including, but not limited
to those trademarks registered with the U.S. Patent and Trademark Office as
Registration Nos. 1087381,1608811, and 0885095; that Trademark registered with
the Canada Intellectual Property Office as Registration No. 240890; that
Trademark registered with the Mexican Industrial Property Office as Registration
No. 504551; those trademarks registered with the Brazil Instituto Nacional Da
Propriedade Industrial as Registration Nos. 816641200, 816641196 and pending
applications with Processing Numbers 817201564 and 817201572; and the mark
attached hereto as Exhibit A.

            "Territory" means North America, Central America and South America.

      2. Licensor hereby grants to Licensee, and Licensee hereby accepts from
Licensor, a perpetual, exclusive right, license and privilege (subject only to
the Debtor's License, described below), in accordance with the terms and
conditions of this Agreement, to utilize the Marks in the Territory in
connection with: (i) a retail mail order sales catalog distributed within the
Territory for retail sales of equestrian products and apparel; and (ii) an
Internet web site that uses the Domain Name for retail sales of equestrian
products and apparel ((i) and (ii) hereafter collectively referred to as the

<PAGE>

"Field"). Licensee shall have no right to use the Marks or the Domain Name for
any other purpose outside of the Field. Specifically, but not by way of
limitation, Licensee shall have no right to make, have made, or import products
bearing the Marks or the Domain Name, and may only sell and offer to sell such
products purchased from authorized licensees of Licensor. Licensee acknowledges
that its license granted herein overlaps with the non-exclusive license (the
"Debtor's License", attached hereto) granted to English Equestrian Group LLC and
Miller Harness Company, Inc. (the "Debtors") and to The Bank of New York to
utilize certain rights, including the Marks and the Domain Name, in the
Territory until April 30, 2003, solely in connection with the distribution,
marketing and/or sale of certain inventory currently owned by the Debtors.
Licensor agrees that it will not 1) extend or otherwise amend the Debtor's
License and 2) grant any other licenses permitting any third party to use the
Marks or the Domain Name in the Field and within the Territory.

      3. Licensee accepts its rights hereunder "AS IS", without any
representation or warranty whatsoever, express or implied. Licensor expressly
disclaims any and all warranties with respect to the Marks and the Domain Name
and the rights therein, including, but not limited to, any warranty that
Licensor has good title to the Marks or valid registration of the Domain Name,
that the Licensor has the power or authority to grant the rights purportedly
granted herein, that the Marks or Domain Name do not infringe upon the rights of
any third party, or that no third party has rights superior to those granted
herein. Licensee acknowledges that it has had the opportunity to conduct due
diligence with respect to Licensor's acquisition of the Marks and the Domain
Name and the rights that Licensor has acquired in such Marks and the Domain
Name.

      4. Licensor agrees that during the term of this Agreement, no fee, royalty
or other payment or compensation shall be due to Licensor for the license
granted pursuant to this Agreement. Licensee agrees that the nature and quality
of all services rendered by Licensee in connection with the Marks, and all
related advertising, promotional and other uses of the Marks by Licensee shall
conform to standards set by and under the control of Licensor.

      5. Licensee agrees to cooperate with Licensor in facilitating Licensor's
control of the nature and quality of the services rendered by Licensee in
connection with the Marks, to permit reasonable inspection of Licensee's
operations, and to supply Licensor with specimens of all uses of the Marks upon
reasonable request accompanied by advance notice of at least fifteen (15)
business days. Licensee shall comply with all applicable laws, regulations, and
obligations, and shall obtain all appropriate government approvals pertaining to
the uses of the Marks and the Domain Name covered by this Agreement.

      6. Licensee agrees to notify Licensor of any unauthorized use of the Marks
by others promptly as it comes to Licensee's attention. Licensor hereby grants
to Licensee the right to bring infringement or unfair competition proceedings
against third

                                       2
<PAGE>

parties for unauthorized usage of the Marks or the Domain Name in the Territory
and within the Field. Licensor agrees to reasonably cooperate with Licensee in
connection with all such proceedings, at Licensee's expense. Licensor shall have
the right, in its discretion and at its sole expense, to join and participate in
all such proceedings initiated by Licensee. Any recovery as a result of such
action by Licensee shall belong solely to Licensee, except to the extent that
such recovery represents damage to Licensor, in which case any such recovery
shall be paid to Licensor. In the event Licensee shall fail to take action
against third party infringers, Licensor shall retain the right to initiate such
proceedings on its own behalf, and shall have the right to join Licensee in such
proceedings to the extent it is deemed a necessary party by any judicial or
arbitral body. Any recovery as a result of such action by Licensor shall belong
solely to Licensor, except to the extent that such recovery represents damage to
Licensee, in which case any such recovery shall be paid to Licensee.

      7. As between Licensor and Licensee, Licensee acknowledges that Licensor
is the sole owner of the Marks, agrees that it will not do anything inconsistent
with such ownership, and that all use of the Marks by Licensee shall inure to
the benefit of Licensor. Except as provided in Section 8 below, nothing in this
Agreement shall give Licensee any right, title or interest in the Marks other
than the right to use the Marks and the Domain Name in accordance with this
Agreement. Licensee will not attack the title of Licensor to the Marks, nor will
Licensee attack the validity of this Agreement.

      8. The license rights granted to Licensee hereunder shall remain in effect
in perpetuity unless earlier terminated in accordance with the terms of the
Agreement. This Agreement may be terminated by either party if the other party
breaches any of its material obligations or representations under this
Agreement, provided that (i) the non-breaching party gives notice to the
breaching party of the breach and (ii) the breaching party does not, within
sixty (60) days from the date of receipt of the notice, cure the breach
described in the notice or contest its existence. Upon the failure to cure
within the cure period, the aggrieved party shall have the right, without legal
action or further notice to terminate this Agreement at the end of the such
sixty (60) days by sending a written notice of termination to the breaching
party. In addition, this Agreement may be terminated immediately by Licensor if
Licensee becomes the subject of any bankruptcy, insolvency, or reorganization
proceeding, or generally seeks relief from its debts, or becomes or is declared,
by any court of competent jurisdiction, to be insolvent. Licensee shall have the
right to terminate this License in accordance with the above procedure in the
event that Licensor has committed acts that materially and adversely affect
Licensee's rights to maintain its usage of, and enforce its rights in, the Marks
pursuant to the license granted hereunder, in which event, upon such
termination, Licensor shall assign to Licensee that portion of its right, title
and interest in the Marks limited to use of the Marks in the Field and within
the Territory. The termination of the Agreement by reason of this paragraph
shall not relieve the breaching party of liability for any damages properly
assessable by reason of the said breach

                                       3
<PAGE>

      9. The parties hereto are independent contractors and engage in the
operation of their own respective businesses. No party hereto is to be
considered the agent or legal representative of the other for any purpose
whatsoever. No party has any right or authority to enter into any contracts or
assume any obligations for any other party or make any warranties or
representations, express or implied, on behalf of any other party or to bind any
other party in any manner whatsoever. Nothing in this Agreement shall be
construed to establish a relationship of partners or joint venturers between or
among the parties. No party will incur any expenses chargeable to any other
party.

      10. This Agreement shall be binding on and inure to the benefit of the
parties, and their respective successors and assigns. This Agreement and any
rights granted hereunder may not be assigned by Licensee without the prior
written consent of the Licensor; provided, however, that either party shall have
the right to assign all of its rights, obligations and privileges hereunder,
upon advance notice to but without any requirement to obtain the consent of the
other party, to a purchaser or successor-in-interest to its business in
connection with a merger, consolidation or sale of all or substantially all of
such party's assets or assets to which this Agreement pertains.

      11. This Agreement shall not confer any rights or remedies upon any person
other than the parties and their respective successors and permitted assigns.

      12. This Agreement (together with the Letter Agreement) constitutes the
entire agreement between the parties relating to the subject matter hereof and
supersedes any prior understandings, agreements, or representations by or
between the parties, written or oral, to the extent they have related in any way
to the subject matter hereof.

      13. This Agreement may be executed in one or more counterparts, including
counterparts executed and delivered by facsimile, each of which shall be deemed
an original but all of which together will constitute one and the same
instrument.

      14. All notices, requests, demands, claims, and other communications
required or permitted hereunder shall be in writing. Any notice, request,
demand, claim, or other communication hereunder shall be deemed duly given if it
is sent by registered or certified mail, return receipt requested, postage
prepaid (and then three business days after), and addressed to the intended
recipient as set forth below.

      If to Licensor:

            WEATHERBEETA PTY LTD
            c/o Weatherbeeta USA, Inc.
            25 Executive Avenue
            Edison, New Jersey 08817
            Attn: Roger Jackson, President
            Tel: (732)650-0026
            Fax: (732) 650-0134

                                       4
<PAGE>

      with copies to:

            Lowenstein Sandler PC
            65 Livingston Avenue
            Roseland, New Jersey
            Attn: David L. Harris, Esq.
            Tel: (973)597-2500
            Fax: (973)597-2400

      If to Licensee:

            Stephen L. Day, President
            Dover Saddlery, Inc.
            525 Great Road
            Littleton, MA 01460

            With a copy to:

            John M. Sullivan, Esq.
            Preti, Flaherty, Beliveau, Pachios & Haley, PLLC
            P.O. Box 1318
            Concord, NH 03302-1318

Any party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
party may change the address to which notice, demands, claims, and other
communications hereunder are to be delivered by giving the other Party notice in
the manner herein set forth.

      15. This Agreement shall be governed by and construed in accordance with
the domestic laws of the State of New Jersey without giving effect to any choice
or conflict of laws provision or rule (whether of the State of New Jersey or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of New Jersey. Licensor and Licensee hereby
consent to the personal jurisdiction to the personal jurisdiction of the state
and federal courts of the State of New Jersey in connection with any dispute
relating to this Agreement (and the Letter Agreement).

      16. No amendment of any provision of this Agreement shall be valid unless
the same is in writing and signed by the parties hereto. No waiver by any party
or any default, misrepresentation, or breach of warranty or covenant hereunder,
whether intentional, or not, shall be deemed to extend to any prior or
subsequent default,

                                       5
<PAGE>

misrepresentation, or breach of warranty or covenant hereunder or affect in any
way any right arising by virtue of any prior or subsequent such occurrence.

      17. If any provision of this Agreement shall be held to be illegal,
invalid or unenforceable, such illegality, invalidity or unenforceability shall
apply only to such provision and shall not in any manner affect or render
illegal, invalid or unenforceable any other provision of this Agreement, and
this Agreement shall be reformed, construed and enforced so as to most nearly
give lawful effect to the intent of the parties as expressed in this Agreement.

      18. Except as expressly agreed otherwise herein, Licensor and Licensee
each agree to bear its own costs and expenses (including legal fees and
expenses) incurred in connection with this Agreement and the transactions
contemplated hereby.

      19. Licensee agrees to refer to Licensor all inquiries regarding the
wholesale purchases of products that use the Marks.

      20. The parties have participated jointly in the negotiation and drafting
of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any of the provisions of
this Agreement.

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement as of
the date and year first above written

                                        WEATHERBEETA PTY LTD, as Licensor

                                        By: /s/ Roger B. Jackson
                                            ------------------------------------
                                        Name: Roger B. Jackson
                                        Title: Authorized Signatory

                                        DOVER SADDLERY, INC., as a Licensee

                                        By: /s/ Stephen L. Day
                                            ------------------------------------
                                            Name: Stephen L. Day
                                            Title: Its President

                                       6
<PAGE>

                                    EXHIBIT A

                                 [MILLER'S LOGO]
                                  350 Page Rd.
                              Washington, NC 27889

                                       7

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